Presentation on course of Strategic Management where Future perspective and Long term Approach of Companies like HP, Merck,GE,Boeing,Walmart,P&G is discussed.

1. GOOD ENOUGH
NEVER IS
How can we do better tomorrow than we did today?
GROUP-1
TEAM-9
501504085 PARAMPREET KAUR
501504101 GURPREET SINGH
501504103 VARUN KALIA
501504095 NIKHIL BHARGAV
401207012 JAGMEET SINGH BAJAJ

2. Companies Discussed in the Chapter

3. Methodology of Visionary Companies
 Superb execution & performance are not the final goal.
 Nothing like “Having made it”
 Demanding of themselves
 Continuous Improvement
 Disciplined, Hard-working and Doing everything possible to make
company stronger for tomorrow
 Never settle and never be Comfortable
 Never being Complacent
 Long Term Vision in Mind (Building the company for Future)

4. Mechanism of Discontent
Brand
Manage
ment
Structur
e
Yielding
Market Share
Innovate
or Die
WORK OUT Eyes of the
Enemy
BEAT YESTERDAY PAY AS
YOU
GO
Sales per
Hour
(SPH)

5. Mechanisms of Discontent
Procter & Gamble
 Created Brand Management Structure in 1931 to make brands within
company compete with each other
 Idea to pit the best against the best
 Stimulated the Change from within the company
 Internal competition resisted complacency
 Copied by Colgate 3 decades later

6. Mechanisms of Discontent
Merck
 In 1950s adopted the strategy of Yielding Market Share
 Forced itself to produce new innovative products
 Helped the company to grow and prosper

7. Mechanisms of Discontent
Motorola
 Used the mechanism of Innovate or Die
 Cut of Mature product lines to make way for new products
 Did with this Televisions and Radios
 Technology Road Map benchmarked technology progress
 Anticipated Market needs up to 10 years in the future

8. Mechanisms of Discontent
General Electric
 Institutionalized discomfort with their process of WORK OUT
 Upper managers not allowed to make inputs in group meetings for making
proposals
 Had to make on the spot decisions about the proposals

9. Mechanisms of Discontent
Boeing
 Introduced planning process called Eyes of the Enemy
 Made managers act like as if they work for the competitor companies
 They gave inputs on how they would exploit weaknesses, Leverage
Strengths
 Based on the inputs given by them Boeing prepared itself of How they
would respond to the situation

10. Mechanisms of Discontent
Wal-Mart
 Use of BEAT YESTERDAY Ledger books
 Tracked daily sales figure and compared with exact same day of week one
year earlier
 These ledgers were a Stimulus to Push the standards up forever
Day 1984 1985 1986 1987
1st Monday
1st Tuesday
1st Wednesday
1st Thursday
1st Friday
1st Saturday
1st Sunday
1st WEEK

11. Mechanisms of Discontent
Nordstrom
 Created an environment for people for never stop trying to improve
 Sales per Hour (SPH) incorporated for peers
 Employees never relaxed after achieving targets
 Tracked customer feedback
 Employ compensation based on it

12. Mechanisms of Discontent
Hewlett-Packard
 Installed a powerful mechanism PAY AS YOU GO
 It resisted the use of Long Term Debt
 Company learned to fund its 20 plus percent average annual growth
 Produced disciplined General Managers
 Improved leanness and efficiency in company
 Bootstrapping leads to innovation

13. Build for the Future (Do well Today)
V/S

14. Condition of HP after
World War II
 Revenues Declined by 50%
 Defence contracts were lost
 There were no prospects in commercial Markets
 Company faced Cash Flow crisis
 Company faced threat of being not able to survive

15. Measures taken by to come out of
the situation
 Payroll cut by 20%
 Decreased dependency on government contract business
 Hired 4 bright young engineers keeping in mind the far-sighted approach

16. Benefits of the approach followed
 As the approach was Long term and far sighted it showed results slowly
after 1950.
 For next two decades after 1950 they performed well and introduced a
slew of innovation and profitable new products
 Came up with Two perspectives
 Fifty-year perspective
 One-year perspective
 Made it non-negotiable if any compromise is made for Long-term vision

17. following the lead of
 Also guided themselves with a Long-term perspective
 Hired top scientists from Research labs
 But unfortunately paved their way away from Long-term vision.
 Started introducing cheap consumer products
 Made unexpected price cut
 All in lieu to grab market share and short term benefits
 The strategy backfired as they suffered from financial losses and bad
reputation in the market

18. The Long term Investment for visionary
companies
R&D Employee training
and Education
New Technology
and Innovation
New Infrastructure
development

19. Investing in R&D
 Merck invested in basic research which is must for Pharmaceutical industry
 Visionaries companies invest at about 30% by percentage of sales
 Merck when compared with Pfizer had invested more
 It was able to sustain the Long-term corporate health

20. Investing in Human Capital
(Employee training and education)
 40 hour training per employee in a year at Motorola
 Three day training course on recruiting and interviewing techniques for all
managers at Merck
 HP 8 people interview system
 GE embraced new Management methods, gave reading material to
managers on the topic of professional managing

21. Investing in New Technology and
Innovation
 TQM process being used at Merck
 Use of high end Financial analysis software in order to make decisions for
long term horizons
 Motorola also invested in new technologies
 Walt Disney invested in New film technology
 Citibank also adopted new technologies 3 decades earlier than the
comparison companies like Chase-Manhattan

22. Investing in New Infrastructure
development
 RJ Reynolds invested in Corporate Jets (RJR Air force) & Built hangars
 Invested widely in Corporate offices
 Sponsored celebrity athletes & events
 McDonnel Douglas resisted to invest in bigger aircrafts
 Boeing used Reaching out tomorrow mindset and invested wisely

23. Howard Johnson’s
Complacency
V/S
JW Marriot’s
Self Discipline and Continuous
improvement

24. Self Discipline and Continuous Improvement Complacency
Invested in infrastructure during recession Refused to invest in hotels and restaurants tailored
for specific market
Pushed itself to improve the quality and the value of
its services
Focussed on cost control, Efficiency & Short term
financial objectives
Modest Lifestyle and personal connection to
business
Lavish lifestyle, Less connection to business
Doing work with complete effort and very less
propagation
Propagating more and doing less in real

25. Mechanisms used by which
provided it the Edge
 Guest Index Survey(GSI) based on customer feedback
 Annual performance reviews
 Incentive bonuses in many areas
 Profit Sharing program for employees
 High investment in HR recruitment
 Employee Development & Learning programs
 Phantom shoppers where the inspectors acted like customers

26. Success Mantras to become a
Visionary Company
 Creating Mechanism of Discontent
 Invest for future
 Building the present
 Responding wisely and with future approach in mind to the Downturns
 Investing wisely in domains essential for the company
 Create an environment of Non-Complacency, sense of discomfort and
competition within the companies
 Hard work, Dedication to improve and Continuously building for Future

27. “Achievements represent the beginning – The start of a never ending journey
of discipline, work and the pursuit of ever-higher standard”

28. THANK YOU