The Applicability of Porter’s Generic Strategies in the Digital Age: Assumptions, Conjectures, and Suggestions

Because current management theories evolved in the context of brick-and-mortar firms, this paper examines three key questions raised by the advent of e-business: (1) Will the strategy types found among e-business firms resemble Porter’s (1980) generic strategies? (2) Will we find performance differences among e-business firms pursuing different types of strategies? (3) Will we find differences in the strategy-performance relationships of pure online firms (pure plays) and firms with both online and offline operations (clicks-and-bricks)? We conclude that integrated strategies that combine elements of cost leadership and differentiation will outperform cost leadership or differentiation strategies. We also argue that, regardless of business strategy type, clicks-and-bricks firms that closely integrate their on- and offline operations will enjoy performance advantages over their pure play counterparts.     

Rethinking Marketing Programs for Emerging Markets

This article points to a fundamental inconsistency in the emerging market strategies of multinational firms. On the one hand, they seek billions of new consumers in the emerging markets of China, India, Indonesia, and Latin America—on the other, their marketing programs are scarcely adapted for these markets. The result is low market penetration, disappointing market shares and poor profitability. These multinationals are trapped by their own devices in gilded cages, serving the affluent few but ignoring the potential of the billions of new consumers that attracted them in the first place. In this article we propose that, in order to attract billions of new consumers, the marketing programs of multinationals need to be rethought from the ground up. We identify three key factors that characterize emerging markets: (1) low incomes, (2) variability in consumers and infrastructure, and (3) the relative cheapness of labor, which is often substituted for capital. We draw on numerous case studies from around the world to illustrate how to incorporate these realities into marketing programs. We conclude with a discussion of the implications of such an approach for the multinational’s core strategic assumptions.     

Knowledge Management Systems in Multinational Corporations: Typology and Transitional Dynamics

Knowledge Management Systems (KMSs) are becoming part of the agenda in many of today's leading firms. Through in-depth case studies of seven multinational companies (MNCs), examined over a period of four years, we identify four distinctive types of KMS - Fragmented, Content-based, Process-based and Capability-based - and their characteristics. These characteristics include both the structure, dimension and flow of the knowledge itself, and the staffing, training and reward systems in place to support the KMS. Relevant organisational factors influencing KMS design and implementation include the level of resource commitment by the headquarters, the structure of the firm, and the distribution of roles between headquarters and subsidiaries. Key external influences include the degree of environmental change and pressures to follow industry norms in technology investment. Our empirical evidence suggests that while some MNCs adopt the same type of KMS for relatively long periods of time, others transit between different KMS types. Moreover, transitions between types may follow either an increased resource commitment and augmented KMS sophistication, or a decreased resource commitment and reduced KMS complexity. Insights from the strategy-structure-process and change management literatures are utilised to examine these transitions between KMS types. Key lessons for MNC managers are provided in relation to both the initial adoption of a KMS and the handling of transitions between different systems.