...Making sustainability profitable Haanaes, K., D. Michael, J. Jurgens, S. Rangan. March 2013. Harvard Business Review. Vol. 91, Issue 3, Page 110—114 “We are moving to a world of scarce resources, in which companies will increasingly need to consider their total return not just on assets and equity, but on resources” ¹. Sustainability leads to innovation and effectiveness. It is hard for companies to believe that a sustainable production manner can be less expensive than a ‘quick-lowering-cost’ manner. Companies follow different approaches to make their environmental efforts pay back financially. Firstly, the ‘long-view’ in which they see that investment eventually leads to lower costs and higher yields. “Secondly, a bootstrap approach to conservation. Companies start with small changes that generate costs savings, which they can use to fund advanced technologies that make production more efficient. The last approach is spreading the sustainability efforts to the operations of their customers and suppliers, in the process devising new business models that competitors find hard to emulate”². Companies have to recognize the fact that initial investments made in more-costly materials and methods will lead to greater savings on the long term. Also, “the pursue of sustainability can be a powerful path to reinvention for all business facing limits on their resources and their customers’ buying power”³. Besides the impressive cost efficiencies, the growth that companies have gained...
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...62 HARVARD BUSINESS REVIEW Many have argued that the Internet renders strategy obsolete. In reality, the opposite is true. Because the Internet tends to weaken industry profitability without providing proprietary operational advantages, it is more important than everfor companies to distinguish themselves through strategy. The winners will be those that view the Internet as a complement to, not a cannibal of, traditional ways of competing. Strategy and the by Mich36l E. Porter Internet I "^ INTERNET is an extremely important new J technology, and it is no surprise that it has received so much attention from entrepreneurs, executives, investors, and business observers. Caught up in the general fervor, many have assumed that the Internet changes everything, rendering all the old rules about companies and competition obsolete. That may be a natural reaction, but it is a dangerous one. It has led many companies, dot-coms and incumbents alike, to make bad decisions - decisions that have eroded the attractiveness of their industries and undermined their own competitive advantages. Some companies, for example, have used Internet technology to shift the basis of competition away from quality, features, and service and toward price, making it harder for anyone in their industries to turn a profit. Others have forfeited important proprietary advantages by rushing into misguided partnerships MARCH 2001 63 strategy and t h e Internet and outsourcing relationships...
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...Lee, H. 2010. Don’t Tweak Your Supply Chain – Rethink It End to Tend. Harvard Business Review. Vol. 88, Issue 10, 63-69 As a company, sustainability is important, and you have to undergo certain steps in order to achieve maximal sustainability. Main points: -Sustainability should be integrated in the core of the operations. -Work together with operations close to yourselves in order to gain sustainability. -Examine the all the links in your supply chain and decide whether or not they can be more sustainable -Work with other supply chains, even rival ones, to achieve high sustainability. Evaluation: The article itself was not bad. Sustainability being a noble subject made the article easy to agree with. The article clearly favored sustainability, contained personal opinions of the author and therefore lacked in objectivity a bit. For example: ‘Instead, companies--throughout the supply chain, not just at the end--should take a holistic approach to sustainability and pursue broader structural changes than they typically do.‘ From this sentence, one can see that the author is very pro-sustainability. He could have put some points against sustainability in the article, so that the reader can evaluate both sides of the topic and then make a decision whether or not sustainability is worth pursuing so intensely as the author wants. Questions: 1 What are the biggest downsides of sustainability? 2 In the article, you told that you have to work closely with your competition...
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...Leadership Reflection This paper reflects on the following questions: What do you think is your passion? Why do you say this is your passion, as it may be manifested in your personality, personal history and lineage? --- As I was reflecting on this intently, I came across this online article from Harvard Business Review where Peter Drucker, one of the most influential people in the area of modern management, talked about the topic on managing oneself. And an excerpt from this article below quite interests me the most. “Most people think they know what they are good at. They are usually wrong. More often, people know what they are not good at—and even then more people are wrong than right. And yet, a person can perform only from strength. One cannot build performance on weaknesses, let alone on something one cannot do at all.” - by Peter F. Drucker, Harvard Business Review: “Managing Oneself”; http://hbr.org/2005/01/managing-oneself/ar/1 This struck me quite a bit as I found this a bit ironic, because this somehow describes how things are unravelling, particularly on the state of my profession right now, and the state of things, in general. Well, I am not quite sure what I’m really good at. It’s not like I’m inept. It’s just that I am not sure if I’m really good at something. I’ve always engaged myself with so many things back then as my personal history reveals, as “jack of all trades, master of none” identity. For example, I have passion for creating...
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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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...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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...HW ASSIGMENT #2 The topic is selected for my weekly assignment is ‘Managing Oneself’. It’s also the title of an article Peter Drucker wrote on Harvard Business Review in 1999. I found it very useful either for the topics we discussed in class during these past two weeks and for my career, both as a student and as a business person. In the article, Drucker focuses the attention on 5 specific, but at the same time broad, questions: ‘What are my strengths?’, ‘How do I work?’, ‘What are my values?’, ‘Where do I belong?’, ‘What can I contribute?’. Reading Drucker’s words, I was most impressed by the second one: ‘How do I work?’, or ‘How do I perform?’. I believe self-consciousness is a fundamental starting point in a successful managerial career: you have to be one hundred percent aware under what circumstances you work best and where your weaknesses may come to surface. One individual has to know his limits as well as his strengths. Every person is different from each other and know yourself as much as possible will only turn out to be helpful and beneficial when working in group. Companies are now becoming more and more team-oriented than they were in the past and interactions with others occur on a daily basis. Only if you know yourself you will be able to know others. I believe this is true even as a business student: work-groups happen regularly and you are expected to perform well even if you are not inside a decision room on the top floor of a company building. It has...
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...Marketing Myopia, Journal Article 1 Sylvia DeSormeau Marketing Management, MKT 308 Rob Koonce, Instructor May 1, 2009 "Marketing Myopia" is an article published in the Harvard Business Review originally in 1960. The very fact that it is still being used as a teaching tool in a marketing class in 2009 speaks volumes for the article's central message, that top executives must define their industries correctly. It seems simple enough, and yet Levitt supplies the reader with many examples of industries that have either given up profitable opportunities or simply drowned in a sea of red due to their industry classification. Industry classification errors do not occur because top management believes that it operates in a different field than it actually does, per se. Rather, Levitt drives home the point that most successful companies identify themselves to be a part of larger industries. This concept is at the heart of Levitt's article. Rather than defining one's industry to be "the street car industry" or "the railroad industry," companies would be much more successful if they thought of themselves as being in "the transportation industry." After all, most of the time technology evolves but the needs to be fulfilled remain the same. Another cause of marketing myopia is what Levitt calls the "idea of indispensability." This concept is embodied by many industries, including the petroleum industry. For instance, Levitt speaks of the gas revolution that posed a threat on the...
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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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...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. Instead of speaking of services and goods, we should speak of intangibles and umgibles. Everybody sells intangibles in tbe marketplace, no matter wbat is produced in tbe factory. Tbe usefulness of the distinction becomes apparent when we consider the...
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...There are 3 points which are in dispute between owners and players. These are 1) Roster depreciation 2) Overstated players salary expense 3) Related-party transactions 1. Roster depreciation Owners say that they bought the Zephyr’s in 1982 for 24 million dollars, and insist that it is applicable to the amortization of 50% of that price over a period of six years. On the other hand, players say that the depreciation expense arises only when a team is sold, and moreover, the depreciation is not real because many players actually improve their skills with experience and, at the same time, there should be an increase in roster value over time. The important point is whether the “team” could be thought as the asset that is applicable to the depreciation. As the principle of GAAP, the asset which is applicable to depreciation decreases the value as the time goes on. In this case, “Team” is not classified as asset but as impairment test which is not allowed to apply depreciation. Therefore, players are right. 2. Overstated players salary expense (1) Owners say that the signing bonuses should be counted as an expense in the period that they are paid out. On the other hand, the players mention that bonuses should be spread over the term of the player’s contract. The important point is when the signing bonuses should be counted as expense. In GAAP, there is principle of conservatism, which means that if a situation arises where there are two acceptable alternatives for reporting...
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...This paper reflects on the following questions: What do you think is your passion? Why do you say this is your passion, as it may be manifested in your personality, personal history and lineage? --- As I was reflecting on this intently, I came across this online article from Harvard Business Review where Peter Drucker, one of the most influential people in the area of modern management, talked about the topic on managing oneself. And an excerpt from this article below quite interests me the most. “Most people think they know what they are good at. They are usually wrong. More often, people know what they are not good at—and even then more people are wrong than right. And yet, a person can perform only from strength. One cannot build performance on weaknesses, let alone on something one cannot do at all.” - by Peter F. Drucker, Harvard Business Review: “Managing Oneself”; http://hbr.org/2005/01/managing-oneself/ar/1 This struck me quite a bit as I found this a bit ironic, because this somehow describes how things are unravelling, particularly on the state of my profession right now, and the state of things, in general. Well, I am not quite sure what I’m really good at. It’s not like I’m inept. It’s just that I am not sure if I’m really good at something. I’ve always engaged myself with so many things back then as my personal history reveals, as “jack of all trades, master of none” identity. For example, I have passion for creating music – composing lyrics...
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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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...(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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...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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