A right to win: Undisputed competitive advantage.

The Right to Win

Business strategy is at an evolutionary crossroads. It’s time to resolve the long-standing tension between the inherent identity of your organization and the fleeting nature of your competitive advantage.

by Cesare Mainardi with Art Kleiner

Photo illustration by Holly Lindem

It’s 8 a.m. in the executive conference room of a large global packaged-foods manufacturer (a real company, its name withheld to preserve confidentiality). For the past two months, a team made up of 15 senior people has been exploring options for growth, winnowing them down to three basic strategies. Each is now summed up in a crisp 20-minute presentation.
The first option focuses on innovation. The company would rapidly develop and launch many new types of snacks and foods, packaged in new and interesting ways, offering leading-edge nutrition and convenience.
Under the second option, the company would get closer to its customers, producing the food people ask for. It could incorporate ideas gathered online into its offerings and provide busy working families with customizable, convenient, and well-balanced meals.
The third option would involve transforming the dynamics of the relevant food sectors by competing more aggressively. The company would become a category leader by investing in new process technology, rightsizing operations to push costs down, and completing key acquisitions.
After the screen goes blank, the CEO leans forward and asks a simple question: “Which strategy would give us the greatest right to win?” His tone, calm and direct, makes everyone sit up a little straighter. And they probably should, for this is the core question underlying every business strategy, although it isn’t always phrased that way.
A right to win is the ability to engage in any competitive market with a better-than-even chance of success — not just in the short term, but consistently....

How blue are the oceans? The Starwood experience

Robyn Pratt, Starwood An INSEAD article In search of blue oceans: The Starwood experience asks: Are companies using Blue Ocean Strategy to search for ‘uncontested market space’ and, if so, how? One group which has been exploring blue ocean thinking for the past three years is Starwood Hotels and Resorts. Jens Meyer In conjunction with Meyer, the company has developed a process through which employees are trained in Blue Ocean Strategy, effectively focusing on non-customers, before being given three to four months to apply the methodology. Projects are then proposed to the senior operating team at a so-called ‘Visual Strategy Fair’; black belts or master black belts then put together a business case to present those projects to the senior leadership team for a decision on whether to implement these.

How to Create Uncontested Market Space and Make Competition Irrelevant

The book ‘Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant’ has had a huge impact worldwide. Written by two INSEAD professors, W. Chan Kim and Renée Mauborgne, it sold more than a million copies within its first year of publication and has been translated into 39 languages, breaking Harvard Publishing records as the fastest selling book in print. In the lead up to writing the award-winning book, Kim and Mauborgne spent 15 years studying strategic moves by companies in more than 30 industries over a period spanning from 1880 to 2000. Traditionally competition has been at the heart of corporate strategy – country versus country, company versus company, and even business school versus business school.  The key question is usually how can a company outdo its rivals?

To what extend CRM Empowers Growth?

O2ibm

Visit this group The CRM tools can empower customer facing employees to help organizations achieve growth strategy.  In this current economic downturn, with increased hyper-competition the pressure is on for the organizations to continually keep track of customer pulse.  This will enable the organizations understand changing customer need constantly. CRM tools can play a pivotal role to create 4 best practices to empower customer facing employees to achieve extraordinary, sustainable results. Attain real-world benefits such as: Increased growth:  With information at their finger tips, employees can cross sell products and services to the customers.  CRM helps create repository of customer behavior at every touch point, thus helping organizations build a detailed virtual client model. Enhanced productivity: With centralized access to all the customer specific data, CRM tools can enhance the productivity of the employees. Achieve short-term goals:  With the access to entire customer information, the management can align employee performance payment to achieve short term goals. Improved collective thinking, flexibility and consistency: This is huge value added feature that the newer CRM tools bring to the organization.  As they are Enterprise 2.0 enabled, they help build a community of customers.  By enabling seamless feedback from the customers at the different touch points in the value chain, the CRM tools can convert a consumer to a ‘prosumer’.  The collective knowledge can be harnessed to build a product or offer a service that will continually add value to the customers and increase the bottom line of the company.  This also helps ever increasing fickle minded consumer to be more loyal to the brand since they are involved in shaping the product. Check out Oracle sponsored white paper here

How do you Shield your Company in Times of Uncertainty?

Building Some Protection Against a Down Economy

Richard Flynn

(American Express OPEN)

Today, business owners find themselves pressed to keep up with uncertain economic conditions.  But even in an economic downturn there are opportunities to be had—if you are prepared to take advantage of them.  The following tips can help you to assess where you stand and to prepare for the surprises and opportunities the market sends your way.   Plan to not fail The difference between who weathers the storm well and who doesn’t often boils down to one factor: planning. Although no one sets out to fail, business owners sometimes don’t have explicit enough plans to help them avoid failure. The trick is not only to recognize your challenges, but to create a plan by putting challenges—and potential solutions—in writing. Write down ten specific challenges that your business faces, along with some possible solutions. The more specific you can be, the better. Some of your challenges may be obvious, but others may require devising some “what if” scenarios to pinpoint potential weaknesses. For example, what if your most important vendor raises prices dramatically—or worse yet, goes out of business?   Reassess budgets and major expenses Take a look at how you predict expenses and assess whether you’re allowing enough leeway to cover the unexpected. While running a little over budget in one area may not be a crisis, doing so consistently in several areas can quickly drain cash. Allow for a little extra time and money by budgeting pessimistically. A little padding may go a long way. Consider cutting back on recurring expenses wherever possible. Look at business relationships and obligations and question whether they may hold opportunity for savings. For example, is there room to renegotiate contracts and agreements, such as leases? Chances are you’re not the only one willing to make some sacrifices. You also may be able to renegotiate payment terms with key vendors. Many vendors will extend trade terms that can allow you to hold on to cash a little longer or that reward early payment with a small discount. You can also gain trade-like terms from vendors without negotiating with the Plum Card® from American Express OPEN^®. Make smart decisions about staff Salaries and wages are often a huge drain, but cutting staff prematurely can lead to being shorthanded when large projects come in later. And, it’s important to remember that it can be very challenging—and expensive—to find and hire qualified employees when the economy rebounds. If cutting salaries and wages is unavoidable, look for creative ways to do so without outright layoffs. For most employees, losing a few hours each week will probably be far preferable than losing a job entirely. While even the most loyal employees probably won’t be willing to settle for reduced hours permanently, this temporary tactic could help you through a rough patch.  Build in options for yourself If your business has the cash to pay routine bills and payroll and buy supplies, it may be in pretty good shape.  The real test, however, comes when a business has to come up with cash to cover the unexpected. Having six months’ cash in reserve could be the key to survival. Each time you’re able to reduce spending in one area or another, consider whether at least a portion of your savings could be diverted into your cash reverses. If you feel building a reserve is an unattainable goal, consult with your accountant or another trusted financial resource to help you devise a workable plan. While not a replacement for cash reserves, financing can also be an important tool. Just like building reserves, advance planning is the best course for establishing financing, partly because it simply takes time to line up several sources of financing. And it may be better not to wait, as banks and other institutions may be more likely to extend credit to your business before cash gets tight or business slows. When you do rely on credit, make sure you use it wisely. Short-term financing options such as lines of credit short-term, loans, or credit cards are meant for short-term cash needs. Likewise, long-term or secured loans are intended for the purchase of long-term investments. In a down economy, being prepared for change is a business’s best asset. Fortunately, small businesses are known for their agility and adaptability. So build a plan and do everything you can to keep enough cash at your disposal, because these moves can also put you in a great position when the economy improves.   Richard Flynn is Senior Vice President and General Manager for American Express OPEN.

O2ibm

Visit this group

Three Key Questions to Foster Competitive Advantage

James Heskett, a Baker Foundation Professor, Emeritus, at Harvard Business School, examined the degree to which strategy, execution, and culture contribute to organizational success, via 3 key questions that reflect all aspects of competitive sucess: