Strategy

When you’re developing a strategy for a new business, testing assumptions in your plan in a logical order gives you the best chance to make course corrections early — and not waste time and money.

Many of today’s most successful companies are able to leverage business model scalability to achieve profitable growth. Executives need to factor scalability attributes into their business model design, or they risk being left behind.

There are four different pathways that businesses can take to become top performers in the digital economy. Leadership’s role is to determine which pathway the company should pursue – and how aggressively to move.

The sharing economy isn't all bad news for manufacturers of big ticket items such as cars. Research from Carnegie Mellon and UC Berkeley says that manufacturers will sometimes be able to charge higher prices to customers who are planning to rent out those goods. In a Q&A, one researcher says that when there’s heterogeneity in the market, meaning both a high-usage population and a low-usage population, circumstances are ripe for “a win-win-win for the borrower, the owner, and the manufacturer.”

Responding to a recently published essay, an MIT SMR reader pushed back against the view that managers must prepare for radical and rapid change in a digital world; he argued that this position may be overly alarmist. The discussion continues.

Executives often look at the network effects of digital platforms as a key source of competitive advantage — without understanding that platforms need to also leverage other factors at play in the local markets and among preferred customers. Network effects can help, but on their own, they offer very limited competitive value.

Companies today will have to reinvent themselves to survive, and every large and ambitious company should be trying to figure out how to become a destination for its customers. Consumers are voting with their mobile devices and choosing from a handful of dominant “ecosystem drivers”— businesses such as Amazon and WeChat, which become destinations for their customers’ needs by offering complementary or sometimes competing services — for each domain in their lives.

Cybersecurity can no longer be the concern of just the IT department. Within organizations, it needs to be everyone’s business — including the board’s.

Lurking within the financial statements and communications of public companies is a troubling trend. Alternative metrics, once used sparingly, have become increasingly ubiquitous and more detached from reality.

Organizations often struggle with corporate strategy because executives lack clarity on how the parts of the corporation fit together. Without a shared understanding of the relationships between headquarters and business units, executives risk talking past one another when discussing strategy.