Strategic Management-Good Enough Never is- Stories of Visionary...
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Transcript of Strategic Management-Good Enough Never is- Stories of Visionary...
![Page 1: Strategic Management-Good Enough Never is- Stories of Visionary Companies-Merck,GE,Motorola,Boeing,Walmart](https://reader036.fdocuments.in/reader036/viewer/2022062503/58882e091a28ab733a8b64d5/html5/thumbnails/1.jpg)
GOOD ENOUGH NEVER ISHow can we do better tomorrow than we did today?
GROUP-1
TEAM-9 501504085 PARAMPREET KAUR501504101 GURPREET SINGH501504103 VARUN KALIA501504095 NIKHIL BHARGAV401207012 JAGMEET SINGH BAJAJ
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Companies Discussed in the Chapter
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Methodology of Visionary Companies
Superb execution & performance are not the final goal. Nothing like “Having made it” Demanding of themselves Continuous Improvement Disciplined, Hard-working and Doing everything possible to make
company stronger for tomorrow Never settle and never be Comfortable Never being Complacent Long Term Vision in Mind (Building the company for Future)
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Mechanism of Discontent
Brand Management Structure
Yielding Market Share
Innovate or Die
WORK OUT Eyes of the Enemy
BEAT YESTERDAY PAY AS YOU GO
Sales per Hour (SPH)
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Mechanisms of Discontent Procter & Gamble
Created Brand Management Structure in 1931 to make brands within company compete with each other
Idea to pit the best against the best Stimulated the Change from within the company Internal competition resisted complacency Copied by Colgate 3 decades later
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Mechanisms of DiscontentMerck
In 1950s adopted the strategy of Yielding Market Share Forced itself to produce new innovative products Helped the company to grow and prosper
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Mechanisms of DiscontentMotorola
Used the mechanism of Innovate or Die Cut of Mature product lines to make way for new products Did with this Televisions and Radios Technology Road Map benchmarked technology progress Anticipated Market needs up to 10 years in the future
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Mechanisms of DiscontentGeneral Electric
Institutionalized discomfort with their process of WORK OUT Upper managers not allowed to make inputs in group meetings
for making proposals Had to make on the spot decisions about the proposals
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Mechanisms of DiscontentBoeing
Introduced planning process called Eyes of the Enemy Made managers act like as if they work for the competitor
companies They gave inputs on how they would exploit weaknesses,
Leverage Strengths Based on the inputs given by them Boeing prepared itself of How
they would respond to the situation
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Mechanisms of DiscontentWal-Mart
Use of BEAT YESTERDAY Ledger books Tracked daily sales figure and compared with exact same day of
week one year earlier These ledgers were a Stimulus to Push the standards up forever
Day 1984 1985 1986 19871st Monday
1st Tuesday
1st Wednesday
1st Thursday
1st Friday
1st Saturday
1st Sunday
1st WEEK
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Mechanisms of DiscontentNordstrom
Created an environment for people for never stop trying to improve
Sales per Hour (SPH) incorporated for peers Employees never relaxed after achieving targets Tracked customer feedback Employ compensation based on it
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Mechanisms of DiscontentHewlett-Packard
Installed a powerful mechanism PAY AS YOU GO It resisted the use of Long Term Debt Company learned to fund its 20 plus percent average annual
growth Produced disciplined General Managers Improved leanness and efficiency in company Bootstrapping leads to innovation
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Build for the Future (Do well Today)
V/S
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Condition of HP afterWorld War II
Revenues Declined by 50%
Defence contracts were lost
There were no prospects in commercial Markets
Company faced Cash Flow crisis
Company faced threat of being not able to survive
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Measures taken by to come out of the situation
Payroll cut by 20%
Decreased dependency on government contract business
Hired 4 bright young engineers keeping in mind the far-sighted approach
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Benefits of the approach followed
As the approach was Long term and far sighted it showed results slowly after 1950.
For next two decades after 1950 they performed well and introduced a slew of innovation and profitable new products
Came up with Two perspectives Fifty-year perspective One-year perspective
Made it non-negotiable if any compromise is made for Long-term vision
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following the lead of
Also guided themselves with a Long-term perspective Hired top scientists from Research labs But unfortunately paved their way away from Long-term vision. Started introducing cheap consumer products Made unexpected price cut All in lieu to grab market share and short term benefits The strategy backfired as they suffered from financial losses and
bad reputation in the market
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The Long term Investment for visionary companies
R&D Employee training and Education
New Technology and Innovation
New Infrastructure development
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Investing in R&D
Merck invested in basic research which is must for Pharmaceutical industry
Visionaries companies invest at about 30% by percentage of sales
Merck when compared with Pfizer had invested more It was able to sustain the Long-term corporate health
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Investing in Human Capital (Employee training and education) 40 hour training per employee in a year at Motorola
Three day training course on recruiting and interviewing techniques for all managers at Merck
HP 8 people interview system GE embraced new Management methods, gave reading material
to managers on the topic of professional managing
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Investing in New Technology and Innovation
TQM process being used at Merck Use of high end Financial analysis software in order to make
decisions for long term horizons Motorola also invested in new technologies Walt Disney invested in New film technology Citibank also adopted new technologies 3 decades earlier than
the comparison companies like Chase-Manhattan
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Investing in New Infrastructure development
RJ Reynolds invested in Corporate Jets (RJR Air force) & Built hangars
Invested widely in Corporate offices Sponsored celebrity athletes & events McDonnel Douglas resisted to invest in bigger aircrafts Boeing used Reaching out tomorrow mindset and invested wisely
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Howard Johnson’s
Complacency V/S
JW Marriot’s
Self Discipline and Continuous improvement
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Self Discipline and Continuous Improvement
Complacency
Invested in infrastructure during recession Refused to invest in hotels and restaurants tailored for specific market
Pushed itself to improve the quality and the value of its services
Focussed on cost control, Efficiency & Short term financial objectives
Modest Lifestyle and personal connection to business
Lavish lifestyle, Less connection to business
Doing work with complete effort and very less propagation
Propagating more and doing less in real
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Mechanisms used by which provided it the Edge
Guest Index Survey(GSI) based on customer feedback Annual performance reviews Incentive bonuses in many areas Profit Sharing program for employees High investment in HR recruitment Employee Development & Learning programs Phantom shoppers where the inspectors acted like customers
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Success Mantras to become a Visionary Company
Creating Mechanism of Discontent Invest for future Building the present Responding wisely and with future approach in mind to the
Downturns Investing wisely in domains essential for the company Create an environment of Non-Complacency, sense of discomfort
and competition within the companies Hard work, Dedication to improve and Continuously building for
Future
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“Achievements represent the beginning – The start of a never ending journey of
discipline, work and the pursuit of ever-higher standard”
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THANK YOU