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How are companies approaching intellectual property strategy, and what are successful strategies for managing IP? To explore such questions, the author and his research team conducted a detailed survey of senior IP executives at 34 companies. The survey findings indicate that IP has become an area of focus for the executive committee and the board at many companies. What's more, the study found that top executives' involvement in IP strategy was correlated with better IP performance. Analysis of the survey data suggests another intriguing point: Some companies are now using an approach to IP strategy that the author calls "full-fledged IP protection." This "full-fledged IP protection" strategy includes seeking technical and nontechnical IP protection for even minor inventions, in an attempt to "pack" technology spaces with IP claims. This practice differs from a classic IP strategy of using IP to support core research and development. At least in some industries, this change in IP use may, the author suggests, be causing the nature of IP competition to shift from the world of "real" products to that of "potential" products. The study also found that, in the companies surveyed, IP-related tasks often entail cooperation among staff from different functional areas within a company, such as product designers and patent and trademark attorneys. Having clear-cut rules about IP at the functional level was associated with better IP performance in the companies surveyed, as was having corporate management devote time to listening to the company's most senior IP officers. On the other hand, failure to sell or license out IP when circumstances facilitated or necessitated such a trade was associated with significantly lower IP performance. In addition to the survey data, the author conducted interviews with senior executives from two of the participating companies: Lars Rebien Sorensen, the CEO of Novo Nordisk A/S, a healthcare company with a specialty in diabetes care; and Dr. Gottlieb Keller, a member of the corporate executive committee of the healthcare company F. Hoffmann- La Roche Ltd. In these interviews, Sorensen and Keller discussed the role of corporate leaders in IP strategy at their respective companies.

While most managers would think long and hard before bringing to market a product that lacked patent protection and could be easily imitated, many invest in sales promotions -- sweepstakes, coupons, time-limited price discounts, free gifts or samples, special events, displays, membership rewards, consumer- directed promotions and so on -- that are easier to imitate than the simplest new product. Others sign off on plans so generic that they seem unrelated to the brand or company offering them, despite the fact that sales promotions may absorb a significant portion of a company's promotional dollars -- currently a reported 31% of marketing budgets. By contrast, a strategic focus -- considering how customers and competitors will react to any promotional effort, as well as the message delivered and the stature in the marketplace of the brand delivering it -- leads to promotions that defy or delay imitation and yield disproportionate benefit for companies that have already developed a strong competitive position. The authors suggest that when all these strategic factors are aligned, the result is a successful promotion, and they illustrate that with successful promotions conducted by General Motors, Home Depot and Procter & Gamble, among others. However, the authors caution, such promotional strategies require inventiveness, originality and swift action -- qualities neither present nor encouraged in many corporate cultures in which familiarity and predictability are prized. Managers in such organizations, then, not only must tailor a promotion successfully to its intended market, they must also skillfully shepherd it through internal barriers. Knowing why, how and for whom sales promotions will most likely be profitable surely will help in that regard.

Since the 1980s, the percentage of obese Americans has risen from one-sixth of the population to nearly one-third -- and the problem is particularly acute among children and adolescents, where the obesity rate has tripled in 30 years. While this problem is certainly, in the first instance, one of personal responsibility and self-control, business leaders should be concerned, too -- for at least four reasons. The first reason is simple self-preservation: Food and beverage companies could find themselves in the trial lawyers' crosshairs. The second reason is closely related to the first: The food and beverage industry is the target of the public's increasing ire over portion sizes and unhealthy ingredients. Third, companies will not be able to function efficiently if a significant proportion of their current and future employees suffer from obesity. And finally, opportunity knocks: Companies have the chance to develop new products and create a positive brand image that will fatten the corporate bottom line while simultaneously helping obese Americans shed dangerous pounds. The authors explain how several companies are actively pursuing several strategies to help solve America's other "energy crisis" -- too much consumption and too little movement.

The term "value chain" suggests an orderly progression of activities that allows managers to formulate profitable strategies and coordinate operations with suppliers and customers. Using examples from the telecom, pharmaceutical, steel and auto industries, the authors argue for a more complex view of value -- one that is represented by a "value grid". The grid approach allows firms to move beyond their industry lines to identify opportunities and threats. It pushes managers to understand the power balance between suppliers and manufacturers. The new pathways to value can be vertical (as firms explore opportunities upstream or downstream from the adjacent tiers in their value chain); horizontal (as firms identify opportunities from spanning similar tiers in multiple value chains); and even diagonal (as firms look more integratively across value chains and tiers for prospects to enhance performance and mitigate risk).

With real wages stagnating and job security elusive for many U.S. workers, the American dream of an improved standard of living for each generation is in jeopardy. The author argues that, although many companies seek to become competitive primarily by reducing costs such as labor, there is another option. A substantial body of research, he reports, indicates that companies that invest in their workforces to build knowledge-based organizations can achieve a return on their investment through higher productivity and profitability. The author cites the example of Continental Airlines Inc., which after an era under Frank Lorenzo that was marked by wage cuts and bankruptcy, experienced improved performance and reputation under a new leadership team with a more collaborative management approach. Southwest Airlines Co. and JetBlue Airways Corp. are also examples of airlines that pursue a high-trust, knowledge-based strategy, while Toyota Motor Corp. and Kaiser Permanente are examples from other industries. Executives interested in building knowledge-based organizations can create momentum for their initiatives in several ways: by carefully documenting the gains from knowledge-based strategies, by encouraging employee representation in corporate governance matters, and by working with other leaders to approach problems that no single company can solve alone.

Although most U.S. businesspeople know better than to sit down with competitors to fix prices or divide markets, they can still violate antitrust rulings. Increasingly, the government agencies that enforce antitrust laws are scrutinizing organizations' marketing, and shifts in practices in the early 2000s have reinvigorated enforcement activity. Understanding what behavior raises antitrust flags is critical for companies with dominant market share in one or more product categories. There has been increasing scrutiny of shelf-slotting practices and category management in the retail sector, for example. In this article, the authors take managers through the process of determining antitrust violation and then lay out five important cases in which practices that seemed to fit with competitive norms or with good citizenship, in fact, were ruled to be breaches of antitrust law -- in some cases, with momentous penalties. The article goes on to describe a sampling of the tactics that can help to temper competitiveness with caution. It concludes that a fundamental requirement is for managers to begin looking at their competitive tactics -- and at the business strategies and processes that support those tactics -- through the eyes of antitrust regulators.

Corporate social responsibility has become a vital part of the business conversation. The issue for most companies is no longer whether to engage in socially responsible activities but how to achieve the maximum benefit from the resources available for social projects while still increasing shareholder value. In this article, the authors draw on years of quantitative and case-based studies of major corporations to conclude that CSR activities work best for society and the corporate participants when they are managed strategically and in collaboration with an array of commercial and noncommercial partners. The authors cite exemplars such as Avon Products, whose name is synonymous with responses to women's healthcare issues, and The Home Depot, whose foundation involves suppliers and government agencies in large-scale efforts to combat housing problems in the United States. The authors point to five core principles behind effective CSR strategies, from the need to contribute "what we do" to the importance of accommodating government's regulatory and taxation influences.

Deep discounting strategies provide decidedly mixed long-term benefits.

The reason most organizations struggle to demonstrate business gains from information-technology investments is that their IT portfolio management (ITPM) is inadequate. Research at 130 companies, including Harrah's Entertainment, Waste Management and Blue Cross Blue Shield, shows that only 17% are at the advanced, or synchronized, stage of ITPM. Scrutiny of that 17% reveals best practices for successfully aligning IT with strategic goals. The key to bridging the business-technology divide and improving results is early communication. Not only must senior business managers understand more about how IT affects both strategy and the bottom line, CIOs need to learn to communicate the vision, strategies and goals of the IT organization in terms non-IT executives can understand. The most effective partnerships studied were those in which the CIO took initiative in discussing ITPM with business leaders and eventually transferred accountability to them. The most successful practitioners obtained cost savings of up to 40% of pre-ITPM budgets, better alignment between IT spending and business objectives, and greater central coordination of IT investments across the organization. By following certain specific steps to establish or upgrade ITPM and by benchmarking against synchronized companies, large organizations can make IT an integral part of their competitive advantage.

In the late 1990s, companies often bought huge quantities of IT for reasons that had nothing to do with their business models or long-term strategies. There was a “follow the pack” approach to IT investment that continues, to a lesser degree, today. For managers seeking to break away from fear-driven IT investment, the author suggests that they consider the operations of Inditex Group, a clothing manufacturer and retailer based in northwestern Spain and best known for its Zara stores. Although few would think first of this industry or region in a search for IT leaders, Inditex’s experience demonstrates that it is possible to select, adopt and leverage IT masterfully while spending very little on it. Inditex has higher operating profit and much better recent stock-price performance than any of its competitors, and the author believes that there is a direct connection between its financial performance and its IT excellence. For managers weary of me-too IT investment, he lays out the five general principles that underlie Inditex’s approach to technology spending.