L2 winning strategies of market driving organization

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L2 winning strategies of market driving organization

  1. 1. <ul><li>Winning strategies of ‘Market’ driven organizations </li></ul>March 15, 2010
  2. 2. Market Driven or Market driving
  3. 3. The M arketing C ontinuum Market Driving Market Driven Sales Product Production
  4. 4. Market Driving firms <ul><li>Market drivers see the world differently and focus on latent or emerging customer needs. </li></ul><ul><li>Market drivers create new markets or redefine the category in a fundamental way that competitors are rendered obsolete. </li></ul>
  5. 5. Market Driving Vs. Market Driven Companies <ul><li>Market driving companies go beyond accepting given market structures and behaviors </li></ul><ul><li>Market driving firms shape or change markets/ </li></ul><ul><li>sectors by eliminating, adding, or modifying the players in markets and their functions </li></ul><ul><li>Market driving companies rewrite industry rules and compete in new market arenas </li></ul>
  6. 6. Market Driving Vs. Market Driven Companies – cont’d <ul><li>Market driving companies have unique business systems and ideas </li></ul><ul><li>Market driving companies deliver large leap in customer value </li></ul>
  7. 7. Market driver’s attributes <ul><li>They trigger industry breakpoints or what Andy Grove of Intel’s “strategic inflexion points”, which change business innovation. </li></ul><ul><li>Core Values inspire their radical business concept. </li></ul><ul><li>Rather than learn from existing customers, they often teach potential customers to consume their drastically different value proposition. </li></ul>
  8. 8. <ul><li>Adopting a proactive approach to reshape, educate and lead the customer </li></ul>
  9. 9. Conceptual Framework : Two forms of Market Orientation Two forms of ‘Market Orientation’: Driven and Driving. Adapted from: Jaworski, B., Kohli, A.K. and Sahay, A. (2000), ‘‘Market-driven versus market driving,’’ Journal of the Academy of Marketing Science, vol. 28 no. 1, pp. 45– 54.,
  10. 10. <ul><li>‘ values’ driven organizations </li></ul>
  11. 11. VALUES DRIVEN CHANGE OR CIRCUMSTANCES DRIVEN CHANGE
  12. 12. “ Get better ” vs “Get di ff erent ”
  13. 13. A JOURNEY THROUGH WHAT IS FUNDAMENTAL AND WHAT IS CHANGEABLE
  14. 14. “ NOTHING SPLENDID HAS EVER BEEN ACHIEVED EXCEPT THOSE WHO DARED BELIEVED THAT SOMETHING INSIDE THEM WAS SUPERIOR TO CIRCUMSTANCE” BRUCE BARTON
  15. 15. Today We Are In A Brawl With No Rules!
  16. 16. <ul><li>HORSE RACE of TOMORROW </li></ul><ul><li>All rules subject to change without notice </li></ul><ul><li>The prize money may change at short notice </li></ul><ul><li>The route and the finish line will likely change after the race starts </li></ul><ul><li>Bets may be made at any time during the race </li></ul><ul><li>New entrants may join the race at any time </li></ul><ul><li>Racers are on line at all the times and may alter their plans based on the most current information </li></ul><ul><li>Racers may form alliances </li></ul><ul><li>All creative strategies that are not specifically against the law are allowed </li></ul><ul><li>Government laws may change at any time (retrospectively) </li></ul>
  17. 17. Confusion And more confusion ….
  18. 18. Forbes100 from 1917 to 1987 [70 years] * 39 members of the Class of 1917 were alive in 1987 * 20 of the firms were in list of 100 in 1987 * 18 F100 “survivors” underperformed the market by 20% * Just 2 (2%) GE & Kodak, outperformed the market 1917 to 1987. Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market
  19. 19. 20 of 26 7 of top 10 *
  20. 20. * P&G : Declining domestic sales in 20 of 26 categories; 7 of them belonged to the top 10 categories: The “billion-dollar problem.” Source: Advertising Age 01.21.2002ecurities
  21. 21. “ They had the unpleasant job of announcing the second straight quarter of losses in their business empire that had never made a loss before.” Mr. Steel's Moment of Truth, Forbes India, June 5, 2009 2009 ….
  22. 22. GM files for bankruptcy …… Ford Motor seeks to gain amid Rival’s pain Economic Times, June 1, 2009
  23. 23. “ There will be more confusion in the business world in the next decade than in any decade in history. And the current pace of change will only accelerate.” Steve Case [America online]
  24. 24. Uncertainty : We don’t know when things will get back to normal. Ambiguity : We no longer know what “normal” means. .
  25. 25. Security in an insecure world (existence)?
  26. 26. “ The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.” Michelangelo Italian Renaissance painter
  27. 27. “ Beware of the tyranny of making Small Changes to S mall Things. Rather, make Big Changes to Big Things.” —Roger Enrico, former Chairman, PepsiCo
  28. 28. Forget > “Learn” “The problem is never how to get new, innovative thoughts into your mind, but how to get the old ones out .” Tom Peters
  29. 29. “ Our ideal acquisition is a small startup that has a great technology product on the drawing board that is going to come out in six to twelve months. We buy the engineers and the next generation product.…” John Chambers, Cisco
  30. 30. “ These days, you can’t succeed as a company if you’re consumer led – because in a world so full of so much constant change, consumers can’t anticipate the next big thing. Companies should be idea-led and consumer-informed.” Doug Atkin, partner, Merkley Newman Harty
  31. 33. <ul><li>“ If I’d listened to customers, </li></ul><ul><li>I’d have given them a faster horse.” </li></ul><ul><li>Henry Ford </li></ul>1896 Ford Quadricycle
  32. 34. “ Our strategies must be tied to leading edge customers on the attack. If we focus on the defensive customers, we will also become defensive.” John Roth, CEO, Nortel
  33. 35. Saviors-in-Waiting Disgruntled Customers Upstart Competitors Rogue Employees Fringe Suppliers Wayne Burkan, Wide Angle Vision
  34. 36. The Dream Manager —Matthew Kelly “An organization can only become the-best-version-of-itself to the extent that the people who drive that organization are striving to become better-versions-of-themselves.” “A company’s purpose is to become the-best-version-of-itself. The question is: What is an emplo y ee’s p ur p ose? Most would sa y , ‘to hel p the com p an y achieve its p ur p ose’—but the y would be wron g. That is certainl y part of the emplo y ee’s role, but an emplo y ee’s p rimar y p ur p ose is to become the-best-version-of-himself or –herself . … When a company forgets that it exists to serve customers, it quickly goes out of business. Our employees are our first customers, and our most important customers.”
  35. 37. Organizing Genius / Warren Bennis and Patricia Ward Biederman “Groups become great only when everyone in them, leaders and members alike, is free to do his or her absolute best .” “The best thing a leader can do for a Great Group is to allow its members to discover their g reatness .”
  36. 38. “ free to do his or her absolute best” … “allow its members to discover their greatness.” Tom Peters, May 28, 2009
  37. 39. “ You have to treat your employees like customers.” —Herb Kelleher, complete answer, upon being asked his “secrets to success” Source: Joe Nocera, NYT, “Parting Words of an Airline Pioneer,” on the occasion of Herb Kelleher’s retirement after 37 years at Southwest Airlines (SWA’s pilots union took out a full-page ad in USA Today thanking HK for all he had done; across the way in Dallas American Airlines’ pilots were picketing the Annual Meeting)
  38. 40. “ Get better ” vs “Get di ff erent ”
  39. 41. Nano Swach
  40. 42. Blue Ocean Strategy “ What we are looking for is – what we can do to satisfy the needs of the swelling middle class and their aspirations for consumption. That is what is called the bottom-of-the-pyramid approach. We are not into the marketing approach of low pricing. We are trying to create fields where none exists.” R.Gopalkrishnan Executive Director Tata Sons
  41. 43. SUCCESSFUL HABITS OF VISIONARY FIRMS COMPANIES HAVE THEIR CORE VALUES AND CORE PURPOSES FIXED WHILE THEIR BUSINESS STRATEGIES AND PRACTICES ENDLESSLY ADAPT TO CHANGING WORLD
  42. 44. VISIONARY FIRMS UNDERSTAND THE DIFFERENCE BETWEEN WHAT SHOULD NEVER CHANGE AND WHAT SHOULD BE OPEN FOR CHANGE WHAT IS VISION? Mission?
  43. 45. VISION AND MISSION VISION : WHAT YOU WOULD LIKE TO BE KNOWN FOR? MISSION : WHAT BUSINESS YOU WOULD LIKE TO BE IN?
  44. 46. Mission Statement components: Customer/Marketing Product or Service Geographic Domain Technology Concern For Survival Company Philosophy Self (Business) Concept Public Image
  45. 47. VISIONARY FIRMS Collins & Porras, 1996
  46. 48.
  47. 49. Comparison Companies <ul><li>Visionary Companies </li></ul><ul><li>3M </li></ul><ul><li>American Express </li></ul><ul><li>Boeing </li></ul><ul><li>Citicorp </li></ul><ul><li>Ford </li></ul><ul><li>General Electric </li></ul><ul><li>Hewlitt-Packard </li></ul><ul><li>IBM </li></ul><ul><li>Johnson & Johnson </li></ul><ul><li>Marriott </li></ul><ul><li>Merck </li></ul><ul><li>Motorola </li></ul><ul><li>Nordstrom </li></ul><ul><li>Philip Morris </li></ul><ul><li>Procter & Gamble </li></ul><ul><li>Sony </li></ul><ul><li>Wal-Mart </li></ul><ul><li>Walt Disney </li></ul><ul><li>Comparison Companies </li></ul><ul><li>Norton </li></ul><ul><li>Wells Fargo </li></ul><ul><li>McDonnell Douglas </li></ul><ul><li>Chase Manhattan </li></ul><ul><li>GM </li></ul><ul><li>Westinghouse </li></ul><ul><li>Texas Instruments </li></ul><ul><li>Burroughs </li></ul><ul><li>Bristol-Myers Squibb </li></ul><ul><li>Howard Johnson </li></ul><ul><li>Pfizer </li></ul><ul><li>Zenith </li></ul><ul><li>Melville </li></ul><ul><li>RJR Nabisco </li></ul><ul><li>Colgate </li></ul><ul><li>Kenwood </li></ul><ul><li>Ames </li></ul><ul><li>Columbia </li></ul>
  48. 50. List of Visionary & comparison companies …
  49. 54. Visionary Company Premier Institution Widely Admired Indelible imprint on the world 50+ year track record Multiple generations of CEOs Multiple product/service cycles
  50. 55. Vision Vision Core ideology Envisioned future
  51. 56. Core Ideology Core values Core Purpose Essential, enduring Tenets (beliefs) Reason for being
  52. 57. What are Core Values? <ul><li>A set of beliefs that influence the way people and groups behave </li></ul><ul><li>They are the “soul” of the organization </li></ul><ul><li>Effective values are deep rooted </li></ul>
  53. 58. YOU DISCOVER CORE IDEOLOGY BY LOOKING INSIDE. IT HAS TO BE AUTHENTIC. YOU CAN’T FAKE IT
  54. 59. Johnson &Johnson Core Values and Purpose <ul><ul><li>The company exists “to alleviate pain and disease” </li></ul></ul><ul><ul><li>“ We have a hierarchy of responsibilities: customers first, employees second, society at large third, and shareholders fourth” </li></ul></ul><ul><ul><li>Individual opportunity and reward based on merit </li></ul></ul><ul><ul><li>Decentralization = Creativity = Productivity </li></ul></ul>
  55. 60. Where do Core Values Come From? <ul><li>Most core values come from the founders of an organization </li></ul><ul><li>Some organizations have used a group consensus process to develop core values </li></ul>
  56. 63. Why are Core Values Important? <ul><li>Influence behavior </li></ul><ul><li>Communicate what we really believe </li></ul><ul><li>Core values are sacred, they do not change </li></ul><ul><li>They provide a moral compass </li></ul><ul><li>Provide continuity through change </li></ul><ul><li>Help people make tough decisions </li></ul><ul><li>They help to decentralize decision making </li></ul><ul><li>Help people to be more proactive </li></ul>
  57. 64. National interest The Tata group is committed to benefit the economic development of the countries in which it operates. No Tata company shall undertake any project or activity to the detriment of the wider interests of the communities in which it operates.
  58. 65. Tata Code of Conduct <ul><li>Gifts and donations </li></ul><ul><li>A Tata company and its employees shall neither receive nor offer or make, directly or indirectly, any illegal payments, remuneration, gifts, donations or comparable benefits that are intended, or perceived, to obtain uncompetitive favours for the conduct of its business. The company shall cooperate with governmental authorities in efforts to eliminate all forms of bribery, fraud and corruption. </li></ul><ul><li>However, a Tata company and its employees may, with full disclosure, accept and offer nominal gifts, provided such gifts are customarily given and / or are of a commemorative nature. Each company shall have a policy to clarify its rules and regulations on gifts and entertainment, to be used for the guidance of its employees. </li></ul>
  59. 66. Integration of Core Values <ul><li>Effective core values are integrated into all levels and functions of the organization </li></ul>Practicing the core values in all areas, all the time creates integrity
  60. 67. Norstan Inc. Integration of Core Values Employees Customers Stakeholders Owners 1. Be Ethical 2. Be Responsive 3. Be Profitable
  61. 68. CORE VALUES: EXAMPLES MERCK Corporate social responsibility Unequivocal excellence in all aspects of the company Science-based innovation Honesty and integrity Profit, but profit from work that benefits humanity
  62. 69. CORE VALUES: EXAMPLES PHILIP MORRIS The right to freedom of choice Winning – beating others in a good fight Encouraging individual initiative Opportunity based on merit; no one is entitled to anything Hard work and continuous self improvement
  63. 70. . CORE VALUES: EXAMPLES SONY Elevation of the Japanese culture and national status Being pioneer – not following others; doing the impossible Encouraging individual ability and creativity
  64. 71. <ul><li>CORE VALUES: EXAMPLES </li></ul><ul><li>Nordstrom </li></ul><ul><ul><li>Service to the customer above all else </li></ul></ul><ul><ul><li>Never being satisfied </li></ul></ul><ul><ul><li>Hard work and individual productivity </li></ul></ul>
  65. 72. <ul><ul><li>Identifying core values: </li></ul></ul><ul><ul><li>What core values you personally bring to work? </li></ul></ul><ul><ul><li>What would you tell your children? </li></ul></ul><ul><ul><li>If you have enough money to retire, would you continue to live those values? </li></ul></ul><ul><ul><li>Can you envision them being as valid for next 100 years? </li></ul></ul><ul><ul><li>Would you hold them even if they become disadvantageous? </li></ul></ul><ul><ul><li>If you start a new organization, what core values you would build into it, regardless of industry? </li></ul></ul>
  66. 73. <ul><ul><li>Core Purpose </li></ul></ul><ul><ul><li>Fundamental reason for being </li></ul></ul><ul><ul><li>Not to be confused with goals or strategies of the firm </li></ul></ul><ul><ul><li>Purpose itself does not change, but it inspires change </li></ul></ul><ul><ul><li>It’s a guiding star on the horizon - forever pursued but never reached </li></ul></ul>
  67. 74. Core Purpose is a company’s raison d’etre, not a goal or business strategy 3M : To Solve unsolved problems innovatively Hewlett-Packard : To make technical contributions for the advancement and welfare of humanity Mary Kay Cosmetics : to give unlimited opportunity to women Nike: to experience the emotion of competition, winning, and crushing the competition McKinsey : To help corporations and Govts. be more successful in 100 years Merck : To preserve and improve human life Wal-Mart : To give ordinary folk the chance to buy the same things as rich people Walt Disney : To make people happy
  68. 75. Envisaged Future BHAGS Vivid Description Huge, daunting goals Clear & compelling, tangible Unifying, inspiring, engaging Making goals ‘ imaginable’ The ‘mind’s eye’ Hopeful, passionate, inspiring images & symbols <ul><li>Difficult Target </li></ul><ul><li>Common enemy </li></ul><ul><li>Role-model </li></ul><ul><li>Internal - </li></ul><ul><li>transformation </li></ul>
  69. 76. ENVISIONED FUTURE Big, Hairy, Audacious Goals : Aid Long Term Vision BHAGs can be quantitative or Qualitative Target, common enemy, role-model or internal transformation Become a $125 billion company by 2000 (Wal-Mart) Democratize the automobile (Ford Motors, 1900) Common-enemy Crush Adidas (Nike, 1960) Yamaha wo tsubusu! We will destroy Yamaha! (Honda, 1970)
  70. 77. ENVISIONED FUTURE Vivid Description Vibrant, engaging and specific description. In 10-20 yrs. What would we love to see? What will a writer say? Passion, emotion and conviction are essential parts of the vivid description
  71. 78. Sony in the 50s <ul><li>CORE IDEOLOGY </li></ul><ul><li>CORE VALUES </li></ul><ul><li>Elevation of Japanese culture & national status </li></ul><ul><li>Being a pioneer-not following others, doing the impossible </li></ul><ul><li>Encouraging individual ability & creativity </li></ul><ul><li>PURPOSE </li></ul><ul><li>To experience the sheer joy of innovation & the application of technology for the benefit & pleasure of the general public </li></ul>
  72. 79. SONY [Contd.] <ul><li>ENVISIONED FUTURE </li></ul><ul><li>Become the company most known for changing the worldwide poor-quality image of Japanese products </li></ul><ul><li>VIVID DESCRIPTION </li></ul><ul><li>We will create products that become pervasive around the world. </li></ul><ul><li>… be the 1 st Japanese company to go into the U.S. market & distribute directly… succeed with innovations that U.S. companies have failed at- such as the transistor radio… 50 years from now, our brand name will be as well known as any in the world…”MIJ” will mean + </li></ul>
  73. 80. Thanx + ?

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