STRATEGYLeveraging organizational resources.ppt

* * Bullwhip effect is the distortion caused during information sharing. Compare Honda to GM or Ford. Honda is younger and offers far fewer variety than either GM or Ford. Honda being smaller helped it in learning more (less garbage to search from). In other words, a firm must consider each new experience, each success or failure as an opportunity to learn (Angarai – exit interviews). * Another example: In the early 1970s, EMI, a British company invented CAT scan. EMI’s CAT was technologically superior but EMI lacked the marketing and distribution skills and consequently EMI could not capture and hold on to its CAT market share. Much of what EMI created became money spinners for GE and other competitors. EMI is a classic example of many of the smaller technology firms; they know much about technology but very little about strategic positioning and leverage. Look at Seagrams, Guiness or IDV, suppliers of famous drink products such as Smirnoff, Johnny Walker or Chivas Regal. These firms realized that having a good product is not adequate but it is also necessary to have a good distribution system. Consequently, these firms began to buy or acquire distributors around the world. * ? 2003 Simchi-Levi, Kaminsky, Simchi-Levi STRATEGYLeveraging organizational resources Suggested Reading: Competing for the Future by Hamel and Prahlad and articles on strategic leverage Strategy and Leverage While strategy is long-term goal and deciding objectives related to marketing, procurement, financial, and selling areas, Leverage is doing more with less resources. Can you suggest a way to manufacture an I-Pod with limited resources? Compared to your competitors, if you organization has more resources Spends more research and development and Has more trained employees, Does that mean that you are likely to be strategically more successful? Doing more with less is called Leverage G.M. spends more on research than Honda Motors. Honda has come out with greater quality products