Search Results

Some successful innovations, such as the microwave oven and the dishwasher, were initially slow to achieve consumer acceptance. When consumers resist adopting an innovation because it requires them to alter established habits, the innovation is called a resistant innovation. The authors use a case study involving the diffusion of screwcap wine closures in three countries -- Australia, New Zealand and the United States -- to analyze strategies for marketing a resistant innovation. For winemakers, screwcap closures represent a solution to "cork taint," a quality problem that can be caused by poor-quality corks and that can affect wine flavor. But consumers have shown resistance to screwcap closures, associating them with cheap wines or preferring the tradition associated with cork. However, among wine consumers in Australia and New Zealand, screwcaps have now achieved widespread acceptance. But 2005 wine industry statistics showed that less than 5% of U.S. wineries used screwcaps on fine wines. What is the reason for this difference? Earlier research in 2004 had found few differences between U.S. wine consumers and those in Australia and New Zealand -- except in their attitudes toward screwcaps. Garcia, Bardhi and Friedrich interviewed decision makers at more than two dozen wineries in the three countries. The authors concluded that winemakers in Australia and New Zealand had generally taken a different approach to marketing screwcap wine closures than United States wineries did. United States winemakers tended to employ vertical cooperation strategies that involved working with distribution channels to market screwcaps. New Zealand and Australian winemakers, on the other hand, used coopetition strategies involving cooperation among wineries, such as a New Zealand wine industry group called the New Zealand Wine Seal Initiative. The authors conclude that, under certain circumstances, coopetition strategies, which involve some cooperation among competitive firms, can be an effective strategy for marketing a resistant innovation. To determine whether or not coopetition is an appropriate strategy, the authors suggest that managers should analyze the marketing problem the new innovation faces and the resources available to address it; consider the kind of specific resources and knowledge that might be exchanged during coopetition; and evaluate the industry climate, including the role of trade associations and industry experts.

Business schools and others interested in management education and development have vigorously debated how best to teach strategy to future leaders. Some experts have questioned whether the topic should be taught at all -- or at least whether it should be taught to managers. Often missing from the debate, however, has been any in-depth discussion of how individuals learn to think strategically in the first place. What specific experiences are important and how do they contribute? Moreover, what are the different ways in which people absorb those experiences to develop the ability to think strategically? To answer these and other questions, the author conducted a study that identified executives who were considered the top strategic thinkers in their industry. The study then investigated the totality of experiences (educational, job related or other) that contributed to the high ability of those individuals. In addition, the research investigated the different ways in which the executives acquired their expertise in strategic thinking -- a process that typically took more than a decade The data showed that strategic thinking arises from 10 specific types of experiences -- for instance, spearheading a major growth initiative or dealing with a threat to organizational survival. Moreover, executives appear to gain their expertise in strategic thinking through one of three developmental patterns. These findings help demystify the process by which strategic thinking is learned, offering important implications for management development and the practice of strategy.

Managing returns, structuring the physical distribution network and deploying product inventories are all key.

Although the Internet has become an indispensable tool for 21st-century organizations, a 2005 report of the President's Information Technology Advisory Committee bluntly states that the information technology infrastructure of the United States is highly vulnerable to terrorist or criminal attacks. In a brief overview of this sobering situation, MIT applied mathematics professor and Akamai Technologies chief scientist Tom Leighton, who served on PITAC and chaired its cyber-security subcommittee, describes two of today's big Internet security threats: denial of service attacks and "pharming" -- both of which could be used to disable individual companies or critical infrastructure, such as the nation's utilities. At the present time, little is being done to fix these problems, says Leighton, though the advisory committee recommended that the U.S. government lead the way by funding long-term, fundamental research on cyber-security issues. Doing so, would promote wider adoption of improved Internet protocols, and that, he says, would lead to a more secure, reliable Internet infrastructure.

Today, as consumer choices on one side of the planet affect living conditions for people on the other side and complex supply chains span the globe, businesses are facing a host of “sustainability” problems & #8212; social and ecological imbalances created by this globalization. Beginning in the late 1990s, organizational members of the Society for Organizational Learning (including Shell, Harley-Davidson, HP, Xerox and Nike, among others) began a variety of initiatives focusing on collaborative solutions to a variety of sustainability issues. The group’s goals have included the application of systems thinking, working with mental models, and fostering personal and shared vision to face these complex sustainability issues. Through its work, SoL (of which two of the authors are founding members) has learned that successful collaborative efforts embrace three interconnected types of work & #8212; conceptual, relational and action-driven & #8212; which together build a healthy “learning ecology” for systemic change. In this article, the authors offer examples from particular projects in which this learning ecology provided an important foundation for substantive progress, and they draw lessons for companies and managers regarding each of the three types of work. Ultimately, the authors conclude that conceptual, relational and action-driven work must be systemically interwoven and that there is little real precedent for that. They offer several guidelines for how it can be accomplished, emphasizing leadership and transactional networks. Finally, they pose three questions that must be answered if systemic solutions are to be successful: (1) How can we get beyond benchmarking to building learning communities? (2) What is the right balance between specifying goals and creating space for reflection and innovation? (3) What is the right balance between private interest and public knowledge?

For several years now, marketers have been urged to embrace one-to-one marketing and to offer microsegmented consumers customized products and services through targeted outreach. While the "market of one" approach can pay off, says the author, it requires a significant upfront investment, including: implementing customer relationship management software applications; filtering, enhancing and cleaning customer data; and personalizing interactions (e-mail, billing, offers and so on). These activities take time and coordination of multiple parts of the organization (marketing, customer service, sales, information technology), which can be daunting for companies trying to react quickly to a changing environment. In addition, those systems have often produced disappointing results because their use was not well integrated with corporate strategy. Also, micro-marketing strategy, on its own, is too narrow. Companies still need to reach broad groups of people with messages that are not dependent on an individual's decision to open an envelope (whether virtual or physical), pick up the phone or click on a box. But broad-based, broadcast media is ineffective and expensive. Fortunately, there are alternative solutions, such as one-to-one targeting and the broadcasting of 30-second television spots. The author's research on trends in marketing spending and consumer attitudes about advertising reveals four strategies available to companies that want to reach broad groups of people without breaking their marketing budget. The strategies are liberally illustrated with examples of Nike, Microsoft, UBS, Delta, Sony, Procter & Gamble, Citibank, Nextel, Honda, Nokia and McDonald's, among others.

Launching new ventures outside a corporation's core business is risky and failure-prone -- yet often perceived as vital to innovation and organic growth. Can investing in new ventures add value to a company despite the risks? To explore that question, the authors conducted an in-depth study of corporate venturing at Nokia Corp. between 1998 and 2002; the study included two years of dissertation research by one of the authors. The research yielded a number of lessons about corporate venturing. For example, Nokia discovered that looking at the success or failure of an individual project as a business was the wrong way to evaluate the effectiveness of the venturing program. Whether or not they succeeded as businesses, Nokia's corporate ventures often added important capabilities to the core business, such as familiarity with a new customer segment for the company. In fact, seemingly unrelated investments sometimes led to technologies that later benefited the company's core business. The authors conclude that, to extract value from corporate ventures, companies must use different management practices than in their established businesses, structure new ventures so that they don't face pressure to deliver immediate results, and emphasize learning. Although 70% of Nokia's corporate venturing investments during the period studied were either discontinued or completely divested, the capabilities and technologies developed nonetheless played an important role in helping the company's core businesses respond to change.

In nearly half a century of literature on corporate strategy, the term has become more complicated and fractured. There are now at least 10 separate schools of thought regarding strategy, and more than a dozen common definitions of the term. To clarify and deepen our understanding of corporate strategy, the author suggests general guidelines that set the boundaries of the discipline and highlight its specifics in order to facilitate future executive decisions. The author argues that strategy comprises three objectives: creating value, handling imitation and shaping a perimeter. The ability to sustain value creation, whether from the customer's or the shareholder's perspective, is the ultimate goal of any strategy. Concepts such as benchmarking, differentiation, core competencies, unique resources, institutionalism and competitive rivalry are all connected with the ability to prevent, implement or leverage imitation. Decisions about diversification, outsourcing, vertical integration, internationalization and positioning are all linked with the search for a profitable perimeter.

Despite the importance of management innovation, it is poorly understood and usually not systematically fostered. To research the process, the authors first conducted an historical analysis of more than 100 management innovations that took place over 130 years. Then they studied 11 recent cases of management innovation, in most cases interviewing one or more of the key innovators. The research revealed that, compared with the process of technological innovation, management innovation tends to be more diffuse and gradual. It typically follows four stages. The first stage is some type of dissatisfaction with the status quo, such as a crisis or strategic threat. That stage is followed by inspiration from other sources. The third stage is the invention of the management innovation itself. While most innovators identified a precipitating event that preceded the innovation, such as a challenge from a boss or a new assignment, few recalled a distinct "eureka moment"when the innovation occurred. The fourth stage is validation, both internally and through external sources such as academics, consultants, media organizations or industry associations.

Successful companies recognize that information technology can fundamentally alter the very nature of work. Such a transformation, however, often requires that an organization rethink its corporate strategy and remake its basic structure and processes. The authors, drawing on interviews with Schneider International as part of MIT's Management in the 1990s Research Program, show that the benefits to organizations are related to the extent that organizations adapt their internal structures, processes and culture to extract the greatest value from technology. Although IT has enabled the growth of new companies and even entire industries, these technologies have also transformed the opportunities and challenges facing established manufacturing and service firms. This article examines Schneider's implementation of technologies such as GPS and satellite tracking not only to improve dispatch but also to provide value to customer service such as pinpointing delivery times, driver availability and the ability to alter delivery pickup and drop-off locations. The authors demonstrate that if organizations invest in complementary assets (people skills, new organizational structures and new work processes) to support their IT, they can transform services into products that will evolve into yet more new services, creating a virtual spiral with enormous competitive advantages.