Strategies for declining businesses—Survival in the fur business

Traditional industries in the craft sector of economies have been declining. They are faced with significant shifts in the pattern of manufacturing and trade. This has created serious threats to the survival of traditional industry centres, and requires the development of new industry-wide strategies to adapt and successfully compete in the new environment. The focus of this study is on development of a framework for understanding the dynamics of industry decline. The framework is illustrated with data from the fur industry. Suggestions for industry-wide strategies which will be effective in facing competitive threats are made. Conclusions of this study are expected to be helpful to fur manufacturers, suppliers and fur marketers, but more importantly the study identifies a framework and approach that can be applied to other craft industries which face similar environmental conditions.     

The electronic ‘go-between service provider': a new ‘middle' role taking centre stage

While the full impact of the Internet on traditional business models and strategies is yet to be played out, one thing is already certain: it will irrevocably challenge the nature of the traditional middle role. A full spectrum of Internet-driven consequences — from disintermediation to cybermediation — has already been observed by numerous academics and practitioners. This article describes a different intermediary: the ‘go-between service provider,' who is increasingly challenging traditionalists benefiting from the new market and economic dynamics of our time. This paper, based on case studies and interviews as part of a long-term research project, presents a conceptual framework; lists critical success factors; and assesses the impact of all this on corporate thinking and practice.     

Local, regional, or global? Geographic orientation and relative financial performance of emerging market multinational enterprises

We extend the regional/global strategies literature by analyzing the relative performance of emerging market (EM) multinational enterprises (MNEs) based on their geographic orientation. We develop a framework showing that firms adopt three geographic orientations—local, regional, and global—and test our framework with the market penetration strategies (sales) of 701 MNEs from 28 EMs during 2000–2006. Our analysis shows that distinguishing among these three geographic segments is important, as not all of these geographic segments enhance firms’ financial performance relative to their industry: a combination of local and global orientations enhances while regional orientation reduces the relative financial performance of EM MNEs.     

Internationalizing managers: Speeding up the process

Most multinational companies agree that their managers need international expertise; but a recent survey surprisingly revealed that more than half of the large European corporations participating in the study lacked a strategy — either in writing or as a commonly articulated value — for internationalizing their managers (Price Waterhouse/Cranfield, 1991, p. 14). Not only must cutting-edge companies implement this process, but they have to find ways to speed it up to stay competitive.Brooklyn Derr and Gary Oddou report a 1991 survey conducted with 105 European multinationals employing an average of 30,000 workers each. The respondents, usually directors of human resource management and management development, identified the current strategies most frequently used to internationalize their firms, the importance assigned these strategies (not necessarily the same thing), and short-range trends. The article also explores the different challenges presented by attempting to internationalize senior managers as compared to junior managers.Expatriation/repatriation has been the traditional means of internationalizing managers, but companies are not doing a uniformly able job in preparing their managers for expatriation nor in taking advantage of their expertise after they return. In addition to making recommendations about expatriation/repatriation, the authors suggest newer, faster practices for internationalizing managers.     

Deciding manufacturing priorities: Flexibility, cost, quality and service

Traditional manufacturing planning focuses first on understanding the realities of the product marketplace and then aligning the production processes to match those realities. By conforming to that independent-market dependent-production model and simply implementing the determined tactics, manufacturing misses the opportunity to create competitive advantage by adopting a strategy that enhances the firm's position. To illustrate how manufacturing can incorporate strategic objectives into its planning, we add a third dimension to the traditional two-dimensional form of the product—process matrix. Along the new axis we show how four key competitive thrusts relate to the stages of the product—process life cycles. The thrusts of flexibility, cost, quality, and service are made explicit by plotting them, in turn, against the stages in the evolution of the product and the process. Each plot reveals new ways for manufacturing to plan for and realize competitive advantage through the application of computer-integrated manufacturing principles.     

Optimal pricing and production decisions in the presence of symmetrical and asymmetrical substitution

Firms may produce a variety of generally similar products or may practice “scientific pricing” or revenue management where the firm will offer similar or somewhat differentiated products in multiple market segments at different prices. Whenever generally similar products are available, the demand for the products is linked through the ability of the customer to substitute one product for another. One widely known type of demand substitution is referred to as inventory-driven substitution where a customer will substitute for a product that is out of stock by buying a similar product. A second type of substitution occurs as a response to price-differences when a customer substitutes a less expensive product for a similar higher priced product.     

CEO Incentives,Takeover Protection and Corporate Innovation

This study examines the effects of CEO equity‐based compensation and anti‐takeover provisions on corporate innovation. Using a large sample of US firms over the period 1996–2014, we find that long‐term incentives have a stronger influence on innovation when combined with takeover threats. We also show that equity‐based compensation is more likely to spur innovation for small firms and firms in industries with high product market competition and innovation pressure. However, this effect is somewhat weaker in the presence of anti‐takeover provisions, suggesting that takeover protection encourages managerial shirking even when external competition is high. Finally, in addition to the existing evidence on the valuation effect of CEO equity‐based compensation, we identify innovation as an important channel through which managerial incentives can enhance firm value. Our results have potential implications for shareholders, managers and policymakers.     

A new approach for understanding dominant design: The case of the ink-jet printer

We study dominant design strategies concerning the allocation of technological resources for ink-jet printers. We find that the dominant design for each firm can be quantitatively represented by the number of ink-jet patents in nine categories of a matrix that distinguishes patents according to method of implementation and type of module. Further, we find that annual firm ink-jet revenue from 1990 through 2000 is positively correlated with a balanced dispersion of patents across the nine categories. Results suggest that higher revenues will accrue to firms in integrated industries when resources are balanced among important sub-technologies in the dominant design.     

Strategizing in a digital world: Overcoming cognitive barriers,reconfiguring routines and introducing new organizational forms

As digital technologies such as cloud and edge computing, machine learning, advanced artificial intelligence (AI), and the internet of things (IoT) unfold, traditional industries such as telecoms, media, entertainment, and financial services are being reconfigured and new sectors are emerging. In this new competitive landscape we observe new organizational forms and new business models, including the emergence of platforms and multi-sided markets. This emergence has required a strategic response from incumbent firms, including both well-established firms and some first-generation digital enterprises. With these advances in digital technology, the very nature of strategy is changing. Fundamentally, the use of digital technologies may provide new opportunities for efficiency gains, customer intimacy, and innovation. However, without the right mindset for change, appropriate digital routines, and structural changes, digital transformation efforts will fail. We therefore present a framework for strategizing in this new digital competitive landscape that underscores the importance of the interplay between (1) the cognitive barriers faced by managers when trying to understand this new digital world and envision new digital business models, (2) a need to reconfigure and extend digital routines, and (3) new organizational forms that are better equipped to creating value and gaining competitive advantage. From this framework of essential pillars, we derive four journeys of digital transformation for companies that were formed in the pre-digital economy. We also describe the management roles required by top, middle, and frontline managers, depending on whether the digital migration is evolutionary or transformative and whether the firm is responding to or attempting to shape the ecosystem. Although digital transformation is technically all about technology, the more important issue is how companies make their way through this strange new digital world in which they find themselves. Ultimately digital transformation is as much about strategizing as it is about technology.     

A competitive multiple-product newsboy problem with partial product substitution

This paper studies a multi-product competitive newsboy problem with shortage penalty cost and partial product substitution. We characterize the unique Nash equilibrium of the competitive model and analyze some properties of the equilibrium. An iterative algorithm is developed on the basis of approximating the effective demand as well as the expected profit function for each product. Numerical experiments are conducted to illustrate the impacts of product substitution, demand correlation and demand variation on the optimal order quantities and the corresponding expected profits, and to compare the total optimal inventory level of the competitive case with that of the centralized case. The conclusion that competition always results in a higher total inventory level, even under the effect of product substitution is drawn in the symmetric case.     

Present positions and future prospects in management science

This paper offers some thoughts on the present state of management science as a discipline and a profession, and considers possible developmental strategies. The growth of management science, and the optimism this engendered, was largely premised on the successful use of scientific methodology and quantitative techniques to solve a relatively narrow range of management problems. In the 1970s, however, this positivist/quantitative ‘traditional management science’ became subject to increasing critical assault from those who wanted to broaden the impact of the discipline. Alternative management science approaches were born—soft systems thinking, organisational cybernetics, critical management science—and succeeded in establishing themselves. The existence of these alternative strands of work, alongside traditional management science, raises important questions about the future development of the discipline and profession. In this paper four developmental possibilities are set down and examined to see what future prospects they hold out for management science. It is argued that three of these—the isolationist, imperialist and pragmatist strategies—would lead the discipline into a dead end. A pluralist option, however, offers excellent opportunities for successful, future development.     

Internal knowledge generation: the research laboratory and innovative productivity in the pharmaceutical industry

As firms face increasing pressures associated with new forms of knowledge-based competition, researchers have begun to focus on knowledge acquisition strategies to the point of ignoring knowledge creation strategies. This paper investigates the impact of research centers in the pharmaceutical industry upon this neglected form of knowledge creation–innovation productivity. We find that firms with separate research facilities are more innovative than firms without such facilities. The results diverge when locational distance of the laboratory is considered for patent versus drug innovations, and vary across diversification types. These findings suggest that managers and researchers need to consider the relationship between the research center and corporate headquarters — and the role of the corporate headquarters — when developing knowledge generation strategies.     

EXPLORING THE LIMITS OF THE TECHNOLOGY S-CURVE. PART I: COMPONENT TECHNOLOGIES

The technology S-curve is a useful framework describing the substitution of new for old technologies at the industry level. In this paper I use information from the technological history of the disk drive industry to examine the usefulness of the S-curve framework for managers at the firm level in planning for new technology development. Because improvements in over-all disk drive product performance result from the interaction of improved component technologies and new architectural technologies, each of these must be monitored and managed. This paper focuses on component technology S-curves, and a subsequent paper, also published in this issue of the journal, examines architectural technology Scurves. Improvement in individual components followed S-curve patterns, but I show that the flattening of S-curves is a firm-specific, rather than uniform industry phenomenon. Lack of progress in conventional technologies may be the result, rather than the stimulus, of a forecast that the conventional technology is maturing, and some firms demonstrated the ability to wring far greater levels of performance from existing component technologies than other firms. Attacking entrant firms evidenced a distinct disadvantage versus incumbent firms in developing and using new component technologies. Firms pursuing aggressive Scurve switching strategies in component technology development gained no strategic advantage over firms whose strategies focused on extending the life of established component technologies.     

基于技术融合的企业研发勾结研究

随着技术融合的日益盛行,产业融合的趋势越来越显著,企业跨产业的合作屡见不鲜。这种技术融合推动下的新竞合动态,迫使企业重新思考创新战略:即,企业如何突破原有产业边界,通过跨技术领域的合作创新,来降低成本、增加产量、提高企业利润、增进社会福利。因此,本文针对目前企业采用最频繁的合作创新模式--研发勾结(R&D Cartelization),在D'Aspremont二阶段模型的基础上,通过构建相应的博弈模型,研究了不同的产品替代系数、技术溢出系数以及创新系数对合作企业均衡成本、均衡研发投资、均衡产量和均衡利润的影响,并进行了相关案例分析。     

Evolution of strategic management: The need for new dominant designs

The development of strategic management is explained from an evolutionary perspective on the basis of cycles of variation, selection and retention. In industry, breakthrough innovations, or technological discontinuities, initiate eras of ferment that end when a generally accepted standard, or dominant design, starts an era of incremental change. In strategic management, the original definition of strategy initiated an era of ferment characterized by a focus on the environment. The attention to the environment of firms and the integration with other areas of inquiry reached a point of maturity with development of a widely accepted model for analyzing industry and with the definition of generic strategies. The resource-based view of the firm created a new era of ferment by affirming that the main sources of sustainable competitive advantages reside in the development and use of valuable resources. A new period, marked by swift advances in technology and increasingly blurred boundaries among industries, markets and competitors as well as diverse and more complex sources of competitive advantages, imposes on scholars and practitioners an imperative need to conceive new dominant designs. This paper illustrates the evolution toward new directions and challenges of creating new dominant paradigms in strategic management that revolve around the concepts of knowledge, learning, and innovation.     

CLOCKSPEED‐BASED STRATEGIES FOR SUPPLY CHAIN DESIGN1

This paper discusses a framework for strategic supply chain design that rests on an assortment of conceptual approaches. These approaches include benchmarking fast‐evolving industries to posit principles of supply chain dynamics and integrating supply chain design into the concurrent processes of product and manufacturing system design. These approaches yield insights into sourcing strategy as well as implementation of concurrent engineering.     

Guided product idea generation

This article describes a successful method for getting many good product ideas during a short period of time, which was developed by the patent broker New Products NordInvent (NP) to be used instead of the normal method of spontaneous idea generation. The article is based on a project ‘Swede Innovation '81’ in which 12 large Swedish companies formulated 64 search profiles and asked all Swedish inventors to invent new products with this guide. NP formulated the original model—which has advantages for the companies, the patent broker and the inventors—and carried through the project on commission from these companies. Out of 2710 product idea contributions sent for evaluation, about ten products will go into production. This figure could have been higher if the companies had been better prepared to receive new products and had had a better knowledge of managing innovations.     

Globalisation, International Configurations and Strategic Implications: The Case of Retailing

In contrast to the old debate between national and more globally orientated strategies, recent typologies, as outlined by Calori and others in a recent issue of this journal, have begun to uncover subtler international strategies applicable to less patently global industries. This article investigates whether such typologies can be adapted to a service sector such as retailing and analyses performance differences across the whole set of these new categorisations, segregating some of the main sectors. Focusing on clothing where scale economies were lower, we present a case study demonstrating how this approach can still yield strategic insights and recommendations at an early stage in internationalisation, even for players located in more peripheral locations such as Norway. We confirm ‘continental leadership’ strategies (under consideration) can be associated with slightly better profitability for retailers more generally; but we warn that this is riskier for clothing retailers, for whom market share emerges as a less critical driver. The most profitable retail strategy configuration is the bold ‘global shaper’ strategy. However, taking into account the case company’s resource position within the clothing sector, our approach recommends consideration of the ‘quasi-global’ strategic configuration, associated with an improvement of just under 2% return on investment. This perspective also aids ‘strategic benchmarking’ (illustrated against high performers H&M and Zara), setting an agenda for operational improvements.     

The unending embrace: Raymond Vernon, multinational enterprises, and national governments

In this article commemorating Raymond Vernon, I make no attempt to summarize his expansive work on the nature and prospects of multinational enterprises (MNEs). Rather, I discuss three forces — rivalry, uncertainty, and time — that Vernon accentuated in his explanations of the behavior of MNEs. I then make brief observations about Vernon and methodology. Subsequently, I speculate on the following question: A hundred years from now, what single idea will Vernon be remembered for? Acknowledging the product cycle as a leading contender, I nominate and discuss (under the moniker “the unending embrace”) another candidate, one that dwells on the undulating tension between MNEs and governments. I conclude by flagging for future research some questions that that central idea raises.