Rethinking - HBR Case Study Analysis


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Course Assignment, HBR article Analysis

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  • Dept. Of Management SciencesFAST – National University of Computer and Emerging Sciences, Lahore.Saad MunirL050411 - BBACourse: Advance Business ConceptsInstructor: Mr. Hassan
  • Rethinking - HBR Case Study Analysis

    1. 1. Click to start.. © Copyrights Saad Munir. Click to see credits.
    2. 2. Porter’s Stance •Highlighted in HBS article ‘ Strategy and Internet’; 2000 •Major Premise: Stick to the traditional ways of doing business • Vertically integrate • Use Internet as a complementary tool only • Internet usage can only help connect PCs • Networking can cause profitability to suffer • There is no thing as a business model • Internet would eventually cease being a source of competitive advantage
    3. 3. Vertically Integrate • Develop competencies internally • The organizational goals haven’t changed, why should the ways to achieve them change either • Tried and proven ways to do things( if the company was profitable before internet, why shift to internet)
    4. 4. Bubble size represents revenue generated Core Out source or Join Venture Keep in house Strategic Importance Non Core Outsource Spin off Non Competitive Competitive Source: A.T Kearney Internal Cost and Capability Competitiveness
    5. 5. Unilever Outsources to Accenture “The outsourcing programme is part of the company’s 'One Unilever' initiatives to increase leverage of its scale, improve its marketplace competitiveness, deliver functional excellence, and create a more competitive cost-structure allowing it to focus on its consumers and customers”
    6. 6. Partnering • Resources that are not owned can be used • Co-create with customers and other outside sources • Suppliers and distributors can contribute to cheaper disruptive innovation • Risk and cost reduction ( Revenue of top 5 contract manufacturers aggregated $ 50 B, ROIC > 25%)
    7. 7. P&G Distributed Innovation Group has increased the percentage of new product ideas from outside the company from 15% to 50% What a DIG Does What a DIG Is Not Scouts for new ideas and untapped An R&D group dedicated to product potential and technological discovery Scans the external environment for A monopoly innovation function emerging technologies charged with enacting all stages of the innovation process Facilitates participation in idea forums A systems-development or corporate-venturing unit Acts as a centre of innovation expertise An office-bound centralized staff unit that sets policy and monitors performance Publicizes promising innovations Funds and serves as an incubator for promising innovations Source: Harvard Business Review
    8. 8. Why Partner ? • Corporate alliances increases by 25% a year • Alliances account for 33% of the company revenues Revenue from Alliances 33% Source: Harvard Business Review
    9. 9. “The Eye of the Beholder” How HP Perceived Itself How Microsoft Perceived HP Collaborative partnering mind-set – looks for the A non-player in services greater good Reinventing – trying to get more focused under new Falling behind its competitors CEO’s leadership Disciplined – takes a long-term, mature approach to Slow, bureaucratic – a laggard evaluating market opportunities Win-win partnering – actively seeks the other Unable to execute consistently and predictably company’s wins Flexible – looks for creative deals Conflicted sales strategies in the field How Microsoft Perceived Itself How HP Perceived Microsoft Competitive, fast-moving, and entrepreneurial Excessively competitive and confrontational “Our products are changing the world in profoundly Controlling, paranoid and greedy positive ways” Center of the new economy “Win – don’t care” partnering mind-set Focuses on objectives and assumes others do the Focused only on the deal same Misunderstood: the world doesn’t realize what Packaged software mentality – commoditize positive things the company does for everyone everything, even partnering Source: Harvard Business Review
    10. 10. The value of Internet • Only a complementary tool ‘ Latest stage in the ongoing evolution of information technology’ • Not and emerging infrastructure for economic activity • Network for connecting desktop PCs
    11. 11. The TRUE value of Internet • A complete infrastructure and architecture • More effective than earlier communication media • Used for transactions • Market Research • Recruiting • Brings the company closer to the market [ better CRM, greater customer insight] • Allows for better governance
    12. 12. There is no such thing as Business Model • The meaning of ‘business model’ has been misunderstood • The term "Business model” is used more or less synonymously with “business strategy” • Historically strategist have not been concerned about business models because each industry had a standard model
    13. 13. Internet based Business Models • The core architecture of the firm • how deploy relevant resources • How to create differentiated value for its customers • The business world is more customer driven these days which necessitates the companies to have continuous interaction with them • Internet allows for development of newer, more innovative types of business models • Allows greater speed of execution
    14. 14. Internet would eventually lose its importance • All companies come to embrace internet, and the internet itself neutralize as the source of competitive advantage. • The competitive advantage increases from traditional strengths
    15. 15. Competitive advantage of Internet • “As the current technological revolution continues to change the face of the world market, only the businesses that are the fastest to anticipate change and to participate in the revolution will prosper” Southwick ; keynote speaker at the New Jersey Software Forum 2000 • Once the second generation of eMarkets gets going, the cost of entry will go up“; Bill Van Emburg, director of Quadrix Solutions • Internet must not be considered only with reference to its present existence [ nobody had imagined any thing such as the internet and so cannot anticipate any future advancements] • Internet would provide a basis for continuous innovation • Unique Products • operational efficiencies • customer services and relationships
    16. 16. Unique Products
    17. 17. Operational Efficiencies
    18. 18. Customer Services and Relationship
    19. 19. Negative Impact on the Profitability Access to Access to more Greater freedom Competitor access to information suppliers of choice market information Reduced Profitability
    20. 20. The Positive aspect • Fair competition • Businesses would deliver what customers truly value • Pressure to improve quality would increase • Benefit to the customer would increase
    21. 21. ‘Business fundamentals, indeed. Fundamentalism, no’ HurraH’s Creativity
    22. 22. Credits Sara Parveen Ume Kalsoom Mariam Malik Sadaf Iwbal Fahad Siddiqui Aesha Shamshad Butt and Wardah Munir and all other subgroups. HurraH’s Creativity