Search for:

Posted on August 19th, 2012, by

Henry M. Flagler and Henry B. Plant were very successful businessmen who developed their railroad and shipping systems which played a very important role in the life of the State of Florida as well as the USA at large. At the same time, they were competitors who struggled for the larger share of the market and higher profits for their companies that stimulated them to expand their business to get a strategic competitive advantage. Nevertheless, their competition could not be characterized as immoral or unethical. In stark contrast, their competition was quite fair to the extent that it is even possible to speak about friendly relationships between Flagler and Plant (Standiford, 311). Hence, they could be viewed as models of behavior for modern businessmen. At the same time, Flagler proved to be more successful than Plan in his business but his gain success in a fair competitive struggle due to his wise market strategy and innovations he introduced within his company.

On analyzing relationship between Flagler and Plant, it should be said that they were competitors since their companies operated in the same industry and compete with each other. However, the traditional view on competition as a severe struggle for survival is not absolutely correct in this regard. To put it more precisely, their rivalry was a kind of parallel development of both companies which gradually gained larger and larger share of the market. In fact, both Flagler and Plant developed their own system according to which they built up their business. In such a way, they did not apply methods of unfair competition. Instead, they attempted to avoid unnecessary conflicts between their companies.

In such a context, it is possible to refer to media of the epoch of the rivalry between Flagler and Plant. For instance, New York Times defines their relations as friendly and their competition was quite unusual for the epoch as well as for the competition at large, because it was a kind of friendly competition, when rivals did not really use methods which could destroy business of the rival immediately (Florida’s Rich Rivals, 1896). In other words, they attempted to avoid unnecessary conflicts which could weaken companies and, therefore, prevent them from success. At the same time, they heavily relied on the system developed by owners of companies. Hence, Flagler system and Plan system were competing and the effectiveness of either system defined the outcome of the competitive struggle of both companies.

In order to understand the success of the Flagler’s system, it is necessary to dwell upon basic advantages of his system compared to that of Plant. In fact, initially, Flagler and Plant were in a similar position. They attempted to develop the railway and shipping system. In this respect, Plant was in an advantageous position because his railway system was geographically more extended and, therefore, he had a larger geographic reach (Martin, 1949, 125). In this respect, it should be said that the development of the railway system and shipping was very prospective in the USA at the epoch because railways became the most effective means of communication and transportation which linked remote parts of the USA and contributed to the fast and reliable delivery of goods and passengers nationwide. In such a situation, the large geographic reach could be a considerable advantage in the competitive struggle of Plant and Flagler.

However, this advantage failed to ensure the victory of Plant in the competitive struggle with Flagler. In this respect, the effectiveness of the system proved to be of the utmost importance. In fact, the high effectiveness of the Flagler system allowed him to outpace his main rival, Plant, whose system proved to be not very effective. In this regard, it is important to take into consideration two factors: the connection of the railways network and the use of new technologies, including more efficient steam engines.

First of all, it is important to lay emphasis on the fact that Flagler decided to connect his network, which became closely integrated and, thus, got strategic advantages over its competitors, including Plant system. The latter used a traditional network, which was practically not connected. In fact, the only connection between the Plant’s system, with a main line from Stanford west to Tampa, was via steamboats on the St. Johns River from Jacksonville to Stanford (Martin, 1998, 211). As a result, in spite of its geographic extension and larger mileage, the Plant’s system was poorly connected and therefore its lines worked practically autonomously. Naturally, such a construction of the system prevented Plant from considerable benefits, which Flagler got from his integrated and closely connected system. Flagler managed not only connect the network and his lines but he also managed to increase the amount of passenger and goods using his network for transportation from one point to another. In contrast, Plant’s system could offer only a fragmentary service and transportation since the lack of connection forced passengers and owners of goods to change the line and, thus, the company, while using the Flagler’s system they could get the full specter of services and they did not need to change the transportation company to arrive to their destination or deliver their goods in time.  Consequently, the Flagler’s system was more intensively used and more convenient for customers compared to the Plant’s system.

Furthermore, Flagler focused on the implementation of new steam engines and steamships to maximize the performance of his company.

In such a way, he managed to outpace his rival, since he got an opportunity to increase the speed of the transportation and comfort of passengers. This means that customers were more inclined to use of his company rather than services of the company owned by Plant.

Thus, taking into account all above mentioned, it is possible to conclude that the development of business by Flagler and Plant was accompanied by the ongoing competition between their companies. In this competitive struggle, Flagler proved to be more successful, due to the more effective use of the potential of his network. Through the optimization of his network by means of connections, he managed to increase the amount of customers and, therefore, company’s revenues, while Plant fail to keep Flagler’s pace, even though his company was more geographically extended and had more steamships. In such a way, the intensiveness of the use of the network by Flagler was one of the key factors leading him to success. This competitive advantage was consistently backed up by the wide implementation of innovations, such as new steam engines and steamships which increased the efficiency of his company and improved its market performance, while Plant’s company needed more funds for restructuring and renovation of its steamships and steam engines.

Posted in Free essays | Tagged | Leave a comment

Leave a comment

Your email address will not be published. Required fields are marked *





0 Comments