Strategy

Image courtesy of Wal-Mart.

Rebuilding the Relationship Between Manufacturers and Retailers

In the tug of war between manufacturers and retailers, retailers seem to be winning. Retailers control market access and influence consumer behavior. Their power has moved downstream. What can be done to improve the situation? While manufacturers are locked into fixed investments and products with long payback cycles, retailers have a variety of ways of making money. This article explores how manufacturers can benefit by tailoring their approaches to a retailer’s specific business model.

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The Messy Business of Management

In a period of rapid technological and business change, successful executives particularly need the ability to think critically — and to be aware that some of their most cherished assumptions may, at any point, be challenged or invalidated by changing events. Business schools excel at teaching young managers well-structured models, theories and frameworks but need to spend more time helping their students surface, debate and test the assumptions underlying each model, theory or framework.

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Making Mergers Work

For organizations to achieve the psychological synergies required to realize economic synergies from mergers and acquisitions, executives need to attend to a more complex set of identity issues. These issues define the essence of the entity and give employees a clear answer to the question “Who are we?” and external stakeholders a clear answer to the question “Who are they?” Left unattended, these identity issues will diminish engagement and will affect the performance of the merged entity.

Image courtesy of Kyocera.

Amoeba Management: Lessons From Japan’s Kyocera

A persistent challenge for companies as they grow is how to maintain the high level of dynamism and employee commitment that drove success in the early days. Over the years, thoughtful managers and management theorists have formulated many approaches for dealing with the problem, all aimed at giving managers and employees more responsibility and accountability for the performance of their own profit centers. But few companies have taken things as far as Kyocera Corp.

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In Defense of Delay

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A new book, “Wait: The Art and Science of Delay,” argues that while snap decisions can be important in times of danger, our brains need time to assess other factors and resist what economists call “present bias.”

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Dethroning an Established Platform

Increasing numbers of companies, whether providing hardware devices, traditional software or software in the cloud, are trying to become platform masters by releasing application programming interfaces that allow others to build software and hardware products or complementary services on top of their offerings.

But what can you do when a competitor has already established a leading platform? Learn from Apple’s iPhone, Google’s Gmail and Facebook — and how they overtook earlier market leaders.

Image courtesy of Amazon.

Creating Value Through Business Model Innovation

Companies are increasingly turning toward business model innovation as an alternative or complement to product or process innovation. Changes to business model design can be subtle; even when they might not have the potential to disrupt an industry, they can still yield important benefits to the innovator. The article offers a number of examples of business model innovation and poses six questions for executives to consider when thinking about business model innovation.

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Achieving Successful Strategic Transformation

Companies that are able to radically change their entrenched ways of doing things and then reclaim leading positions in their industries are the exception rather than the rule. Even less common are companies able to anticipate a new set of requirements and mobilize the internal and external resources necessary to meet them. The article focuses on three companies that transformed themselves and compares them with three other companies from similar industries that hadn’t been required to make a dramatic shift.

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How to Identify New Business Models

Companies traditionally pursue growth by investing heavily in product development so they can produce new and better offerings; by developing consumer insights so they can satisfy customers’ needs; or by making acquisitions and expanding into new markets. This article identifies a fourth method: “business model experimentation,” or using thought experiments to quickly and inexpensively examine new business model possibilities.

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Why Dominant Companies Are Vulnerable

Research has shown that several factors influence a company’s ability to retain market leadership. However, one factor has largely been ignored: the psychological forces that drive decisions consumers make and, specifically, the degree to which people feel they have choices. Once people have learned a company’s technology interface, they become more efficient using that interface and are often reluctant to switch to products requiring new skills or allowing limited transfer of current skills.

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Gaining a New Understanding of Risk

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In these days of uncertain markets – and an uncertain economy – risk can seem almost omnipresent. But how do you manage risk prudently – yet still grow your company? Harvard Business School professor Robert S. Kaplan began exploring risk management in the wake of the 2008 financial crisis, after he saw venerable firms such as Lehman Brothers and Bear Stearns collapse – despite having risk management functions. Here are a few of his insights on the topic of risk management.

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Should You Have a Global Strategy?

Senior executives weighing strategies appropriate for today’s global economy will hear contradictory advice. Some say you need to move quickly, before competitors, to establish a worldwide presence; others cite data showing that this approach is often less profitable. The reality is that neither approach is appropriate for every circumstance. Therefore, executives need to understand when to pursue one route and when to pursue the other.

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Which Strategy When?

Markets are changing, competition is shifting and businesses are suffering or perhaps thriving. Whatever the immediate circumstances, corporate managers ask the same questions: Where do we go from here, and which strategy will get us there? To figure out when it makes sense to pursue strategies of position, leverage or opportunity, managers must understand their company’s immediate circumstances, take stock of their current resources and determine the relationships among the various resources.

Michael A. Cusumano, professor of management, MIT Sloan School of Management

How to Innovate When Platforms Won’t Stop Moving

In this interview, MIT Sloan School of Management professor of management Michael Cusumano discusses traits that will help companies through disruptive transitions. One trait is agility, which has four principles: capabilities rather than strategy; pull rather than push concepts; economies of scope rather than scale; and an emphasis on flexibility rather than efficiency. A second trait is deep, differentiating capabilities, which can be found in processes (such as supply-chain management).

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The Business Models Investors Prefer

Why are investors so bullish on companies like Apple and Disney? Is it metrics, management, industry prowess, good investor relations or good timing? Probably all of these. But something else may be at work, too. According to research conducted at the MIT Sloan School of Management, the stock market consistently values certain types of business models more highly than others. In recent years, investors have favored models focused on intellectual property and highly innovative manufacturing.

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