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Toshiba Quits HD DVD - An Application of the Dip

By TLS | February 23, 2008

I picked up a book the other day called ‘the dip’ by Seth Godin. It talks about knowing when to quit in business (or anything). The recent news surrounding Blue Ray disc and HD DVD has provided a practical application of the principle. In his book, Godin describes a couple of curves called the Dip and the Cul-de-sac. The Cul-de-sac is not really a curve; rather, it is a dead end. If you are putting too much time and effort into something with limited or no return then you may be in a cul-de-sac. If so, it’s time to bail out. On the Dip curve, your efforts are highly rewarded at first, but then you drop into a slope of the curve where your reward is not outweighing the effort. The trick is knowing how to handle the Dip. Do you push through it to the other side where the reward again outweighs the effort? Or do you cut your losses and quit?

The Dip Curve

Toshiba is facing a big Dip with regards to the Blue Ray competition. With Sony and Walmart teaming up, it would be very hard for Toshiba’s HD DVD technology to win, so they are opting to get out. Probably a smart move. Sony did the same thing when they dumped their BetaMAX technology years ago when VHS became the standard.

For me this was an interesting application of the thoughts Godin shares in his book.

Topics: Books, Business |

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