...Rivals * Nirmalya Kumar From the December 2006 Issue * Strategies to Fight Low-Cost Rivals Strategy & Execution HBR Article Executive Summary Reprint: R0612F Companies find it challenging and yet strangely reassuring to take on opponents whose strategies, strengths, and weaknesses resemble their own. Their obsession with familiar rivals, however, has blinded them to threats from disruptive, low-cost competitors. Successful price warriors, such as the German retailer Aldi, are changing the nature of competition by employing several tactics: focusing on just one or a few consumer segments, delivering the basic product or providing one benefit better than rivals do, and backing low prices with superefficient operations. Ignoring cut-price rivals is a mistake because they eventually force companies to vacate entire market segments. Price wars are not the answer, either: Slashing prices usually lowers profits for incumbents without driving the low-cost entrants out of business. Companies take various approaches to competing against cut-price players. Some differentiate their products—a strategy that works only in certain circumstances. Others launch low-cost businesses of their own, as many airlines did in the 1990s—a so-called dual strategy that succeeds only if companies can generate synergies between the existing businesses and the new ventures, as the financial service providers HSBC and ING did. Without synergies, corporations are better off trying to transform...
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...Chain store or retail chain are retail outlets that share a brand and central management, and usually have standardized business methods and practices. In retail, dining, and many service categories, chain businesses have come to dominate the market in many parts of the world. * Tesco * Apple * MacDonald’s | Independents | * Anna Falcke-small business * Bristol Books * Broadmead has more than 50 independent shops | Supermarkets | * Aldi * Asda * Iceland’s * farm foods * Lidl * Morrison’s | Specialist outlets | * Mercedes * BMW * Toyota | Catalogue stores | * Argos * H&M | Membership club | * Tesco * Shell | Discount stores | * Pound land * Pound stretcher | Internet stores | * Amazon * Littlewoods * Beloved | Internet auction | * EBay * Amazon * Ubid * Ebid * Sky auction | Starbucks “Owning a franchise allows you to go into business for yourself, but not by yourself.” A franchise provides franchisees with a certain level of independence where they can operate their business. A franchise provides an established product or service which may already enjoy widespread brand-name recognition. This gives the franchisee the benefits of a pre-sold customer base which would ordinarily takes years to establish. A franchise increases your chances of business success because you are associating with proven products and methods. Franchises may offer consumers the attraction of a...
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...Master in International Business, Intake 7 London Corporate Web Communications http://www.ryanair.com Martin Sentis 11 Martin Sentis MIB 7 – Group B Table of content INTRODUCTION ................................................................................................................................. 3 BUSINESS OBJECTIVES AND BUSINESS MODELS ............................................................................... 3 Presence ........................................................................................................................................ 3 Pricing ........................................................................................................................................... 3 Revenue......................................................................................................................................... 3 Exchange type ............................................................................................................................... 4 How does the Internet add value? ................................................................................................ 4 Rappa’s business model ................................................................................................................ 4 AUDIENCE PROFILE ........................................................................................................................... 5 WEB EVALUATION......................................
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...owners before presenting adequate options to Wal-Mart´s executives who will decide whether or not to consider Baja-Land’s proposals. You have been assigned to this project by the CEO of Baja-Land. Your first task would be to analyze Wal-Mart’s recent growth in Latin America. Your boss has the impression that Wal-Mart’s growth in the region has decreased substantially in the last years. So you need to determine the importance of Latin American markets for this giant multinational and anticipate potential company´s needs for land reserves in the region. You also are asked to consider other significant factors of Wal-Mart’s business model mainly types of business facilities, relationships with suppliers, and tactics for expansion into new geographic markets. Your job is to evaluate potential gains and risks for Baja-Land to get involved in this business opportunity. Report your findings and conclusions. Report Requirements – Start by reading Case 13 in your text book (pp. 420-436). Look for additional information as needed to solve the...
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...excellence in the pharmaceutical industry Delivering superior value to your customers in challenging times Stephan Danner, Aleksandar Ruzicic, Patrick Biecheler Study Commercial excellence in the pharmaceutical industry Delivering superior value to your customers in challenging times 2 | Study Contents Letter from the authors Executive summary 1. At a glance: Turbulent times, here to stay? 2. Taking the first steps towards commercial excellence 3. Sales excellence: Still a worthwhile investment 4. The nuts and bolts of customer excellence a) The importance of customer relationship management (CRM) b) Towards a customer-centric approach c) The promotional mix as a stepping-stone to customer excellence 5. New business models: Making the necessary changes 6. Mapping out the road to commercial excellence 7. Sources 8. Who to contact about commercial excellence 3 4 6 10 14 18 19 22 26 30 38 41 42 3 | Commercial excellence in the pharmaceutical industry Letter from the authors For a while now, pharmaceutical companies have been faced with a multitude of difficult challenges. Financial pressures, regulatory changes and increasingly active stakeholders have put the industry’s sales growth and profitability to an ongoing and demanding test. In the past, many companies reacted to these obstacles by simply restructuring and downsizing their sales forces. Yet many onlookers now consider this approach to be outdated. If companies want to succeed – and generate...
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...is undoubtedly the future of the video rental industry. Netflix has already taken a good lead in it but must have fresh ideas to keep its advantage in the industry. Beating its competitors in the domestic market is important, however, Netflix should jump out of its own circle into a new market to gain the first mover advantage. Looking at the global market, China is a good choice for Netflix’s next station. Using the Porter’s Five Forces model, Netflix can examine its advantages and disadvantages see whether entering China is good choice: * Bargaining power of customers China has a growing economy with a large group of new middle-class, who are able and willing to consume on entertainment. Nowadays, Chinese usually watch films on free websites with a low picture quality and slow Internet speed. While the number of people watching films are increasing, the picture quality is becoming more important for the viewing experience. Providing a fast, flexible and high-quality service, Netflix can persuade many customers into its subscription model. * Bargaining power of suppliers: China’s film and TV show makers have been facing a major problem: plagiarizing (including unpaid online watching), which substantially decreases their profits. They are finding a pathway to introduce their product to the customers. The advantages of plagiarizing products are the cheap prices and convenience, which Netflix can also provide. Netflix should cooperate with Chinese filmmakers to gain sources...
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...acquisition growth strategy allows boost to grow faster than normal.in addition it’s a lot easier to finance by the bank. The franchisee strategy entails a few dangers associated with the model. Having to deal with fierce market competition from established brands and their popularity, managing seasonal inputs and acquiring a failing franchisee may drag the organisation down. This model also helps leveraging off synergy, from Salsa’s fresh mix grill. This subsidiary of Boost juice has complementary products to support its healthy image. Undoubtedly, the future strategic challenges must tackle problems like changing environments, conjuring a differentiation strategy and competition will always be a challenge coupled with sustainability struggle during off season. The biggest aspects that boost prides itself in its social responsibility that Boost Juice Bars have taken on is, the commitment to the health and wellbeing of its customers. Providing fresh produce and low calorie alternatives. Also its cups are made of bio degradable materials, reducing recyclable waste. Boost’s menu is a host to a variety of fruit drinks. It has to maintain variety as it faces strong competition from substitutes like supermarket juices, premium gourmet juices etc. The core question around which any business revolves, what is the potential for earning. For a potential franchisee it’s essential that it has a pre-established brand name in the market. It is also vital that how much training and...
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...Walmart Organizational Management Name Institution Affiliation Organizational Context Wal-Mart Stores Inc. or Walmart is a multinational retail organization that has numerous chains of large discount warehouse and general stores. The company was formed in 1962 by Sam Walton as a family-owned business. It was incorporated in 1969 and traded on the Stock Exchange of New York publicly in 1972. Since then this organization has grown strength to strength winning various accolades. In 1988, it was ranked as the most profitable retail business in America outselling competitors such as K-Mart and Sears in the retail business (Fishman, 2006). It was founded on Sam Walton’s quest for providing goods and services at relatively low or discounted prices. The Walmart principles have been hinged on cost-cutting while at the same retailing goods at consumer-friendly prices. The organization too, has been hailed for its global standard efficiency and business innovations. It was one of the first corporations that integrated use of computers in its operations in all its branches. The mission statement reflects on the founder’s business model of passing savings to his clientele and amassing profits through volume sales. This principle has made consumers feel more welcome and their needs taken care of over the years. The cost-cutting initiatives embraced by the company operations have been as a result of this old age philosophy Walmart has spread its wings world over opening up over 8...
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...analytical An analytical framework for evaluating e-commerce business models and strategies Chung-Shing Lee The author Chung-Shing Lee is Director of Electronic Commerce Resource Center and an Assistant Professor of Information Systems and Technology Management in the School of Business at Pacific Lutheran University, Tacoma, Washington, USA. Keywords Internet, Economy, Innovation, Strategy Abstract Electronic commerce or business is more than just another way to sustain or enhance existing business practices. Rather, e-commerce is a paradigm shift. It is a ``disruptive’’ innovation that is radically changing the traditional way of doing business. The industry is moving so fast because it operates under totally different principles and work rules in the digital economy. A general rule in e-commerce is that there is no simple prescription and almost no such thing as an established business or revenue model for companies even within the same industry. Under such conditions, an analytical framework is needed to assist e-commerce planners and strategic managers in assessing the critical success factors when formulating e-commerce business models and strategies. This research develops an analytical framework based on the theories of transaction costs and switching costs. Both demand-side and supply-side economies of scale and scope are also applied to the development of this framework. In addition, e-commerce revenue models and strategies are also discussed. Based on the analytical...
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...0BILL%20-%20BUSINESS%20AT%20THE%20SPEED%20OF%20THOUGHT.TXT BUSINESS AT THE SPEED OF THOUGHT by bill Gates ALSO By BILL GATES The Road Ahead BUSINESS AT THE SPEED OF THOUGHT: USING A DIGITAL NERVOUS SYSTEM BILL GATES WITH COLLINs HEMINGWAY 0 VMNER BOOKS A Time Warner Company To my wife, Melinda, and my daughter, Jennifer Many of the product names referred to herein are trademarks or registered trademarks of their respective owners. Copyright (D 1999 by William H. Gates, III All rights reserved. Warner Books, Inc, 1271 Avenue of the Americas, New York, NY 10020 Visit our Web site at www.warnerbooks.com 0 A Time Warner Company Printed in the United States of America First Printing: March 1999 10 9 8 7 6 5 4 3 2 1 ISBN: 0-446-52568-5 LC: 99-60040 Text design by Stanley S. Drate lFolio Graphics Co Inc Except as file:///C|/Documents%20and%20Settings/Admini...SINESS%20AT%20THE%20SPEED%20OF%20THOUGHT.TXT (1 of 392)12/28/2005 5:28:51 PM file:///C|/Documents%20and%20Settings/Administrator/Deskto...0BILL%20-%20BUSINESS%20AT%20THE%20SPEED%20OF%20THOUGHT.TXT indicated, artwork is by Gary Carter, Mary Feil-jacobs, Kevin Feldhausen, Michael Moore, and Steve Winard. ACKNOWLEDGMENTS I first want to thank my collaborator, Collins Hemingway, for his help in synthesizing and developing the material in this book and for his overall management of this project. I want to thank four CEOs who read a late draft of the manuscript and offered valuable thoughts on how to make it more meaningful for business leaders: Paul O'Neill, Alcoa;...
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...l in Zimbabwe Understanding the “new normal” in Zimbabwe The term ‘new normal’ is a term coined by Mohamed El-Erian, co-chief investment officer of Pimco, a California investment firm to refer to the situation the world found itself in after the Global Financial Crisis (GFC) of 2008-2010. From a global perspective, this phenomenon has led to mixed fortunes on the economies of different countries. Characteristic of the ‘new normal’ is the remarkable gaining of economic influence of the East due to the growing shift in global economic activity from West to East. Emerging Markets (Ems) proved to be a force to reckon with due to the increased flow of capital between the (Ems) themselves and to industrial countries as well as due to the increase in their stake or share in the global output from 40% in 1990 to 50% and expected to grow to 60% by 2035. The Global recession resulted in a deliberate greater government intervention in most countries to save respective banking systems from collapsing. As a result, there is a significant role to be played by governments in the economies of most countries which might have a negative impact of financial protectionism in some instances or lead to greater global financial coordination and transparency. In the ‘new normal’, the West has lost its ability to set the global agenda as seen in the transition from a G-7 to a Group of 20 which includes players in the Emerging Markets like Brazil, Russia, India, China, South Korea, Saudi Arabia...
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...Case Study 2.6—Pandora Pandora radio originally operated as a freemium business model but soon switched to an ad-supported free business model. The difference between the two is what quadrupled their revenue. Pandora offers a unique customer value proposition. MailChimp succeeded with a freemium model but Ning did not because MailChimp was able to deal with issues because free products are ripe for abuse. When Pandora opened in 2005, they offered users 10 hours of free radio, then a year’s subscription for $36 per year. “In the first couple weeks we had 100,000 people come through and the vast majority listened to every last minute of their free ten hours,” said CTO Tom Conrad. “Then we asked them for their credit card and they would wander off into the wilderness.” (Gannes, 2010). They quickly switched to an ad-supported model. It was ad-supported in name only, however, because they had no ad server, no ad staff — not even a place on their page to put ads: But growth quadrupled overnight, and within three days, Apple called and asked to buy out ad inventory through December (Gannes, 2010). Pandora’s customer value proposition is an uncanny algorithmic ability to predict the music their customers want to listen to, and unlimited free musical content for those that don’t mind listening to advertisements ("Pandora and a," 2012). For freemium models, it was difficult to succeed for one main reason. A 354 percent increase in abuse-related issues like spamming, followed...
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...Culture concepts (habit, ideology, not informal or egalitarian, internal policies, etc.), natural environment, regulation, monopolize, government bureaucracy and salary standard. The same parts are: Strong business competition, higher and higher customer needs and need for networking. 3. First, getting to know political/economic environments, laws and regulations in China, especially for high-tech industry and foreign; then find professional people in Chinese culture to know what we cannot do and what people may accept more easily. Third, collecting information of high-tech industry in China find out the appropriate price of labor and resources in China and choose the best location to start since China is so big and has incredible regional gap. 4. (1) Find chance from small and specific things, be professional and concentrative. (2) Understand cultures and environments then make the appropriate decision. (3) Using both earlier experience and new things just appeared. (4) Setting right approach to find the best people and put them in right positions. (5) Learn from everything and everyone, and try to accept different things to join in the new environment. Be quality-oriented and highly efficient, but also understanding customer's need. (3) Make sure business models in different places are based on local situation, not by standard or past experience only. Using simple...
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...Times have changed, and the business models governing companies a unilateral way there have forced an adaptation to technologies and market trends to continue in this way in a successful way. Undeniably, one of the most important factors that gave this result is that Blockbuster is not coupled to the new market trends, refusing to change its business model to new technology revenues, and most importantly, did not pay attention to the needs of its consumers. Although the business model Blockbuster rents was innovative at the time and later, like its competitor Netflix, income raided by mail, but not daring to adopt new technologies online income, hosted in the cloud timely, as they failed to take critical questions that have saved the company. Netflix, and even companies like Sony, bet stores online video hosted on the cloud, with a proposal within your PlayStation 3, then why not consider this trend Blockbuster on time and took it? Sometimes organizations including businesses, agencies, and even people grow attached to their working methods, resulting in that they cannot accept new technologies and business models that work in your market. This line of thinking must be avoided especially in these times of radical changes in consumer behavior. Always be attentive to the needs and market trends. Only that way can stay ahead and prevent a market previously dominated by fear is lost or ignorance to new technologies. “ Absorptive capacity theory examines the extent to which a firm...
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...India, which he cofounded with Harvard Business School professor Clayton M. Christensen. He has consulted to Global 1000 and start-up companies in a wide range of industries—including health care, aerospace/defense, enterprise IT, energy, automotive, and consumer packaged goods—and has advised Singapore’s government on innovation and entrepreneurship. Book The book is focused on business model innovation and introducing a simple framework for thinking about potential business model innovations and evaluating the positives and negatives of a potential business model. Then it continues to define the parameters of the ‘white space’, which is the uncharted territory for any organization. This can be either geographical, demographical or product distinctions. Mark W. Johnson understands that white space is difficult to define. Where white space may represent available opportunities outside of one company’s area, those same opportunities may represent the core business for another organization. In the case of a company considering entering a white space, there is the challenge of risk. For many organizations, the risk of failure is considered too great, and many potential new products and markets are missed as a result. The compromise position, taken by many enterprises, is to enter into related markets, adjacent to their core product line. While potentially profitable, the adjacent market doesn’t represent a transformation of the business model in a fundamental way, leaving the company...
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