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In the B2B platform economy, companies are looking beyond just selling products and are building platforms that enable others — customers, suppliers, and partners — to create value.
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The Spring 2019 issue of MIT SMR takes a close look at market evolution and growth. Does a disruptive industry’s success necessarily come at the expense of another entity? Or are there mechanisms to business growth that can expand opportunities without (necessarily) spelling doom to existing systems?
Many people have come to view disruption as a synonym for innovation. This single-minded focus leads companies to overlook an alternative path to growth: the nondisruptive creation of brand-new markets where none existed before. It’s time to embrace the idea that companies can create without destroying — and expand the conversation about the problems they can solve and the opportunities they can seize.
Companies aspiring to organic growth leadership in their industries should start with a coherent, affirming innovation narrative and reinforce it with action. The authors tested 18 well-known innovation levers and identified the four that organic growth leaders use most to stay ahead of competitors: (1) invest in innovation talent, (2) encourage prudent risk-taking, (3) adopt a customer-centric innovation process, and (4) align metrics and recognition with innovation activity.
The biggest consumer goods companies shell out more than $1 billion a year for R&D but lately have seen no appreciable impact on their sales. That’s troubling for companies whose growth has leveled off in recent years. In contrast, some smaller competitors that spend less on R&D — but do so more shrewdly — have seen a significant boost in sales.
MIT Sloan Management Review and Google’s new cross-industry survey about key performance indicators (KPIs) asked senior executives to explain how they and their organizations are using KPIs in the digital era. The results shed light on the challenges and emerging opportunities companies face when using KPIs, demonstrate the many ways advanced use of KPIs can benefit organizations, and offer steps executives can take to make the most of KPIs going forward.
Less than 5% of companies are using AI to reinvent how they do business, but the competitive intensity surrounding the technology suggests that a wait-and-see strategy could be a costly mistake. To get a share of the global profit pool of $1 trillion that AI will produce by 2030, the McKinsey Global Institute says companies should begin adopting it at scale within the next three years.
When a corporate culture is designed not just to encourage innovation but to systematically nurture employee ideas, the results are dramatic: The companies that have the greatest level of participation have the best ideas. They’ve also got the strongest profit growth. All this stems from a culture that recognizes that effective innovations can come from anyone, at any level in the organization.
The worldwide population of seniors is growing rapidly. So why are tech companies ignoring them? An excerpt from The Longevity Economy highlights the opportunities in catering to older adults.
Many of today’s most successful companies are able to leverage business model scalability to achieve profitable growth. Executives need to factor scalability attributes into their business model design or they risk being left behind.
Although traditional financial services companies now offer mass-market financial advice via “robo-advisers,” average U.S. customers seeking investment advice are still underserved — and platform-based digital powerhouses like Amazon are taking notice.
Many companies today are operating several business models at once. But despite the potential that business model diversification has for generating growth and profit, executives need to carefully assess the strategic contributions of each element of their business model portfolio.
Despite India’s economic growth, many foreign companies have found it difficult to make money selling there. But a number of companies have found a winning strategy that involves weaving together local and global value chains.
Innovation, much like marketing and human resources, can be made less reliant on artful intuition by using information in new ways. But this requires a change in perspective: We need to view innovation not as the product of luck or extraordinary vision but as the result of a deliberate search process.
Even as multinationals struggle to make inroads in emerging markets, companies from those markets are finding ways to compete in Europe and the U.S. A case in point is Huawei, a Chinese telecommunications company, which has used strategic partnerships to gain ground in Europe. Huawei’s overseas expansion closely resembles the strategy the company used to build its position in China: Start at the perimeter and work toward the center.
Globalization offers significant opportunities, yet most companies approach key decisions haphazardly. Although the complexity of globalization means managers rarely can fully analyze a global business opportunity before they need to act, the basic tensions in global business models are straightforward. A simple analysis of global ventures along these dimensions can help entrepreneurs develop clearer expectations and decision-making processes.
The next generation of business executives will face a choice: What kind of companies do they want to lead? Organizations that will treat most employees as costs to be minimized — or ones where both employees and the company prosper together? So-called “high-road” companies begin with different values and assumptions about the workplace. But few MBAs are learning about high-road strategies in their courses, and they don’t learn that they will have distinct choices in how to compete.
That ideas can go viral is now a given in corporate marketing. But new research suggests the term “viral” marketing does not describe well what happens in the market.
Sharad Goel, senior researcher at Microsoft Research, and fellow researchers wanted to see whether messages spread via social networks virally, “like the common cold, some sort of biological contagion. One person gets infected and their friend gets infected and a friend of their friend gets infected.”
That wasn’t what Goel found.
It’s difficult to start a venture that gains traction with paying customers, but it’s even harder to grow beyond certain levels of sales. The original business model must deal with new products or markets. Early leadership behaviors are often no longer viable. Moreover, different customers come with different transaction costs for the seller. This article discusses the importance of customer selection and how intelligent opportunity management can help companies scale their selling initiatives.
Today, the task of the global strategist involves not only identifying where to leverage a company’s strength but also how to enhance and renew its capabilities. The experience of many global companies suggests that expensive mistakes are often made when companies don’t ask key questions before making internationalization decisions. By better understanding their own competitive advantages and how they might fit into or complement a new market, companies can improve their chances of success.
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