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Strategies and
Implementation Models
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ImplementationChallenges
Of Change
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Strategy Formulationvs.
Implementation• Strategy Formulation
Stage of strategic management that involves planning and decision making on Vision, Mission, Corporate Objective and strategies for a specific strategic plan
• Strategy Implementation
Stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes
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Managing Change
“Change is not merely necessary to life. It is life“
Alvin Toffler
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Introduction
• Change is the singly most important element of successful management
• To remain effective, organizations (and individuals in them) have to adopt a positive attitude to change
• Ignoring or trivialising change can be costly
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Change• No organization is
immune to change • To cope with new
external and internal forces, leaders have sought to fundamentally alter the way their organizations work
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Sources of Resistance to Change
• Ignorance: a failure to understand the situation or the problem
• Mistrust: motives for change are considered suspicious
• Disbelief: a feeling that the way forward will not work
• “Power-Cut”: a fear that sources of influence and control will be eroded.
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Sources of Resistance to Change
• Loss: change has unacceptable personal costs
• Inadequacy: the benefits from the change are not seen as sufficient
• Anxiety: fear of being unable to cope with the new situation.
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Sources of Resistance to Change
• Comparison: the way forward is disliked because an alternative is preferred
• Demolition: change the destruction of existing social networks.
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Types of Resistance
Functional Resistance:
• critically assessing whether change will lead to improvements
• exploring the consequences of change.
Dysfunctional Resistance:
• avoiding dealing with urgent and pressing issues
• declining to work on what really needs to be done.
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Types of Resistance
Functional Resistance:
• feelings of regret, anxiety or fear
• to a previous history of non-disclosure and poor working relations.
Dysfunctional Resistance
• blaming and criticising without proposing alternatives sabotaging change
• non-collaboration with others.
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Scepticism• Causes are complex• Often slow to overcome• Sceptics often dislike the “language” change is expressed and want and benefits• Not wholly negative - can
constructive in “reality-testing” change.
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The change process involves Nine critical stages
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1. Establish a Sense of Urgency
• Examine external realities • Identify and discuss crises, potential
crises, or major opportunities
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2. Form a Powerful Guiding Coalition
• Assemble a group with enough power to lead the change effort
• Encourage the group to work as a team
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3. Create a Vision
• Create a vision to help direct the change effort
• Develop strategies for achieving that vision
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4. Communicate the Vision • Use everything possible to
communicate the new vision and strategies
• Teach new behaviors by the example of the guiding coalition
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5. Empower Others to Act on the Vision
• Get rid of obstacles to change
• Change systems or structures that seriously undermine the vision
• Encourage risk taking and nontraditional ideas, activities, and actions
• Bucks Stop Here - Roosevelt
He was the only president elected four times—in 1932, 1936, 1940, and 1944. During his first presidential speech
Roosevelt gave his uttered the famous quote,
"The only thing to fear, is fear itself".
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6. Plan for and Create Short-Term Wins
• Plan for visible performance improvements
• Create those improvements • Recognize and reward employees
involved in the improvements
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7. Consolidate Improvements
and Produce Still More Change
• Use increased credibility to change systems, structures, and policies that don't fit the vision
• Hire, promote, and develop employees who can implement the vision
• Reinvigorate the process with new projects, themes, and change agents
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8. Implement Agreed changes and
wait until politically acceptable• Firstly, Implement agreed changes • By pointing out the benefits of initial changes,
implement the rest.• Otherwise, wait until the powerful informal group
accepts the changes Lakshmi Mittal
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9. Institutionalize New Approaches
• Articulate the connections between the new behaviors and organizational success
• Develop the means to ensure leadership development and succession
• Samsung Focus on memory chips, LCDs, monitors, and Braun tubes instead of traditional cheap copycats products..
• “ Change every thing except your spouse and children” – Kun Hee Lee CEO of Samsung
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Four Mistakes
The source of most failures of change
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1. Writing a memo instead of lighting a fire
• Change efforts fail at the first critical step - establishing a sense of urgency
• Too often leaders launch their initiatives by calling a meeting then expect people to “buy-in”
• It doesn't happen “ Success breeds Success” The statement is not always true. Loss of market share by arrogant GM due to ignorance of aggressive efforts of Japanese.JC Penny and Sears, retail giants was humbled by Pretty effective job of Wal-MartMotorola, giants of semiconductors and analog cell phones was humbled by digital market
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2. Talking too much and saying too little
• Most leaders under communicate their change vision by a factor of 10
• An effective change vision must include new, aligned behaviors on the part of senior executives
• Leading by example• People watch their bosses very closely• Inconsistent behavior by a manager fuel the
cynicism and frustration
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3. Declaring victory before the war is over
• It is important to celebrate results but underestimating the difficulty and duration of organizational transformation can be catastrophic
• If you settle for too little too soon, you will probably lose it all• Celebrating incremental improvements is good to mark
progress and sustain commitment - but don't forget how much work is still needed
Sale of Siemens Cell PhoneTo BenQ
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4. Looking for villains in all the wrong places
• The perception that large organizations are filled with middle managers who resist all change is not only unfair but untrue
• People at every level are engaged in change processes
• The biggest obstacles to change are not middle managers but, more often, those who work just a level or two below the CEO - vice presidents, directors, general managers, and others who may have the most to lose in a change
• That's why it is crucial to build a guiding coalition that represents all levels of the organization
Sacking high level managers and empowering Lower level Managers by Samsung CEO
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Good Reasons Why change is Unnecessary
We've never done it before Nobody else have ever done it It has never been tried before We tried it before Another company/person tried it before We've been doing it this way for 25 years It won't work in a small company It won't work in a large company It won't work in our company Why change — it's working OK The boss will never buy it It needs further investigation
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Good Reasons Why change is Unnecessary
Our competitors are not doing it It's too much trouble to change Our company is different The ad department says it can't be done The sales department says it can't be done The service department won't like it The janitor says it can't be done It can't be done We don't have the money We don't have the personnel We don't have the equipment The union will scream
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Good ReasonsWhy change is Unnecessary
I don't like it You're right, but ... We're not ready for it It needs more thought Management won't accept it We can't take the chance We'd lose money on it It takes too long to pay out We're doing all right as it is It needs a committee study Competition won't like it It needs sleeping on It won't work in this department It's impossible
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Good Reasons Why change is unnecessary
It's too visionary You can't teach an old dog new tricks
It's too radical a change It's beyond my responsibility
It's not my job We don't have the time
It will obsolete other procedures Customers won't buy it It's contrary to policy
It will increase overhead The employees will never buy it
It's not our problem
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Current situation in the worldThe fortunes of the bottom of the pyramid
• One billion people live on less than $1 a day• Another 2.7 billion survive on less than $2 a day• 6 million children a year die from malnutrition before their fifth birthday• Every 3.6 seconds, someone dies of starvation• 11 million children die – most under the age of five every year,
and more than 6 million of them from completely preventable causes like, malaria, diarrhoea and pneumonia
• 114 million children do not get even a basic education• More than 2.6 billion people lack basic sanitation• 5 million, mostly children, die every year from water-borne
diseases
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Change for Better1. Eradicate extreme poverty and hunger2. Achieve universal primary education3. Promote gender equality and empower women4. Reduce child mortality5. Improve maternal health6. Combat HIV, AIDS, Malaria and other diseases7. Ensure environmental sustainability8. Develop a global partnership for development9. Ensure sustainability
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Changes
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ChangesThe Fortunes of the Bottom of the Pyramid
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A Proven Change Agent
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Obama poses as a change agentand wins D Seat
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You must be the change you wish to seeIn the world
Mahathma Gandhi
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You must be the change you wish to seeIn the world
Mahathma Gandhi
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Forward IntegrationhangesModels for Implementation
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Forward IntegrationImplementation Models
1. Demand Chain2. Transportation Model3. Customer Relationship Management4. Customer Life Cycle5. Activity Based Costing
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Demand ChainImplementation Models
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Transportation Model Implementation Models
Linear Programming
1. When used2. When Demand exceed the Supply3. When Supply exceed demand
Details to be considered4. Origin Points with Supply Capacity5. Destination Points with demand details6. Cost of distribution from each origin point to
destination
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Transportation Model
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Customer Relationship Management
Implementation Models
1. Exploration2. Acquisition3. Retention of core customers4. Retrieval of Core Defectors5. After Sales service6. Customer Life Cycle – Prospects, First Time
Buyer, Early Repeat Buyer, Core Customer, Core Defectors
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Activity Based CostingImplementation Models
1. Analysis of Activities2. Ordering3. Receiving4. Assembly5. Quality Control6. Systems Loading7. Shipping8. Delivery9. After Sales Service
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Backward IntegrationImplementation Models
Inputs1. Men – Learning Curve2. Machine – NPV, Pay Back Period3. Materials – TQM, JIT, Vendor Rating4. Methods – Systems Life Cycle5. Money - Alternative Capital Structure
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Men – Learning Curve Implementation Models
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Machines – NPV, PBPImplementation Models
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Materials Implementation Models
1. TQM – Zero Defects, Six Sigma of Motorola, PDG of Intel, Quest by Dell, TPS Toyota
2. Just in Time – Nortel, Cycle time of the Supplier
3. Vendor Rating – Honey Well
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MethodsImplementation Models
1. Systems of Marketing2. Systems of operations3. Financial Control Systems4. Systems Life Cycle
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MoneyImplementation Models
Details 100% 75% 50% 25% 10%Equity 100 75 50 25 10
Debt 10% 0 25 50 75 90
Total 100 100 100 100 100
EBIT 20% 20 20 20 20 20
Less Interest
0 2.5 5 7.5 9
EBT 20 17.5 15 12.5 11
Tax 30% 6 5.25 4.5 3.75 3.33
Net Profit 14 12.25 10.5 8.75 7.67
ROE 14% 16% 21% 35% 77%
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Horizontal IntegrationImplementation Models
1. Competitors Profile Matrix2. Competitors Map3. GE/ McKenzie Matrix4. Game Theory – Zero Sum Game
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Competitor Profile MatrixImplementation Models
1. Critical Success Factors2. Major Competitors3. Industry Weights4. Company Rating
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Horizontal IntegrationImplementation Models
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Horizontal IntegrationImplementation Models
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Market PenetrationImplementation Models
1. Pricing Matrix2. Dimensions of Quality3. Demand and Supply Theory4. Bricks and Clicks Model5. 4 Cs6. Cash Breakeven Point
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Pricing MatrixImplementation Models
Margin Volume Profits Products
HM HV HP BMW Mercedes
Apple iPhone
HM LV HP Rolls Royce car
LM HV HP Kellogg’s Policy
LM LV LP Cigarette companies
LM LV Loss Philips
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8 Dimensions of QualityImplementation Models
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Demand and Supply AnalysisImplementation Models
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Bricks and Clicks ModelImplementation Models
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4 CS Implementation Models
1. Cost2. Convenience –PU PE3. Customisation4. Competition
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Cash Breakeven PointImplementation Models
Details per Unit BEP Cash BEP
Selling Price 10 10
Variable cost - 6 - 6
Contribution 4 4
Fixed CostDepreciation
Salary40002000 2000
Total Fixed Cost 6000 2000
Breakeven Point 6000/4 =1500 units
2000/4 =500units
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Market Development Implementation Models
1. SEPT Analysis2. Forecasting3. Customer Profile Matrix4. Blue Ocean5. Red Ocean6. Porter’s Diamond Model
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SEPT Analysis Implementation Models
1. SEPT Analysis2. PEST Analysis3. LEAST Analysis4. ETOP 5. Scenario Planning
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Customer Profile Matrix Implementation Models
1. Demographic Factors (Who they are)2. Geographic Factors (Where they are)3. Psychographic Factors (How they think)4. Behavioural Factors (What they do)5. Environmental Factors (SEPT)
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Blue Ocean Strategy Implementation Models
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Porter’s Demand Model Implementation Models
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Product Development Implementation Models
1. Technology Acceptance Model2. PLC and Product Adoption3. BCG Matrix4. New Product Opportunities5. Brand Development6. Arthur D Little
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Technology Acceptance Model
Implementation Models
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PLC and Product Adoption Implementation Models
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BCG Matrix Implementation Models
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Arthur D Little Matrix Implementation Models
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New Product Opportunities Implementation Models
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Brand Development Implementation Models
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Concentric Diversification Implementation Models
1. Resource Based View of the Firm VRIN2. Sustainable Competitive Advantage3. Delta Model4. Corporate level strategy& Controls5. Management Excellence6. Core Competence and Markets
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Resource Based View VRIN Implementation Models
1. Valuable: source of greater value, in terms of relative costs and benefits, than similar resources in competing firms
2. Rare: scarce relative to demand for its use and what it produces
3. Inimitable: it is difficult and costly to copy4. Non-substitutable: other different types of
resources cannot be functional substitutes.
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Sustainable Competitive Advantage Implementation Models
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Delta Model Implementation Models
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Corporate Level Strategy and Controls
Implementation Models
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Management Excellence Implementation Models
Eight Attributes of Management Excellence1. A bias for action – “getting on with it”2. Close to the customer – learning from the people served by the business3. Autonomy and entrepreneurship – fostering innovation and nurturing “champions”4. Productivity through people: treating rank and file employees as a source of quality5. Hands-on, value-driven: management philosophy that guides everyday practice – management showing its commitment6. Stick to the knitting: stay with the business that you know7.Simple form, lean staff: some of the best companies have minimal headquarter staff8. Simultaneous loose-tight properties – Autonomy within shop-floor activities plus centralized
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Core Competence and Market
Implementation Models
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Conglomerate Diversification Implementation Models
1. GE / McKinsey Matrix2. Scenario Planning3. Conglomerate Configuration4. Relative Competitive Strength5. Value Chain
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GE/ Mckinsey MatrixImplementation Models
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Scenario Planning Implementation Models
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Conglomerate Configuration Implementation Models
1. Holding Company2. Subsidiary Company3. Sub-Subsidiary Company4. Associate Company
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Value Chain Implementation Models
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Relative Competitive Strengths Implementation Models
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Joint Venture Implementation Models
1. Merger & Acquisition2. Synergy3. Co-opetition4. Strategic Alliance5. Strong Vs Weak
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Merger & Acquisition Implementation Models
There are four types of value creation:1. Resource sharing by combining the companies at the operating level2. Functional skills transfer by moving people or sharing information, knowledge and knowhow3. General management skill transfer through improved insight, coordination or control4. Combination benefits by leveraging cash resources, borrowing capacity, added purchasing power or greater market power
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Synergy Implementation Models
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Co-Opetition Implementation Models
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Strategic AllianceImplementation Models
1. Sale and Lease Back2. Outsourcing
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Strong Vs Weak Implementation Models
Tax Benefit
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Retrenchment Implementation Models
1. Down Sizing of Resources2. Right Sizing of Resources3. Business Process Reengineering4. Value Engineering5. Automation6. Chrysler’s Score Model
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Downsizing Implementation Models
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Down Sizing Implementation Models
1. Work force Reduction2. Closing Unprofitable Plants
3. Outsourcing Unprofitable activities4. Implementation of tighter Cost or quality Control
5. New Policies on Quality Efficiency
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Right Sizing or Reengineering
Implementation Models
Reengineering is the fundamental rethinking and radical redesign of business processes to achievedramatic improvements in critical, contemporary measures of performance such as cost, quality, service andspeed
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Value Engineering Implementation Models
Automation
– Half the Work force, Double the wages, Triple the Output
Score Model
Suppler Cost Reduction Effort by Chrysler
Divestment or Divestitures
1.Sell offs, 2.Spin offs,
3.Carve outs 4. Tracking stock
Sell Off
Subsidiary B
Company A without Subsidiary B
Company C
Sell Off
Company A w/o subsidiary B
Old Sub B
Company C
Cash, securities or assets as consideration
Spin offs• Typically parent corporation distributes on
pro rata basis, all the shares it owns in subsidiary to its own shareholders.
• No money generally changes hands• Non taxable event
– as long as it jumps through substantial hoops
Spin offs
Company A without Subsidiary B
Subsidiary B
Shareholders own shares of combined company. Own the equity in subsidiary implicitly.
Spin offs
Company A after spinoff
New company BShareholders receive Shares of company
B
Old shareholders still own shares of company A, which now only represent ownership of A without B.
Equity carve outs• Also called partial IPO• Parent company sells a percentage of the
equity of a subsidiary to the public stock market
• Receives cash for the percentage sold• Can sell any percentage, often just less
than 20%, just less than 50%, are chosen.
Equity carve out (partial IPO)
Company A without subsidieary B
Subsidiary B
Shareholders implicitly own 100% of equity of subsidiary B through their Company A shares.
Equity carve out (partial IPO)
Company A without subsidieary B
Portion ofSub B equity
Not soldX % of sub B equity sold
To market for cashIn IPO
Shareholders now own 100% of Company A (without B)And (1-X)% of Company B implicitly
Through their company A shares
X % ofCompanyB shares
Motivations for transactions• Market for corporate control
• Asset are more valuable to alternative management team» Divestiture, spin off, carve out, tracking stock
• Unlocking hidden value• Stock market problem or management problem?
• Improving management incentives» Divestiture, spin off, carve out, tracking stock
• Agency costs» Divestiture, spin off, carve out, tracking stock
Moving assets to more highly valued user
– Division no longer has a “strategic fit”– Returning to the core business
(undiversifying)– Buyers might simply be willing to pay too
much!– Spin off, carve out, may set up a subsequent
control transaction– Or the threat may improve incentives
Focus management• Part of undiversification
• Easier to run, more able to focus efforts
• Superior performance measurement– Because you can use direct equity for compensation
(divestiture?)– By the stock market?
• Reduction in bureaucracy/Decision making authority – Internal capital markets/external cap markets
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Liquidation Implementation Models
1. Chapter 112. Compulsory Liquidation3. Voluntary Liquidation
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Liquidation Implementation Models
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Venture Capitalists Implementation Models
1. Their Role2. Financial Gamblers3. Venture Capitalists or Vulture Capitalists?
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Differentiation Implementation Models
1. USP2. Innovation Diffusion Theory3. Distinctive Capabilities
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Differentiation Implementation Models
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USP Implementation Models
1. Unique Selling Proposition2. Unique – Distinctive Difference of the product from
that of the competitor Offering totally a new product with inimitable features to Customers 3. Selling – Transfer of ownership from buyer to Seller4. Proposition – Distinctive promise of the facts of the
product or service to be delivered to the customer
Innovation Diffusion Theory• Innovation = An idea, practice, or object
perceived as new by an individual or other unit of adoption– Software (necessary)– Hardware (optional)
• The Diffusion of Innovations Theory attempts to predict adoption of innovations. . . Typically, the adoption follows a standard pattern:
Attributes of Innovations that Impact on Rate of Adoption
The corresponding Classic Bell-Shaped Adopters Curve
Many studies have looked at how these groups differ:Innovators are highly cosmopolite and open to new things.Early adopters tend to be opinion leaders.Early majority provide “legitimization” of the innovation.Late majority are skeptical.Laggards put trust in the status quo.
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Distinctive Capabilities Framework - John Kay
Implementation Models
1. Architecture – Structure of relationship with employees, customers and suppliers
2. Reputation built around customers’ own experience, quality, warranty, guarantee, word of mouth
3. Translation of innovation into competitive advantage
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Differentiation Implementation Models
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Cost LeadershipImplementation Models
1. TQM2. JIT3. Autonomation4. Cybernetics 5. Lean Management
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In search Cost Control with six sigma
Six Sigma Quality (TQM)
1. A high level of quality associated with approximately 3.4 defective parts per million
2. Six Sigma was coined by Motorola in the 1980s. Sigma stands for number of std deviations of the process
3. Before a product is designed, marketing ensures that product characteristics are exactly what customers want.
4. Operations ensure s that exact product characteristics can be achieved through product, design, the manufacturing process and the materials used.
5. The six sigma is integral part of other functions as well
6. At Motorola it is six sigma, at Xerox it is called leadership through quality, at Intel it is PDQ ( Perfect Design Quality ) or Pretty Dam Good) at HP, it is Total Quality control
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Elements to support Just In Time
1. Production of goods shortly before they are needed to keep inventories low2. Limited varieties with in a factory3. Uniform production rate4. Pull Vs Push method of coordinating work centers5. Kanban System6. Production, ordering and procurement in small lots
7. Quick, inexpensive set ups8. Multi skilled workers and flexible facilities9. High quality levels - Acceptable quality levels 10. Effective preventive and predictive maintenance11. Continuos monitoring and improvement12. Theory of constraints and limiting factors
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Autonomation “JIDOKA”1. Autonomation and JIT are two key aspects of Toyota Production system2. Jidoka is a reliable system that is cheaper to operate and produced the
expected quality3. Whenever defect is spotted, Jidoka becomes operational.
4. It stops operation and triggers a switch to show red light Andon.5. The red light alerts the work force to the problem and its location6. The machine or batch of machines will remain shut down until the
workforce can identify the cause and correct the problem.
7. Problem correction is the responsibility of all employees in the vicinity of the work station.
8. In most instances, the Andon (red light) remains on only for seconds9. If longer delays were to occur in a plant, that plant would just not be
ready for the JIT Process
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Cybernetics
1. Basically a scientific method of control of problems and communications.
2. This science is useful in every area of production but particularly in psychological motivation and reducing the cost of operations.
2. An emerging field of study that explores the integration of the human nervous system and human-made technological devices, such as microchips, robotic components, “nano” machines and electronics to reduce cost and to increase production efficiency .
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Lean Manufacturing Origination from Toyota production system Taiichi Ohno.
Its relationship with frugal manufacturing:
Improve capability to modify, customize and simplify Automate only when benefits are clear Factories within factories Split plants when they become too large
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JIT and TQM at Northern Telecom
Achievement of JIT and TQM in NT
Area Percentage Prior After JIT JIT Manufacturing Cycle Time 100% 25%Aggregate Inventory 100% 70%Operational Overhead 100% 65%
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Conclusion
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Peter Drucker’s Next Society
1. Tomorrow is closer than you think. Peter Drucker explains how it will differ from today and what needs to done to prepare for it2. The new demographics How to live with aging population ?3. The new workforce Knowledge workers are the new capitalists
4. The manufacturing paradox How do you get far more output with far fewer workers5. Will corporations survive ? Yes, but not as we know it6. The way ahead The time to get ready for next society is now
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Knowledge Workers Vs Knowledge Technologists
1. Present Knowledge Worker - People with considerable theoretical knowledge and learning: doctors, lawyers, teachers, accountants, chemical engineers
2. Most striking growth - Emergence of Knowledge Technologists: Computer technicians, software designers, analysts in chemical labs, manufacturing technologists, paralegals etc
3. Just as unskilled manufacturing workers were dominant social and political force in the 20th Century, knowledge technologists are likely to
dominate as social and political force over the next decades
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The Manufacturing Paradox How do you get far more output with far fewer workers?
1/2 x 2 x 3 Half the work force, Double the wages, Triple the output
1. Between 1960 and 1999, manufacturing jobs is reduced to half as against
doubling or tripling of manufacturing output 2. Labor cost was around 30% of manufacturing cost in 1960 and now it
is down to 15%
3. The contribution of manufacturing towards GNP is reduced to less than half as
against the contribution of services sector is increased to more than half of
total employment ( In fact, in USA, it is 75%)
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Will Corporation Survive ?
Yes, but not as we know it ?Since the invention of Corporation in 1870, the following five basic points have been
assumed to apply..
1. Corporation is the master and employee is the servant.
2. Full time employment for corporation.
3. Production under one management or one company concept lowers transaction cost. Rockefeller’s successful experiment of putting exploration, production, transport, refining and selling under one corporate structure resulted into lowest cost petroleum operation. So also Ford’s experiment.
4. Market power with manufacturers and brand loyalty
5. To any one particular technology pertains to only one industry and any one particular industry pertains to only one technology.
Above assumptions remained valid for whole century, but from 1970 onwards every one of them turned upside down.
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The New Workforce Knowledge workers are the new capitalists
1. Steady shrinkage of factory workers and emergence of knowledge workers in
developed countries.
2. Coining of words “ Knowledge Industry”’ “ Knowledge work”’ “Knowledge
Worker” firstly by a Princeton Economist Fritz Machlup the second and third by
Peter Drucker.
3. Emergence of knowledge workers as new capitalists due to their massive and
majority stakes in pension and mutual funds.
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Will Corporation Survive ?
Yes, but not as we know it ?The five assumptions remained valid for whole century, but from 1970 onwards
every one of them turned upside down
1. The highly portable knowledge worker and knowledge technologist provide capital just as provider of money making them as equal partner.
2. Emergence of part time, temporaries, consultants or contractors.
3. Instead of costly and complex integration of various activities, outsourcing to professional organizations. Even HRD functions in USA is outsourced
4. Market power is shifting from manufacturer to customer who can have full information of the market through internet.
5. Any technology to any industry. Transistor invented by Bell telephone largely used by Japanese electronic companies like Sony.
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Information Revolution
1. 16th Century to 19th Century – First and Second Industrial revolution were most innovative and most fertile periods for creation of new institutions.
2. The First industrial revolution brought forth intellectual property, universal incorporation, limited liability, trade union, the co-operative, the
technical university and news paper.
3. The second industrial revolution produced the modern civil service and modern corporation, the commercial bank, the business schools and office going women.
4. What next ? Information Revolution once again emerges into new theories, new
institutions and new money which totally beyond the control of any country.
5. In Information Revolution. IT will, of course, will be important, but it will be only one of several important new technologies.
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Differentiation Implementation Models
1. USP2. Innovation Diffusion Theory3. Distinctive Capabilities
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Forward Integration Ownership or Control over outputs -5 Ms
• Expensive or unreliable Distributors or outputs • Competes in a growing industry• Surplus capital and human resource• Need to maintain stable supply price• High Profit margin ouput providers• Models: Bricks and Clicks, ABC, Delta Model
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Forward Integration
Successes Failures
GM Reliance Petroleum
Dell Dell in China
Levi’s Kripsy Cream Doughnuts
Las Vegas Casino Machine Co Mary Kay’s in China
Amway P&G and its E Stores
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Forward IntegrationImplementation Models
1. Demand Chain2. Transportation Model3. Customer Relationship Management4. Customer Life Cycle5. Activity Based Costing
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Demand ChainImplementation Models
149
Transportation Model Implementation Models
Linear Programming
1. When used2. When Demand exceed the Supply3. When Supply exceed demand
Details to be considered4. Origin Points with Supply Capacity5. Destination Points with demand details6. Cost of distribution from each origin point to
destination
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Transportation Model
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Customer Relationship Management
Implementation Models
1. Exploration2. Acquisition3. Retention of core customers4. Retrieval of Core Defectors5. After Sales service6. Customer Life Cycle – Prospects, First Time
Buyer, Early Repeat Buyer, Core Customer, Core Defectors
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Activity Based CostingImplementation Models
1. Analysis of Activities2. Ordering3. Receiving4. Assembly5. Quality Control6. Systems Loading7. Shipping8. Delivery9. After Sales Service
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Backward Integration
Ownership or Control over inputs -5 Ms
• Expensive or unreliable input providers• Competes in a growing industry• Surplus capital and human resource• Need to maintain stable supply price• High Profit margin input providers• Models: Performance Appraisal, NPV, JIT,TQM, • Systems life Cycle, Cost of Capital
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Backward Integration
Successes Failures
Amazon.com AOL with Time Warner
Starbucks GM with Dlphi Automotives
Arcelor Mittal Lockeed Martin with NOC
Pepsi Cola Ford Location owning 16 coal mines
Fed Express Boeing and Airbus in 90s
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Backward IntegrationImplementation Models
Inputs1. Men – Learning Curve2. Machine – NPV, Pay Back Period3. Materials – TQM, JIT, Vendor Rating4. Methods – Systems Life Cycle5. Money - Alternative Capital Structure
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Men – Learning Curve Implementation Models
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Machines – NPV, PBPImplementation Models
158
Materials Implementation Models
1. TQM – Zero Defects, Six Sigma of Motorola, PDG of Intel, Quest by Dell, TPS Toyata
2. Just in Time – Nortel, Cycle time of the Supplier
3. Vendor Rating – Honey Well
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MethodsImplementation Models
1. Systems of Marketing2. Systems of operations3. Financial Control Systems4. Systems Life Cycle
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MoneyImplementation Models
Capital Structure - Alternatives
Details 100% 75% 50% 25% 10%Equity 100 75 50 25 10
Debt 10% 0 25 50 75 90
Total 100 100 100 100 100
EBIT 20% 20 20 20 20 20
Less Interest
0 2.5 5 7.5 9
EBT 20 17.5 15 12.5 11
Tax 30% 6 5.25 4.5 3.75 3.33
Net Profit 14 12.25 10.5 8.75 7.67
ROE 14% 16% 21% 35% 77%
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Horizontal Integration
Ownership or Control over competitors
• Desire to become near monopoly • Competes in a growing industry• Surplus capital and human resource• Need to maintain stable supply price• Need for Economies of scale• Lack of managerial expertise of faltering competitors• Models: Red Ocean, Cost – Benefit Analysis,
Acquisition Integration Approach
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Horizontal Integration
Successes Failures
Compaq & HP Compaq & DEC
AT&T and Comcast BMW & Rolls Roye
Air France &KLM Daimler &Chrysler
Tata & Corus Nestle and Rowntree
Kraft and Cadbury Bank America a& Merrill Lynch
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Horizontal IntegrationImplementation Models
1. Competitors Profile Matrix2. Competitors Map3. GE/ McKenzie Matrix4. Game Theory – Zero Sum Game
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Competitor Profile MatrixImplementation Models
1. Critical Success Factors2. Major Competitors3. Industry Weights4. Company Rating
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Horizontal IntegrationImplementation Models
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Horizontal IntegrationImplementation Models
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Market Penetration Existing markets with existing Products for
increased market share
• Non Saturated current markets (PLC)• Need to increase usage rate of current customers• Increase in industry sales and decline of competitor’s
sales – Nokia• Need for Economies of scale• High ratio of marketing expenditure on sales• Models: Ansoff, PLC, BCG, Pricing Matrix
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Market Penetration
Successes Failures
Wal-Mart K Mart
Pepsi Vs Coke E-Bay in China
Intel Starbucks in Australia
GM Vs Ford Motorola in US
Toyota in US AMD in US
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Market PenetrationImplementation Models
1. Pricing Matrix2. Dimensions of Quality3. Demand and Supply Theory4. Bricks and Clicks Model5. 4 Cs6. Cash Breakeven Point
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Pricing MatrixImplementation Models
Margin Volume Profits Products
HM HV HP BMW Mercedes
Apple iPhone
HM LV HP Rolls Royce car
LM HV HP Kellogg’s Policy
LM LV LP Cigarette companies
LM LV Loss Philips
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8 Dimensions of QualityImplementation Models
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Demand and Supply AnalysisImplementation Models
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Bricks and Clicks ModelImplementation Models
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4 CS Implementation Models
1. Cost2. Convenience –PU PE3. Customisation4. Competition
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Cash Breakeven PointImplementation Models
Details per Unit BEP Cash BEP
Selling Price 10 10
Variable cost - 6 - 6
Contribution 4 4
Fixed CostDepreciation
Salary40002000 2000
Total Fixed Cost 6000 2000
Breakeven Point 6000/4 =1500 units
2000/4 =500units
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Market Development New markets with existing Products
• Reliable, inexpensive channels• Existence of untapped or unsaturated markets• Surplus capital and human resource• Excess Production capacity• Rapid global growth of basic industries• Models: Positioning Trout, Experience or learning
Curve
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Market Development
Successes Failures
Airtel Entry into Africa K Mart, Wal mart
Nestle McDonald in Jamaica
Philips Walt Disney into France
IKEA entry into China Whirlpool in Japan
Toyota in US Nokia in Japan
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Market Development Implementation Models
1. SEPT Analysis2. Forecasting3. Customer Profile Matrix4. Blue Ocean5. Red Ocean6. Porter’s Diamond Model
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SEPT Analysis Implementation Models
1. SEPT Analysis2. PEST Analysis3. LEAST Analysis4. ETOP 5. Scenario Plaaning
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Customer Profile Matrix Implementation Models
1. Demographic Factors (Who they are)2. Geographic Factors (Where they are)3. Psychographic Factors (How they think)4. Behavioural Factors (What they do)5. Environmental Factors (SEPT)
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Blue Ocean Strategy Implementation Models
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Portor’s Demand Model Implementation Models
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Product Development
Existing markets with New Products to increase sales
• Maturity Stage of PLC• Rapid Technology Development of the industry• Better quality and pricing by competitors• Industry in high growth• Strong R & D Base• Models: PLC, BCG Product Port Folio
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Product Development
Successes Failures
SONY Window Vista
Apple RJ Reynold Premier Cigarettes
Gillette Campbell Soup's beverage
Intel 286,386,486, 586, Pentium New Coke
Ford Sportsman Car Blackberry Play Book
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Product Development Implementation Models
1. Technology Acceptance Model2. PLC and Product Adoption3. BCG Matrix4. New Product Opportunities5. Brand Development6. Arthur D Little
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Technology Acceptance Model
Implementation Models
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PLC and Product Adoption Implementation Models
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BCG Matrix Implementation Models
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Arthur D Little Matrix Implementation Models
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New Product Opportunities Implementation Models
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Brand Development Implementation Models
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Concentric Diversification
Related Diversification – Adding new but
related products
• No Growth or slow growth industry• Need to new, but related products• New to introduce related products to match with
seasonal sales• Decline stage of PLC• Presence of strong management Team• Models: GE, BCG, Porter’s Value Chain
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Concentric Diversification
Successes Failures
AT&T entry into internet video service by acq Bell South
McDonald - McPizza
Google Acquisition of You Tube Apple Game Sole
Sea Gate – from disk drive to data storage thro Evault
HP Touch Pad a tablet computer
CisCo – from computer routers to online conferencing services
Pond’s Toothpaste
Sime Darby Maggie Atta Noodles
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Concentric Diversification Implementation Models
1. Resource Based View of the Firm VRIN2. Sustainable Competitive Advantage3. Delta Model4. Corporate level strategy& Controls5. Management Excellence6. Core Competence and Markets
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Resource Based View VRIN Implementation Models
1. Valuable: source of greater value, in terms of relative costs and benefits, than similar resources in competing firms
2. Rare: scarce relative to demand for its use and what it produces
3. Inimitable: it is difficult and costly to copy4. Non-substitutable: other different types of
resources cannot be functional substitutes.
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Sustainable Competitive Advantage Implementation Models
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Delta Model Implementation Models
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Corporate Level Strategy and Controls
Implementation Models
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Management Excellance Implementation Models
Eight Attributes of Management Excellence1. A bias for action – “getting on with it”2. Close to the customer – learning from the people served by the business3. Autonomy and entrepreneurship – fostering innovation and nurturing “champions”4. Productivity through people: treating rank and file employees as a source of quality5. Hands-on, value-driven: management philosophy that guides everyday practice – management showing its commitment6. Stick to the knitting: stay with the business that you know7.Simple form, lean staff: some of the best companies have minimal headquarter staff8. Simultaneous loose-tight properties – Autonomy within shop-floor activities plus centralized
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Core Competence and Market
Implementation Models
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Conglomerate Diversification
Unrelated Diversification – Adding new
unrelated products
• Dire Need to increase the revenue• Low industry profit margin• Usage of present channels for unrelated products• Surplus capital and managerial talent• Attractive investment opportunity• Anti Trust Laws• Models: GE, BCG, Porter’s Value Chain
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Conglomerate Diversification
Successes Failures
All Korean Conglomerates Samsung entry into automobiles
GE from bulb to oil &gas, finance, aviation, health
Sime Darby in ASEAN
Toyota from sericulture to Automobiles
Harley Davidson to aftershave lotion
Nokia from Forestry to Telcom Colgate to Frozen food
Tata – a cotton trading Co 1856ITCEssar
Bic Corporation from disposable pen to cigarettes, women underwear Citi Bank
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Conglomerate Diversification Implementation Models
1. GE / McKinsey Matrix2. Scenario Planning3. Conglomerate Configuration4. Relative Competitive Strength5. Value Chain
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GE/ Mckinsey MatrixImplementation Models
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Scenario Planning Implementation Models
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Conglomerate Configuration Implementation Models
1. Holding Company2. Subsidiary Company3. Sub-Subsidiary Company4. Associate Company
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Value Chain Implementation Models
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Relative Competitive Strengths Implementation Models
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Joint Venture Co-operative arrangements thro strategic
alliances
• Crisis management• Synergy effect • Domestic company with foreign company• Profitable risky projects – Alaska pipelines • Joint venture of small firms against big rival
• Models: Profit Pools Method, Theory of Strategic Thrust
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Joint Venture
Successes Failures
Product of Nestle and distribution capabilities of CocaCola
GM Daewoo in Korea
Tata and AIG GE Appliances and Godrej
Maruthi and Suzuki Intel and Sap due high cost of SAP
Honda and Hero France Telcom and Sprint Germany - Culture
Sony Ericsson Mahindra and Renault
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Joint Venture Implementation Models
1. Merger & Acquisition2. Synergy3. Co-opetition4. Strategic Alliance5. Strong Vs Weak
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Merger & Acquisition Implementation Models
There are four types of value creation:1. Resource sharing by combining the companies at the operating level2. Functional skills transfer by moving people or sharing information, knowledge and knowhow3. General management skill transfer through improved insight, coordination or control4. Combination benefits by leveraging cash resources, borrowing capacity, added purchasing power or greater market power
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Synergy Implementation Models
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Co-Opetition Implementation Models
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Strategic AllianceImplementation Models
1. Sale and Lease Back2. Outsourcing
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Strong Vs Weak Implementation Models
Tax Benefit
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Retrenchment Regrouping the resources to reverse
downward trend
• Failure of distinctive competencies • Organization as a Weaker competitor • Inefficiency, low profits, low employee morale • Failure to capitalize external opportunities• Growing Big
• Models: PLC, BCG, BP Reengineering, Value Engineering
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Retrenchment
Successes Failures
British Petroleum RBS – 2009
Citi Bank PAN AM
Thomson and Reuters Jet Airways / Air India
GM Nortel
Rolls Royce – cutting tem work force and work shops – Xmas Shut down
Maruti Udyog of Sanjay Gandhi – Court order to reemploy
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Retrenchment Implementation Models
1. Down Sizing of Resources2. Right Sizing of Resources3. Business Process Reengineering4. Value Engineering5. Automation6. Chrysler’s Score Model7. Demerger
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Downsizing Implementation Models
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Down Sizing Implementation Models
1. Work force Reduction2. Closing Unprofitable Plants
3. Outsourcing Unprofitable activities4. Implementation of tighter Cost or qualityControl
5. New Policies on Quality Efficiency
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Right Sizing or Reengineering
Implementation Models
1.Fundamental rethinking and radical redesign of business processes
2. Achievement of dramatic improvements in critical areas
3. Contemporary measures of performance such as cost, quality, service and speed
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Value Engineering Implementation Models
Automation
– Half the Work force, Double the wages, Triple the Output
– Peter F.Drucker
Score Model
Suppler Cost Reduction Effort by Chrysler
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Divestment Selling a division or a part of a company
• Failure of Retrenchment strategy• Need for more resources • Poor performance of a division• Misfit of a division
• Models: Cost-Benefit Analysis, PLC, BCG
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Divestment
Successes Failures
Kodak sale of health care PAN AM sale of air craft to Delta
L & T sale of cement division Tyco sale of Capital group and health care
Du Pont sale of Textile unit TATA Telcom divests hardware to AVAYA – Now TATA pays high charges for its requirements
Motorola - Outsourcing Kellogg’s divest non core assets in Argentine snack foods
IBM sale of PC unit CBS Seven TV stations
Divestment or Divestitures
1.Sell offs, 2.Spin offs,
3.Carve outs 4. Tracking stock
Sell Off
Subsidiary B
Company A without Subsidiary B
Company C
Sell Off
Company A w/o subsidiary B
Old Sub B
Company C
Cash, securities or assets as consideration
Spin offs• Typically parent corporation distributes on
pro rata basis, all the shares it owns in subsidiary to its own shareholders.
• No money generally changes hands• Non taxable event
– as long as it jumps through substantial hoops
Spin offs
Company A without Subsidiary B
Subsidiary B
Shareholders own shares of combined company. Own the equity in subsidiary implicitly.
Spin offs
Company A after spinoff
New company BShareholders receive Shares of company
B
Old shareholders still own shares of company A, which now only represent ownership of A without B.
Equity carve outs• Also called partial IPO• Parent company sells a percentage of the
equity of a subsidiary to the public stock market
• Receives cash for the percentage sold• Can sell any percentage, often just less
than 20%, just less than 50%, are chosen.
Equity carve out (partial IPO)
Company A without subsidieary B
Subsidiary B
Shareholders implicitly own 100% of equity of subsidiary B through their Company A shares.
Equity carve out (partial IPO)
Company A without subsidieary B
Portion ofSub B equity
Not soldX % of sub B equity sold
To market for cashIn IPO
Shareholders now own 100% of Company A (without B)And (1-X)% of Company B implicitly
Through their company A shares
X % ofCompanyB shares
Motivations for transactions• Market for corporate control
• Asset are more valuable to alternative management team» Divestiture, spin off, carve out, tracking stock
• Unlocking hidden value• Stock market problem or management problem?
• Improving management incentives» Divestiture, spin off, carve out, tracking stock
• Agency costs» Divestiture, spin off, carve out, tracking stock
Moving assets to more highly valued user
– Division no longer has a “strategic fit”– Returning to the core business
(undiversifying)– Buyers might simply be willing to pay too
much!– Spin off, carve out, may set up a subsequent
control transaction– Or the threat may improve incentives
Focus management• Part of undiversification
• Easier to run, more able to focus efforts
• Superior performance measurement– Because you can use direct equity for compensation
(divestiture?)– By the stock market?
• Reduction in bureaucracy/Decision making authority – Internal capital markets/external cap markets
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Liquidation Implementation Models
1. Chapter 112. Compulsory Liquidation3. Voluntary Liquidation
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Liquidation Implementation Models
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Venture Capitalists Implementation Models
1. Their Role2. Financial Gamblers3. Venture Capitalists or Vulture Capitalists?
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Differentiation
USP
• Diverse needs of customers • Strong differentiated rival firms• Competition revolves around technology• Nature of industry• Insensitive price customers
• Models: Porter’s Generic Model
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Differentiation
Successes Failures
Mountain Dew – Root beer taste HD DVD by Toshiba
Blue Ray Disc of Warner Brothers Maruthi Luxury NPV minibus shape
Fed Express guaranteed Delivery Coco-Cola Vanilla Flavor
Toyota Qualis BMW with Rolls Royce
Apple iPhone 1 Black Berry
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Differentiation Implementation Models
1. USP2. Innovation Diffusion Theory3. Distinctive Capabilities
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Differentiation Implementation Models
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USP Implementation Models
1. Unique Selling Proposition2. Unique – Distinctive Difference of the product from
that of the competitor Offering totally a new product with inimitable features to Customers 3. Selling – Transfer of ownership from buyer to Seller4. Proposition – Distinctive promise of the facts of the
product or service to be delivered to the customer
Innovation Diffusion Theory• Innovation = An idea, practice, or object
perceived as new by an individual or other unit of adoption– Software (necessary)– Hardware (optional)
• The Diffusion of Innovations Theory attempts to predict adoption of innovations. . . Typically, the adoption follows a standard pattern:
Attributes of Innovations that Impact on Rate of Adoption
The corresponding Classic Bell-Shaped Adopters Curve
Many studies have looked at how these groups differ:Innovators are highly cosmopolite and open to new things.Early adopters tend to be opinion leaders.Early majority provide “legitimization” of the innovation.Late majority are skeptical.Laggards put trust in the status quo.
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Distinctive Capabilities Framework - John Kay
Implementation Models
1. Architecture – Structure of relationship with employees, customers and suppliers
2. Reputation built around customers’ own experience, quality, warranty, guarantee, word of mouth
3. Translation of innovation into competitive advantage
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Differentiation Implementation Models
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Cost Leadership
Lesser cost at a better quality and price & better than competitor
• Rigorous competition with rivalry • Product differentiation• Similar usage of products by most buyers• Large buyers with significant bargaining power• Reduced cost of raw materials with better quality• Price and quality better than the competitor
• Models: Pricing matrix, Six Sigma, Value Engineering
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Cost Leadership
Successes Failures
Samsung LCD and mobiles Sharp LCD
IKEA / HP Printers Texas Instruments Electronic Digital Watches
South West Airlines Skybus Airlines
Toyota – TPS – Lean Ford Motors Model T like Tata Nano
Japanese Watch Industry and Swiss
SONY Betamax
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Cost LeadershipImplementation Models
1. TQM2. JIT3. Autonomation4. Cybernetics 5. Lean Management
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In search Cost Control with six sigma
Six Sigma Quality (TQM)
1. A high level of quality associated with approximately 3.4 defective parts per million
2. Six Sigma was coined by Motorola in the 1980s. Sigma stands for number of std deviations of the process
3. Before a product is designed, marketing ensures that product characteristics are exactly what customers want.
4. Operations ensure s that exact product characteristics can be achieved through product, design, the manufacturing process and the materials used.
5. The six sigma is integral part of other functions as well
6. At Motorola it is six sigma, at Xerox it is called leadership through quality, at Intel it is PDQ ( Perfect Design Quality ) or Pretty Dam Good) at HP, it is Total Quality control
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Elements to support Just In Time
1. Production of goods shortly before they are needed to keep inventories low2. Limited varieties with in a factory3. Uniform production rate4. Pull Vs Push method of coordinating work centers5. Kanban System6. Production, ordering and procurement in small lots
7. Quick, inexpensive set ups8. Multi skilled workers and flexible facilities9. High quality levels - Acceptable quality levels 10. Effective preventive and predictive maintenance11. Continuos monitoring and improvement12. Theory of constraints and limiting factors
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Autonomation “JIDOKA”1. Autonomation and JIT are two key aspects of Toyota Production system2. Jidoka is a reliable system that is cheaper to operate and produced the
expected quality3. Whenever defect is spotted, Jidoka becomes operational.
4. It stops operation and triggers a switch to show red light Andon.5. The red light alerts the work force to the problem and its location6. The machine or batch of machines will remain shut down until the
workforce can identify the cause and correct the problem.
7. Problem correction is the responsibility of all employees in the vicinity of the work station.
8. In most instances, the Andon (red light) remains on only for seconds9. If longer delays were to occur in a plant, that plant would just not be
ready for the JIT Process
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Cybernetics
1. Basically a scientific method of control of problems and communications.
2. This science is useful in every area of production but particularly in psychological motivation and reducing the cost of operations.
2. An emerging field of study that explores the integration of the human nervous system and human-made technological devices, such as microchips, robotic components, “nano” machines and electronics to reduce cost and to increase production efficiency .
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Lean Manufacturing Origination from Toyota production system Taiichi Ohno.
Its relationship with frugal manufacturing:
Improve capability to modify, customize and simplify Automate only when benefits are clear Factories within factories Split plants when they become too large
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JIT and TQM at Northern Telecom
Achievement of JIT and TQM in NT
Area Percentage Prior After JIT JIT Manufacturing Cycle Time 100% 25%Aggregate Inventory 100% 70%Operational Overhead 100% 65%
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Focus
Focus on Cost leadership or Differentiation or both
• Niche market with prospects of growth • Market leaders do not consider niche to be crucial• Too costly or difficult to meet the needs of specialist* Models: Test Marketing Model
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Conclusion
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Peter Drucker’s Next Society
1. Tomorrow is closer than you think. Peter Drucker explains how it will differ from today and what needs to done to prepare for it2. The new demographics How to live with aging population ?3. The new workforce Knowledge workers are the new capitalists
4. The manufacturing paradox How do you get far more output with far fewer workers5. Will corporations survive ? Yes, but not as we know it6. The way ahead The time to get ready for next society is now
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Knowledge Workers Vs Knowledge Technologists
1. Present Knowledge Worker - People with considerable theoretical knowledge and learning: doctors, lawyers, teachers, accountants, chemical engineers
2. Most striking growth - Emergence of Knowledge Technologists: Computer technicians, software designers, analysts in chemical labs, manufacturing technologists, paralegals etc
3. Just as unskilled manufacturing workers were dominant social and political force in the 20th Century, knowledge technologists are likely to
dominate as social and political force over the next decades
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The Manufacturing Paradox How do you get far more output with far fewer workers?
1/2 x 2 x 3 Half the work force, Double the wages, Triple the output
1. Between 1960 and 1999, manufacturing jobs is reduced to half as against
doubling or tripling of manufacturing output 2. Labor cost was around 30% of manufacturing cost in 1960 and now it
is down to 15%
3. The contribution of manufacturing towards GNP is reduced to less than half as
against the contribution of services sector is increased to more than half of
total employment ( In fact, in USA, it is 75%)
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Will Corporation Survive ?
Yes, but not as we know it ?Since the invention of Corporation in 1870, the following five basic points have been
assumed to apply..
1. Corporation is the master and employee is the servant.
2. Full time employment for corporation.
3. Production under one management or one company concept lowers transaction cost. Rockefeller’s successful experiment of putting exploration, production, transport, refining and selling under one corporate structure resulted into lowest cost petroleum operation. So also Ford’s experiment.
4. Market power with manufacturers and brand loyalty
5. To any one particular technology pertains to only one industry and any one particular industry pertains to only one technology.
Above assumptions remained valid for whole century, but from 1970 onwards every one of them turned upside down.
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The New Workforce Knowledge workers are the new capitalists
1. Steady shrinkage of factory workers and emergence of knowledge workers in
developed countries.
2. Coining of words “ Knowledge Industry”’ “ Knowledge work”’ “Knowledge
Worker” firstly by a Princeton Economist Fritz Machlup the second and third by
Peter Drucker.
3. Emergence of knowledge workers as new capitalists due to their massive and
majority stakes in pension and mutual funds.
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Will Corporation Survive ?
Yes, but not as we know it ?The five assumptions remained valid for whole century, but from 1970 onwards
every one of them turned upside down
1. The highly portable knowledge worker and knowledge technologist provide capital just as provider of money making them as equal partner.
2. Emergence of part time, temporaries, consultants or contractors.
3. Instead of costly and complex integration of various activities, outsourcing to professional organizations. Even HRD functions in USA is outsourced
4. Market power is shifting from manufacturer to customer who can have full information of the market through internet.
5. Any technology to any industry. Transistor invented by Bell telephone largely used by Japanese electronic companies like Sony.
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Information Revolution
1. 16th Century to 19th Century – First and Second Industrial revolution were most innovative and most fertile periods for creation of new institutions.
2. The First industrial revolution brought forth intellectual property, universal incorporation, limited liability, trade union, the co-operative, the
technical university and news paper.
3. The second industrial revolution produced the modern civil service and modern corporation, the commercial bank, the business schools and office going women.
4. What next ? Information Revolution once again emerges into new theories, new
institutions and new money which totally beyond the control of any country.
5. In Information Revolution. IT will, of course, will be important, but it will be only one of several important new technologies.
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Differentiation Implementation Models
1. USP2. Innovation Diffusion Theory3. Distinctive Capabilities
