IDEAS IN PRACTICE
Shokisumai Industries
Aim:
to list the types of factor that a company can develop into a competitive
advantage.
Organisations want to develop
capabilities that give a sustainable competitive advantage. Without some kind of distinctive capability,
there is nothing to distinguish an organisation’s products, and no reason for
customers to prefer them. This is
typical of a commodity market. In
principle, organisations can build almost any aspect of their operations into a
competitive advantage. However, there
are some common options, such as low costs, speed, reliability and so on. Shokisumai Industries identify five general
areas where they develop a capability – market features and relations with
customers, product features, availability of resources, use of resources and
relationships with stakeholders. This
list – with a few adjustments – is relevant for almost any other organisation.
Tarmac
Aim:
to suggest the type of mission that is found in a major construction company
The most common contents of a
mission are statements about purpose, values, strategy and standards of behaviour. These come in an almost endless variety of
formats and details. The example of
Tarmac illustrates how these can appear in practice, with the company clearly
stating it position.
Lufthansa Aviation
Group
Aim:
to show the mission of a major service provider, and suggest the way that this
can be expanded to lower levels
The mission becomes the basis for
strategic goals and objectives, which cascade down to lower decisions. This case in Lufthansa shows the initial
steps in this movement. The first part
of their mission outlines their purpose, and the second part begins to expand
this into strategic goals. It mentions
‘market leadership’ and prepares the way for more detailed decisions by talking
about specific areas like reliability, punctuality and punctuality. The third part of the mission looks at their
responsibilities towards different stakeholders. The next steps would be to expand these goals
into more specific objectives, and then into more details goals.
Microsoft
Aim:
the last case showed how a mission can be expanded into more detailed goals and
objectives; this case gives an example of this move down from corporate to
business level.
As you would imagine, Microsoft has
a very clear and well-presented mission that shows its purpose and the values
that help it to succeed. The mission
gives a review of how Microsoft approach their work. But – perhaps not surprisingly – the mission is slightly
eccentric. Rather than listing their
types of products, it describes the way that they take on big challenges and
see them through, and use constructive self-criticism. Eventually, these hazy aspirations have to be
translated into more practical forms, so that Microsoft continue to supply
products that customers buy. This is
done in the seven core business units.
Each of these considers the products that it makes, and designs an
appropriate business strategy to support the corporate strategy and mission.
Aim:
to outlines the factors that an investment company considers important in a
company that it might invest in.
This case suggests the factors that
one investment company considers most important for the long-term success of a
company. They clearly emphasise the role
of senior management in formulating and implementing a reasonable
strategy. In particular, they look for a
convincing mission that explicitly includes profit, and a business strategy of
either working in an inherently attractive industry or having distinctive
capabilities that give high rewards in the chosen industry. Most significantly, the investment trust then
looks for an operations strategy that can deliver the business strategy. So a clearer link is developing between the overall
organisational purpose and the way that this is achieved through an operations
strategy.
PepsiCo, Inc
Aim: to outline the effects of a strategy
that changes over time
PepsiCo’s is one of the world’s best known companies, whose overriding
objective is ‘to increase the value of our shareholders' investment through
integrated operating, investing and financing activities’. This is developed in the corporate strategy
which focuses on growing businesses, both through internal growth and
acquisitions. At a business level,
distinctive capabilities are implicit in the company’s statement that their ‘success is the result of superior
products, high standards of performance, distinctive competitive strategies and
the high level of integrity of our people’.
Although they have a clearly stated strategy, it follows common patterns
that appear in many other organisations – effectively using generic strategies.
These strategies have changed markedly
over recent years, as the company moved from diversification to retrenchment
and then development of its core activities.
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