I think Schwinn's response to changing market dynamics is typical of companies that dominated their market at one time, but that same dominance also either made them lax, or unable to adapt to the changing market conditions.
Baldwin Locomotive Works built more steam locomotives than any other company worldwide. When diesel locomotives entered the scene, Baldwin produced diesels as well; but did so using the same market strategy they used in the steam era; and custom built each offering to the buyer’s specification. The Electromotive Division of General Motors turned out carbon copy diesels that they offered to everyone, and offered great financing to boot. Baldwin became the first of the big steam locomotive builders to close shop.
IBM had a lock on the mainframe computer market, and looked down on the personal computer market; outsourcing all of the parts, and buying the operating system (PC-DOS) from Microsoft. But others quickly realized that they could buy the same parts and offer the same computer for much less; Microsoft was all too happy to sell them an operating system as well (MS-DOS.) IBM responded by developing what was supposed to be a superior, but proprietary system in house (The PS/2 computer and OS/2 operating system); the market rejected them both. IBM managed to refocus on corporate solutions with midrange and mainframe computers and software, but completely abandoned the personal computer market after these two failures.
General Motors. Need I say more….
