Thursday, September 17, 2009
- Core Strategy: the essence of how the firm chooses to compete
- Strategic Resources: unique, firm-specific, and upon which advantage rests
- Customer Interface: How the producer and consumer reach one another
- Value Network: what surrounds the firm and complements its own resources
Speaking at the start of the 28th Conference on Tire Science and Technology in Akron on Tuesday, Goodyear Chief Executive Officer Robert Keegan said embracing innovation helped his company survive one of the most challenging times of its existence.He used Goodyear's newest consumer tire, the Assurance Fuel Max, to illustrate how supporting a new product line with everything from improvements in processes to development of personnel can reinvent a business.
Groundwork for the new tire, introduced this year, was laid in 2002, when Goodyear began designing its Assurance line of premium tires. ''We found ourselves in one of those times we had to change simply to survive, but as we did that, we changed the way we worked, and from that point on there was no looking back,'' Keegan said.'So we decided we clearly needed a new tire, and what we created was a new company.'' ... 'We began thinking less like a traditional manufacturing-based company, like we had been, and more like a fast-moving consumer products company,'' he said. ''More importantly, we began acting like an innovative company.''
One year later — in a pace Keegan believes is unprecedented in the industry — the Assurance Fuel Max was designed, developed and introduced, thanks to a ''totally committed cross-functional effort.''
''Every aspect of the proposed product, from fundamental technology to product development, from quality and manufacturing to supply chain, was addressed concurrently,'' Keegan said.
''The result: Exponential acceleration of time to market, a critical factor in driving prosperous innovation,'' he said.
''I'm proud of that because the technology that we develop and the products that we develop have to be also economically relevant,'' he said.
Keegan encouraged his peers to respond to market needs with a ''sense of urgency'' and using ''cross-functional teamwork.''
"Configuration" is one of the three linking or bridging concepts in Hamel's theory. It is the link between "Strategic Resources" and "Core Strategy." Specifically it concerns how the three categories of Strategic Resources--Core Competencies, Strategic Assets, and Core Processes--are arrayed to support the Core Strategy. This distinction between competencies, assests, and processes is a vital and straight-forward one: there are things that a firm does (processes), that it has (assets) and what it knows (competences).
Sunday, September 13, 2009
Saturday, September 12, 2009
Most major U.S. airlines plan to offer fewer flights this fall than they did a year ago as they adjust to weak demand. Here's a look at recent announcements from the carriers, who are listed in descending order of size based on capacity in August. The figures include both "mainline" and regional affiliates for each company. Passenger-carrying capacity is measured in "available seat miles" or ASMs — miles flown times seats on the planes. A 150-seat jet flying 100 miles equals 15,000 available seat miles.
American Airlines Inc. is making its case for antitrust immunity for its oneworld Alliance to push forward with business arrangements with its members by filing a pre-emptive defense to possible objections that the Department of Justice recently raised in relation to an antitrust immunity case filed byContinental Airlines.Tim Smith, a spokesman for American, said the airline became concerned with some of the issues the DOJ raised when Continental made a similar request to obtain antitrust immunity. He said because they raised those issues, American wanted to submit a filing in advance that responds to those issues. He said the filing basically says “there is no harm to competition” through the alliance.
Andrew Zheng says his new Asian-fusion restaurant is just the ticket for a vacant Off-Track Betting parlor on North Pearl Street in the Albany’s downtown. Zheng’s plans for the three-story building at 68 N. Pearl St. —situated between Jillian’s and the Bayou Cafe Downtown—start with a 200-seat restaurant on the first floor. Subsequent phases, he says, will include a “virtual” game room on the second floor, and apartments and condos on the third floor. Zheng plans to attract a following of patrons who work and/or socialize downtown and are looking for alternatives to the mainly Italian and American fare offered there. “I think downtown is missing the kind of thing that we’ll offer,” said Zheng, 27, whose family operates South Wok and West Wok in Glenmont, and China Dragon in Schenectady. ... Tai’s American-infused menu will feature traditional Chinese, Japanese, Thai and Malaysian cuisine. Zheng said he’s not concerned about the current down economy because the restaurant will cater to a niche audience.
The experiment here (though not a controlled one) is whether a mixed or multi-use establishment--in an Asian fusion restaurant + virtual game room + apartment/condo block-- will survive its entry into a a downtown restaurant market dominated by traditional Italian and American fare.
Another way to view this story is as one about barriers to entry and rivalry. In most US cities, it is relatively easy to open a restaurant. That is to say, barriers to entry are low. In order to lessen the intensity of rivalry, differentiation is a strategy that permits firms to compete on a basis other than price. Differentation on type is an obvious dimension. All else equal, an Italian restaurant alongside a American along side a Chinese alongside an Asian Fusion restaurant would not have as intense a rivalry as would four Italian or four Chinese restaurants.
Friday, September 11, 2009
Right now, the U.S. does not have a national market for health insurance. It has 50 separate state markets. Erecting walls around each state means less competition and higher prices for consumers. There's not even one market for the Chicago area. If you live in South Holland or Calumet City, your insurance options could be completely different from your Indiana neighbors in Hammond or Merrillville. What sense does that make?
The easiest way to see how insurance competition benefits consumers is to look at auto insurance. That's a huge, nationwide market and companies compete intensively for a share of it. Some stress their low prices, others customer service, whatever gives them an edge in the marketplace.Geico and Progressive have been especially aggressive in touting cost savings. State Farm and Allstate certainly compete on price, but they stress service after an accident. That's why Allstate says "you're in good hands," and State Farm says it will be there "like a good neighbor." Other companies, like SafeAuto, focus on drivers who want only minimum coverage to meet state license requirements. In short, auto insurance companies compete vigorously to provide what different consumers want, and they tell them so in national advertisements. Life insurance companies do the same thing. There are even companies that specialize in comparing policies for customers. Competition drives down excess profits and means better, cheaper options for consumers. Ever see an ad touting health insurance? They are rare because the markets are small and companies don't need to compete aggressively on price or service.