...Local Business Strategy Review Outline HEB was founded in 1905 by Florence Butt, it is a popular grocery retail establishment that is primary in Texas and Mexico with over 350 locations. HEB was ranked number 13 in 2008 “Top 75 North American Food Retailers” and bringing in revenue of over 18 billion. “HEB does business in 5 different retail formats: general H-E-B stores, Central Market, H-E-B Plus, Mi Tienda and Joe V's Smart Shop. H-E-B produces many of their own-brand products, including milk, ice cream, bread, snacks, and ready-cooked meats and meals. These and other private-label products are sold under various brands, including "Central Market Naturals", "Central Market Organics", "H-E-B", "H-E-Buddy", "Hill Country Fare", "H-E-B Creamy Creations" ice cream”(Wikipedia). HEB takes pride in hiring the right employees to make HEB a more pleasurable place for shoppers to purchase their home goods. They set up an amazing system for employees to rise up on the company ladder. HEB is a great place for customers to shop and a great place for employees to work. HEB has topics pertaining to how the company is ran and the reasons behind them. For example, HEB practices Human capital which is “the individual capabilities knowledge, skills, and experience of a company’s employees and managers” (Strategic Management CH 4). HEB employees are well taken care of with providing health insurance, frequent raises for good work, and proper training for employees that see HEB in their future...
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...Oct. 24 2014 Yinan Wang (Nancy) Title: Marketing Myopia Author: Theodore Levitt Year: 2004 Source: Levitt, T. (2004) Marketing Myopia, Harvard Business Review, Jul-Aug, pp138-149; originally published in Harvard Business Review, July/Aug. 1960, pp. 45-56. Insight：Interesting Readability: a little hard to read Relevance: good practice Overall: 7.5 Key Content: The article focus on trade will get successful when they cater for customers’ demands rather than selling their products for clients. The effective corporate management is very essential for development of companies. Some firms’ business stopped growing because of failing business management, such as incorrect business orientation and purposes, concrete matters. The article showed that petroleum industry makes its business get success because improved manufacture oil product’s efficiency, products innovation and gas and oil transmission, in particular, developed domestic central-heating system to compete with rivalry. Also pointed that the car industry’s ford company through saving its product costs to reduce its cars price to meet more customers’ demands to purchase its cars and increase industry profits. Therefore, for pursuing enterprise business success, corporations must pay attention to customer creating and customer-satisfy organism through a powerful leadership. Learning / Reflection: In the article, successful company leader utilize marketing...
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...Question 1 Communication across Computime is lacking. According to Wolcott and Lippitz, Computime lacks formal communication channels between Research and Development (R&D) and business unit engineers (2008). If the R&D unit is unaware of how Computime’s customers are innovating a product, how can the department anticipate needs and make adjustments prior to unveiling a new product? Communication needs addressed. Chinese engineers “tend to be less accustomed to sharing problems, offering ideas, and working in teams” (Wolcott & Lippitz, 2008). This is a barrier for Computime, as Chinese engineers may not be able to communicate effectively with the R&D units. To improve communication channels, Computime can use Frans Johnansson’s concept of making barriers fall, by embracing a range of cultures (2004). Computime can hire engineers who are familiar with the Chinese culture and have experience with Chinese workers. By hiring people who know best how to work with the Chinese, communication can improve. Through improved communication, employees will be able to share ideas about customers’ needs and further anticipate future products. Computime will need to create a sense of urgency regarding the importance of improved communication (Kotter, 2002). To create a sense of urgency, Computime will show videotapes of angry customers to employees. Hearing and seeing customer frustrations will help employees better understand the need for improved communication (Kotter, 2002). In order...
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...than customers’ needs, create a “marketing myopia” resulting in business nearsightedness or shortsightedness. The most important question is therefore, “What business are we really in?” from the perspective of what customer want. What do people really want when they acquire a product or a service? This question directly impacts the strategy and the value proposition definition Companies need to understand the difference between a product and a commodity: • A product is what customer feels about your business • A commodity is anything for which there is a demand, but which is supplied without qualitative differentiation across a market Kodak is a great example in which marketing myopia was present. The digital camera was invented at Kodak in 1975. But instead of marketing the new technology, the company kept it under wraps for fear of hurting its lucrative film business. And when Kodak decided to get in the game it was too late. Kodak had the myopic view that the company was in the film business rather than the story telling business. But customers aren’t buying cameras and film as much as they are buying a record of their memories. Kodak therefore misdefined the business they were in: instead of focusing on the product: capturing stories, they hooked on the commodity: selling film. Marketing Myopia is the title of an important marketing paper written by Theodore Levitt and published in 1960 in the Harvard Business Review • ◦ #Kodak ◦ #Marketing ◦ #Innovation • 1 year ago • 10 • Permalink...
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...In 1993 the American iconic company IBM hired a new turnaround CEO named Lou Gerstner. In this Harvard Business Review article entitled Diversity as Strategy, Harvard Professor David A. Thomas writes about an aspect of Gerstner’s strategy is really a story about people, starting with the diversity of people within IBM, and the positive replication into their global markets. These markets include customers, employees, and the search for new talent to recruit. Gerstner realized that an organization the size of IBM must embrace diversity, to not only influence people, but as a strategy to open the doors to new opportunities both internally and externally. Gerstner launched a Diversity Task Force initiative with the goal, “to uncover and understand the differences among the groups and find ways to appeal to a broader set of employees and customers” (Thomas, 2004. Pg. 1). Gerstner explained that it was more than just about the talent pool, and that it was a market based issue. Realizing the diversity in the markets, and IBM’s need to expand in the markets, would require the people representing IBM to be as diverse and multi-culture oriented as the markets. The first usable takeaway from the articles emphasis on culture change is the idea of Constructive Disruption. It’s an interesting approach to how IBM, and most employers really, approached employee management issues. Companies had become very careful at not distinguishing differences among groups of diversity to remove...
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...Can You Say What Your Strategy Is? by David J. Collis and Michael G. Rukstad CAN YOU SUMMARIZE YOUR COMPANY’S STRATEGY in 35 words or less? If so, would your colleagues put it the same way? It is our experience that very few executives can honestly answer these simple questions in the affirmative. And the companies that those executives work for are often the most successful in their industry. One is Edward Jones, a St. Louis–based brokerage firm with which one of us has been involved for more than 10 years. The fourth-largest brokerage in the United States, Jones has quadrupled its market share during the past two decades, has consistently outperformed its rivals in terms of ROI through bull and bear markets, and has been a fixture on Fortune’s list of the top companies to work for. It’s a safe bet that just Getty Images and IPNstock 82 Harvard Business Review | April 2008 | hbr.org It’s a dirty little secret: Most executives cannot articulate the objective, scope, and advantage of their business in a simple statement. If they can’t, neither can anyone else. Can You Say What Your Strategy Is? about every one of its 37,000 employees could express the company’s succinct strategy statement: Jones aims to “grow to 17,000 financial advisers by 2012 [from about 10,000 today] by offering trusted and convenient face-to-face financial advice to conservative individual investors who delegate their financial decisions, through a national network of onefinancial-adviser...
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...a lecturer in Business Administration at the Harvard Business School; now, he is a full-fledged professor. The Harvard Business Review has sold more than half a million reprints of this article and each reprint has no doubt been copied several times over. There will be few marketing students who have not read this article which is about how an organization can guarantee its sustained growth a big question? To quote from the summing up of this article, Marketing Myopia answered that question mark in a new demanding way by urging organizations to define their business broadly to take privilege of development opportunities. Using the example of the railroads, Levitt showed how they declined as technology highly developed since they define themselves too narrowly. To continue growing, companies must ascertain and act on their customers' needs and desires, and not bank on the presumptive longevity of their products. Even more dramatic is the first paragraph of this seminal article which reads: “Every major industry was once a growth industry. But some that are now riding a wave of growth enthusiasm are very much in the shadow of decline. Others which are thought of as seasoned growth industries have actually stopped growing. In every case the reason for growth is threatened, slowed, or stopped is not because the market is saturated; it is because there has been a failure of management”. Well I am with Levitt, those companies who have not defined there business or had defined...
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...competitive edge is nearly impossible these days. A playbookfor strategy in a highvelocity world by Rita Günther McGrath 62 Harvard Business R ARTWORK Tara Donovan, Untitted (Styrofoam Cups), aoo8, Styrofoam cups •and glue, installation dimensions variable SPOTLIGHT ON STRATEGY FOR TURBULENT TIMES Each month we illustrate our Spotlight package with works from an accomplished artist. We hope that the lively, cerebral creations of these photographers, painters, and installation artists will infuse the pages with additional energy and intelligence and amplify what are often complex and abstract concepts. This month we showcase Tara Donovan, a Brooklynbased artist known for her large sculptures and installations. Donovan, whose work is composed of everyday objects like pencils and toothpicks, has explained, "It's all about perceiving this material from a distance and close up and how the light interacts with it." View more of the artist's work at pacegaUery.com. S R T G IS STUCK. For too long the business world an inflection point. Thefieldof strategy needs to acT AE Y has been obsessed with the notion of building a sus- knowledge what a multitude of practitioners already tainable competitive advantage. That idea is at the know: Sustainable competitive advantage is now the core of most strategy textbooks; it forms the basis exception, not the rule. Transient advantage is the of Warren Buffett's investment strategy; it's central new normal. to the success of companies on the...
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...progressively gained awareness, no longer allowing business actions to remain independent of society endeavors. The obligation or “duty” that has surfaced between organizations and their commitment to the environment and society has typically been the result of enforced government regulations and “bad” publicity. However, Michael Porter and Mark Kramer point out the opportunity that is presented from the application of CSR within a business. Not only can the incorporation be innovative and bode well for the community and economy, but it can equally pose as a competitive advantage by building and capitalizing on shared values. Applying monetary means, resources and expertise in issues specific to an organization allows the business to integrate themselves into society, impact perception and support their business while inflating the economy (Porter & Kramer, 2006). Businesses such as Toms Shoes, Burt’s Bees, The Body Shop, etc. have been able to take CSR one step further, by building their company strategy to incorporate it. They have, in essence, created a shared value that serves the economy and sustains their organization within the industry. Toms Shoes created their brand based on the idea that consumers enjoy feeling good about their purchases and what better way to do that than tying a purchase with a donation. They have been able to leverage the organizations resources to benefit society, while growing the business and profitability because they set themselves apart...
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...Value, Conscious Capitalism, and Social Business. Throughout this paper, I will be discussing these major trends and demonstrating how different businesses embody them. These major trends do not always work together. However, many businesses demonstrate one or two of these trends. In today’s world, corporate social responsibility is something that every business should make a great effort to incorporate into their business model. This is important because corporate social responsibility is how businesses are impacting society. CSR is a way for businesses to have some accountability in making sure their products or services do not impact the environment or community in a negative way. Throughout the next few pages, you will read examples of companies in our current society and prove how these companies are applying these trends to their business models. Shared value is the first trend of CSR. Shared value was introduced in a Harvard Business Review article. Strategy & Society: The link between Competitive Advantage and Corporate Social Responsibility was published in late 2006 by Michael E. Porter and Mark R. Kramer. Both Kramer and Porter helped spread the word about shared value and revealed how it works and why shared value was a necessary component to society. Porter has been considered to be the front-runner on competitive strategy and is the chair at the Institute for Strategy and Competitiveness at Harvard Business School. Shared value creates value...
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...Tata Nano - Porter’s Five Forces Businesses need to understand the forces affecting them. These competitive forces offer a framework for every firm showing them how they can influence competition in the future. (PORTER 2008, p. 80) They also indicate the attractiveness of a given industry. (PORTER 2008, p. 80) The first part of these five forces consists of the rivalry of existing competitors. Which competitors are taken into consideration depends on the scope of competition the firm is defining. Many firms struggle because they do not define the industry broadly enough they are doing business in. (LEVITT 1960, p. 45) In the case of Tata competitors consist of manufacturers of motorcycles and scooters. According to the case study, there were 7 million sold in 2007. Another competitor is BAJAJ Auto that is also developing a low-price car. At the moment, the rivalry is not very strong for this price-class but success of the Tata could change that. As this market segment will grow, there might be new market entrants, e. g. European, American or other Asian car manufacturers that find it attractive to produce for the Indian market. Nevertheless, there are a few entry barriers like financial resources or capacity of the factories, e. g. to realize economies of scale. The third force is the bargaining power of suppliers. Like all car manufacturers, Tata is dependent from suppliers of various parts. On the one hand, the suppliers’ bargaining power is high because their parts...
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...(Drucker 1973, pp.64-65) In the early years of the ‘70s era, Drucker was one of the first educators and authors who identify marketing as a way to understand customers’ needs rather than to sell the products. With the same thinking as Drucker, in a journal article named Marketing Myopia (1960), Theodore Levitt examines and analyzes limitations of managers in approaching the philosophy of modern business. The core of this article is to criticize myopic visions of managers who always pay attention to their selling targets as well as their firms’ without perceiving that the most crucial goal in business is to satisfy customers, not to sell products. In order to illustrate his view, Levitt (1960) take the railroad industry as a typical example for the failure in its business at that time. In this case, he points his finger on the railroads’ disorientation as the main culprit in making their customers to use others such as cars, trucks, airplanes and even telephones instead of being royal travelers to the old traditional transportation. In other words, the railroads killed their business by themselves because they determined their industry in a wrong mind and the reason as Levitt (1960) mentioned was because they were product-oriented (railroad-oriented) instead of customer-oriented (transportation-oriented). Once again, the railroads’ illustration was cited by James R. Stock (2002) in his paper namely Marketing Myopia Revisited: Lessons For Logistics as an evidence to prove...
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...Chesbrough and David J. Teece Creativity Is Not Enough Theodore Levitt r0208k In Closing Stumbling into Brilliance Danny Hillis r0208l BEST OF HBR 1985 The Discipline of Innovation by Peter F Drucker . How much of innovation is inspiration, and how much is hard work? If it’s mainly the former, then management’s role is limited: Hire the right people, and get out of their way. If it’s largely the latter, management must play a more vigorous role: Establish the right roles and processes, set clear goals and relevant measures, and review progress at every step. Peter Drucker, with the masterly subtlety that is his trademark, comes down somewhere in the middle. Yes, he writes in this article, innovation is real work, and it can and should be managed like any other corporate function. But that doesn’t mean it’s the same as other business activities. Indeed, innovation is the work of knowing rather than doing. Drucker argues that most innovative business ideas come from methodically analyzing seven areas of opportunity, some of which lie within particular companies or industries and some of which lie in broader social or demographic trends. Astute managers will ensure that their organizations maintain a...
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...imperceptible product features can aid both sales and postsales efforts Theodore Levitt All products, whether they are services or goods, possess a certain amount of intangibility. Services like insurance and transportation, of cours;, are nearly entirely intangible. And even goods, while they can be seen, often can': be tried out before they are bought. Underjitanding the degree of a product's intangibility can affect hoth sales and postsales follow-up strategies. While services are less able to be tested in advance than goods, the intangible factors in both types of products are important for convincing prospective customers to buy. Sellers of services, however, face special problems in making customers aware of thi; benefits they are receiving. The author considers the intangible factors present in all products and also advises producers of services about how best to hold on to their customers. Mr. Levitt is the Edward W. Carter Professor of Business Administration and head of the marketing area at the Harvard Business School. He has written nearly two dozen articles for HBR, including the well-known "Marketing Myopia" {published in i960 and reprinted as an HBR Classic in September-October 1975) and "Marketing When Things Change" [November-December 1977). //lustration hy ]im Kingston. Distinguishing between companies according to whether they market services or goods has only limited utility. A more useful way to make the same distinction is to change the words we use...
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...Michael Porter, siendo una gran figura en el tema de estrategia de empresas, economía global, medio ambiente y salud. Se dio cuenta que medir la competencia en la industria a base de rivalidad entre ellos mismos, era muy básica. Así qué al estudiar este tema más a fondo, resumió las 5 fuerzas competitivas con las que es necesario medirla: El poder de negociación con los compradores, el poder de negociación con los proveedores, la amenaza de nuevos competidores, la amenaza de los productos sustitutos y la rivalidad entre los competidores existentes. Para sostener la rentabilidad a largo plazo de una empresa, ésta debe de responder de forma estratégica en el mercado. Estas 5 fuerzas no sólo sirven de modelo para crear una estrategia, si no que mide el entorno competitivo en donde se encuentra tu compañía y ayuda a localizar donde se encuentra el poder en tu negocio. Rivalidad entre competidores: Son las empresas que compiten en un mismo sector del mercado, ya sea porque ofrecen un mismo producto u ofrezcan un mismo servicio. Cabe mencionar que entre mayor sea la competencia, menor la posibilidad de obtener más ganancias con ello, por lo tanto se vuelve un negocio con poca rentabilidad. Para medir la intensidad de competencia, hay factores que se deben tomar en cuenta: Si los competidores son numerosos o son escasamente iguales en tamaño y poder. En los mercados donde hay una empresa dominante, como Netflix que tiene la libertad de fijar los precios a competidores (la...
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