tag:blogger.com,1999:blog-83303757726213606482024-02-29T21:41:24.200-08:00Build Your Personal BrandManaging Yourself as a Brand should be the focus to become a superior human being. Your image to the external world should be a reflection of your true self , and that Image should possess appeal. Your inner strength , uniqueness , talent & potential , manifest in ways in which impact is created where ever you go , whatever you do , whoever you are with ...... even if you do nothing , it can still create ripples of energy. Make yourself what YOU Should Be.Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.comBlogger59125tag:blogger.com,1999:blog-8330375772621360648.post-46294712647516878382023-10-30T02:19:00.000-07:002023-10-30T02:19:10.944-07:00Make In India iPhones .... a historical initiative <p> <a href="https://www.msn.com/en-in/autos/news/tata-group-to-become-first-indian-iphone-maker-as-it-gets-ready-to-take-over-wistron-plant/ar-AA1iWxIp?ocid=msedgntp&cvid=dcca87879a704c0ab7e192632073fc0a&ei=10">Tata Group to become first Indian iPhone maker as it gets ready to take over Wistron plant (msn.com)</a></p>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-79942065953528286652023-07-04T05:25:00.003-07:002023-07-04T05:25:49.457-07:00<p> <a href="https://hbr.org/2023/06/does-your-company-have-an-india-strategy" target="_blank">https://hbr.org/2023/06/does-your-company-have-an-india-strategy</a></p>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-91870210698095222152023-06-30T11:31:00.002-07:002023-06-30T11:31:30.819-07:00Reinventing the Maharaja<p><a href="https://m.economictimes.com/industry/transportation/airlines-/-aviation/is-air-india-retiring-its-maharaja-the-aging-mascot-hits-a-crossroads/articleshow/101381142.cms" target="_blank">https://m.economictimes.com/industry/transportation/airlines-/-aviation/is-air-india-retiring-its-maharaja-the-aging-mascot-hits-a-crossroads/articleshow/101381142.cms</a> </p>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-58896769958460548072023-06-29T12:10:00.003-07:002023-06-29T12:10:59.834-07:00Youngest Billionaire Today... <p><a href="https://zeenews.india.com/companies/next-elon-musk-worlds-youngest-billionaire-alexandr-wang-a-college-dropout-who-used-to-make-piles-of-notes-at-the-age-of-19-had-a-net-worth-rs-60000-crore-2628061.html" target="_blank">https://zeenews.india.com/companies/next-elon-musk-worlds-youngest-billionaire-alexandr-wang-a-college-dropout-who-used-to-make-piles-of-notes-at-the-age-of-19-had-a-net-worth-rs-60000-crore-2628061.html</a> </p>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com1tag:blogger.com,1999:blog-8330375772621360648.post-78057584032522973942023-06-24T00:20:00.002-07:002023-06-24T00:20:29.616-07:00Sunder Pichai unveils his plan for India in his meeting with PM Modi<p><a href="https://www.cnbctv18.com/business/companies/google-sundar-pichai-unveils-plans-fintech-hub-gift-city-gujarat-17029411.htm">https://www.cnbctv18.com/business/companies/google-sundar-pichai-unveils-plans-fintech-hub-gift-city-gujarat-17029411.htm</a> </p>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-12969833245453830032023-06-16T02:05:00.000-07:002023-06-16T02:05:01.695-07:00A new acquisition by Unilever<p><a href="https://youtube.com/@jamsheddarasha1837">https://youtube.com/@jamsheddarasha1837</a> </p>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-37567496274688518752023-06-13T02:13:00.000-07:002023-06-13T02:13:10.115-07:00And on the other hand Sunder Pichai as a word of praise for Apple Vision Pro <p><a href="https://www.msn.com/en-in/lifestyle/shopping/apple-vision-pro-has-a-new-fan-and-it-is-none-other-than-google-ceo-sundar-pichai/ar-AA1ct7rz?ocid=msedgntp&cvid=33b19d728dec47cc99fefdbefe0a7012&ei=21">https://www.msn.com/en-in/lifestyle/shopping/apple-vision-pro-has-a-new-fan-and-it-is-none-other-than-google-ceo-sundar-pichai/ar-AA1ct7rz?ocid=msedgntp&cvid=33b19d728dec47cc99fefdbefe0a7012&ei=21</a> </p>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-35162983825729636812023-06-12T23:26:00.000-07:002023-06-12T23:26:39.585-07:00Brand Valuation -a great post by Wallstreetmojo. <p> <a href="https://www.wallstreetmojo.com/brand-valuation/" rel="">Brand Valuation - What Is It, Methods, Examples, Advantages (wallstreetmojo.com)</a></p>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-54956280835519981292023-06-12T23:16:00.001-07:002023-06-12T23:16:41.925-07:00Competition on Mixed Reality Head Sets - Meta to Apple <p><a href="https://www.bing.com/videos/riverview/relatedvideo?q=mark+zuckerberg&mid=3C8C46851AF6B26686743C8C46851AF6B2668674" rel="" target="_blank">https://www.bing.com/videos/riverview/relatedvideo?q=mark+zuckerberg&mid=3C8C46851AF6B26686743C8C46851AF6B2668674</a> </p>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-76081980528729671452020-05-03T10:17:00.000-07:002020-05-03T10:17:04.998-07:00Personal branding is about leadership<div dir="ltr" style="text-align: left;" trbidi="on">
https://youtu.be/RzKajy6WaBs</div>
Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-68045119786245599092020-04-29T23:40:00.002-07:002020-04-29T23:41:15.915-07:00Steve Jobs at the Stanford University - stay hungry stay foolish <div dir="ltr" style="text-align: left;" trbidi="on">
<a href="https://www.youtube.com/watch?v=UF8uR6Z6KLc&feature=youtu.be" target="_blank">https://www.youtube.com/watch?v=UF8uR6Z6KLc&feature=youtu.be</a><br />
<br /></div>
Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-11603938516644365242020-04-25T00:26:00.001-07:002020-04-25T00:26:24.191-07:00Marketing 4.0: Moving from Traditional to Digital<iframe allowfullscreen="" frameborder="0" height="270" src="https://www.youtube.com/embed/AHu2mPYJAfw" width="480"></iframe>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-61633473454424677322020-04-25T00:23:00.001-07:002020-04-25T00:23:09.600-07:00What you need to know from the book marketing 4.0 from Philip Kotler in ...<iframe allowfullscreen="" frameborder="0" height="270" src="https://www.youtube.com/embed/t9o20TIz_t4" width="480"></iframe>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-21404228411747724982020-04-24T23:42:00.001-07:002020-04-24T23:42:58.109-07:00Philip Kotler: Marketing<iframe allowfullscreen="" frameborder="0" height="270" src="https://www.youtube.com/embed/sR-qL7QdVZQ" width="480"></iframe>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-64485297443200295262020-04-09T00:47:00.000-07:002020-04-09T00:54:39.771-07:00MBA I & 2 - Leadership in Organizations during crises <div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoListParagraph" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
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<span style="font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">Just click on 'leadership and it will take you to the site </span><br />
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<span style="font-family: "calibri" , "sans-serif"; font-size: 11.0pt; line-height: 115%;">1 . <a href="https://economictimes.indiatimes.com/small-biz/hr-leadership/leadership/micromanagement-in-the-times-of-crisis-preparing-for-the-covid-19-threat-in-the-workplace/articleshow/74859172.cms?from=mdr" rel="nofollow" target="_blank">leadership 2</a></span></div>
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Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-767100404451074762020-02-13T02:43:00.001-08:002020-02-13T02:43:57.496-08:00BYPB See Light!!<iframe allowfullscreen="" frameborder="0" height="270" src="https://www.youtube.com/embed/Bf-pfj12EcQ" width="480"></iframe>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-1327447393933951752019-09-03T00:27:00.001-07:002019-09-03T00:27:26.966-07:00Organization Capabilities - Excellent paper<div dir="ltr" style="text-align: left;" trbidi="on">
THE PLACE OF ORGANISATIONAL CAPABILITIES IN
STRATEGY FORMULATION AND IMPLEMENTATION: AN
EXPLORATORY ANALYSIS
JULIANA B. AKAEGBU AND A. A. USORO
(Received 15 May 2017; Revision Accepted 7 July 2017)
ABSTRACT
One of the most difficult things to do when venturing on a project or strategy, is how to start it. To
implement a strategy is to change an organization or its processes of thinking, its processes of structure
and its process of culture. Literature abound that one way or another has enunciated the benefits to be
derived from maximizing organizational capability as a means of achieving competitive advantage.
However, there is very little research done on the role capabilities play in the formulation and
implementation of strategy. It is hereby pertinent to know that in order to implement a strategy, one
needs to positively change and effectively feed his/her capabilities. The paper therefore seeks to explore
extensively what capability and strategy are all about. It adopts the methodology of documentary
analysis of relevant literature, making the research process exploratory and expository. The paper finds
that there are nine stipulated steps in the process of formulating a strategy; the five essential capabilities
and three levels of strategy were also noted. The need for organizational capability was emphatically
emphasized, as well as, its place in strategy implementation. The paper therefore recommends amongst
other things, that organization do periodic organizational capability audit in order to be always proactive
enough to meet its goals and objectives and hence achieve competitive advantage.
KEYWORDS: Organisational capabilities, strategies, innovation and competitive advantage.
INTRODUCTION
Strategic issues are difficult to manage
because of the subjectivity involved in their
direction and diagnosis. The market for strategic
issues in organization has to be made explicit
and expressive. The level of capability goes a
long way to help achieve this. Strategies are best
driven by the organizational capabilities. They
serve as the vehicles for translating individual
concerns into organizational actions. Veskaisri,
Chan and Pollard (2007) posit that, without a
clearly defined strategy, a business will have no
sustainable basis for creating and maintaining a
competitive advantage in the industry where it
operates.
As businesses compete with one another
for customers, market share and revenue, they
employ tactics according to deliberate strategies.
The process of shaping strategies and putting
them into action is the responsibility of a business
leadership. However, not all businesses have the
same advantages when it comes to developing
and employing strategy. An organization’s
competitive position is enabled by its ability to
perform at a high level in differentiated ways, in
short, its strategic success is enabled by
distinctive organizational capabilities.
Organisational capability is simply conceptualised
as a business's ability to successfully utilise
competitive strategies to survive and increase it
value in an industry.
In today’s dynamic world, we face the
ongoing need to identify and develop new
capabilities to respond to changing customer
demands to competitive threats. Failing to do so
can put an organization at risk of becoming
obsolete. With the emergence of the knowledge
39
Juliana B. Akaegbu, Department of Business Management, Faculty of Management Sciences,
University of Calabar, Calabar, Nigeria.
A. A. Usoro, Department of Business Management, Faculty of Management Sciences, University of
Calabar, Calabar, Nigeria.
era, it has become widely recognized that the
intangible assets of an enterprise will be key to
both its ability to create competitive advantage
and to grow at an accelerated pace.
Organization exist as the vehicle through
which resources are transformed into outputs,
delivered to the necessary channels and desired
goals and objectives achieved. However we look
at it, we all need organization, at one point or
another. There is therefore, this constant need to
attend to the needs and demands of the
customers. This can only be made possible when
the capabilities of the organization are effectively
and efficiently matched with the strategy in
operation. Not much has been done in this
direction, as to aid the appreciation of such
capabilities in the life of an organization. This
paper would contribute in filling this gap and
foster proper understanding of the need to
recognize the different capabilities that drive
organisation's competitive advantage.
This research work examines the place
of capabilities in strategy. The work is driven out
of the desire to ascertain why organizational
capabilities are not well appreciated in the
formulation and implementation processes of
strategy in organizations. This research is
significant in numerous ways, it would bring to
focus how organizational capabilities can be
integrated into strategy processes in order to
sustain and further improve effectiveness and
efficiency. It would broaden our knowledge and
increase our understanding regarding the subject
under study base on the indebt literature
expositions carried out. The content and context
of organizational capabilities would be better
appreciated to further improve on organizational
productivity, through adequate utilization of the
skills and experiences of employees. The
research work would also serve as a medium of
advancing the frontiers of knowledge for future
researchers on the subject.
This paper adopts the methodology of
documentary analysis of current literature which
enhances critical and contextual examination of
issues. Understanding how strategies are
formulated and executed is of serious concern
both to the people and the organization at large
and as such attracts a plethora of scholarly
commentaries. The paper therefore employs an
exploratory and narrative methodology where
critical review of existing puny literature was
carried out. From the foregoing, the objective of
this paper is to determine the place of capabilities
(organizational or strategic) in the formulation
and implementation of the strategic process.
The paper is therefore divided into five
sections. The first section deals with the
introduction, statement of the problem,
significance of the study and methodology. The
literature review which deals with the concepts of
strategy, organizational capabilities and
competitive strategy is presented in section two.
Section three states the theoretical framework,
the resource-based theory, and this is followed by
section four as conclusion. Section five which is
the last section outlines the recommendations.
2.0 LITERATURE REVIEW
2.1 Organizational capabilities
This is simply the ability to perform or
achieve certain actions or outcomes. These refer
to a business's ability to successfully employ
competitive strategies that allow it to survive and
increase its value, overtime. They focus on the
organization’s assets, resources and market
position, projecting how well it will be able to
employ strategies in the future. There is no single
method or universal metric for measuring or
noting capabilities.
According to Smallwood and Ulrich
(2004) organizational capabilities emerge when a
company delivers on the combined competencies
and abilities of its individuals. Organisational
capabilities enable a company to turn its
technical know-how into results. The ability of an
enterprise to operate its day to day business as
well as grow, adapt, and seek competitive
advantage in the market place. The notion of
capability has been extended into that of dynamic
capabilities (Eisenhardt & Martin, 2000).
If organization wants to improve its
strategy execution rate, the first place to start is
to agree on what really constitutes organizational
capabilities. Capabilities comprise the ability and
capacity of an organization expressed in terms of
its human resources (quality, number, skills and
experience), physical and material resources
(machines, land, buildings), financial resources
(money and credit), information resources (pool
of knowledge, databases) and intellectual
resources (copyrights, designs and patents etc).
According to Gill and Delahaye (n.d.)
organizational capability is defined as the
embodied knowledge set that supports
competitive advantage through innovation and
flexibility gained by building alignment between
the expertise of the individuals in the workforce.
Kelchner (2016) sees organizational capability as
the company’s ability to manage resources, such
40 JULIANA B. AKAEGBU AND A. A. USORO
as employees, effectively to gain an advantage
over competitors. The company’s organizational
capability must focus on the business ability to
meet customer's demand.
In a bid to articulate the capabilities
required to create new opportunity to which
financial capital can be applied, one must ensure
that capabilities move to the centre of the
organisation’s strategic planning framework. The
objectives, responses and business models of
the enterprise can best be calibrated on the basis
of the capabilities of the organization. The pace
at which an organization can grow is, in large
part, determined by the speed at which it can
generate and configure its capabilities in
response to challenges encountered in that
changing market place. This is further explained
in the capability dimension model presented
below in Figure 1.
The rapid shift of customer preferences
and market trends imposes a need for the
acquisition of capabilities at an equally
accelerated pace. Each competitor aims to shape
the market to its strength in order to achieve a
preeminent position. Organizational capabilities,
according to Kelchner (2016) need to be unique
to the organization to prevent application by
competitors. Organizational capability plays an
enormous role in the strategy of an organization:
it aids in achieving strategic competitive
advantage. This can be seen when an
organization creates new capabilities and
develop existing ones, they tend to maintain
advantage over competition.
- There would be improved customer
relationships which would in turn ensure
continued growth in the market. The
relationship between organization and its
customers, as an organizational
capability, affects sales, loyalty and
reputation in the future business.
- Maintaining a talented workplace is an
organizational capability that ensures
they have the resources to improve
continuously.
The capabilities an organization
possesses would drive the attainment of its
strategic plan. The different levels of strategy,
directly or indirectly need the effective application
of organizational capabilities in order to make a
head way. Strategic plans provide guidance for
the preparation of functional plans and business
budget (Butuner, 2016). Functional strategic
plans help in implementation by organising and
activating specific units of the business strategy
(marketing, finance, production, etc) in order to
pursue the business strategy in daily activities.
THE PLACE OF ORGANISATIONAL CAPABILITIES IN STRATEGY FORMULATION AND IMPLEMENTATION 41
2.1.1 Capability dimension model
FIG. 1: Capability dimension model
Source: Authors’ Conceptualized Model (2017)
This model shows some of the building
blocks that, as an integrated set, serves as the
foundation of an organizational capability. These
elements can be helpful for execution to keep in
mind when considering adapting or building
capabilities needed to support company’s
strategy. Organizational capabilities transcend
through the talents of the people in the
organization, the mission (personal and
collective) of the people and the insights they
derive, being integrated into the existing
technological processes as well as mode of
operation in the system. The talents (skills and
abilities) of an employee need to be first
discovered, in other to be groomed to suit the
best job role. The personal mission of the people
needs to align with the general mission of the
organization for productivity to be achieved. The
capacity of the software and hardware needs to
be in line with the capabilities of the people in the
organization for efficient and effective purposes.
Integration could come in form of training,
workshops, technical exploration by either an inhouse expert or an out-sourced consultant. This
would create a balance in understanding the
processes and activities of the job to be carried
out. All the variables in the model are
interconnected and working together to achieve a
ORGANIZATIONAL CAPABILITY DIMENSIONS
TALENTS
Skills
Incentive
Workforce planning
that enable an optimal
talent base to execute
capability
MISSION
The process of a
capability, how it will
operate and what it will
deliver
The mission is
delivered directly from
the company strategy
INSIGHTS
The information
analytics and decision
flow that drive more
informed and timely
decisions making
INTEGRATION
Clear roles, decision
rights and policies
that inform the
organizational
structure
PROCESS
An integrated set of
processes and
activities to achieve
a desired outcome
TECHNOLOGY
The technologies (software
and hardware capacity)
42 JULIANA B. AKAEGBU AND A. A. USORO
capability synergy in the strategy formulation and
implementation process of an organization.
2.1.2 The significance of capability
It is seen as a major component in
remaining financially viable and growing despite
the presence of competition in a free market.
Many people tend to track strategic capability by
trying to invest their money into businesses with
reasonable chances of future success and
growth. Employees do so in order to identify
businesses that are stable and likely to go under
or those that need to cut costs through layoffs.
Business leaders on the one part, track it not only
for their own companies but also for competitors
to better understand the markets in which they
operate. Also, financial analysts and government
regulatory agencies on the other part, have
interests in strategic capabilities since these play
a role on how they value and monitor businesses.
Companies can improve on this track
record by paying greater attention to the
capabilities they need to successfully implement
their strategy. Doing so, starts with understanding
exactly what capabilities are and what they are
not, as well as determining which capabilities are
strategic i.e., are vital to the effective execution of
a particular strategy which are core to
competitive performance and which are
fundamental abilities that a company must have
to be a viable competitor. It also involves defining
these capabilities, especially strategic ones, at a
much fine level of detail to make it clear what the
organization is hoping to accomplish with them.
2.1.3 Five essential capabilities for
organizational success
Leadership: Silva (2016) sees
leadership as easily effective if only it achieves its
desired results. According to Bennis and
Townsend (1995) leadership is the capacity to
create a compelling vision and to translate vision
into organizational realities. This is often
perceived as a set of people at the top of the
organization but it is actually a skill that can and
should exist at every level. Leadership is the
capability to inspire and motivate people to fulfil a
mission. At the top of the organization, it includes
directing others while at lower levels, it is
accomplished through influencing others. Your
company’s leadership performance has a lot to
do with how much the organization can
accomplish in a given amount of time.
Collaboration: collaboration can
reinvigorate organization by fully engaging
employees, improving retention among them and
increasing innovation. Kelly (2015) sees
collaboration as a process with associated
behaviour that can be taught and developed. A
process governed by a set of norms and
behaviours that maximize individual contribution
while leveraging on the collective intelligence of
everyone involved. Collaboration is also seen as
a durable relationship that brings previously
separate organizations into a new structure with
commitment to a commonly defined mission,
structure, or planning effort (Perrault, McClelland,
Austin & Sipeppert, 2011). This is the ability to
work productively with others. At the low end of
performance, collaboration provides the ability to
effectively break down complex tasks and
distribute the parts across a group of people or
organisations. At higher levels of performance,
collaboration creates organizational synergy,
producing a performance boost where the whole
is greater than the sum of its parts. Some
organizations might require a higher degree of
collaboration than others but every organization
needs to collaborate at some level.
Adaptability: This refers to modification
and alteration in the organization and its
components in order to adjust to changes in the
external environment (Sirinthon & Phapruke,
2010). Adaptation, according to Dreyer and
Gronhaug (2004) is seen as an important
capability for survival and success. At no time in
our history has adaptability been so critical. It is
the organisation’s ability to give up the existing
skills, processes and technologies that have led
to its past success and create new skills and
approaches that ensure success tomorrow.
Organisations need to be adaptable just to
survive and highly adaptable if they expect to
thrive.
Creativity: Creativity is the creation of a
valuable, useful new product, service, idea,
procedure, or process by individuals working
together in a complex social system (Woodman,
Sawyer & Griffin, 1993). The problems we face
today are much more complex and time critical
than those of the past. They often cannot be
solved by brute force alone. Creativity describes
the organisation’s ability to think differently and
allow different thinking to influence day to day
and strategic decisions. At the low end of the
performance curve, organisations can be trapped
in tradition and best practices, unable to solve
persistent problems. At the high end, they are
THE PLACE OF ORGANISATIONAL CAPABILITIES IN STRATEGY FORMULATION AND IMPLEMENTATION 43
often challenged to prioritize among numerous
new ideas.
Innovation: This goes beyond creativity
to turning creative ideas into reality. Innovation
culture increases decision making
comprehensiveness via managerial activation
(Moham, Voss & Jimenez, 2017). It is the ability
to translate a good concept into a compelling
value proposition that others are willing to
support and invest in. In the same way that
national culture influences individuals’
behavioural dispositions, so also organizational
culture can activate one’s innovative skills. When
innovation ability is high, companies go beyond
innovative products to design innovative
processes, organizational structures,
management practices and employment
engagement approaches.
These five capabilities permeate the
entire organization and every individual
employee. Functional units can be established to
act as centres of excellence that support and
encourage the development of these capabilities,
but that is not where the value resides. Yet each
of these capabilities is essential for a high
performing organization.
2.2 Concept of strategy
There is no unified meaning as to what
strategy means. It is often used to refer to varying
number of things. It could be seen as a plan or
course of action or a set of decision rules making
a pattern or creating a common thread. It can
also be seen as the pattern or common thread
related to the organization’s activities which are
derived from the policies, objectives and goals.
Kazmi (2008) defines strategy as the
means to archiving objectives. It is seen as one
of the most significant concepts to have emerged
in the subject of management studies in the
recent past. To Andrews (1980), strategy is the
pattern of decision in a company that determines
and reveals its objectives, purposes or goals, and
defines the range of businesses the company is
to pursue, the kind of economic and human
organization it is or intends to be, and the nature
of the economic and the non-economic
contribution it intends to make to its
shareholders, employees, customers and
communities.
Strategies are business approaches to a
set of competitive moves that are designed to
generate a successful outcome (Rowe, 2008). It
is seen as the determination of the basic long
term goals and objectives of an enterprise, and
the adoption of courses of action and the
allocation of resources necessary for achieving
these goals. It is primarily referred to as the roadmap laid out by an organization to ensure that an
organization achieves the set targets in order to
sustain and grow in an increasing competitive
world. O’Regan, Sim and Gallear (2008) define
strategy as an organization's main path of
achieving overall corporate objectives and
fundamental strategic goals, which in return
create long term superior performance.
2.2.1 Competitive strategy
Since capability fosters competitive
advantage of a strategy, what then is competitive
strategy about? Porter (1986) believes that, in
considering competitive strategy, two main issues
have to be emphasized: industry attractiveness
and competitive position. Competitive strategy
must evolve from an understanding of the rules of
competition that determine an industry’s
attractiveness. Mohsenzadeh and Ahmadian
(2016) opine that competitive strategies mediate
production capabilities in an organization. The
ultimate goal of a firm’s competitive strategy is to
deal with or modify the rules to the advantage of
the firm. Porter (1986) outlines an industry as
having five competitive forces as – supplier
power, buyer/customer power, substitute threat,
exit/entry threat, and industry rivalry.
Kitching, Blackburn, Smallbone and
Dixon (2009) affirm that the main motive of
competitive strategy is to provide answers to two
fundamental questions – i.e., what is the
business doing, and how do firms compete in the
rapid changing environment? Organizations
adapt to environmental forces as they plan and
carry out strategic activities. Predicting changes
in the environment and acting proactively are all
indices of an organisation’s capabilities (Adeleke,
Ogundele & Oyenuga, 2008; Uvah, 2005).
Strategies should be capable of producing
intended results. Consistency of the strategy and
its components should be well emphasized the
need to gain competitive edge. This is why
Oghojafor (2000) asserts that any strategy that
does not provide a particular advantage to an
organization against its rivals should be
discarded.
2.2.2 Strategy formulation process
Formulating strategy requires sixth sense
and rational reasoning (Oyewobi, Windapo,
Cattel & Rotimi, n. d.). The need for proactive
thinking when formulating strategy is highly
44 JULIANA B. AKAEGBU AND A. A. USORO
emphasized in the works of Barney (2001) as
well as Priem & Butler (2001). The following are
the nine (9) steps taken at arriving at a welldefined strategy.
1. Formulating the company’s mission
including broad statements about mission
2. Conduct an analysis that reflects the
company’s internal conditions and
capabilities, i.e. trying to analyse those
things that are very strategic, that give
the firm advantage over others. The
essence of doing so, is to check
resources, personnel, etc, to know how
best to operate.
3. Assess the external factors
4. Analyzing the company’s options by
matching its resources with the external
environment
5. Identify the most desirable options
(strategies) by evaluating each of the
options in likes of the company’s mission
6. Select a set of long term objectives and
grand strategies that would achieve the
most desirable result.
7. Develop annual objectives and short term
strategies that are compatible to the
selected set of long term objectives and
grand strategies
8. Implementing a strategic choice by
means of budgeted resource allocation,
in which the margin of tax, people,
structure, technologies and reward
system is emphasized.
9. Evaluate the success of the strategic
process as a yardstick for future decision
making. Trying to see if the aim of the
strategy is successful or not. This would
aid future application of such strategy.
Babafemi (2015) opines that strategy
formulation process comprises three main
elements that help turn an organisation’s vision
or mission into concrete achievable. They are
namely strategic analysis, strategic choice and
strategic implementation. The strategic analysis
encompasses setting the organizations direction
in terms of vision, mission and business
environment. Strategic choice involves
generating, evaluating and selecting the most
appropriate strategy, while the strategy
implementation consists of putting in place the
relevant policies and formulating framework that
will aid in translating chosen strategy into
actionable forms.
2.2.3 Levels of strategy
The three organizational levels of
strategy are those of the corporate, strategic
business unit (SBU) and functional levels. They
can be further simplified into different other types.
Corporate strategy level: This is seen
as an overarching plan of action covering the
various functions that are performed by different
business units. It deals with the objectives of the
company, allocation of resources and
coordination of the business units for optimal
performance. Corporate level strategies are
basically about decisions related to managing
and nurturing a portfolio of businesses. It helps to
exercise the choice of direction that an
organization adopts. According to Glueck &
Jauch (1984) there are four strategic alternatives:
expansion, stability, retrenchment and any
combination of these three.
Business level strategy: This is a
comprehensive plan providing objectives for
SBUs, allocation of resources among functional
areas and coordination between them for making
optimal contribution to the achievement of the
corporate level objectives. They are the courses
of action adopted by an organisation for each of
its businesses separately, which serve identified
customer groups and provide value to the
customer by satisfaction of their needs. In the
process, the organization uses its competencies
to gain, sustain and enhance its strategic or
competitive advantage.
Functional level strategy: This deals
with a relatively restricted plan, providing
objectives for certain functions, allocating
resources among different operations within that
functional area and coordination between them
for optimal contribution to the achievement of the
SBU and corporate level objectives. It is
designed to achieve goals in the functional areas
of business. It entails allocation of these
resources to drive business and corporate
strategies implementation.
2.3 The place of capabilities in strategy
Strategy processes change under
different transitions as from craft to mass
production. Recently, it has become evident that
the current landscape in many industries is one
of ongoing, heightened levels of competition,
which demand that a range of capabilities,
including flexibility, delivery speed and innovation
are in place. These approaches have emerged
THE PLACE OF ORGANISATIONAL CAPABILITIES IN STRATEGY FORMULATION AND IMPLEMENTATION 45
as a result of increased competition and greater
levels of customer choice. Developing
capabilities demands that a strategy be in place
to achieve these requirements (Brown, 1998).
Successful competitors move quickly in
and out of products, market and sometimes even
entire businesses, a process more akin to an
interactive video game than to chess. In such an
environment, the essence of strategy is not the
structure of a company’s products and markets
but the dynamics of its behaviour. The goal here
is to identify and develop the hard-to-imitate
organizational capabilities that distinguish a
company from its competition in the eyes of
companies. Stalk, Evans and Shulman (1992)
believe that the key to transforming a set of
individual business processes, is to connect them
to real customer needs. A capability is strategic
only when it begins and ends with the customer.
Smallwood and Ulrich (2004) see capabilities as
the collective skills, abilities and expertise of an
organization that are the outcome of investments
in staffing, training, compensation,
communication and other human resources
areas.
In some manner, they represent the ways
that people and resources are brought together
to accomplish work. According to Mikalef and
Pateli (2017), dynamic capabilities facilitate as
well as enhance competitive performance
strategy in organizations. They form the identity
and personality of the organization by defining
what it is good at doing and, in the end, what it is.
Here, we are looking at organizational
capabilities and its essence in strategy
formulation and implementation. An organization
with an effective organizational capability range,
gives a clear message of what the organization
values now and in the foreseeable future.
Through organizational capabilities in strategy,
these benefits can be achieved (Ulrick & Lake,
1991):
1. Greater stability
2. Individuals in the organization are more
informed and empowered
3. There are reduced risks and stronger
competitive advantages. Greater
flexibility and innovation to respond to
changing external influences
4. Acts as a strategic partner and improving
stakeholder satisfaction
3.0 Theoretical framework
This paper is based on the resource
based theory of the firm which tends to combine
concepts from organisational economics and
strategic management (Barney,1991). This theory
emphasizes that the competitive advantage and
superior performance of an organization can be
explained by its distinctiveness of capabilities
(Johnson, Scholes & Whittington, 2008). The
resource-based view (RBV) as a basis for
competitive advantage lies primarily in the
application of diverse valuable tangible or
intangible resources at the firm’s disposal. To
transform a short run competitive advantage into
a sustainable one, requires the heterogeneity of
these resources. This effectively translates to
valuable resources that are neither perfectly
imitable nor substitutable without great effort
(Barney, 1991).
Strategy is seen as a match an
organization makes between its internal
resources and skills and opportunities and risks
created by its external environment (Olanipekun,
Abioro, Akanni, Arulogun & Rabiu, 2015). The
resources and capabilities of a firm are the
central consideration in formulating its strategy;
they are the basis upon which a firm can
establish its identity and frame its strategy. The
key to a resource-based approach to strategy
formulation is understanding the relationships
between resources, capabilities, and competitive
advantage. This theory has a common interest
for management researchers and numerous
writings. It explains the ability to deliver
sustainable competitive advantage when
resources are managed such that their outcomes
cannot be imitated by competitors, which
ultimately creates a competitive barrier. It
emphasizes the fact that a firm’s sustainable
competitive advantage is reached by virtue of
unique resources being rare, valuable, inimitable,
unsubstitutable, as well as firm specific.
CONCLUSION
Organisations are said to be operating in
a turbulent and hyper competitive environment,
and it is their desire to continue to operate
successfully by creating and delivering superior
value to their customers while also learning how
to adapt to a continuous and dynamic business
environment. Strategies normally tend to be
clear, to some extent, regarding their vision and
high level outcomes when they are first
developed. However, literature explored so far in
the study, show that many formulated
organizational strategies do not take into account
the necessary capabilities needed. As a result,
46 JULIANA B. AKAEGBU AND A. A. USORO
they may face significant difficulties in articulating
their requirements in terms of clear objectives,
actionable initiatives as well as precise and
measurable performance indicators. It should
therefore be the goal of every organization to
reduce complexity where and whenever deemed
necessary, and try to maximize their different
capabilities therein.
RECOMMENDATIONS
The paper explored the position
capability takes in the formulation and
implementation of the strategies adopted in
organisations. The practical implication shows
that implementation success of any strategy
resides within the capabilities of the firm and so
practitioners must constantly sharpen the internal
competences. Based on the findings made in the
course of exploring, the subject matter, it is
therefore recommended that:
1. The strategy formulation and
implementation practices needs
continuous and sustained supervision,
improvement and adequate funding in
view of it importance.
2. Organization should have a well-
conceived strategic vision that must be
communicated to all employees, because
this amounts to strengthening its
capabilities
3. It is imperative to emphasise that there
be an organizational capability audit from
time to time. This is to enable the
organization check its ability to carry out
any form of strategy when need arises.
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48 JULIANA B. AKAEGBU AND A. A. USORO </div>
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<div class="MsoNormal" style="background: white; line-height: 0%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 1;">
<b><span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN; mso-font-kerning: 18.0pt;">Strategy as Stretch and Leverage<o:p></o:p></span></b></div>
<ul style="margin-top: 0cm;" type="disc">
<li class="MsoNormal" style="background: white; color: #282828; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-list: l1 level1 lfo1; tab-stops: list 36.0pt;"><span style="font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><a href="https://hbr.org/search?term=gary%20hamel"><span style="color: blue;">Gary
Hamel</span></a><o:p></o:p></span></li>
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MARCH–APRIL 1993 ISSUE<o:p></o:p></span></div>
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<a href="https://www.blogger.com/null" name="article-top"></a><b><span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN; text-transform: uppercase;">VIEW MORE
FROM THE<o:p></o:p></span></b></div>
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<b><span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><a href="https://hbr.org/archive-toc/3932"><span style="color: #282828;">March–April
1993 Issue</span></a><o:p></o:p></span></b></div>
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</v:rect><![endif]--><!--[if !vml]--><span style="mso-ignore: vglayout;"><a href="https://hbr.org/archive-toc/3932"><img alt="Description: https://hbr.org/resources/images/covers/3932_500.png" border="0" height="40" src="file:///C:/Users/USER/AppData/Local/Temp/msohtmlclip1/01/clip_image001.png" v:shapes="Rectangle_x0020_4" width="40" /></a></span><!--[endif]--><!--[if mso & !supportInlineShapes & supportFields]><v:shape
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</v:shape><span style='mso-element:field-end'></span><![endif]--><span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
<span style="color: #888888; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><a href="https://hbr.org/magazine"><span style="color: #0787b1;">Explore The Archive</span></a><o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
<span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"> Loading...<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">General Motors
versus Toyota. CBS versus CNN. Pan Am versus British Airways. RCA versus Sony.
Suppose you had been asked, 10 or 20 years ago, to choose the victor in each of
these battles. Where would you have placed your bets? With hindsight, the
choice is easy. But at the time, GM, CBS, Pan Am, and RCA all had stronger
reputations, deeper pockets, greater technological riches, bigger market
shares, and more powerful distribution channels. Only a dreamer could have
predicted that each would be displaced by a competitor with far fewer
resources—but far greater aspirations.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Driven by the need
to understand the dynamics of battles like these, we have turned
competitiveness into a growth industry. Companies and industries have been
analyzed in mind-numbing detail, autopsies performed, and verdicts rendered.
Yet when it comes to understanding where competitiveness comes from and where
it goes, we are like doctors who have diagnosed a problem—and have even found
ways to treat some of its symptoms—but who still don’t know how to keep people
from getting sick in the first place.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #888888; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">We can analyze
companies in mind-numbing detail, perform autopsies, and render verdicts, but
we are still addressing the <i>what</i> of competitiveness, not
the <i>why</i>.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Consider the
analogy. The first step in understanding competitiveness is to observe competitive
outcomes: some companies gaining market share, others losing it, some companies
in the black, others bleeding red ink. Like doctors taking a patient’s blood
pressure or temperature, we can say whether the patient is well or ill, but
little more.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The next step is to
move from observation to diagnosis. To diagnose competitive problems, we rely
on industry structure analysis. A company’s market position—the particular
market segments in which the company participates—broadly determines the
potential for profitability and growth. Within any particular market segment,
it is the company’s relative competitive advantage that determines actual
profitability and growth.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Industry structure
analysis points us to the <i>what</i> of competitiveness: <i>what</i> makes
one company more profitable than another. As new whats have been discovered,
companies have been exhorted to strive for six sigma quality, compete on time,
become customer led, and pursue a host of other desirable advantages. In
diagnosing a specific competitive disease, we may conclude that a company is in
an unattractive industry segment with a cost disadvantage and subpar quality.
This is a bit like determining that a patient has Parkinson’s disease: the
diagnosis may point to a cure, but it isn’t the cure itself and certainly won’t
prevent disease.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">To find a cure, the
medical researcher must unravel the workings of disease. The competitive
analogy lies in studying organizational structure and process: For example,
what are the administrative attributes of a speedy product-development process
or a successful total quality management program? But however deeply we
understand the various elements of a company’s competitive advantage, we are
still addressing the what of competitiveness, not the <i>why</i>.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Understanding the what
of competitiveness is a prerequisite for catching up. Understanding the why is
a prerequisite for getting out in front. Why do some companies continually
create new forms of competitive advantage, while others watch and follow? Why
do some companies redefine the industries in which they compete, while others
take the existing industry structure as a given?<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">To answer these
questions, another layer of understanding must be peeled back. If the goal of
medicine is to prevent rather than simply cure disease, a doctor must search
for the reason some people fall ill while others do not. Differences in
life-style and diet, for instance, predispose some to sickness and others to
wellness. A company’s institutional environment is the industrial corollary
here. Monetary and fiscal policy, trade and industrial policy, national levels
of education, the structure of corporate ownership, and the social norms and
values of a particular nation all have an impact on how well that nation’s
industries will compete.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">But often too much
attention is paid to these factors, especially by managers eager to externalize
the causes of competitive decline—and the responsibility for it. After all, we
regularly see companies that fail to benefit from the inherent advantages of
their institutional context and others that manage to escape the disadvantages.
Why hasn’t Japan, with more snow skiers than any country on earth, produced a
world-class manufacturer of ski equipment? Conversely, why did Yamaha, a
Japanese company, become the world’s largest producer of high-quality grand
pianos, which are not suited to the homes or traditional musical tastes of
Japanese customers? And why do U.S. computer manufacturers, competing in an
industry targeted by Japan’s industrial policymakers, thrive around the world
when U.S. automakers often wilt in the face of Japanese competition?
Institutional factors are only part of the story.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;">
<b><span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Breaking the Managerial Frame<o:p></o:p></span></b></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">To understand why
some people contract a disease while others do not, a medical researcher must
finally confront genetics. Just as genetic heritage manifests itself as a
susceptibility to some diseases and an ability to resist others, managerial
frames of reference—the assumptions, premises, and accepted wisdom that bound
or “frame” a company’s understanding of itself and its industry and drive its
competitive strategy—determine in large part which diseases a company will fall
prey to and which it will avoid.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Managers acquire
their frames of reference invisibly from business school and other educational
experiences, from peers, consultants, and the business press, and, above all,
from their own career experiences. But invisible as the frames themselves may
be, their consequences are visible at every turn in how a company’s senior
managers understand what it means to be “strategic,” in their choice of
competitive stratagems, in their relationships with subordinates. In this
sense, managerial frames, perhaps more than anything else, bound a company’s
approach to competitive warfare and thus determine competitive outcomes.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Failure to reckon
with managerial frames was understandable as long as competition took place
mostly between companies whose managers graduated from the same universities,
hired the same consultants, subscribed to the same trade journals, and
job-hopped among the same few companies. After all, it wasn’t Ford that
challenged GM’s long-held managerial precepts, nor Thomson that compelled
Philips to discard once-sacrosanct organizational tenets. Today such blindness
is inexcusable. Just as the health of biological species depends, over time, on
genetic variety, so it is with global companies: long-term competitiveness
depends on managers’ willingness to challenge continually their managerial
frames.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The term
“head-to-head competition” is literal. Global competition is not just product
versus product, company versus company, or trading bloc versus trading bloc. It
is mind-set versus mind-set, managerial frame versus managerial frame.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;">
<b><span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">From Fit to Stretch<o:p></o:p></span></b></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">A good place to
begin deconstructing our managerial frames is with the question, “What is
strategy?” For a great many managers in large Western companies, the answer
centers on three elements: the concept of fit, or the relationship between the
company and its competitive environment; the allocation of resources among
competing investment opportunities; and a long-term perspective in which
“patient money” figures prominently. From this perspective, “being strategic”
implies a willingness to take the long view, and “strategic” investments are those
that require a large and preemptive commitment of resources—betting bigger and
betting earlier—as well as a distant return and substantial risk.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">This dominant
strategy frame is not wrong, only unbalanced. That every company must
ultimately effect a fit between its resources and the opportunities it pursues,
that resource allocation is a strategic task, and that managers must often
countenance risk and uncertainty in the pursuit of strategic objectives all go
without saying. But the predominance of these planks in corporate strategy
platforms has obscured the merits of an alternative frame in which the concept
of stretch supplements the idea of fit, leveraging resources is as important as
allocating them, and the long term has as much to do with consistency of effort
and purpose as it does with patient money and an appetite for risk.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">To illustrate the
effects of these opposing frames, imagine two companies competing in the same
industry. Alpha, the industry leader, has accumulated a wealth of resources of
every kind—human talent, technical skills, distribution access, well-known
brands, manufacturing facilities, and cash flow—and it can fund just about any
initiative it considers strategic. But its aspirations to remain atop its
present perch, to grow as fast as its industry, and to achieve a 15% return
on equity are modest. “Where do you go,” Alpha’s managers ask themselves, “when
you’re already number one?”<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Beta, its rival, is
a relative latecomer to the industry. It is much smaller than Alpha and has no
choice but to make do with fewer people, a smaller capital budget, more modest
facilities, and a fraction of Alpha’s R&D budget. Nevertheless, its
ambitions belie its meager resource base. Beta’s managers have every intention
of knocking Alpha off its leadership perch. To reach this goal, they know that
they must grow faster than Alpha, develop more and better products than Alpha,
and build a worldwide brand franchise and a presence in every major market, all
while expending fewer resources. The misfit between Beta’s resources and its
aspirations would lead most observers to challenge the feasibility of its
goals, if not the sanity of its managers.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">But consider the
likely effects of Alpha’s abundance and Beta’s ambition on how the two
companies frame their competitive strategies and marshal their resources.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Clearly, Alpha is
much better placed to behave “strategically”: to pre-empt Beta in building new
plant capacity, to outspend Beta on R&D, to buy market share through
aggressive pricing, and so on. Alpha’s managers are likely to rest easily,
confident that they can overpower their smaller rival in any confrontation.
They are also likely to approach their battles with a mind-set reminiscent of
World War I trench warfare—“Whoever runs out of ammunition first is the
loser”—however resource-inefficient this approach may be.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Beta, on the other
hand, is likely to adopt the tactics of guerrilla warfare in hopes of
exploiting the orthodoxies of its more powerful enemy. It will search for
undefended niches rather than confront its competitor in well-defended market
segments. It will focus investments on a relatively small number of core
competencies where management feels it has the potential to become a world
leader. It might even find itself compelled to invent lean manufacturing with
an emphasis on doing more with less.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The argument here
is substantially more subtle than the oft-made point that small companies are
more nimble. What distinguishes Beta from Alpha is not Beta’s smaller resource
base but the greater gap that exists between Beta’s resources and its
aspirations. In contrast, Alpha’s problem is not that it is large—there’s no
inherent virtue in being small—but that it has insufficient stretch in its
aspirations. Alpha’s managers will not think and behave as if they were in a
small, resource-restrained company. What bedevils Alpha is not a surfeit of
resources but a scarcity of ambition.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #888888; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Abundant resources
alone won’t keep an industry giant on top when its hungrier rival practices the
strategic discipline of stretch.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The products of
stretch—a view of competition as encirclement rather than confrontation, an
accelerated product-development cycle, tightly knit cross-functional teams, a
focus on a few core competencies, strategic alliances with suppliers, programs
of employee involvement, consensus—are all elements of a managerial approach
typically labeled “Japanese.” But as the less than sterling performance of
Japan’s well-endowed banks and brokerage houses reminds us, there is no magic
simply in being Japanese. Indeed, so-called Japanese management may have less
to do with social harmony and personal discipline than it does with the
strategic discipline of stretch. Companies like NEC, CNN, Sony, Glaxo, and
Honda were united more by the unreasonableness of their ambitions and their
creativity in getting the most from the least than by any cultural or
institutional heritage. Material advantages are as poor a substitute for the
creativity stretch engenders in Japan as they are in the United States or
Europe. Creating stretch, a misfit between resources and aspirations, is the
single most important task senior management faces.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;">
<b><span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">From Allocation to Leverage<o:p></o:p></span></b></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">“If only we had
more resources, we could be more strategic.” Every experienced manager will
recognize that lament. Yet it is clear that copious resources cannot guarantee
continued industry leadership. Tens of billions of dollars later, no one can
accuse GM of not being “strategic” in its pursuit of factory automation. If
anything, GM was <i>too</i> strategic. The company’s ability to
invest outpaced its ability to absorb new technology, retrain workers,
reengineer work flows, rejuvenate supplier relationships, and discard
managerial orthodoxies.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Conversely, if
modest resources were an insurmountable deterrent to future leadership, GM,
Philips, and IBM would not have found themselves on the defensive with Honda,
Sony, and Compaq. NEC succeeded in gaining market share against AT&T, Texas
Instruments, and IBM despite an R&D budget that for most of its history was
more modest in both absolute and relative terms than those of its rivals.
Toyota developed a new luxury car for a fraction of the resources required by
Detroit. IBM challenged Xerox in the copier business and failed, while Canon, a
company only 10% the size of Xerox in the mid-1970s, eventually displaced
Xerox as the world’s most prolific copier manufacturer. CNN in its adolescence
managed to provide 24 hours of news a day with a budget estimated at one-fifth
that required by CBS to turn out 1 hour of evening news. Performance like this
isn’t just lean manufacturing; it’s lean everything.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Allocating
resources across businesses and geographies is an important part of top
management’s strategic role. But leveraging what a company already has rather
than simply allocating it is a more creative response to scarcity. In the
continual search for less resource-intensive ways to achieve ambitious
objectives, leveraging resources provides a very different approach from the
downsizing and delayering, the restructuring and retrenchment that have become
common as managers contend with rivals around the world who have mastered the
art of resource leverage.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">There are two basic
approaches to garnering greater resource productivity, whether those resources
be capital or human. The first is downsizing, cutting investment and head count
in hopes of becoming lean and mean—in essence, reducing the buck paid for the
bang. The second approach, resource leveraging, seeks to get the most out of
the resources one has—to get a much bigger bang for the buck. Resource leverage
is essentially energizing, while downsizing is essentially demoralizing. Both
approaches will yield gains in productivity, but a company that continually
ratchets down its resource base without improving its capacity for resource leverage
will soon find that downsizing and restructuring become a way of life—until
investors locate a new owner or demand a management team with a better track
record. Indeed, this is happening in the United States and in Europe as an
increasing share of human and physical capital falls through acquisition, joint
venture, and surrender of market share to competitors who are better at getting
more from less.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;">
<b><span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The Arenas of Resource Leverage<o:p></o:p></span></b></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Management can
leverage its resources, financial and nonfinancial, in five basic ways:
by <i>concentrating</i> them more effectively on key strategic goals;
by <i>accumulating</i> them more efficiently; by <i>complementing</i> one
kind of resource with another to create higher order value; by <i>conserving</i> resources
wherever possible; and by <i>recovering</i> them from the marketplace
in the shortest possible time. Let us look, one by one, at some of the
components that make up these broad categories and ask the questions that
managers must ask to assess the scope within their company for further resource
leverage.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Convergence: Have
we created a chasm between resources and aspirations that will compel creative
resource leverage? Have we been loyal to our strategic goals and consistent in
their pursuit?<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<i><span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Concentrating
Resources: Convergence and Focus.</span></i><span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"> Leverage
requires a strategic focal point, or what we have called a strategic intent, on
which the efforts of individuals, functions, and businesses can converge over
time. Komatsu’s goal of “encircling Caterpillar,” President Kennedy’s challenge
to “put a man on the moon by the end of the decade,” British Airway’s quest to
become the “world’s favorite airline,” and Ted Turner’s dream of global news
all provided a strategic intent.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Yet in many,
probably most, companies there is neither a strategic focal point nor any deep
agreement on the company’s growth trajectory. As a result, priorities shift
constantly. Resources are squandered on competing projects. Potentially great
ideas are abandoned prematurely. And the very definition of core business
changes often enough to confuse both investors and employees. It is hardly
surprising then that in many companies there is little cumulativeness to
month-by-month and year-by-year strategic decisions.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Compare NEC’s
relentless pursuit of “computers and communication” with IBM’s on-again,
off-again affair with telecommunications. While NEC was first a
telecommunications equipment manufacturer and IBM first a computer maker, both
have long recognized that the two industries are converging. Yet IBM’s
Satellite Business Systems, dalliances with MCI and Mitel, and the acquisition
of Rolm have come and, for the most part, gone, while its communications
business remains a poor relation to its computer business. NEC, on the other
hand, is the only company in the world that is a top-five producer of both
computer and communications equipment. NEC achieved this not by outspending IBM
but rather through its strategic focus. In the mid-1970s, management
established the goal of becoming a leader in both computers and communications;
next it elaborated the implications of that goal in terms of the skills and
capabilities it would require; and finally, it pursued its ambition
unswervingly for the next decade and a half.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">As NEC’s experience
suggests, convergence requires an intent that is sufficiently precise to guide
decisions. Converging resources around an amorphous goal—becoming a $100
billion company, growing as fast as the industry, achieving a 15% return
on equity—is difficult if not impossible.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Resource
convergence is also unlikely if strategic goals fail to outlive the tenures of
senior executives. Even with a high degree of resource leverage, the attainment
of worldwide industry leadership may be a ten-year quest. Recasting the
company’s ambition every few years virtually guarantees that leadership will
remain elusive. The target has to sit still long enough for all members of the
organization to calibrate their sights, take a bead on the target, fire, adjust
their aim, and fire again.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Focus: Have we
clearly identified the next competitive advantage that we must build? Is top
management’s attention focused firmly on the task until it is accomplished?<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">If convergence
prevents the diversion of resources over time, focus prevents the dilution of
resources at any given time. Just as a general with limited forces must pick
his targets carefully, so a company must specify and prioritize the
improvements it will pursue. Too many managers, finding their companies behind
on cost, quality, cycle time, customer service, and other competitive metrics,
have tried to put everything right at the same time and then wondered why
progress was so painfully slow. No single business, functional team, or
department can give adequate attention to all these goals at once. Without
focused attention on a few key operating goals at any one time, improvement
efforts are likely to be so diluted that the company ends up as a perpetual
laggard in every critical performance area.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Consider Komatsu.
Starting with products that were judged only half the quality of Caterpillar’s,
Komatsu won Japan’s highest quality award, the Deming Prize, in three years.
Many other companies have been wrestling with quality for a decade or more and
still cannot lay claim to world-class standards. What accounts for this
difference? When Komatsu initiated its total quality control program, every
manager was given explicit instructions to vote quality in a choice between
cost and quality. Although quality may be free in the long run, Komatsu’s
managers recognized that the pursuit of quality is anything but free in the
short run. Thus Komatsu focused almost exclusively on quality until it had
achieved world standards. Then, and only then, did it turn successively to
value engineering, manufacturing rationalization, product-development speed,
and the attainment of variety at low cost. Each new layer of advantage provided
the foundation for the next.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Dividing meager
resources across a host of medium-term operational goals creates mediocrity on
a broad scale. Middle managers are regularly blamed for failing to translate
top-management initiatives into action. Yet middle management often finds
itself attempting to compensate for top management’s failure to sort out
priorities, with the result that mixed messages and conflicting goals prevent a
sufficient head of steam from developing behind any task.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Extraction: Are we
willing to apply lessons learned on the front line, even when they conflict
with long-held orthodoxies? Have we found a way to tap the best ideas of every
employee?<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<i><span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Accumulating
Resources: Extracting and Borrowing.</span></i><span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"> Every
company is a reservoir of experiences. Every day, employees come in contact
with new customers, learn more about competitors, confront and solve technical
problems, and discover better ways of doing things. But some companies are
better than others at extracting knowledge from those experiences. Thus what
differentiates companies over time may be less the relative quality or depth of
their stockpile of experiences than their capacity to draw from that stockpile.
Because experience comes at a cost, the ability to maximize the insights gained
from every experience is a critical component of resource leverage. Being a
“learning organization” is not enough; a company must also be capable of
learning more efficiently than its competitors.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Take Mazda, for
example. The Japanese automaker has launched a fraction of the new models
created by Ford or GM, yet it seems capable of developing new products in a
fraction of the time it takes the other two and at a fraction of the cost.
Mazda’s experience mocks the experience curve because it suggests that the rate
of improvement in a company’s capabilities is determined not by some lockstep
relationship with accumulated volume but by the relative efficiency with which
the company learns from experience. The smaller a company’s relative experience
base, the more systematic its managers must be in searching for clues to where
and how improvements might be made.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The capacity to
learn from experience depends on many things: employees who are both reflective
and well schooled in the art of problem solving; forums (such as quality
circles) where employees can identify common problems and search for higher
order solutions; an environment in which every employee feels responsible for
the company’s competitiveness; the willingness to fix things before they’re
broken; continuous benchmarking against the world’s best practice. But learning
takes more than the right tools and attitudes. It also requires a corporate
climate in which the people who are closest to customers and competitors feel
free to challenge long-standing practices. Unless top management declares open
season on precedent and orthodoxy, learning and the unlearning that must
precede it cannot begin to take place.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Borrowing: Are we
willing to learn from outsiders as well as from insiders? Have we established
borrowing processes and learning goals for employees working within alliances
and joint ventures?<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">“Borrowing” the
resources of other companies is another way to accumulate and leverage
resources. The philosophy of borrowing is summed up in the remark of a Japanese
manager that “you [in the West] chop down the trees, and we [in Japan] build
the houses.” In other words, you do the hard work of discovery, and we exploit
those discoveries to create new markets. It is instructive to remember that
Sony was one of the first companies to commercialize the transistor and the
charge-coupled device, technologies pioneered by AT&T’s Bell Laboratories.
Increasingly, technology is stateless. It crosses borders in the form of
scientific papers, foreign sponsorship of university research, international
licensing, cross-border equity stakes in high-tech start-ups, and international
academic conferences. Tapping into the global market for technology is a
potentially important source of resource leverage.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">At the extreme,
borrowing involves not only gaining access to the skills of a partner but also
internalizing those skills. Internalization is often a more efficient way to
acquire new skills than acquiring an entire company. In making an acquisition,
the acquirer must pay both for the critical skills it wants and for skills it
may already have. Likewise, the costs and problems of integrating cultures and
harmonizing policy loom much larger in an acquisition than they do in an
alliance.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">NEC relied on
hundreds of alliances, licensing deals, and joint ventures to bolster its
product-development efforts and to gain access to foreign markets. Alliances
with Intel, General Electric, Varian, and Honeywell, to name a few, multiplied
NEC’s internal resources. Indeed, NEC managers have been forthright in
admitting that without the capacity to learn from their partners, their
progress toward the goal of computers and communication would have been much
slower.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Borrowing can
multiply more than technical resources. Companies such as Canon, Matsushita,
and Sharp sell components and finished products on an OEM basis to
Hewlett-Packard, Kodak, Thomson, Philips, and others to finance their
leading-edge research in imaging, video technology, and flat-screen displays.
Almost every Japanese company we have studied had a bigger share of world
development spending in core competence areas and a bigger share of world
manufacturing in core components than its brand share in end-product markets. The
goal is to capture investment initiative from companies either unwilling or
unable to invest in core competence leadership, in order to gain control of
critical core competencies. Think of this as borrowing distribution channels
and market share from downstream partners to leverage internal development
efforts and reduce market risks.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">In leveraging
resources through borrowing, absorptive capacity is as important as inventive
capacity. Some companies are systematically better at borrowing than others
are, not least because they approach alliances and joint ventures as students,
not teachers. Suffice it to say, arrogance and a full stomach are not as
conducive to borrowing as humility and hunger. Captives of their own success,
some companies are more likely to surrender their skills inadvertently than to
internalize their partners’ skills. We might call this negative leverage!<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Borrowing can take
a myriad of forms: welding tight links with suppliers to exploit their
innovations; sharing development risks with critical customers; borrowing
resources from more attractive factor markets (as, for example, when Texas
Instruments employs relatively low-cost software programmers in India via a
satellite hookup); participating in international research consortia to borrow
foreign taxpayers’ money. Whatever the form, the motive is the same, to
supplement internal resources with resources that lie outside a company’s
boundaries.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Blending: Have we
created a class of technology generalists who can multiply our resources? Have
we created an environment in which employees explore new skill combinations?<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<i><span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Complementing
Resources: Blending and Balancing.</span></i><span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"> By
blending different types of resources in ways that multiply the value of each,
management transforms its resources while leveraging them. The ability to blend
resources involves several skills: technological integration, functional
integration, and new-product imagination.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">It is possible that
GM or Ford could outspend Honda in developing engine-related technologies like
combustion engineering, electronic controls, and lean burn—and perhaps even
attain scientific leadership in each area—but still lag Honda in terms of
all-around engine performance because the U.S. companies were able to blend
fewer technologies. Blending requires technology generalists, systems thinking,
and the capacity to optimize complex technological trade-offs. Leadership in a
range of technologies may count for little and the resources expended in such a
quest may remain underleveraged if a company is not as good at the subtle art
of blending as it is at brute-force pioneering.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Successfully
integrating diverse functional skills like R&D, production, marketing, and
sales is a second form of blending. Where narrow specialization and
organizational chimneys exist, functional excellence is rarely translated into
product excellence. In such cases, a company may outinvest its competitors in
every functional area but reap much smaller rewards in the marketplace. Again,
what is required is a class of generalists who understand the interplay of
skills, technologies, and functions.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The third form of
blending involves a company’s ingenuity in dreaming up new-product
permutations. Sony and 3M, for example, have demonstrated great imagination in
combining core technologies in novel ways. Sony’s “Walkman” brought together
well-known functional components—headphones and an audiotape playback
device—and created a huge market if not a new life-style. Yamaha combined a
small keyboard, a microphone, and magnetically encoded cards to create a
play-along karaoke piano for children. In these cases, the leverage comes not
only from better amortizing past investments in core competencies but also from
combining functional elements to create new markets.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Balancing: Have we
pursued high standards across the board so that our ability to exploit
excellence in one area is never imperiled by mediocrity in another? Can we
correct our imbalances?<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Balancing is
another approach to complementing resources. To be balanced, a company, like a
stool, must have at least three legs: a strong product-development capability;
the capacity to produce its products or deliver its services at world-class
levels of cost and quality; and a sufficiently widespread distribution,
marketing, and service infrastructure. If any leg is much shorter than the
others, the company will be unable to exploit the investments it has made in
its areas of strength. By gaining control over the missing resources, however,
management can multiply the profits extracted from the company’s unique assets.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">To illustrate,
consider the situation EMI faced in the early 1970s when it invented
computerized axial tomography, or the CAT scanner. Although the British company
had a ground-breaking product, it lacked a strong international sales and
service network and adequate manufacturing skills. As a result, EMI found it
impossible to capture and hold onto its fair share of the market. Companies
like GE and Siemens, with stronger distribution and manufacturing capabilities,
imitated the concept and captured much of the financial bonanza. As for EMI, it
ultimately abandoned the business.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Today many small,
high-tech companies are unbalanced the way EMI was. While they can enter
partnerships with companies that have complementary resources, the innovators
are likely to find themselves in a poor bargaining position when it comes to
divvying up profits. This imbalance explains why so many Japanese companies
worked throughout the 1980s to set up their own worldwide distribution and
manufacturing infrastructures rather than continue to borrow from their
downstream partners. They realized they could fully capture the economic
benefits of their innovations only if they owned all complementary resources.
Today, in contrast, Japanese companies are acquiring innovators to complement
their strong brand and manufacturing skills. Of the more than 500 small,
high-tech U.S. companies sold to foreign interests between 1988 and 1991,
Japanese companies bought about two-thirds.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Whatever the nature
of the imbalance, the logic is the same. A company cannot fully leverage its
accumulated investment in any one dimension if it does not control the other
two in some meaningful way. Rebalancing leads to leverage when profits captured
by gaining control over critical complementary assets more than cover
acquisition costs.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Recycling: Do we
view core competencies as corporate resources rather than the property of
individual businesses? Have we created lateral communication to ensure that
ideas aren’t trapped?<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<i><span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Conserving
Resources: Recycling, Co-opting, and Shielding.</span></i><span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"> The more often a given skill or competence is
used, the greater the resource leverage. Sharp exploits its
liquid-crystal-display competence in calculators, electronic pocket calendars,
mini-TVs, large-screen-projection TVs, and laptop computers. Honda has recycled
engine-related innovations across motorcycles, cars, outboard motors,
generators, and garden tractors. It is little wonder that these companies have
unmatched R&D efficiency. The common saying in Japan is, “No technology is
ever abandoned, it’s just reserved for future use.” Honda and Sharp are proof
of that maxim.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Recycling isn’t
limited to technology-based competencies. Brands can be recycled too.
Familiarity with a high-quality “banner” brand can predispose customers at
least to consider purchasing new products that bear the “maker’s mark.” Think
of the leverage Sony gets when it launches a new product, thanks to the
relatively modest incremental cost of building credibility with retailers and
consumers and the implicit goodwill with which the product is imbued simply
because it carries the Sony brand.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Banner branding
cannot turn a loser into a winner. In fact, a lousy product will undermine the
most respected brand. And in companies such as Unilever and Procter &
Gamble, with a long history of product branding, it would be foolish to abandon
well-loved brands for an unknown corporate banner. Yet even these companies are
more and more apt to use their corporate monikers along with well-known product
brands. For example, in working to build a strong presence in Japan, P&G
recognized the added oomph its efforts would receive from a judicious use of
its corporate name. Building brand leadership in a new market is always a slow
and expensive process. But it becomes even more so when advertising budgets and
customer awareness are fragmented across multiple brands.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Walk through an
international airport and note the billboards bearing the corporate logos of
Japan’s and Korea’s industrial giants. For these companies, brand building is a
corporate responsibility. No one expects each business to bear the costs of
building global share of mind. A few years ago, a major U.S. company took what,
for it, was an unusual step. It erected an illuminated billboard at Heathrow
with its logo and a slogan. The billboard didn’t stay up long, however; none of
the business units was willing to pay for the sign. A few days later, that
piece of English sky belonged to a Japanese competitor.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Opportunities for
recycling hard-won knowledge and resources are manifold. The ability to switch
a production line quickly from making widgets to making gadgets, known as
flexible manufacturing, is one. Others include sharing merchandising ideas
across national sales subsidiaries, transferring operating improvements from
one plant to another, using the same subsystem across a range of products,
quickly disseminating ideas for better customer service, and lending
experienced executives to key suppliers. But recycling will not occur without a
strong organizational foundation. It requires a view of the corporation as a
pool of widely accessible skills and resources rather than a series of
fiefdoms.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Co-option: Have we
identified the industry players who are dependent on us for some critical skill
or for their very livelihood? Do we understand how to enroll others in the
pursuit of our goals?<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Co-option provides
another route to conserving resources. Enticing a potential competitor into a
fight against a common enemy, working collectively to establish a new standard
or develop a new technology, building a coalition around a particular
legislative issue—in these and other cases, the goal is to co-opt the resources
of other companies and thereby extend one’s own influence. In borrowing
resources, management seeks to absorb its partners’ skills and make them its
own; in co-opting resources, the goal is to enroll others in the pursuit of a
common objective.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The process of
co-option begins with a question: “How can I convince other companies that they
have a stake in my success?” The logic is often, “My enemy’s enemy is my
friend.” Philips has a knack for playing Sony and Matsushita against each
other, enrolling one as a partner to block the other. Being slightly
Machiavellian is no disadvantage when it comes to co-opting resources.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Sometimes co-option
requires a stick as well as a carrot of common purpose. Typically, the stick is
control over some critical resource, and the unstated logic here is, “Unless
you play the game my way, I’ll take my ball and go home.” Fujitsu’s relationship
with its partners in the computer business is a good example. Each of these
partners—ICL in Britain, Siemens in Germany, and Amdahl in the United
States—shares a common objective to challenge the dominance of IBM. That is the
carrot. The stick is the substantial, in some cases almost total, dependence of
these companies on Fujitsu’s semiconductors, central processors, disc drives,
printers, terminals, and components.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Shielding: Do we
understand competitors’ blind spots and orthodoxies? Can we attack without
risking retaliation? Do we know how to explore markets through low-cost,
low-risk incursions?<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">To understand
shielding, the third form of resource conservation, think about military
tactics. Wise generals ensure that their troops are never exposed to
unnecessary risks. They disguise their true intentions. They reconnoiter enemy
territory before advancing. They don’t attack heavily fortified positions. They
feint to draw the enemy’s forces away from the intended point of attack. The
greater the enemy’s numerical advantage, the greater the incentive to avoid a
full frontal confrontation. The goal is to maximize enemy losses while
minimizing the risk to one’s own forces. This is the basis for “resource
shielding.”<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Attacking a
competitor in its home market, attempting to match a larger competitor
strength-for-strength, accepting the industry leader’s definition of market
structure or “accepted industry practice” are strategies akin to John Wayne
taking on all the bad guys single-handedly—and they work better in Hollywood
than they do in global competition. In business, judo is more useful than a
two-fisted brawl. The first principal in judo is to use your opponent’s weight
and strength to your own advantage: deflect the energy of your opponent’s attack;
get him off balance; then let momentum and gravity do the rest.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Dell Computer,
America’s fastest growing personal computer company, could never have matched
Compaq’s dealer network or IBM’s direct sales force, so the company chose to
sell its computers by mail. Computer industry incumbents have found it almost
impossible to match Dell, not because they don’t have the resources but because
these companies face powerful constituents who have a big stake in the status
quo. Critical success factors become orthodoxies when a competitor successfully
changes the rules of engagement. Such competitive innovation is an important
way of shielding resources.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Searching for
underdefended territory is another way to shield resources. Honda’s success
with small motorbikes, Komatsu’s early forays into Eastern Europe, and Canon’s
entry into the “convenience” copier segment all failed to alert incumbents
whose attention was focused elsewhere. Understanding a competitor’s definition
of its “served market” is the first step in the search for underdefended
competitive space. The goal is to build up forces just out of sight of stronger
competitors. This may be one reason why Toyota chose to launch the Lexus, its
challenge to Mercedes Benz, not in Germany but in California, where buyers are
technologically sophisticated, value conscious, and not overly swayed by brand
loyalty.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Recovery: Have we
shortened product-development, order-processing, and product-launch times? Have
we built global brands and distribution positions that allow us to preempt
slower rivals?<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<i><span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Recovering
Resources: Expediting Success.</span></i><span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"> The
time between the expenditure of resources and their recovery through revenues
is yet another source of leverage—the more rapid the recovery process, the
higher the resource multiplier. A company that can do anything twice as fast as
its competitors, with a similar resource commitment, enjoys a twofold leverage
advantage. This rudimentary arithmetic explains, in part, why Japanese
companies have been so intent on accelerating product-development times.
Consider the effects of the two-to-one development-time advantage Japanese
automakers traditionally held over their U.S. and European rivals. This lead
not only allowed them to recoup investments more quickly but also gave them
more up-to-date products and gave customers more excuses to abandon their brand
loyalties.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">But fast-paced
product development is only one way of expediting recovery time. A company that
has built a highly esteemed global brand will find customers eager to try out new
products. This predisposition to buy can expedite recovery dramatically, since
recovery time is measured not from product concept to product launch but from
product concept to some significant level of world-market penetration.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;">
<b><span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Stretch Without Risk<o:p></o:p></span></b></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The essential
element of the new strategy frame is an aspiration that creates by design a
chasm between ambition and resources. For many managers, great ambition equals
big risk. If managers at Ford, for instance, were simply to extrapolate past
practices, they might believe that developing a car five times as good as the
Escort (a potential Lexus beater, say) would require five times the resources.
But stretch implies risk only when orthodox notions dictate how the ambition is
to be achieved.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Stretch can beget
risk when an arbitrarily short time horizon is set for long-term leadership
goals. Impatience brings the risk of rushing into markets not fully understood,
ramping up R&D spending faster than it can be managed, acquiring companies
that cannot be digested easily, or rushing into alliances with partners whose
motives and capabilities are poorly understood. Trouble inevitably ensues if
resource commitments outpace the accumulation of customer and competitor
insights. The job of top management is not so much to stake out the future as
it is to help accelerate the acquisition of market and industry knowledge. Risk
recedes as knowledge grows, and as knowledge grows, so does the company’s
capacity to advance.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #282828; font-family: "Guardian","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The notion of
strategy as stretch helps to bridge the gap between those who see strategy as a
grand plan thought up by great minds and those who see strategy as no more than
a pattern in a stream of incremental decisions. On the one hand, strategy as
stretch is strategy by design, in that top management has a clear view of the
goal line. On the other hand, strategy as stretch is strategy by
incrementalism, in that top management must clear the path for leadership meter
by meter. In short, strategy as stretch recognizes the essential paradox of
competition: leadership cannot be planned for, but neither can it happen
without a grand and well-considered aspiration.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
<span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">A version of this article appeared in
the <a href="https://hbr.org/archive-toc/3932"><span style="color: #0787b1;">March–April
1993</span></a> issue of <i>Harvard Business Review</i>.<o:p></o:p></span></div>
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</v:shape><span style='mso-element:field-end'></span><![endif]--><span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto;">
<span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><a href="https://hbr.org/search?term=gary%20hamel&search_type=search-all"><span style="color: #0787b1;">Gary Hamel</span></a> is a visiting professor at
London Business School and the founder of the Management Lab. He is a co-author
of <a href="https://www.amazon.com/Humanocracy-Creating-Organizations-Amazing-People-ebook/dp/B07B9HFSHX/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=&sr=" target="_blank"><span style="color: #0787b1;">Humanocracy: Creating Organizations
as Amazing as the People Inside Them</span></a> (Harvard Business Review
Press, forthcoming).<o:p></o:p></span></div>
<div align="center" class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: center;">
<span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">
<hr align="center" size="0" width="100%" />
</span></div>
<div class="MsoNormal" style="background: white; line-height: normal; mso-margin-bottom-alt: auto;">
<span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><a href="https://hbr.org/search?term=c.k.%20prahalad&search_type=search-all"><span style="color: #0787b1;">C.K. Prahalad</span></a> was the Paul and Ruth
McCracken Distinguished University Professor of Strategy at the University of
Michigan’s Ross School of Business. He wrote this article, his 16th for HBR,
before he passed away, on April 16, 2010.<o:p></o:p></span></div>
<div align="center" class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: center;">
<span style="color: #282828; font-family: "National","serif"; font-size: 16.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">
<hr align="center" size="0" width="100%" />
</span></div>
<br /></div>
Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-26527891208483494432019-03-28T23:09:00.001-07:002019-03-28T23:09:42.137-07:00BYPB - Your uniqueness can prove you supreme.<iframe allowfullscreen="" frameborder="0" height="270" src="https://www.youtube.com/embed/2bDQPZhi9T4" width="480"></iframe>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com1tag:blogger.com,1999:blog-8330375772621360648.post-91311665407348910552019-03-04T23:43:00.001-08:002019-03-04T23:43:58.246-08:00BYPB - Build Your Personal Brand , The Realization Series.<iframe allowfullscreen="" frameborder="0" height="270" src="https://www.youtube.com/embed/OQZOKP4VYfU" width="480"></iframe>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-6203186563701777572018-10-25T23:59:00.002-07:002018-10-25T23:59:40.418-07:00Triple Bottom line - John Elkington <div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal">
<span style="color: #121212; font-family: "Constantia","serif"; font-size: 27.0pt; letter-spacing: -.55pt; line-height: 115%;">Triple bottom line</span><o:p></o:p></div>
<div class="MsoNormal">
<i><span style="color: #121212; font-family: "Constantia","serif"; font-size: 15.0pt; line-height: 115%;">It consists of three Ps:
profit, people and planet</span><o:p></o:p></i></div>
<div class="MsoNormal">
<span style="color: #121212; font-family: "Constantia","serif"; font-size: 15.0pt; line-height: 115%;">The phrase “the triple bottom line” was
first coined in 1994 by John Elkington, the founder of a British consultancy
called SustainAbility. His argument was that companies should be preparing
three different (and quite separate) bottom lines. One is the traditional
measure of corporate profit—the “bottom line” of the profit and loss account.
The second is the bottom line of a company's “people account”—a measure in some
shape or form of how socially responsible an organisation has been throughout
its operations. The third is the bottom line of the company's “planet”
account—a measure of how environmentally responsible it has been. The triple
bottom line (TBL) thus consists of three Ps: profit, people and planet. It aims
to measure the financial, social and environmental performance of the
corporation over a period of time. Only a company that produces a TBL is taking
account of the full cost involved in doing business.</span><o:p></o:p></div>
<div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #121212; font-family: "Constantia","serif"; font-size: 15.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">In some senses the TBL is a
particular manifestation of the balanced scorecard. Behind it lies the same
fundamental principle: what you measure is what you get, because what you
measure is what you are likely to pay attention to. Only when companies measure
their social and environmental impact will we have socially and environmentally
responsible organisations.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #121212; font-family: "Constantia","serif"; font-size: 15.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The idea enjoyed some success in the
turn-of-the-century <i>zeitgeist</i> of corporate social
responsibility, climate change and fair trade. After more than a decade in
which cost-cutting had been the number-one business priority, the hidden social
and environmental costs of transferring production and services to low-cost countries
such as China, India and Brazil became increasingly apparent to western
consumers. These included such things as the indiscriminate logging of the
Amazon basin, the excessive use of hydrocarbons and the exploitation of cheap
labour.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #121212; font-family: "Constantia","serif"; font-size: 15.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Growing awareness of corporate
malpractice in these areas forced several companies, including Nike and Tesco,
to re-examine their sourcing policies and to keep a closer eye on the ethical
standards of their suppliers in places as far apart as Mexico and Bangladesh,
where labour markets are unregulated and manufacturers are able to ride
roughshod over social and environmental standards. It also encouraged the
growth of the Fairtrade movement, which adds its brand to products that have
been produced and traded in an environmentally and socially “fair” way (of
course, that concept is open to interpretation). From small beginnings, the
movement has picked up steam in the past five years. Nevertheless, the
Fairtrade movement is still only small, focused essentially on coffee, tea,
bananas and cotton, and accounting for less than 0.2% of all UK grocery sales
in 2006.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #121212; font-family: "Constantia","serif"; font-size: 15.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">One problem with the triple bottom
line is that the three separate accounts cannot easily be added up. It is
difficult to measure the planet and people accounts in the same terms as
profits—that is, in terms of cash. The full cost of an oil-tanker spillage, for
example, is probably immeasurable in monetary terms, as is the cost of
displacing whole communities to clear forests, or the cost of depriving
children of their freedom to learn in order to make them work at a young age.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
<a href="https://www.blogger.com/null" name="further_reading"></a><b><span style="color: #121212; font-family: "Constantia","serif"; font-size: 15.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Further
reading</span></b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="color: #121212; font-family: "Constantia","serif"; font-size: 15.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Elkington, J., “Cannibals with Forks:
the Triple Bottom Line of 21st Century Business”, Capstone, 1997<o:p></o:p></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8gJSHDEsBNjJpzPpPkzH-jStz-gbCEYq3Een8TlsBI3hMG6aT4tcNVSU7IUh3W2XdkXzg4W2KpS9n6r8ZaUeXcZFWKlRBYqFOnUzBtVAOMLVY-1wgKz1uK7sVaeUxl6-U5gupEOuyvuI/s1600/People-Planet-Profit-by-Peter-Fisk-3.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="711" data-original-width="781" height="291" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8gJSHDEsBNjJpzPpPkzH-jStz-gbCEYq3Een8TlsBI3hMG6aT4tcNVSU7IUh3W2XdkXzg4W2KpS9n6r8ZaUeXcZFWKlRBYqFOnUzBtVAOMLVY-1wgKz1uK7sVaeUxl6-U5gupEOuyvuI/s320/People-Planet-Profit-by-Peter-Fisk-3.jpg" width="320" /></a></div>
<br /><br /></div>
Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-67472448609524397432018-10-25T01:42:00.005-07:002018-10-25T01:42:48.862-07:008 Principles of Blue Ocean Strategy <div dir="ltr" style="text-align: left;" trbidi="on">
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Business</span></a><o:p></o:p></span></b></div>
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<b><span style="background: #BBBBBB; color: white; font-family: "Arial","sans-serif"; font-size: 8.5pt; letter-spacing: 2.25pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">пятница,
8 мая 2015 г.</span></b><b><span style="color: black; font-family: "Arial","sans-serif"; font-size: 8.5pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></b></div>
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<a href="https://www.blogger.com/null" name="4327427799341352679"></a><b><span style="color: black; font-family: "Trebuchet MS","sans-serif"; font-size: 16.5pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">8
Core Principles of Blue Ocean Strategy<o:p></o:p></span></b></div>
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<span style="color: black; font-family: "Arial","sans-serif"; font-size: 16.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The fundamentals that will jump start
your strategy development process<o:p></o:p></span></div>
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<i><span style="color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">W. Chan Kim and Renée Mauborgne</span></i><span style="color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">What is distinctive about blue ocean
strategy as a theory? How is blue ocean strategy different from a classic
differentiation strategy? Is it another form of low cost strategy? What’s the
research process behind it? In the decade since <a href="http://www.amazon.com/Blue-Ocean-Strategy-Expanded-Uncontested/dp/1625274491/ref=la_B00459UV38_1_1?s=books&ie=UTF8&qid=1431093027&sr=1-1"><i><span style="color: #0070b5;">Blue Ocean Strategy</span></i></a> was first
published, we’ve fielded thousands of such questions. Some executives want to
understand how it addresses the issue of execution. Some ask what the strategy
is based on. Others question whether the strategy will be effective in their
industry. We heard certain questions again and again and, in response, have
identified eight core principles. Here we outline the essence of blue ocean
strategy.<br />
<br />
</span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; font-size: 16.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">It’s grounded in data<o:p></o:p></span></div>
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<span style="background: white; color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Blue ocean strategy is
based on a decade long study of more than 150 strategic moves spanning more
than 30 industries over 100 years. Industries ranged from hotels, cinema,
retail, airlines, energy, computers, broadcasting, and construction to
automobiles and steel. We analyzed not only winning business players who
created blue oceans but also their less successful competitors. We searched for
convergence among the group that created blue oceans and within less successful
players caught in the red ocean. We also searched for divergence across these
two groups. In so doing, we tried to discover the common factors leading to the
creation of blue oceans and the key differences separating those winners from
the mere survivors and the losers adrift in the red ocean. As our database and
research have continued to expand and grow over the last ten years since the
first edition of our book was published, we have continued to observe similar
patterns whether blue oceans were created in for-profit industries, non-profit
organizations, or the public sector.</span><span style="color: black; font-family: "Trebuchet MS","sans-serif"; font-size: 10.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><br />
</span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; font-size: 16.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">It pursues differentiation and low cost<o:p></o:p></span></div>
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<span style="background: white; color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Blue ocean strategy is
based on the simultaneous pursuit of differentiation and low cost. It is an
“and-and,” not an “either-or” strategy. Conventional wisdom holds that
companies can either create greater value for customers at a higher cost or
create reasonable value at a lower cost. Here strategy is seen as making a
choice between differentiation and low cost. In contrast, blue ocean strategy
seeks to break the value-cost tradeoff by eliminating and reducing factors an industry
competes on and raising and creating factors the industry has never offered.
This is what we call </span><span style="color: black; font-family: "Trebuchet MS","sans-serif"; font-size: 10.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><a href="http://www.blueoceanstrategy.com/tools/value-innovation/"><span style="background: white; color: #0070b5; font-family: "Arial","sans-serif"; font-size: 11.0pt;">value innovation</span></a></span><span style="background: white; color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">.</span><span style="color: black; font-family: "Trebuchet MS","sans-serif"; font-size: 10.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Value innovation is distinctively
different from the competitive strategic approach that takes an industry
structure as given and seeks to build a defensible position within the existing
industry order. The strategic logic of value innovation guides companies to
identify what buyers commonly value across the conventional boundaries of
competition and reconstruct key factors across market boundaries, thereby
achieving both differentiation and low cost and creating a leap in value for
both buyers and the company.<o:p></o:p></span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; font-size: 16.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">It creates uncontested market space<o:p></o:p></span></div>
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<span style="background: white; color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Blue ocean strategy
doesn’t aim to out-perform the competition. It aims to make the competition
irrelevant by reconstructing industry boundaries. Whereas conventional
strategic approaches drive companies to define their industry similarly and
focus on being the best within it, blue ocean strategy prompts them to break
out of the accepted boundaries that define how they compete. Instead of looking
within these boundaries, managers need to look systematically across them to
create blue oceans – new and uncontested market space of new demand and high
profitable growth.</span><span style="color: black; font-family: "Trebuchet MS","sans-serif"; font-size: 10.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; font-size: 17.5pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">It empowers you through tools and
frameworks<o:p></o:p></span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Blue ocean strategy offers systematic
tools and frameworks to break away from the competition and create a blue ocean
of uncontested market space. The field of strategy, by contrast, has
predominantly focused on how to compete in established markets, creating an
arsenal of analytic tools and frameworks to skillfully achieve this. Blue ocean
strategy is built on the common strategic patterns behind the successful
creation of blue oceans. These patterns have allowed us to develop underlying
analytic frameworks, tools and methodologies to systematically link innovation
to value and reconstruct industry boundaries. The visual and actionable
frameworks and tools like the <a href="http://www.blueoceanstrategy.com/tools/strategy-canvas/"><span style="color: #0070b5;">strategy canvas</span></a>, <a href="http://www.blueoceanstrategy.com/tools/4-actions-framework/"><span style="color: #0070b5;">four actions framework</span></a> and <a href="http://www.blueoceanstrategy.com/tools/six-paths/"><span style="color: #0070b5;">six paths</span></a> form the analytic foundations
of the blue ocean creation process, bringing structure to what has historically
been an unstructured problem in strategy. They provide a roadmap and critical
visual guidance for systematically pursuing value innovation and creating
uncontested market space. Companies can make proactive changes in industry or
market fundamentals through the purposeful application of these blue ocean
tools and frameworks.</span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; font-size: 16.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">It provides a step-by-step process<o:p></o:p></span></div>
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<span style="background: white; color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">From assessing the
current state of play in an industry, to exploring the six paths to new market
space, to understanding how to convert noncustomers into customers, blue ocean
strategy provides a clear four-step process to break away from the competition and
create a blue ocean of strong profitable growth. The four-step process is
designed around the concepts and analytic tools of blue ocean strategy
and </span><span style="color: black; font-family: "Trebuchet MS","sans-serif"; font-size: 10.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><a href="http://www.blueoceanstrategy.com/tools/fair-process/"><span style="background: white; color: #0070b5; font-family: "Arial","sans-serif"; font-size: 11.0pt;">fair process</span></a></span><span style="background: white; color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">. It is built based on our strategy practices in
the field with many companies over the last two decades. It allows managers and
their teams to develop rigorous and concrete strategies while capturing the big
picture. In this way, it presents an alternative to the existing strategic
planning process, which is often criticized as a number-crunching exercise that
keeps companies locked into making incremental improvements.</span><span style="color: black; font-family: "Trebuchet MS","sans-serif"; font-size: 10.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><br />
</span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; font-size: 17.5pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">It maximizes opportunity while
minimizing risk<o:p></o:p></span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Blue ocean strategy is an
opportunity-maximizing risk-minimizing strategy. Of course any strategy will
always involve risks – be it red or blue. However, blue ocean strategy provides
a robust mechanism to mitigate risks and increase the odds of success. A key
framework here is the Blue Ocean Idea Index. The Blue Ocean Idea Index lets you
test the commercial viability of your blue ocean ideas and shows you how to
refine your ideas to maximize your upside while minimizing downside risks. It
allows you to answer four key questions: First, is there a compelling reason
for people to buy your offering? Second, is your offering priced to attract the
mass of target buyers so they have a compelling ability to pay for it? Third,
can you produce your offering at the strategic price and still earn a healthy
profit from it? And finally what are the adoption hurdles in rolling out your
idea and have you addressed these upfront? The first two questions address the
revenue side of your business model. They ensure that you create a leap in net
buyer value. The third question ensures the profit side of your business model.
And the last question ensures that you have given good thought and addressed
externalities that could trip up even the best new idea.<o:p></o:p></span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; font-size: 16.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">It builds execution into strategy<o:p></o:p></span></div>
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<span style="background: white; color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">The process and tools
of blue ocean strategy are inclusive, easy to understand and communicate, and
visual – all of which makes the process non-intimidating and an effective path
to building execution into strategy and the collective wisdom of a company.</span><span style="color: black; font-family: "Trebuchet MS","sans-serif"; font-size: 10.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><br />
</span><span style="background: white; color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Equally
as important, blue ocean strategy is a strategy that expressly joins analytics
with the human dimension of organizations. It recognizes and pays respect to
the importance of aligning people’s minds and hearts with a new strategy so
that at the level of the individual, people embrace it of their own accord and
willingly go beyond compulsory execution to voluntary cooperation in carrying
it out. To achieve this, blue ocean strategy does not separate strategy
formulation from execution. Although this disconnect may be a hallmark of most
companies’ practices, our research shows it is also a hallmark of slow and
questionable implementation and mechanical follow-through at best. Instead,
blue ocean strategy builds execution into strategy from the start through the
practice of fair process in the making and rolling out of strategy.</span><span style="color: black; font-family: "Trebuchet MS","sans-serif"; font-size: 10.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><a href="http://www.blueoceanstrategy.com/tools/fair-process/"><span style="color: #0070b5;">Fair Process</span></a>, namely, engagement, explanation
and expectation clarity, prepares the ground for implementation by invoking the
most fundamental basis of action: trust, commitment, and the voluntary
cooperation of people deep in an organization. Commitment, trust, and voluntary
cooperation are not merely attitudes or behaviors. They are intangible capital.
They allow companies to stand apart in the speed, quality, and consistency of
their execution and to implement strategic shifts fast at low cost.<o:p></o:p></span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; font-size: 17.5pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">It shows you how to create a win-win
outcome<o:p></o:p></span></div>
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<span style="color: black; font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">With its integrated approach, blue
ocean strategy shows how to align the three strategy propositions – value,
profit, and people – to ensure your organization is aligned around your new
strategy and that it creates a win for buyers, the company, and for employees
and stakeholders. For any strategy to be successful and sustainable an
organization must develop an offering that attracts buyers; it must create a
business model that enables the company to make a tidy profit; and it must
motivate the people working for or with the company to execute the strategy.
While good strategy content hinges upon a compelling value proposition for
buyers and a robust profit proposition for the organization, sustainable
strategy execution is based largely on a motivating people proposition. The
alignment of the three propositions proposed by blue ocean strategy ensures
that an organization is taking a holistic approach to the formulation and
execution of strategy. Together the three propositions provide an organizing
framework for creating a winning strategy that will benefit buyers, the
company, as well as internal and external stakeholders.<o:p></o:p></span></div>
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Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-35436872375992917632018-10-25T01:30:00.001-07:002018-10-25T01:30:13.899-07:00Blue Ocean Strategy Summary<iframe allowfullscreen="" frameborder="0" height="270" src="https://www.youtube.com/embed/8cVS7YEW2Fk" width="480"></iframe>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0tag:blogger.com,1999:blog-8330375772621360648.post-34202126224894374862018-10-25T01:25:00.001-07:002018-10-25T01:25:37.120-07:00What's a Strategy Canvas<iframe allowfullscreen="" frameborder="0" height="270" src="https://www.youtube.com/embed/AGREE7D8vvU" width="480"></iframe>Build Your Personal Brandhttp://www.blogger.com/profile/01394954118947708452noreply@blogger.com0