- Research Feature
- Read Time: 25 min
In a world of commoditized products, companies are turning to service offerings for growth. The key to success involves redefining markets in terms of customer activities and outcomes, not products and services.
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Growth is not perpetual, and its continued pursuit can be costly, especially for large, mature companies. Instead, say the authors, smart managers should acknowledge the natural limits of their company‘s path to growth and consider viable alternatives.
For many years, when it came to setting goals, organizations took a top-down approach. It made sense: Goal setting requires information of the sort only top-level managers had, and it was their job to make the calls and pass them along to the lower levels of the company.
Venture capital has dried up. Business pages report on getting back to basics. It has even become fashionable to snicker about the foolish mass hallucination of the New Economy. Anyone with a new idea in a corporation is being told “cost cutting is our focus right now.&
Managers typically think that the competitive pressure their companies experience is solely the result of the behavior of their rivals. But, by mapping the system of pressures in which they operate, they can make the optimal choice of competitors, allies and markets to gain superior strategic influence over the evolution of their industry and their organization”s role in it.
Risk has been a top-of-mind consideration since September 11, but corporations are also concerned with less catastrophic forms of risk: customer credit problems, labor strikes, changes in market acceptance or energy prices — any type of uncertainty that could cause their businesses to stray from plan.
Global companies today are struggling with a Catch-22. On one side is the legacy of the 1990s, when investors became accustomed to double-digit annual growth.
No enterprise can out-innovate all potential competitors, suppliers and external knowledge sources. Knowledge frontiers are moving too fast. In almost every major discipline, up to 90% of relevant knowledge has appeared in the last 15 years.
The external environment dictates to a great degree whether competition or cooperation is the preferred road.
You would think that a company like Intel, which in 2001 provided nearly 85% of the microprocessors for personal computers, would feel relatively secure. But companies holding the keys to popular technology don’t live in a vacuum.
Using the metaphor of improvisational theater, the author lays out six elements of strategic improvisation that executives can apply to transform their organizations into experimental arenas. Companies that engage in such continual improvisation are better equipped to explore highly threatening disruptive technologies and embrace radical change.
Some of the greatest failings of strategic management, the authors say, occur when managers take one point of view too seriously. Ideas and practices that originate from collaborative contacts between organizations, from competition and confrontation, from recasting of the old, and from the sheer creativity of managers are driving the evolution of strategic management today.
On the basis of research into 100 enterprises, the authors developed a helpful strategic tool, the Delta Model. Companies using the framework define strategic positions that reflect new sources of profitability, align the strategic options with their activities, and establish processes that adapt well to change. The researchers outline practical mechanisms for obtaining feedback from the adaptive processes, and they offer critical metrics to track performance.
Scholars and observers from disciplines as disparate as sociology, economics, and management science agree that a transformation has occurred — knowledge is at center stage.1 Knowledge is information combined with experience, context, interpretation, and reflection.
While outsourcing might be attractive for some parts of a value center, it is not a substitute for crafting a strategy to leverage IT resources for business success. An effective strategy framework recognizes four interdependent sources of value from IT resources and the approaches for managing each source.
Much has been written in recent years about flexible factories and flexible manufacturing systems (FMS), but the literature has been largely theoretical; managers who are interested in making their factories more flexible have little empirical research on which to base their decisions.
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