Strategy

Information about intangibles and the opportunity they offer are a valuable part of a company's portfolio.

Which jobs are good candidates for global disaggregation?

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.

The colonization of American manufacturing by distributors has pushed U.S. companies overseas.

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.

Many manufacturers already have established product development activities in different countries around the world. As a rule, the current approach includes colocation of cross-functional teams to foster close collaboration among engineering, marketing, manufacturing and supply-chain functions. The results to date -- better product designs, faster time to market and lower-cost production -- have been satisfactory. However, growth and innovation can now be much more effective if manufacturers tie their decentralized development organizations into a cohesive, unified global product development operation. In this article, the authors introduce new empirical frameworks to guide managers toward such practices. Citing exemplars such as Hewlett-Packard, Eastman Kodak, Hyundai Motors, Haier, Alcatel and Cummins, the authors explain why GPD has come of age and demonstrate a three-stage approach that puts product development in the context of a company's relationships with outside partners. The article draws from extensive interviews with engineering managers at more than 100 companies in 15 countries in North America, Europe and Asia. Additional data are from a recently completed study on GPD that PTC has conducted with BusinessWeek Research Services, interviewing and surveying more than 1,100 engineering managers worldwide.

For both manufacturing companies and service firms, the basis of competition is shifting fast. Manufacturers are finding they must compete by selling services; service firms now have to provide products as well as services. The emerging battleground is known as "integrated solutions," and it is where leading companies such as IBM, General Electric, Rolls-Royce and EDS already compete aggressively. Rolls-Royce provides airlines with "power by the hour," selling engines along with the services to maintain and upgrade them over many years. Services provider EDS now manages and integrates different suppliers' technologies and products as part of its business outsourcing solutions. However, the integrated solutions approach is not simply a matter of blending products and services. Customers are buying guaranteed solutions for trouble-free operations. So the key is to develop and deploy the right capabilities -- and to structure the organization so these capabilities match customers' needs. This article offers a blueprint for implementing integrated solutions, drawing on extensive research with such companies as Alstom Transport, Cable & Wireless, Thales, Ericsson and Atkins. The article highlights the importance of four prerequisite capabilities and shows the organization structures necessary for success -- structures that are no longer bounded by product, service or geographic lines. The article then lays out three levels of organizational capability to chart the journey that integrated-solutions providers must take.

AåÊframework called the "innovation radar" can help companiesåÊidentify opportunities for innovation.

Multinationals are finding it increasingly important to match the strengths of their subsidiaries' host economics to their strategic needs.