Doc21 - #— 4/6/2010 Growth Profit Company Wal<Mart...

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Unformatted text preview: #— 4/6/2010 Growth Profit Company Wal<Mart Atlas Door Th omasvrlle 36 vs. 12% 15 vs. 5% Wilson Plastics 9 vs. 3% 12 vs. 3% 19 vs. 9% 10 vs. 2% 40 vs. 10% 21 vs. 11% I Firms need less inventory I Firms can make purchase decisions closer to time of need I Customers are less likely to cancel orders I Firm's cas - t cyclei p I Firm deve ps opportunities for developing new services, special offers. and/or customized products « further differentiation I Productivity increases (lower labor costs, higher economies of scale) I Prices can be increased (1 0—100% premium. 20% is average) I Plan for small improvements I Plan for many improvements I Put relevant groups together I Put relevant resources together - reduce waste I Risk is reduced (reduces forecasting) I Share l5 increased (what customer wants not what company has. time- based customers are increasing) l Engage in market experimentation I Reduce lot sizes I Simplify plant layouts I Reduce set up time I Shoot for quick responses to customer demands I Organize by productlprooess I Pass advantages on to buyers and suppliers I Make delivery system 2 or 3 times more flexible than competitors I Change production runs from long to short— use information technology I Determine how your customers value these speed—based capabilities and price products/ services accordingly I Use multifunctional teams I Develop a strategy for surprising competitors with time-based advantage mums!) I Organizing for economies of scale rather than fast throughput I Functional organization design (traditional business depanmentaiization) 4/6/2010 The .05 to 5 rule ~ most products/servaoes are actually reoeiving value for only 05 to 5% ofthe tlnie they are in the value-delivery system. The 313 rule — reducmg waiting for (1) current batch (2) prevrous batch and (3) managementsdecrsrons to move batches. by reducing batch sizes Increases productivrty by 3% (apprommately). The "4 2-20 rule— for every quartering at time requrred to provide a servrce there can be a 2.20% reduction in COSTS The 3X2 rule - growth rates three times industry snugly Chiln Gymnastlcs. Outsourcing. subcontracting partnering art-s urine, and bashsnonng from Asia have Iawereii costs, improved prams. and helper: marry mmpanies build market share Sideskppina Econ es arScuIa Tn: "disuasahl:taciery"rs laDDrrlnhenSIva‘ cap‘ gilt. and utfer: hi n thrcu n at at low cost. lt has been an min, Di growth iormfiwfi competitors The same princrples may were way turmore traditional pia ers to address the uncertainty inherent in today; shuner product an business model life: 5;! iii fast-Chan in environments in mm er 0 a usrnesss e emerris may prove Ersqasafi e. inclining urgemzaturial structures manlglmentteams‘ distribution channels and even strategies Dynamic Pricing Can :Itl charge more tor a cold drink when the weather gets warmer? ii a unverpay a higher toll to amid the heaviest trams" In many sectors ll :5 now possible“) maximize protits By matching pricing to reaLhme demand And nrsr movers can gaina critical information advantage that‘s hard to neutrallze staying IMId of the curvI also re uires top management to learn hawln spat npporlunilieS and marina res on their own I Firrn becomes leader in developing new innovations in products/services technology, work processes and organizational structures I Firm is first to get new products in hands of customers I Firm increases both efficiency and quality I Firm can use what is learned to move to next wave of innovation - can develop new I Grow faster and are more profitable than their industry competitors I Become closer and more essential to their customers I Obtain leadership positions in their industries I And offer managers the excitement of growing flexible core businesses! l Speed focus now needs to be more on strategy (relatively less about operations) I How to accelerate strategy: — Make decisions last (with air] of Cl) — Change direction nimoly [use Judo) — Figure out when to entera market and when to exrt (5 forces) — Go fast through the curves and use technology to accelerate feedback [drsru ptive tech [hyper- competition) — Use alliances for agility (corporate—level strategy) mu muimlmmummhmimmumi writ-ch. M m xii xtséumvzrofi if“? FEE? were Mr” H George Stalk — Boston Consulting Group, 1998 E Management 377 u l.~‘1Tl" \lV RSIH ol Husttir‘s‘ 4/6/2010 "You may delay‘ but time Will not ” Benjamin Franklin "I wasted time, and now doth time waste me" William Shakespeare “lryou stop to smell the roses, you'll get hit by a truck" Les Wexner (CEO of Limited Brands) As for strateg , be quick and dirty. Engageand then plan, And ge it better. Revolutions in our industry in our lifetime have taken place using exactly this formula " Andy Grove “Time flies like an arrow‘ fruitflies like a banana" Groucho Marx I If things seem to be under control you’re not going fast enough! tl‘t"u\5li'\l| I Competition is based on responsiveness: — external marketing = customers — internal organization = flexible production I Firms maintain service with: — decreased inventory — increased choice I Old way = value at low cost I New way = most value at lowest cost in least amount of time Time is the secret weapon of bustness‘ Advantages in response time provide leverage for all other competitive differences that make up a company‘s overall competitive advantage A new generation of competitors is obtaining remarkable results by focusing its organizations on flexibility and responsiveness Choose time consumption as a Critical strategic measure Use responsiveness to stay close to customers, increasing their customers dependenceon them Rapidly redirect their value-delivery systems to the most attractive customers forcing competitors to the least attractive grOup Grow taster with higher profits than their competitors Set the pace of business innovation in their industries ...
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This note was uploaded on 10/12/2011 for the course MGMT 377 taught by Professor Staff during the Spring '08 term at Iowa State.

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Doc21 - #— 4/6/2010 Growth Profit Company Wal<Mart...

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