Business Strategy

Online Branding

noreply@blogger.com (Unknown) — Sun, 14 Sep 2008 19:35:00 +0000

Why would one want to build a brand online?

One might want to be remembered and would like to transfer the real world image to the online world. I would look at brand as a differentiator of the services being delivered by each company.

How would one differentiate between TechCrunch vs Mashable? It could be looked at as social media experts bringing light to a particular evolution or maybe the tech geek bloggers only posting views. I am sure that my views would be different from yours

What should traditional brands do so as to create an identity online?

Adam Broitman, a media strategist from Morpheus Media says, ‘Google knows what is true’.

One should have:-

1) Searchable pages: Google should be able to tell what is the brand is trying to sell and offer in terms of value to the world

2) Continuous updates: The fresher the content the better. Not only Google but all of us value it.

3) Web Directories: Just like the telephone directory, the inclusion of one’s website in prominent search engines matters.

4) Inbound links: When others refer or pass the user to your website then surely the information provided is of value.

5) Outbound links: This is to help the users get the right value by routing them to the right link and of course proves that the website has a lively presence.

6) Mechanical Quality: Well maintained websites have a greater potential to be recognized.

How can one go about using the online medium so as to build a brand?

LISTENING

1) Ego searches to monitor blogs and portals so as to catch any referral of one’s product or company

2) Use tools like CrazyEgg.com so as to trace where the users are clicking and where they are not

3) Track community sentiments from conversations in twitter.com

FEATURES

1) The about section in the web page should convey about the business

2) It should be easy to comment on the website

3) Site’s content, loading time, colors/fonts and various other design features

OUTPOSTS

1) Not to forget the online forums and social networking websites

2) Pass on the links to the website through newsletters, facebook communities, yahoo groups, Myspace etc.

CONTENT

1) Keep updating the content

2) The more usable the content, the quicker it will adopted. So, it is better to have a http://anupam.webportal.com for each end user to give him/her the personalized association with the brand.

3) Images interests and holds the attention of the visitor.

4) A video on the website can add on as personal branding or promotion

PROMOTION

1) Use links like StumbleUpon and Del.icio.us to drive awareness

2) Guest blog on other related websites and leave one’s own link

3) Videos about the product on LinkedIn

4) Use the status message on Facebook/Linkedin

5) Advertise through Google’s Adsense/Adwords

One needs to continually emphasize the value their brand can provide to the world which can be done by promotions and marketing through the right channels. Web now has become one of the most important workplace for any business and provides the largest space to socialize.

It isn’t easy to convey information through this medium than what can be done in person. However, this information above will surely equip you with tools so as to build relationships in business so as to strengthen and promote the brand.

DYOB: Destroy your own business

noreply@blogger.com (Unknown) — Mon, 08 Sep 2008 19:21:00 +0000

GE, one of the Fortune 500 companies that lay off one of its arm each year and reconsolidates every time it goes about selling its sub-business. Recently, it brought its appliances business up for sale through auction but then it has a completely diversified business line like GE Universal Studios. Isn’t such an association of Universal Studios with GE a little difficult to be thought of? The organization has moved itself from a position where it was bound to face competition in to a completely new arena. DYOB (Destroy your own business) is the essence here which leads to destructing its earlier business model and adapting a newer one.

It is the core values which are imbibed in this organization that forces it to reinvent itself every now and then. It was Jack Welch who was running the organization then and it is Jeff Immelt now who is steering the organization but it is the values that act as the forces to drive the organization to go about reinventing itself every time.

It has been a time when continuous improvement in services have been looked at to provide that extra advantage over one’s competitors but it is a disruptive innovation that can keep one over the others for a longer while. It is this innovation that can help an enterprise to not only outperform others but also leapfrog into new areas of competitive advantage which has been termed as the ‘Blue Ocean’. Studies indicate that continuous reinventing of the business models have been actively scrutinized in the areas of Business Strategy. However, there is not much direction and thought built upon reshaping/evaluating the present business model so as to phase it out and bring about the proposed new business model.

In this era of rapidly changing battlefield of business, new sources for sustainable competitive edge can be assured only by reinventing the business model every now and then.

Evident examples:

1)www.Demonoid.com is a market space where the latest movies are available for free downloads. Such a disruption has actually destroyed the evolutions like DVD which had come a long way from the foundations of VHS.

2)For the philanthropic reason of having a greener and a better world, the automobile industry has moved from Diesel/Petrol run cars to Compressed Natural Gas ones. What now? There’s a revolution of electric hybrid vehicles that are in the making and will re-mould the entire industry.

3)Business like IBM and Apple as organizations which went about moving from the same value chain as that of providing computer hardware to that of Business Services and Music Services respectively. It is a disruptive idea and a requirement in the business environment which made them move from their core business areas to untried battlefields. They had to let go off their earlier revenue model and tap areas that were left unidentified.

In all the spheres available, there is only one thought and it all means the same.
a) ‘eat lunch or be lunch’,
b) ‘control your own destiny or someone else will’
c) ‘destroy yourself or get destroyed’

Challenge of Institutionalization of 'Open Innovation' for long term significance

noreply@blogger.com (Unknown) — Mon, 28 Jul 2008 15:47:00 +0000

It is the era of 'Open Innovation' where the enterprises engage their partners - customers/suppliers/consultants so as to contribute towards building up a new product or service for serving the consumers what they want.

The neighbourhood tailor used to customize our clothes right to the size that would fit in perfectly which is why the services provided by the tailor haven't been substituted yet. Even Levis and other mega brands do stitch at times for the customers who don't want to opt for their readymade offerings. Participation of consumers, partners and suppliers has picked up over the last decade for product development.

A challenge which is being faced is the correct technology to create a network of product-specialists, customers, partners, suppliers so as to collect the rich intellect from each one of them. They collaborate and work with continuous interaction to formulate the design for a product that the consumer is really looking for.

Certain suppliers do know the manufacturing components that the latest technology like Apple's products would need so they would supply them the appropriate chips. This is in mutual consent for product development with Apple.

Wikipedia follows a different form of collaboration where it arranges a platform for users so as to facilliate content contribution and editing as well. Wikipedia is no corporation as such.

Challenges
I
How would one entice users to participate and continuously contribute their intellectual ideas for formulating the right product design as needed by the consumers?

Helping a charitable organization
Advancing the state of the art
Public recognition
Token compensation - gift check for $100 if contribution is accepted

Who would own the product as there would be various participants who would help in its cocreation?

Fractional ownership for each volunteer but it doesn't sound convincing

Maintaining Quality

It is still hard to digest that the quality is best delivered for cocreated products

Conclusion

Many companies have already done it; for e.g Apple. However, there are many companies that have still taken those few steps towards it and have a long way to go.

Knowledge is Power but can it be used as a weapon for your Enterprise? Decide it for yourself.

noreply@blogger.com (Unknown) — Sun, 20 Jul 2008 16:23:00 +0000

How can one define knowledge?

What is the meaning of bare numbers?
for e.g. 37 It is just plain Data.

What is a number/data got to do?
If you attach a °C to it, then it becomes information.

The next question one can ask: what is the temperature being referred to?
the contextual information is knowledge.
e.g the normal temperature of the body is 37 °C

Knowledge Strategy

A strategy that has to be put in place so as to build up knowledge resources of the organization in order to deliver products and services superior to that of the competitors.

K-SWOT is done so as to identify strengths, weakness, opportunities and threats that exist due to the existing knowledge potential of the organization.

K - Map - would help in relating the knowledge potential/gap needed so as to meet the strategic objectives of the organization mentioned in the vision &the mission statement of the organization.

One needs to tap the knowledge assets so as to achieve the strategic objectives of the organization. In order to tap these knowledge assets one needs to convert an enterprise in to a Knowledge Enterprise. This can be done by employing the right Knowledge Management Tools and infrastructure. Also, the readiness of the enterprise needs to be checked so as to see how easily and effectively a knowledge management infrastructure be incorporated. Once it is all in place a continous audit needs to be performed so as to ensure that the corporation is updated with all its needs for becoming the right knowledge enterprise.

Following is a brief description of each step involved in building or recommending an enterprise equipped with the right knowledge management infrastructure.

Different types of Knowledge Assets

Explicit knowledge - that is available in the form of documents/books stored as repositories. Such kind of a knowledge needs to be exploited by the organization as it is available in a codified form.

Tacit knowledge - exists in intuitive/judgmental form. it is peculiar to experts or the employees. most difficult to explore.

Internal knowledge - available within the organization

External knowledge - exists with clients, competitors, partners or consultants.

Structural, human and relational capital of the firm.

Drew's Boston Box (http://www.tlainc.com/articl145_files/image010.jpg)
it is used to further classify about what the organization is aware/unaware of the knowledge that it possesses or not.

Knowledge Management Tools

There are many tools available for managing a company's knowledge.

Before selecting these tools, one needs to carefully evaluate them keeping in mind the issues that one can encounter during implementation.

The frameworks available for consulting the right Infrastructure dimensions needed for creating the right knowledge enterprise:

Nagrajan and Shekhar Dual model
Nonaka's SECI Model
Ovum consulting layer

The next vital stage is to determine Critical Success Factors and their corresponding Key Performance Indicators for knowledge management infrastructure to be implemented

Assess organization's readiness for KM implementation:
On the basis of 3 dimensions

Technology and Systems
Business Environment
Organizational Environment

Knowledge Audit

The final stage is to measure the effectiveness of the Knowledge strategy suggested which is done through the K - Audit.
It is followed by measurement of performance w.r.t. Critical Success Factors determined for the company.
Use the checklist for the entire process map to overview completed processes.
Share the KM implementation across teams and document the same.

E-tailing

noreply@blogger.com (Unknown) — Fri, 08 Feb 2008 05:44:00 +0000

E-tailing is about marketing and selling goods over the internet. There were hordes of people following suite by launching Online Portals for their business. The flaw was that none of the prospective buyers knew about these .com addresses. It is all about how the owners blend the .com/website with the back end or the brick and mortar operations of the business.

A few examples on how the businesses adapted the concept and leveraged e-commerce to generate phenomenal growth for them.

Office Depot (www.officedepot.com):- They had an online portal where they had replicated their regular catalog on the internet. For e.g. if some one is looking for a specific Heavy Duty Stapler the person didn't know where to look for in that catalog. It used to take five clicks to reach the product of one's choice which was very cumbersome. The prevailing problem was that the catalog wasn't interactive. Now they have a form where one can search their product by color, size, capacity and other attributes.

Land's End (www.landsend.com):- This is a portal where one can create a 3 D image of himself/herself online so as to see the look the display clothing available across can give him/her. This enables online selection and purchasing of clothes.

Matsushita (www.panasonic.com):- The challenge at their hand was to tie up their online portal with the inventory so that the buyers would know how soon the request of their supply will be met.

This is how e-commerce can do wonders but only if it is effectively used else it is bound to become a liability to the owner.

E-Tailing is emerging as an attractive alternative to the traditional brick-and-mortar retailing. The chances are that they will compliment each other while they exist.

Extension of the Supply Chain link

noreply@blogger.com (Unknown) — Wed, 06 Feb 2008 15:20:00 +0000

About the Business
The distribution subsidiary of WESCO International Inc. supplies electrical products and maintenance/repair/operations(MRO) for commercial and industrial purposes.

Operations and Issue
WESCO distribution not only stocks more than 140,000 items from various manufacturers but also offers its customers various MRO products which it wouldn'tstock and then arrange it from various suppliers. Whenever WESCO received orders of the items for which they didn't maintain stock, it would take themextra pain to call up the suppliers/manufacturers in order to find out the pricing and availability data before they get back to their customers. Though only 20% of the total orders constituted the Non stock items but the it took around 40% of the salesperson's time to relay the desired information back to the customer.

Solution
To address this issue, the company built a new software which connected the Mainframe "Legacy" System of WESCO with the heterogenous systems of the supplierfor inbound and outbound communication. This helped WESCO in relaying the information of the non stock items to their customers within 30 seconds as the information of the same was now available just a click away.

Mathematics
The cost to implement such a system was about $400,000 and the savings were around $12 million annually as it saved them $75 per hour for each salesperson.

Benefits to

1) WESCO

a) Customer Perception: It moved towards the positive as WESCO was able to answer the customers' queries and supply to them the goods they were looking for.
b) Data Accessibility: Branches of WESCO were able to access the Non Stock Item Information online.
c) Cost Reduction: WESCO started to represent the suppliers for Stock Items too in order to reduce inventory maintenance and save cost.

2) SUPPLIER

a) The supplier was able to connect to the customer directly through this channel

What Royal Enfield should learn from Harley Davidson at this point of time!

noreply@blogger.com (Unknown) — Fri, 19 Oct 2007 01:03:00 +0000

Brands like Coco-Cola, McDonald's, Levi's, Nike etc. have reached iconic status after ages of advertising their punch lines through expensive campaigns but Harley Davidson which was twice at the brink of bankruptcy adopted the unconventional route to brand excellence.

While finding new ways to reach out to the customers, employees and dealers Harley Davidson changed the lingering loyalty for their products to a passion which was very contagious to many new buyers. No other product unlike the America's freewheeling brand exemplified this non-traditional route to brand excellence. With the total marketing budget of $20million, they spent a miniscule $1million on advertising. However, the shoppers purchased $100 million worth of Motorclothes and spent a good amount on food, fun and other fare at the Harley Davidson Cafe. The Harley toys and Barbie dolls for the kids also increased revenue for Harley.

Their sophisticated intranet system connects its dealers with the central database hence enabling them in reducing inventory costs for the bikes relating to storage, financing and other expenses. Effectively, every bike which Harley makes has already been sold i.e the company is now building to order. It is not just the customers but even the Harley employees own these motorcycles and they ride with their customers in the rallies. Even the employees take the same place as their customers on the waiting lists for the bikes.

ALL THEY DID TO MAINTAIN THE BRAND EQUITY ,AND THIS DECIDED HARLEY's FATE.

Preserving Heritage : They made a clear choice of staying with their vintage styling and not redesigning their bikes to the likes of the slick Japanese machines.

Community : H.O.G. - Harley Owners Group is a community built for all the Harley riders who would participate in rallies and remain closely in touch with the Harley Inc. and also companion Harley owners.

Brand Extension: There are sponsored Motorclothes from Harley for adults and children. Further, Harley licensed its logo to be used on Loreal Products , Zippo Lighters and even Harley toys being manufactured by Mattel.

STRENGTH OF THE Harley Davidson BRAND?

Harley didn't spend a single penny on their advertising.

Their brand was so powerful that even in the superbowl games where many brands had to shell out money for the 30 second interim advertisement slots these bikes used to do be on the field as part of the cheerleaders' team.

In the times of public promotions and gatherings even the star personalities liked themselves to be associated with these vintage machines which led to free publicity of the brand Harley.

QUALITY WAS A SURVIVAL TOOL and now the story has changed.

Indeed, Quality has driven the Harley story more than any other factor. By re-engineering its production process, redesigning its machinery and instituting a range of Japanese - style methods of manufacturing and quality control methods , that coupled its survivor's attitude with an aggressive revitalization of its brand.

I.T. as an enabler ?

noreply@blogger.com (Unknown) — Sat, 29 Sep 2007 15:38:00 +0000

I.T. -------> Information Technology

Information Systems became a top priority for GE, the company I used to work for as declared by it's then CEO Jack Welch in the 1995 annual report. Even, Benetton adapted a central program which connected all the retail stores with headquarters. This enabled the organization to identify the hottest fashion items, for which production can be stepped up in order to replenish inventory or meet the incoming demand for it.

The problem is that the managers of certain companies are still fretting over the steep price which they have to incur for implementation of I.T. It is essential that I.T. not only is seen as an enabler but becomes a part of business plans. The key is for I.T. to be seen as an engine for growth and not as a frustrating cost center for executives.

Best way to do it is to make a technology proposition a part of a Business Requirement and let the operations dept. of an organization own that initiative as well as highlight the profits of the same. It sounds simple but even Mr. John Donovan, a professor at MIT's Sloan School of Management suggests that bridging the technology and operations function is not easy at all.

A Big Question - Who will run the show?

It should be someone from the business side but then taking the I.T. people out of the picture doesn’t make sense. Ultimately, the I.T. people are the ones who will help the executive distinguish between pipe dreams and achievable goals. The equation should be well balanced depending upon the requirements of the business. One side of the equation being the business aspect and the other being I.T.

The unrealized and unseen advantages of I.T. in the corporations.

Email - Effective way of communication which helps in saving cost by cutting down on phone calls, facsimiles etc.

Intranet - Harley Davidson Inc., the motorcycle manufacturer incorporated an intranet system which allows the headquarters to keep a link of over a 1000 dealers they have across the world. So, as to supply as per demand which comes in from the customers visiting the dealers. In turn, this helps them in cutting out on their inventory maintenance charges.

Internet - It can help a Czech company to sell their product in Japan and make a local company become a global organization.

Mr. Callahan a vice-president of Booz-Allen says, ‘ I.T. on it’s own cannot change the course of a company but it’s intimate integration into every aspect of corporate strategy can.’

1. Ways one can look at to Integrate I.T. with Business Strategy.
2. Draw I.T. leaders into company’s elite decision making circle.
3. Improve communication between business head and the I.T. head.
4. Consider appointing an I.T. head with business background.
5. Adopt a mixed team comprising business background and technical background people.
6. I.T. should be presented as a corporate priority.
7. I.T. should be measured by profits and not cost for which it should be seen as a revenue driver and not a cost center.

The Bazaar or The Cathedral ???

noreply@blogger.com (Unknown) — Fri, 21 Sep 2007 12:32:00 +0000

An exemplified example of The Bazaar Model is the Linux operating System which was built by contributions from an informal community of volunteers having different agendas and approaches. This is completely in contrast to the way a sophisticated software is built where a small group of developers work in an isolated Cathedral.

The Open source model did come into being with the advent of the Internet when communities with similar interests could really meet virtually and puttheir minds to good use. It opened up a whole treasury of ideas coming out from people and innovation was no more to be tried in insolation.

Strengths and Weakness !!!

When we consider Linux, it's an example of a very high quality Operating System which could run for a long time on the system without crashing. Lot of volunteer developers keep looking out for ways in which they can enhance the software and improve it by adding more utilities to it but all this is governed by a central authority. There is a strict quality control imposed by a strong central authority which checks for the changes proposed by the developers, since all are welcome to propose changes it being an open source model.

The advantage of this kind of a model is that a large number of people will be able to discover more number of bugs in a shorter period of time whereas a smaller group of people working in an isolated Cathedral type model will take longer and may not be efficient in discovering most of the problems.

At times, such kind of an approach may lead to lose out focus on quality. A very easy example of this is the giant online Encyclopedia "Wikipedia". It's again an achievement of the Open Source Movement where the Internet members write on the topic which interests them.This led the enyclopedia to become big and that too at a very quick pace. Unfortunately, the articles were poorly written and weren't well organized. The reason for this is that there isn't any editorial filter like the strong central authority ensuring high quality in case of the Linux operating system. It's no doubt a more democratic process but the quality of the product suffers.

The DEBATE :-)

Peer production is a good way to generate raw material for innovation since the many involved would think alike but it doesn't seem well suited to deliver a final product. One can test, debug and improve in The Bazaar but a task is best done in a closed collaborated group of individuals working in the Cathedral as it enables to deliver the perfect finished product without developing intricacies by going stray from the point of focus.

The Role a Supply Chain Transformation can play in reshaping a company's fortune !

noreply@blogger.com (Unknown) — Wed, 12 Sep 2007 08:49:00 +0000

If all of you have had a creative childhood then you must have come across the brand name 'Lego', the company behind the brick building games which do a lot more to build creativity and imagination amongst children.

Noone could have ever imagined or have even heard that this seemingly successful fourth largest toymaker in the world went through it's set of doldrums. Some speculated that it is because of the company's decision to enter a diverse product line or it could well be because of the over popularity of video games and the low cost producers from China.

The company leadership when attended to these issues realized that their supply chain model was way out of date. For six decades, while company made profits their products were customized for smaller retails post which this model started to fail. Despite the brand equity this company held it started to lose out ground to other companies that operated on analysis and optimized costs to make provisions to the behemoths of the business.

It took the leadership a lot of time to diagnose the problem from the symptoms of such a misaligned supply chain model. They approached it holistically while keeping in view every aspect of company's product development, sourcing, manufacturing, and distribution.

Problems faced:

Product Development: The company used to innovate and welcome new designs in shorter periods but never factored in the costs which came in due to this carefree creativity.

Sourcing: where the organization was dealing with an array of suppliers/vendors. The engineers were in ad hoc relationships with these vendors for supplying of parts/resins which have been designed by them. Due to bad inventory management and poor calculations of material requirement only a few kilos out of the total import got used and rest went waste.

Manufacturing: Haphazardly placed orders and demands changing very dynamically without keeping in regards the inventory levels led to a very chaotic day to day operation. This murkiness led to overall capacity utilization of just 70%.

Distribution strategy: didn't work in the times when big retails were in as they had clientele of small shops which did not even have a demand of a standard carton so packing was also customly done for them to cater to their demands of limited products.

Solution:

The leadership team tackled this very tactfully without missing out on any of the issues. To begin with they started cutting down on the different number of colours and elements. They decided to take specific models for around 4-12 week production cycles. They streamlined it further by reducing the number of suppliers with only stipulated designs to be outsourced which weren't a burden to them when it came to cost. The distribution of it's products to various shops which was a huge overhead was brought down by consolidating logistics providers in order to bring the lego group in line with the big retailers so as to reduce transportation costs.

The analysis and the strategy planned by the leadership was far more gruelling and puzzling but it did help them bring the organization back to track. This supply chain restructuring had a transformational impact on the company as a whole. Rationalizing and streamlining it's product development, sourcing, manufacturing and distribution helped it pour it's resource into what it does best: building creativity and imagination in children with the help of it's toys.

Impossibly economical and Unexpectedly profitable !

noreply@blogger.com (Unknown) — Thu, 17 May 2007 17:23:00 +0000

IndiOne, a subsidiary of Indian Hotels Company belonging to the Taj Group of Hotels are planning to spring up around 35 hotels in India providing all the luxuries which any 5 or a 7 star hotel would have like a refrigerator, internet connection, coffee maker, work area etc. The rent
of these rooms are estimated to be around 10% of the usual room rents and still making a good 50% plus margins. Such kind of models are not only breakthroughs but they are the ones which bring change to times. It will help in expanding the business travel in order to explore opportunities in India and generate more revenue for India.

When such a kind of a model needs to be realized it has to make sure that :

The quality is the finest and the best
Cost reduction will be around 80-90% of the original prices
The product is marketed well to reach the masses
It should be made viable so that it can be accessed by the last rung of the economic pyramid which comprise people having the lowest levels of income.

INNOVATION "SANDBOX"

This approach is similar to how a Sandbox looks like, as described so by a professor at a US league university. Here, the innovators have the liberty to try any approach and experiment within the limits of constraints. The value of this approach will be felt beneficial in the lower economic society where the dirth of qualified service looms over the poor people who cannot afford the costly services.

Dismal State of Healthcare in India.

80% of the population cannot afford the health care facilities and insurance services. Also, it is unavailable and inaccessible to them in the rural areas of the country India. There is a shortage of doctors too as only one doctor is available for 100,000 people unlike one doctor for every 160 in The United States of America. Since, people travel from rural areas to cities along with their families to to avail of the medical facilities, the treatment must get over in one sitting so that the patient and the family can return home the same day.

Using the above limitations as constraints a few health care providers converted the situation into opportunities.

Narayana Hrudayalaya (NH) - A cardiac care centre in Bangalore, which specializes in performing over 8000 cardiac surgeries, treated over 60,000 outpatients and also provided consultation/treatment to people at remote sites through internet/telephone till date.

Bhagwan Mahaveer Viklang Sahayata Samiti (BMVSS) - Since, 1975 it's been distributing Jaipur Foot ( A prosthetic foot made out of rubber) and does not charge for the prosthetics and services; it survives on donations from satisfied patients and from philanthropists.

Aravind Eye Care System - The goal of this organization is to wipe out needless blindness by performing cataract surgeries free for around 60% of its patients and continue to operate profitably.

All these three profitable organizations could provide good quality care all coming in from basic philanthropy and public sector subsidies.

To Note: They all innovated under self imposed constraints such as the quality of the service is non negotiable irrespective of what kind of society the customer belongs to. It remained same for all the business models be it IndiOne, NH, BMVSS or Aravind.

Sandbox in Action

There is no generic sandbox design but a checklist of strategies which business leaders can identify so as to overcome them to give birth to breakthrough innovations.

Constraints used for tackling the state of healthcare in India are:

Specialization - A general hospital is known to provide all the health care facilities but the ones like NH, they specialize in providing dedicated heart care facilities performing 23 cardiac surgeries in a day which is in contrast to any other urban hospital performing only 4-5 surgeries in a day.

Pricing - The organization has to take care of the pricing of their services in order to maintain profits as well as to make sure that the services reach the lowest economical class without a compromise in the quality of service. Even so, many patients could not afford this facility, NH tied up with State Govt. of Karnataka and ICICI (India's second largest bank) so as to make it available for poor people through an affordable insurance plan.

Capital Intensity - Cost reduction also needs innovative methods. At NH, they only purchase equipments related to Cardiac Surgeries so as to make use of it round the clock. Incentives are encouraged at off-peak hours when the patients come in for tests at odd hours. NH also bought X-Ray machines which stored X-Ray images on computers cutting down on X-Ray Film costs.

Talent Leverage - Surgical skills can only be improved by the no. of encounters a surgeon gets to face. At NH, the heart operation is broken into sub - procedure where every sub procedure is being looked into by the respective expert team.

Workflow - Process design is critical. Each member of the team needs to have the know how of what each team member is responsible for. They are all answerable for the outcome. The quality of the outcome depends on the sophistication with which the total task has been disaggregated and assigned to its incumbents.

Customer Acquisition - The success of such kind of a business model is dependent upon the volume of customers. The business needs to continuously deploy ways to attract more and more customers. Aravind, organizes eye checking camps in rural areas and even takes the patients along with their relative to their centres. None of them are denied the care if needed, while food and lodging too is taken care.

Values and Organization - It is not possible for such breakthrough innovations to become a success unless all the members at the organization are imbued with the importance of the deeply held values to provide world class care to rich and poor.

Any company belonging to any industry in any country can adopt such kind of an approach but they need to be disciplined to breakthrough innovation.

They must rethink the entire business model which includes - techonology choices, distribution, pricing, scale,, workflow and organization instead of fine tuning the existing model.
Rather than researching the markets they should immerse themselves in the lives of their target consumers.
They must accept constraints.
They must innovate in an ecosystem with many collaborators and partners.
None of the changes are possible without a clear and unflagging commitment to a strategic intent.

Why do multinational corporations fail to embrace such an approach? The companies are unable to get out of their dominant set of logic using which they have been successful in the past. Managers here believe that 80% of the humanity is too poor to afford their products and services. So, they make minor changes to the existing products and business models, start endeavours that often fail and conclude that success from these was indeed impossible.

For these innovations to be a success the companies/managers need to mobilize themselves so as to target the waiting consumers belonging to the bottom of the pyramid. The opportunity beckons.

Barrier between Corporate Decision Makers and Industrial Designers

noreply@blogger.com (Unknown) — Fri, 11 May 2007 01:28:00 +0000

Minds of the people - a hurdle in itself .

As Corporate hunts for new ideas in the market to maintain their monopoly, the pace of new product introduction increases in tandem. Sadly, the statistics suggest that 90% of the new products and the businesses fail. The failure is not because of a flaw in the product, or the incorrect timing; instead, it is to do with the ways the business keeps themselves in a shell/comfort zone away from risks.

When a company really needs to slingshot it's position to topmost tier, with the natural tendency of staying averse from risk it rejects the innovations it needs the most. Even on knowing that every business carries a risk, innovation is a gamble which they need to play where the success is dependent on the product acceptance and customer reaction. Companies should be willing to learn from the inventions which have become a commercial success so that they can distinguishably go for gambles that are likely to win.

How hard it is to get a hit innovation accepted commercially ?

One day in 1956 an unexpected squall drenched an artist, now an inventor while he was painting by the stream. He had no way to shelter his easel. In a desperate attempt to save his art piece he dug the handles of the fishing poles in the soil to form a rough circle, tying them together he spread his poncho over it to build an impromptu dome. It was then when it struck him that the improvised version of this impromptu shelter could help in transforming the all male activity of camping and hiking into a family one.

The QUESTION is that how could a Tent (Pop Tent) bring such a major change in the Public Attitude ?

In contrast to the heavy, clumsy and bulky canvas built tents which need a lot of muscular strength from a group of at least four people to put it in place, this one could be easily opened up by a single person even in the dark. The main advantage of the Pop Tent is that it had an integral flooring with screened windows so no mammals could intrude making it completely safe. It's streamlined body could also protect the inhabitants from wind and rain. The wonder could get easily and neatly packed with the weight just being less than half of the ugly traditional tents with no floor. Yet, the inventor failed to convince the tent retailer that the customers wanted it.

The Pop Tent didn't need any marketing or a research to sell. The product is right, the time is right and the design is such that it attracted many who would consider using it as a national pastime. Pop Tent was selling well at small shops but the inventor wanted to interest the world's largest tent retailer Sears, Roebuck and Company. On getting a ten minute appointment with them the inventor himself demonstrated opening up of the tent in less than a minute. The owner of the Tent Retailer criticized saying, " It's just an umbrella with a floor ! ". It dismayed and shocked the inventor leaving him puzzled with questions, " What could that guy be thinking? " , " Why was he so hostile to a product that would sell well? " .

The Thesis behind this hostile behaviour.

The buyer's comment revealed that he never wanted the introduction of a new product no matter what the advantages. His attitude exhibited the defensiveness towards the comfortable status quo of the company. Defensive and innovation rarely mix usefully. The retailer knew that he would need to hire a new group of people to take care of the campaigning, demonstration. Also, if the Pop Tent sells well it would make the entire range of tents look obsolete and would ultimately cause losses to the retailer.

It can be concluded that the people who usually hold the barricades against the inventions are likely to hold some kind of a financial/MBA degree. The industrial designers tend to regard these people as "bean counters" and as their most dangerous opponents instead of being a collaborator. For the Corporate Decision makers new equals risky and only a few have the gift for distinguishing between the right gambles and the insubstantial schemes. The solution to these problems require a new sort of interaction between the MBAs and the designers. On the Corporate side, the MBAs need to be aware of the potential of the real inventions so as to balance the current needs of the enterprise. They need to lose the knee - jerk temptation to downplay or ignore the power of the new idea. Designer's side, one needs to attune themselves to the strategic value of the ideas.

It is clear that the barrier between the Corporate Decision Makers and Industrial Designers must come down. Companies that are serious about reaching beyond their own walls must face their biggest obstacle: The minds of their own people.

Get the Balance Right

noreply@blogger.com (Unknown) — Sun, 06 May 2007 15:55:00 +0000

One needs aims and objectives in business to turn desires into reality. We will read how Kellogg prepared a successful strategy by setting aims and objectives keeping it's uniqueness intact.

What is a BRAND?

An organization or a business is a brand when the consumer recognizes the product and extracts it's information from the brand (name of the business/organization) itself. Product positioning which comes in is a process where the various attributes and qualities of a brand are emphasized to consumers. We will see how Kellogg used it's aims and objectives to make it a unique brand in the minds of it's consumers.

What's the AIM?

Post the survey, Kellogg's knew it held a premium position within the market.
Reasearch undertaken for Kellogg, growing public awareness helped the decision takers to understand the main concern people had. More than ever before people have been conscious of having a lifestyle in which the food they eat and the activities they took part in kept them healthy.

The decision takers wanted to demostrate Corporate Responsibility which meant that they wanted to develop the business responsibly and in a way that was sensitive to all of Kellogg's consumers' needs, particularly with regard to health issues. This led the business to develop a direction in form of a broad statement of intent or aim, which everyone in the organization can follow. An aim helps the people outside the organization to understand the beliefs and principles of the business. Here, Kellogg's aim was to reinforce the importance of a balanced lifestyle so it's consumers can understand how a balanced diet and exercise can improve their lives.

Followed by Business Objectives

Business Objectives must be

Specific
Measurable
Achievable
Realistic
Time bound

Each of the objectives set by Kellogg helped it pave a direction that would take the business to where it wanted to be three years into the future.

Aims --> STRATEGY <-- Objectives

Having created an aim and set objectives , Kellogg put in place a process of planning to develop a strategy and a series of action.

Series of actions

Supporting improved food labelling - Kellogg introduced GDA (Guideline Daily Amount) which allowed consumers to comprehend what amount of the recommended daily level of nutrients is in a serving of Kellogg's food. Working with a group of other major manufacturers these GDAs have been adopted by other manufacutrers and retailers too.
Supporting swimming programes - The company started working with the Amateur Swimming Association(ASA). Kellogg became the main sponsor of swimming in Britain. It also sponsored the ASA Awards Scheme with more awards presented to swimmers each year. This helped Kellogg contribute in a recognizable way to how individuals achieve an active healthy balanced lifestyle. This reinforces its brand position.
Promoting exercise - Working with the ASA helped Kellogg set up links with a number of other bodies. For example, Sustrans which is the UK's leading sustainable transport organization. It looks at the different ways in which individuals can meet their transport needs in a way that reduces environmental impact. It is the coordinator of National Cycle network. To meet it's business objective of encouraging and supporting physical activity Kellogg developed a promotion of a free Cyclometer.
Kellogg in the community - As a contribution towards community, in 1998 Kellogg invested to help national learning charity ContinYou to develop nationwide breakfast club initiatives.

Effective Communication is vital for any strategy to be successful. Kellogg's success was the result of efficient communication of it's objectives to consumers to help them consider how to 'Get the Balance Right' .

Conclusion

Kellogg is demonstrating good corporate responsibility by promoting the message whenever it can and by investing money in the appropriate activities. This was the broad aim. To achieve this aim, Kellogg set out measurable objectives followed by developing business strategies, that engaged Kellogg in a series of activities and relationships with other organizations. The key was not just to create a message about a balanced lifestyle for its consumers but also to set up activities that helped them achieve this lifestyle.

The Game Theory

noreply@blogger.com (Unknown) — Mon, 30 Apr 2007 02:31:00 +0000

What is Game Theory?

Game Theory is the Science of Interactions which was introduced by John Von Nweumann, the father of modern computer architecture, and economist Oscar Morgenstern. Game Theory is a mathematical tool used to anticipate possible scenarios and develop appropriate strategies to deal with them. For example , a basketball player on a winning streak changes the nature of play for the entire team; the opposition because it must devote its attention to guarding the star player, can no longer cover the whole court effectively. This is turn gives other members of the star player's team a better chance of becoming star themselves. In pure Game Theory, winning strategies involve learning to understand the mind-set and likely moves of key players, and then anticipating their impact as everyone else reacts. For businesspeople, an effective game theory - based strategy might mean examining all the players in an industry and teasing out how a move in any particular direction will affect everyone else.

The Game Theory to Business !

Barry Nalebuff, a Yale professor set out to reverse the trend of The Game Theory getting increasingly abstract and mathematical. Nalebuff instead of basing his conclusions on equations like others did rather used real experience so as to reconnect the game theory to the real world. Although it is a widely accepted approach now, extending game theory to business required an intellectual leap. For someone to succeed in poker, football, chess, or even submarine warfare, someone else has to lose. “In business, your success doesn’t require others to fail,” he says. The second reason is that there are no explicitly defined rules in business. Indeed, nothing defines the boundaries of a “game,” or even whether the same game is being played by all competitors. And that’s where both the peril and the potential lie. “In business, you can work incredibly hard and your efforts won’t be rewarded if you are playing the wrong game,” Nalebuff says. “But you also have the opportunity to change the game, rather than just play it. Success comes from playing the right game.”

Example of Game Theory !

Nalebuff takes up the example of Holland sweetener company as a case while teaching at Yale's School of Management. In the late 80's Holland sweetener was planning to take up on Monsanto's NutraSweet Business. As the latter's patent on aspartame, the sweetner in Diet Coke and Diet Pepsi, was set to expire in 92, Holland sweetener invested $50 million to build a plant and enter the aspartame business.

But Holland Sweetner played the wrong game. Coke and Pepsi took advantage of this newcomer to haggle with Monsanto to squeeze out a $200 million savings on NutraSweet. So, it's predictable that Coke and Pepsi never wanted to switch, they wanted to use Holland to get a lower price.

Game Theory suggests that Holland should have gotten paid for changing the game rather than playing the game. Nalebuff says “They should have said to Coke and Pepsi, ‘Before we build this plant, give us a contract. And if you are not willing to give us a contract now, why in the world would you be willing to give us a contract after we build the plant?’”

Holland sweetener also might have asked Coke and Pepsi to pay for the cost of the plant. Or even bargained for a percentage of the savings that the new plant would make possible. "They failed to see that they had a lousy product to sell in Aspartame, but they were a monopolist in selling competition" Nalebuff says. In short, selling competition - offering Coke and Pepsi new leverage in negotiating deals for its sweetener- was the game Holland sweetener should have been playing. Companies are too quick to give away competition. Competition is always valuable. When one takes on this activity, they know what's in it for others but one needs to understand that what's in it for them. One needs to be sure that they are going to be rewarded for changing the game.

About Holland sweetener, after the plant opened in 1980s, it lost so much money that the company's executives decided to exit the aspartame game. But as a last-ditch move, Holland sweetener went to Coke and Pepsi and threatened, 'Guys we are about to leave, unless you give us a contract'. So, although they didn't get payed to play, they got paid to stay.

A company must understand the nature of its leverage in order to understand how to play or change the game. Before it goes through the expense and time, it needs to discover in advance how much they value you. When you discover that they don't value you, you need to do something else. And when you discover that they do value you, then you can change the game to make sure you are going to get more of that business.

Lightly Sweetened Valuations

Honest Tea has been one company which emerged out of years of teaching Coke and Pepsi (Game Theory) to his student and realizing the dearth of not-too-sweet options in the market. Both literally and figuratively, Honest Tea puts Nalebuff’s theories on display. In other words, how can you get great taste without a lot of calories? Not by eliminating sugar, but by skimping on it. A little sugar adds taste (marginal utility), whereas a lot of sugar adds only calories (declining marginal utility). You will notice that we did not pick the point on the curve where the flavor was maximized,” Nalebuff says. “The reason was that by backing off the sweetness from there we lost very little in terms of flavor, while saving a good amount in terms of calories.” Honest Tea’s performance suggests that the theory holds water: The slightly sweet beverage is the number one brand in such premium chains as Whole Foods.

As with so much in Barry Nalebuff’s world, the question here is, What is the game? And how can you think about it a little bit differently — to give yourself the edge to win?