Global comPetition is not just product versus product or company versus company. It is mind-set versus mind-set. Driven to understand the dynamics of competition, we have learned a lot about what makes one company mor...
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Global comPetition is not just product versus product or company versus company. It is mind-set versus mind-set. Driven to understand the dynamics of competition, we have learned a lot about what makes one company more successful than another. But to find the root of comPetitiveness-to understand why some companies create new forms of competitive advantage while others watch and follow - we must look at strategic mind-sets. For many managers, ''being strategic'' means pursuing opportunities that fit the company's resources. This approach is not wrong, Gary Hamel and C.K. Prahalad contend, but it obscures an approach in which ''stretch'' supplements fit and being strategic means creating a chasm between ambition and resources. Toyota, CNN, British Airways, Sony, and others all displaced competitors with stronger reputations and deeper pockets. Their secret? In each case, the winner had greater ambition than its well-endowed rivals. Winners also find less resource-intensive WaYs of achieving their ambitious goals. This is where leverage complements the strategic allocation of resources. Managers at competitive companies can get a bigger bang for their buck in five basic ways: by concentrating resources around strategic goals;by accumulating resources more efficiently;by complementing one kind of resource with another;by conserving resources whenever they can;and by -covering resources from the marketplace as quickly as possible. As recent competitive battles hav, demonstrated, abundant resource, can't guarantee continued industry leadership. To contend with hungry rivals, managers must master the art of resource leverage and recognize that creating stretch - a gap between where a company is and where it wants to be - is the most important task they face.
Despite a flurry of activities aimed at serving customers better, few companies have systematically revamped their operations with customer loyalty in mind. Instead, most have adopted improvement programs ad hoc, and ...
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Despite a flurry of activities aimed at serving customers better, few companies have systematically revamped their operations with customer loyalty in mind. Instead, most have adopted improvement programs ad hoc, and paybacks haven't materialized. Building a highly loyal customer base must be integral to a company's basic business strategy. Loyalty leaders like MBNA credit cards are successful because they have designed their entire business systems around customer loyalty - a self-reinforcing system in which the company delivers superior value consistently and reinvents cash flows to find and keep high-quality customers and employees. The economic benefits of high customer loyalty are measurable. When a company consistently delivers superior value and wins customer loyalty, market share and revenues go up, and the cost of acquiring new customers goes down. The better economics mean the company can pay workers better, which sets off a whole chain of events. Increased pay boosts employee moral and commitment;as employees stay longer, their productivity goes up and training costs fall;employees' overall job satisfaction, combined with their experience, helps them serve customers better;and customers are then more inclined to stay loyal to the company. Finally, as the best customers and employees become part of the loyalty-based system, competitors are left to survive with less desirable customers and less talented employees. To compete on loyalty, a company must understand the relationships between customer retention and the other parts of the business - and be able to quantify the linkages between loyalty and profits. It involves rethinking and aligning four important aspects of the business: customers, product/service offering, employees, and measurement systems.
Strategic performance can be linked to shareholder value by measuring the positive spread between a company's return on capital employed and the cost of capital. If managers see a significant performance gap in th...
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Strategic performance can be linked to shareholder value by measuring the positive spread between a company's return on capital employed and the cost of capital. If managers see a significant performance gap in their spread, compared with that of a premier company, they should redefine their strategic goals.
As companies move through the stages of their corporate life cycle, many fail to adjust their sales model to meet new business requirements. This article illustrates that problem with a case study of a major telecommu...
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As companies move through the stages of their corporate life cycle, many fail to adjust their sales model to meet new business requirements. This article illustrates that problem with a case study of a major telecommunications organization and includes a three-step process that can be used during strategic planning and budgeting.
By recognizing its core competencies, a company can clearly define organizational boundaries and focus resources for maximum advantage. The authors outline an approach for identifying those competencies that can provi...
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By recognizing its core competencies, a company can clearly define organizational boundaries and focus resources for maximum advantage. The authors outline an approach for identifying those competencies that can provide a company with the best chance to achieve long-term competitive advantage.
Some assumptions of planners are no longer valid, and the tools they use to formulate strategy may need updating. The author investigates those assumptions and suggests a few techniques to supplement a planner's t...
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Motorola, Northern Telecom, Federal Express, and Cintas have reaped the benefits of implementing quality-oriented strategies. While other forms of competitive advantage are either short-lived or can be quickly duplica...
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Motorola, Northern Telecom, Federal Express, and Cintas have reaped the benefits of implementing quality-oriented strategies. While other forms of competitive advantage are either short-lived or can be quickly duplicated, these firms have shown that only companywide quality is virtually unassailable.
This article describes a case history of strategic planning, learning and change within a major division of Dowty plc. At Dowty CASE, a telecommunications company, the management team used strategic planning as a stru...
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This article describes a case history of strategic planning, learning and change within a major division of Dowty plc. At Dowty CASE, a telecommunications company, the management team used strategic planning as a structured learning process to generate strategic change. There are many lessons which academics and practitioners alike can learn from this case of strategic planning and change in action.
The concept of 'strategic options' has become firmly established in recent years--this regards choices such as 'organic growth', acquisition, merger, and so on. This paper explores one such route forwa...
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The concept of 'strategic options' has become firmly established in recent years--this regards choices such as 'organic growth', acquisition, merger, and so on. This paper explores one such route forward, the option of joint-ventures. The examination is undertaken within a framework that considers market structures and the pressures for change. Initial sections introduce a form of analysis based upon the work of Michael Porter. This is used to suggest how and why joint-ventures and other alliances are attractive. Later discussion considers some of the practical considerations when setting-up a joint-venture.
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