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[Site] Strategic Management Society - Home Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectivesDavid, F Strategic Management, Columbus:Merrill Publishing Company, 1989. It is the process of specifying the organization's objectives, developing policies and plans to achieve these objectives, and allocating resources to implement the policies and plans to achieve the organization's objectives. Strategic management, therefore, combines the activities of the various functional areas of a business to achieve organizational objectives. It is the highest level of managerial activity, usually formulated by the Board of directors and performed by the organization's Chief Executive Officer (CEO) and executive team. Strategic management provides overall direction to the enterprise and is closely related to the field of Organization Studies. In the field of business administration it is possible mention to the "strategic consistency." According to Arieu (2007), "there is strategic consistency when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context." [News] Strategic Management “Strategic management is an ongoing process that assesses the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly regularly to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.” (Lamb, 1984:ix)Lamb, Robert, Boyden Competitive strategic management, Englewood Cliffs, NJ: Prentice-Hall, 1984 [Image] There are many software products available in the market that process and report organisational data and which aid in strategic management—e.g. SAP, SEM, SAS, etc. [Video] 2 bedroom for sale in GOLDEN SANDS,
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ProcessesStrategic management is a combination of three main processes which are as follows:[Auction] Strategic Management Concepts by Michael Hitt
Strategy formulation
[Post] strategic management
Strategy implementation
Strategy evaluation
[Site] Strategic Management Society - Publications In corporate strategy, Jonhson and Scholes present a model in which strategic options are evaluated against three key success criteria: [News] Software integrates reward/talent management for workplace.
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SuitabilitySuitability deals with the overall rationale of the strategy. The key point to consider is wether the would address the key strategic issues underlined by the organisation's strategic position.[Video] Brian Tracy -Strategic Achievement
[Auction] Strategic Management & Business Policy Tools that can be used to evaluate suitability include: [Post] Historicism in narrative reviews of strategic management research ...
[Book] Strategic Management and Business Policy (11th Edition) Prentice Hall
FeasibilityFeasibility is concerned with the resources required to implement the strategy are available, can be developed or obtained. Resources include funding, people, time and information.[Site] STRATEGIC MANAGEMENT - New Approaches for the New Era of Rapid Change Tools that can be used to evaluate feasibility include: [News] Atlantica Online Brings Strategic, Turn-Based RPG Gameplay Back to the MMO World
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AcceptabilityAcceptability is concerned with the expectations of the identified stakeholders (mainly shareholders, employees and customers) with the expected performance outcomes, which can be return, risk and stakeholder reactions.[Video] Learn The Secret Marketing Tips Your Upline Won't Share w/U
[Auction] Strategic Management & Competitive Advantage Jay Barney Tools that can be used to evaluate feasibility include: [Post] The Lisante Plan
General approachesIn general terms, there are two main approaches, which are opposite but complement each other in some ways, to strategic management:
[Site] AN INVITATION TO STRATEGIC MANAGEMENT Strategic management techniques can be viewed as bottom-up, top-down, or collaborative processes. In the bottom-up approach, employees submit proposals to their managers who, in turn, funnel the best ideas further up the organization. This is often accomplished by a capital budgeting process. Proposals are assessed using financial criteria such as return on investment or cost-benefit analysis. Cost underestimation and benefit overestimation are major sources of error. The proposals that are approved form the substance of a new strategy, all of which is done without a grand strategic design or a strategic architect. The top-down approach is the most common by far. In it, the CEO, possibly with the assistance of a strategic planning team, decides on the overall direction the company should take. Some organizations are starting to experiment with collaborative strategic planning techniques that recognize the emergent nature of strategic decisions. [News] Research on Priceline-style Web sites favors package deals, says Management Insights
The strategy hierarchyIn most (large) corporations there are several levels of strategy. Strategic management is the highest in the sense that it is the broadest, applying to all parts of the firm. It gives direction to corporate values, corporate culture, corporate goals, and corporate missions. Under this broad corporate strategy there are often functional or business unit strategies.[Image] Functional strategies include marketing strategies, new product development strategies, human resource strategies, financial strategies, legal strategies, supply-chain strategies, and information technology management strategies. The emphasis is on short and medium term plans and is limited to the domain of each department’s functional responsibility. Each functional department attempts to do its part in meeting overall corporate objectives, and hence to some extent their strategies are derived from broader corporate strategies. [Video] Spring 2009 Elective Spotlight Many companies feel that a functional organizational structure is not an efficient way to organize activities so they have reengineered according to processes or strategic business units (called SBUs). A strategic business unit is a semi-autonomous unit within an organization. It is usually responsible for its own budgeting, new product decisions, hiring decisions, and price setting. An SBU is treated as an internal profit centre by corporate headquarters. Each SBU is responsible for developing its business strategies, strategies that must be in tune with broader corporate strategies. [Auction] Strategic Human Resource Management by Jeffrey Mello The “lowest” level of strategy is operational strategy. It is very narrow in focus and deals with day-to-day operational activities such as scheduling criteria. It must operate within a budget but is not at liberty to adjust or create that budget. Operational level strategy was encouraged by Peter Drucker in his theory of management by objectives (MBO). Operational level strategies are informed by business level strategies which, in turn, are informed by corporate level strategies. Business strategy, which refers to the aggregated operational strategies of single business firm or that of an SBU in a diversified corporation refers to the way in which a firm competes in its chosen arenas. [Post] Events Corporate strategy, then, refers to the overarching strategy of the diversified firm. Such corporate strategy answers the questions of "in which businesses should we compete?" and "how does being in one business add to the competitive advantage of another portfolio firm, as well as the competitive advantage of the corporation as a whole?" [Book] Strategic Management: An Integrated Approach South-Western College Pub Since the turn of the millennium, there has been a tendency in some firms to revert to a simpler strategic structure. This is being driven by information technology. It is felt that knowledge management systems should be used to share information and create common goals. Strategic divisions are thought to hamper this process. Most recently, this notion of strategy has been captured under the rubric of dynamic strategy, popularized by the strategic management textbook authored by Carpenter and Sanders [1]. This work builds on that of Brown and Eisenhart as well as Christensen and portrays firm strategy, both business and corporate, as necessarily embracing ongoing strategic change, and the seamless integration of strategy formulation and implementation. Such change and implementation are usually built into the strategy through the staging and pacing facets. [Site] Strategic Management
Historical development of strategic managementBirth of strategic managementStrategic management as a discipline originated in the 1950s and 60s. Although there were numerous early contributors to the literature, the most influential pioneers were Alfred D. Chandler, Jr., Philip Selznick, Igor Ansoff, and Peter Drucker.[News] Regents pay $15,000 for strategic plan facilitator Alfred Chandler recognized the importance of coordinating the various aspects of management under one all-encompassing strategy. Prior to this time the various functions of management were separate with little overall coordination or strategy. Interactions between functions or between departments were typically handled by a boundary position, that is, there were one or two managers that relayed information back and forth between two departments. Chandler also stressed the importance of taking a long term perspective when looking to the future. In his 1962 groundbreaking work Strategy and Structure, Chandler showed that a long-term coordinated strategy was necessary to give a company structure, direction, and focus. He says it concisely, “structure follows strategy.”Chandler, Alfred Strategy and Structure: Chapters in the history of industrial enterprise, Doubleday, New York, 1962. [Image] In 1957, Philip Selznick introduced the idea of matching the organization's internal factors with external environmental circumstances.Selznick, Philip Leadership in Administration: A Sociological Interpretation, Row, Peterson, Evanston Il. 1957. This core idea was developed into what we now call SWOT analysis by Learned, Andrews, and others at the Harvard Business School General Management Group. Strengths and weaknesses of the firm are assessed in light of the opportunities and threats from the business environment. [Video] NSCYBERSPACE #124 THE NATIONAL STRATEGY TO SECURE CYBERSPACE Igor Ansoff built on Chandler's work by adding a range of strategic concepts and inventing a whole new vocabulary. He developed a strategy grid that compared market penetration strategies, product development strategies, market development strategies and horizontal and vertical integration and diversification strategies. He felt that management could use these strategies to systematically prepare for future opportunities and challenges. In his 1965 classic Corporate Strategy, he developed the gap analysis still used today in which we must understand the gap between where we are currently and where we would like to be, then develop what he called “gap reducing actions”.Ansoff, Igor Corporate Strategy McGraw Hill, New York, 1965. [Auction] Strategic Brand Management, Kevin Lane Keller Peter Drucker was a prolific strategy theorist, author of dozens of management books, with a career spanning five decades. His contributions to strategic management were many but two are most important. Firstly, he stressed the importance of objectives. An organization without clear objectives is like a ship without a rudder. As early as 1954 he was developing a theory of management based on objectives.Drucker, Peter The Practice of Management, Harper and Row, New York, 1954. This evolved into his theory of management by objectives (MBO). According to Drucker, the procedure of setting objectives and monitoring your progress towards them should permeate the entire organization, top to bottom. His other seminal contribution was in predicting the importance of what today we would call intellectual capital. He predicted the rise of what he called the “knowledge worker” and explained the consequences of this for management. He said that knowledge work is non-hierarchical. Work would be carried out in teams with the person most knowledgeable in the task at hand being the temporary leader. [Post] A conceptual link among facilities management, strategic ... In 1985, Ellen-Earle Chaffee summarized what she thought were the main elements of strategic management theory by the 1970s:Chaffee, E. “Three models of strategy”, Academy of Management Review, vol 10, no. 1, 1985.
[Book] Strategic Management of Health Care Organizations (5th Edition) Wiley-Blackwell
Growth and portfolio theoryIn the 1970s much of strategic management dealt with size, growth, and portfolio theory.The PIMS study was a long term study, started in the 1960s and lasted for 19 years, that attempted to understand the Profit Impact of Marketing Strategies (PIMS), particularly the effect of market share. Started at General Electric, moved to Harvard in the early 1970s, and then moved to the Strategic Planning Institute in the late 1970s, it now contains decades of information on the relationship between profitability and strategy. Their initial conclusion was unambiguous: The greater a company's market share, the greater will be their rate of profit. The high market share provides volume and economies of scale. It also provides experience and learning curve advantages. The combined effect is increased profits.Buzzell, R. and Gale, B. The PIMS Principles: Linking Strategy to Performance, Free Press, New York, 1987. The studies conclusions continue to be drawn on by academics and companies today: "PIMS provides compelling quantitative evidence as to which business strategies work and don't work" - Tom Peters.[Site] STRATEGIC MANAGEMENT The benefits of high market share naturally lead to an interest in growth strategies. The relative advantages of horizontal integration, vertical integration, diversification, franchise, mergers and acquisitions, joint ventures, and organic growth were discussed. The most appropriate market dominance strategies were assessed given the competitive and regulatory environment. [News] BB&T shuffles management lineup There was also research that indicated that a low market share strategy could also be very profitable. Schumacher (1973),Schumacher, E.F. Small is Beautiful: a Study of Economics as if People Mattered, ISBN 0061317780 (also ISBN 0881791695) Woo and Cooper (1982),Woo, C. and Cooper, A. “The surprising case for low market share”, Harvard Business Review, November–December 1982, pg 106–113. Levenson (1984),Levinson, J.C. Guerrilla Marketing, Secrets for making big profits from your small business, Houghton Muffin Co. New York, 1984, ISBN 0-396-35350-5. and later Traverso (2002)Traverso, D. Outsmarting Goliath, Bloomberg Press, Princeton, 2000. showed how smaller niche players obtained very high returns. [Image] By the early 1980s the paradoxical conclusion was that high market share and low market share companies were often very profitable but most of the companies in between were not. This was sometimes called the “hole in the middle” problem. This anomaly would be explained by Michael Porter in the 1980s. [Video] NSCYBERSPACE #98 THE NATIONAL STRATEGY TO SECURE CYBERSPACE The management of diversified organizations required new techniques and new ways of thinking. The first CEO to address the problem of a multi-divisional company was Alfred Sloan at General Motors. GM was decentralized into semi-autonomous “strategic business units” (SBU's), but with centralized support functions. [Auction] Strategic Management Concepts by Michael Hitt One of the most valuable concepts in the strategic management of multi-divisional companies was portfolio theory. In the previous decade Harry Markowitz and other financial theorists developed the theory of portfolio analysis. It was concluded that a broad portfolio of financial assets could reduce specific risk. In the 1970s marketers extended the theory to product portfolio decisions and managerial strategists extended it to operating division portfolios. Each of a company’s operating divisions were seen as an element in the corporate portfolio. Each operating division (also called strategic business units) was treated as a semi-independent profit center with its own revenues, costs, objectives, and strategies. Several techniques were developed to analyze the relationships between elements in a portfolio. B.C.G. Analysis, for example, was developed by the Boston Consulting Group in the early 1970s. This was the theory that gave us the wonderful image of a CEO sitting on a stool milking a cash cow. Shortly after that the G.E. multi factoral model was developed by General Electric. Companies continued to diversify until the 1980s when it was realized that in many cases a portfolio of operating divisions was worth more as separate completely independent companies. [Post] Simplistic Strategic Management Strategies
The marketing revolutionThe 1970s also saw the rise of the marketing oriented firm. From the beginnings of capitalism it was assumed that the key requirement of business success was a product of high technical quality. If you produced a product that worked well and was durable, it was assumed you would have no difficulty selling them at a profit. This was called the production orientation and it was generally true that good products could be sold without effort, encapsulated in the saying "Build a better mousetrap and the world will beat a path to your door." This was largely due to the growing numbers of affluent and middle class people that capitalism had created. But after the untapped demand caused by the second world war was saturated in the 1950s it became obvious that products were not selling as easily as they had been. The answer was to concentrate on selling. The 1950s and 1960s is known as the sales era and the guiding philosophy of business of the time is today called the sales orientation. In the early 1970s Theodore Levitt and others at Harvard argued that the sales orientation had things backward. They claimed that instead of producing products then trying to sell them to the customer, businesses should start with the customer, find out what they wanted, and then produce it for them. The customer became the driving force behind all strategic business decisions. This marketing orientation, in the decades since its introduction, has been reformulated and repackaged under numerous names including customer orientation, marketing philosophy, customer intimacy, customer focus, customer driven, and market focused.[Book] Strategic Management: Text and Cases McGraw-Hill/Irwin
The Japanese challengeBy the late 70s people had started to notice how successful Japanese industry had become. In industry after industry, including steel, watches, ship building, cameras, autos, and electronics, the Japanese were surpassing American and European companies. Westerners wanted to know why. Numerous theories purported to explain the Japanese success including:
[Site] Introduction to Strategic Management In 1981 Richard Pascale and Anthony Athos in The Art of Japanese Management claimed that the main reason for Japanese success was their superior management techniques.Pascale, R. and Athos, A. The Art of Japanese Management, Penguin, London, 1981, ISBN 0-446-30784-x. They divided management into 7 aspects (which are also known as McKinsey 7S Framework): Strategy, Structure, Systems, Skills, Staff, Style, and Supraordinate goals (which we would now call shared values). The first three of the 7 S's were called hard factors and this is where American companies excelled. The remaining four factors (skills, staff, style, and shared values) were called soft factors and were not well understood by American businesses of the time (for details on the role of soft and hard factors see Wickens P.D. 1995.) Americans did not yet place great value on corporate culture, shared values and beliefs, and social cohesion in the workplace. In Japan the task of management was seen as managing the whole complex of human needs, economic, social, psychological, and spiritual. In America work was seen as something that was separate from the rest of one's life. It was quite common for Americans to exhibit a very different personality at work compared to the rest of their lives. Pascale also highlighted the difference between decision making styles; hierarchical in America, and consensus in Japan. He also claimed that American business lacked long term vision, preferring instead to apply management fads and theories in a piecemeal fashion. [News] Namibia: Health Strategic Plan Reviewed One year later The Mind of the Strategist was released in America by Kenichi Ohmae, the head of McKinsey & Co.'s Tokyo office.Ohmae, K. The Mind of the Strategist McGraw Hill, New York, 1982. (It was originally published in Japan in 1975.) He claimed that strategy in America was too analytical. Strategy should be a creative art: It is a frame of mind that requires intuition and intellectual flexibility. He claimed that Americans constrained their strategic options by thinking in terms of analytical techniques, rote formula, and step-by-step processes. He compared the culture of Japan in which vagueness, ambiguity, and tentative decisions were acceptable, to American culture that valued fast decisions. [Image] Also in 1982 Tom Peters and Robert Waterman released a study that would respond to the Japanese challenge head on.Peters, T. and Waterman, R. In Search of Excellence, HarperCollins, New york, 1982. Peters and Waterman, who had several years earlier collaborated with Pascale and Athos at McKinsey & Co. asked “What makes an excellent company?”. They looked at 62 companies that they thought were fairly successful. Each was subject to six performance criteria. To be classified as an excellent company, it had to be above the 50th percentile in 4 of the 6 performance metrics for 20 consecutive years. Forty-three companies passed the test. They then studied these successful companies and interviewed key executives. They concluded in In Search of Excellence that there were 8 keys to excellence that were shared by all 43 firms. They are:
[Video] NSCYBERSPACE #97 THE NATIONAL STRATEGY TO SECURE CYBERSPACE The basic blueprint on how to compete against the Japanese had been drawn. But as J.E. Rehfeld (1994) explains it is not a straight forward task due to differences in culture.Rehfeld, J.E. Alchemy of a Leader: Combining Western and Japanese Management skills to transform your company, John Whily & Sons, New York, 1994, ISBN 0-471-00836-2. A certain type of alchemy was required to transform knowledge from various cultures into a management style that allows a specific company to compete in a globally diverse world. He says, for example, that Japanese style kaizen (continuous improvement) techniques, although suitable for people socialized in Japanese culture, have not been successful when implemented in the U.S. unless they are modified significantly. [Auction] Strategic Brand Management Kevin Lane Keller US edition
Gaining competitive advantageThe Japanese challenge shook the confidence of the western business elite, but detailed comparisons of the two management styles and examinations of successful businesses convinced westerners that they could overcome the challenge. The 1980s and early 1990s saw a plethora of theories explaining exactly how this could be done. They cannot all be detailed here, but some of the more important strategic advances of the decade are explained below.[Post] Testking Microsoft MB3-003 Gary Hamel and C. K. Prahalad declared that strategy needs to be more active and interactive; less “arm-chair planning” was needed. They introduced terms like strategic intent and strategic architecture.Hamel, G. & Prahalad, C.K. “Strategic Intent”, Harvard Business Review, May–June 1989.Hamel, G. & Prahalad, C.K. Competing for the Future, Harvard Business School Press, Boston, 1994. Their most well known advance was the idea of core competency. They showed how important it was to know the one or two key things that your company does better than the competition.Hamel, G. & Prahalad, C.K. “The Core Competence of the Corporation”, Harvard Business Review, May–June 1990. [Book] Concepts: Strategic Management & Business Policy (11th Edition) Prentice Hall Active strategic management required active information gathering and active problem solving. In the early days of Hewlett-Packard (H-P), Dave Packard and Bill Hewlett devised an active management style that they called Management By Walking Around (MBWA). Senior H-P managers were seldom at their desks. They spent most of their days visiting employees, customers, and suppliers. This direct contact with key people provided them with a solid grounding from which viable strategies could be crafted. The MBWA concept was popularized in 1985 by a book by Tom Peters and Nancy Austin.Peters, T. and Austin, N. A Passion for Excellence, Random House, New York, 1985 (also Warner Books, New York, 1985 ISBN 0-446-38348-1) Japanese managers employ a similar system, which originated at Honda, and is sometimes called the 3 G's (Genba, Genbutsu, and Genjitsu, which translate into “actual place”, “actual thing”, and “actual situation”). [Site] Principles of Strategic Management Probably the most influential strategist of the decade was Michael Porter. He introduced many new concepts including; 5 forces analysis, generic strategies, the value chain, strategic groups, and clusters. In 5 forces analysis he identifies the forces that shape a firm's strategic environment. It is like a SWOT analysis with structure and purpose. It shows how a firm can use these forces to obtain a sustainable competitive advantage. Porter modifies Chandler's dictum about structure following strategy by introducing a second level of structure: Organizational structure follows strategy, which in turn follows industry structure. Porter's generic strategies detail the interaction between cost minimization strategies, product differentiation strategies, and market focus strategies. Although he did not introduce these terms, he showed the importance of choosing one of them rather than trying to position your company between them. He also challenged managers to see their industry in terms of a value chain. A firm will be successful only to the extent that it contributes to the industry's value chain. This forced management to look at its operations from the customer's point of view. Every operation should be examined in terms of what value it adds in the eyes of the final customer. [News] Strategic Diagnostics Reports Third Quarter 2008 Results In 1993, John Kay took the idea of the value chain to a financial level claiming “ Adding value is the central purpose of business activity”, where adding value is defined as the difference between the market value of outputs and the cost of inputs including capital, all divided by the firm's net output. Borrowing from Gary Hamel and Michael Porter, Kay claims that the role of strategic management is to identify your core competencies, and then assemble a collection of assets that will increase value added and provide a competitive advantage. He claims that there are 3 types of capabilities that can do this; innovation, reputation, and organizational structure. [Image] The 1980s also saw the widespread acceptance of positioning theory. Although the theory originated with Jack Trout in 1969, it didn’t gain wide acceptance until Al Ries and Jack Trout wrote their classic book “Positioning: The Battle For Your Mind” (1979). The basic premise is that a strategy should not be judged by internal company factors but by the way customers see it relative to the competition. Crafting and implementing a strategy involves creating a position in the mind of the collective consumer. Several techniques were applied to positioning theory, some newly invented but most borrowed from other disciplines. Perceptual mapping for example, creates visual displays of the relationships between positions. Multidimensional scaling, discriminant analysis, factor analysis, and conjoint analysis are mathematical techniques used to determine the most relevant characteristics (called dimensions or factors) upon which positions should be based. Preference regression can be used to determine vectors of ideal positions and cluster analysis can identify clusters of positions. [Video] NSCYBERSPACE #96 THE NATIONAL STRATEGY TO SECURE CYBERSPACE Others felt that internal company resources were the key. In 1992, Jay Barney, for example, saw strategy as assembling the optimum mix of resources, including human, technology, and suppliers, and then configure them in unique and sustainable ways.Barney, J. (1991) “Firm Resources and Sustainable Competitive Advantage”, Journal of Management, vol 17, no 1, 1991. [Auction] Strategic Management & Competitive Advantage Jay Barney Michael Hammer and James Champy felt that these resources needed to be restructured.Hammer, M. and Champy, J. Reengineering the Corporation, Harper Business, New York, 1993. This process, that they labeled reengineering, involved organizing a firm's assets around whole processes rather than tasks. In this way a team of people saw a project through, from inception to completion. This avoided functional silos where isolated departments seldom talked to each other. It also eliminated waste due to functional overlap and interdepartmental communications. [Post] Strategic management in aviation :critical essays In 1989 Richard Lester and the researchers at the MIT Industrial Performance Center identified seven best practices and concluded that firms must accelerate the shift away from the mass production of low cost standardized products. The seven areas of best practice were:Lester, R. Made in America, MIT Commission on Industrial Productivity, Boston, 1989.
[Book] Strategic Management of Technological Innovation McGraw Hill Higher Education A large group of theorists felt the area where western business was most lacking was product quality. People like W. Edwards Deming,Deming, W.E. Quality, Productivity, and Competitive Position, MIT Center for Advanced Engineering, Cambridge Mass., 1982. Joseph M. Juran,Juran, J.M. Juran on Quality, Free Press, New York, 1992. A. Kearney,Kearney, A.T. Total Quality Management: A business process perspective, Kearney Pree Inc, 1992. Philip Crosby,Crosby, P. Quality is Free, McGraw Hill, New York, 1979. and Armand FeignbaumFeignbaum, A. Total Quality Control, 3rd edition, McGraw Hill, Maidenhead, 1990. suggested quality improvement techniques like Total Quality Management (TQM), continuous improvement, lean manufacturing, Six Sigma, and Return on Quality (ROQ). An equally large group of theorists felt that poor customer service was the problem. People like James Heskett (1988),Heskett, J. Managing in the Service Economy, Harvard Business School Press, Boston, 1986. Earl Sasser (1995), William Davidow,Davidow, W. and Uttal, B. Total Customer Service, Harper Perennial Books, New York, 1990. Len Schlesinger,Schlesinger, L. and Heskett, J. "Customer Satisfaction is rooted in Employee Satisfaction," Harvard Business Review, November–December 1991. A. Paraurgman (1988), Len Berry,Berry, L. On Great Service, Free Press, New York, 1995. Jane Kingman-Brundage,Kingman-Brundage, J. “Service Mapping” pp 148–163 In Scheuing, E. and Christopher, W. (eds.), The Service Quality Handbook, Amacon, New York, 1993. Christopher Hart, and Christopher Lovelock (1994), gave us fishbone diagramming, service charting, Total Customer Service (TCS), the service profit chain, service gaps analysis, the service encounter, strategic service vision, service mapping, and service teams. Their underlying assumption was that there is no better source of competitive advantage than a continuous stream of delighted customers. [News] Nigeria: SA Announces Strategic Appointments Process management uses some of the techniques from product quality management and some of the techniques from customer service management. It looks at an activity as a sequential process. The objective is to find inefficiencies and make the process more effective. Although the procedures have a long history, dating back to Taylorism, the scope of their applicability has been greatly widened, leaving no aspect of the firm free from potential process improvements. Because of the broad applicability of process management techniques, they can be used as a basis for competitive advantage. [Image] Some realized that businesses were spending much more on acquiring new customers than on retaining current ones. Carl Sewell,Sewell, C. and Brown, P. Customers for Life, Doubleday Currency, New York, 1990. Frederick Reicheld,Reichheld, F. The Loyalty Effect, Harvard Business School Press, Boston, 1996. C. Gronroos,Gronroos, C. “From marketing mix to relationship marketing: towards a paradigm shift in marketing”, Management Decision, Vol. 32, No. 2, pp 4–32, 1994. and Earl SasserReichheld, F. and Sasser, E. “Zero defects: Quality comes to services”, Harvard Business Review, Septemper/October 1990. showed us how a competitive advantage could be found in ensuring that customers returned again and again. This has come to be known as the loyalty effect after Reicheld's book of the same name in which he broadens the concept to include employee loyalty, supplier loyalty, distributor loyalty, and shareholder loyalty. They also developed techniques for estimating the lifetime value of a loyal customer, called customer lifetime value (CLV). A significant movement started that attempted to recast selling and marketing techniques into a long term endeavor that created a sustained relationship with customers (called relationship selling, relationship marketing, and customer relationship management). Customer relationship management (CRM) software (and its many variants) became an integral tool that sustained this trend. [Video] NSCYBERSPACE #94 THE NATIONAL STRATEGY TO SECURE CYBERSPACE James Gilmore and Joseph Pine found competitive advantage in mass customization.Pine, J. and Gilmore, J. “The Four Faces of Mass Customization”, Harvard Business Review, Vol 75, No 1, Jan–Feb 1997. Flexible manufacturing techniques allowed businesses to individualize products for each customer without losing economies of scale. This effectively turned the product into a service. They also realized that if a service is mass customized by creating a “performance” for each individual client, that service would be transformed into an “experience”. Their book, The Experience Economy,Pine, J. and Gilmore, J. (1999) The Experience Economy, Harvard Business School Press, Boston, 1999. along with the work of Bernd Schmitt convinced many to see service provision as a form of theatre. This school of thought is sometimes referred to as customer experience management (CEM). [Auction] Strategic Human Resource Management by Jeffrey A. Mello Like Peters and Waterman a decade earlier, James Collins and Jerry Porras spent years conducting empirical research on what makes great companies. Six years of research uncovered a key underlying principle behind the 19 successful companies that they studied: They all encourage and preserve a core ideology that nurtures the company. Even though strategy and tactics change daily, the companies, nevertheless, were able to maintain a core set of values. These core values encourage employees to build an organization that lasts. In Built To Last (1994) they claim that short term profit goals, cost cutting, and restructuring will not stimulate dedicated employees to build a great company that will endure.Collins, James and Porras, Jerry Built to Last, Harper Books, New York, 1994. In 2000 Collins coined the term “built to flip” to describe the prevailing business attitudes in Silicon Valley. It describes a business culture where technological change inhibits a long term focus. He also popularized the concept of the BHAG (Big Hairy Audacious Goal). [Post] BUSINESS EXPERT PROFESSOR NICK BINEDELL TO GIVE KEYNOTE ADDRESS AT ... Arie de Geus (1997) undertook a similar study and obtained similar results. He identified four key traits of companies that had prospered for 50 years or more. They are: [Book] Strategic Management in Action (4th Edition) Prentice Hall
The military theoristsIn the 1980s some business strategists realized that there was a vast knowledge base stretching back thousands of years that they had barely examined. They turned to military strategy for guidance. Military strategy books such as The Art of War by Sun Tzu, On War by von Clausewitz, and The Red Book by Mao Zedong became instant business classics. From Sun Tzu they learned the tactical side of military strategy and specific tactical prescriptions. From Von Clausewitz they learned the dynamic and unpredictable nature of military strategy. From Mao Zedong they learned the principles of guerrilla warfare. The main marketing warfare books were:
[News] Event Innovation and Motorola Announce a Strategic Partnership for the Sports and Entertainment Industry There were generally thought to be four types of business warfare theories. They are: [Image]
[Video] NSCYBERSPACE #80 THE NATIONAL STRATEGY TO SECURE CYBERSPACE The marketing warfare literature also examined leadership and motivation, intelligence gathering, types of marketing weapons, logistics, and communications. [Auction] Strategic Management & Business Policy By the turn of the century marketing warfare strategies had gone out of favour. It was felt that they were limiting. There were many situations in which non-confrontational approaches were more appropriate. The “Strategy of the Dolphin” was developed in the mid 1990s to give guidance as to when to use aggressive strategies and when to use passive strategies. A variety of aggressiveness strategies were developed. [Post] Taking the Lead: Strategic Management for e-Learning In 1993, J. Moore used a similar metaphor.Moore, J. “Predators and Prey”, Harvard Business Review, Vol. 71, May–June, pp 75–86, 1993. Instead of using military terms, he created an ecological theory of predators and prey (see ecological model of competition), a sort of Darwinian management strategy in which market interactions mimic long term ecological stability. | |
