Last month we discussed the fall of one of the most respected brands in the style/fashion industry – Gucci – in the mid-1970s. Our aim in these classic strategy stories is to bring to life the other articles in this series over the last fifteen months. We chronicled Gucci family struggles and intrigue as the founder’s sons tried several strategies to turn the company around after some disastrous strategic moves.
Offerings
The Fall and Rise of Gucci Part 1
This article and some others for the rest of the year will provide some quintessential company examples of putting the elements into practice. There is no better place to start than with the Fall and Rise of Gucci. Gucci is the firm that embodied high fashion and inspired design of leather goods and accessories and almost went bankrupt not heeding some of the key principles highlighted in this article series.
Thinking You Can Do Anything: The Case Of Masco Corporation
In 1986 Masco Corporation was considering a $1.5 billion move into the furniture manufacturing industry in the United States. Prior to this, the company had re-invented the faucet industry. Its portfolio included kitchen and bathroom cabinets, locks and building hardware and many other household products. These were “sleepy” industries before Masco entered, and Masco shook them up by “professionalizing” them and it extracted nice growth and profits.
The Story of Keen Footwear: Dynamic Capabilities – Part 2
Recall from Part 1 last month there are eight skills that are required for Dynamic Capabilities. Keen Footwear embodies all of them and in May 2003 started perfecting them like almost no other firm had done before. It is a fascinating story of how inexpensive shoe design tools and part time designers, offshore factories, and free buzz marketing helped Keen go from idea to a $30 million hit virtually overnight. I will paraphrase from an article in Business 2.0 Magazine by Michael Copeland and present my own research into Keen.
Dynamic Capabilities – A New Approach to Strategy – Part 1
Up to now, the strategy field has provided many valuable tools, frameworks, and knowledge. The emphasis for the current tools and frameworks is around “positioning”. I have discussed many aspects of positioning over the last twenty-two months. Positioning seeks to have a firm develop a great strategy and business model and then “defend” that position. Defending comes from marketing your current offerings and brand frequently to keep you visible to current customers.
Innovation: The Hot American Business Topic – Part 2
In the last article, I built the case for why your firm should think about whether the innovation revolution that is sweeping publically traded companies would be right for it. In Part 2 I want to give you a glimpse of some of the “secrets” to innovation some leading firms are using. There are many approaches being used but I like the approaches by IDEO, Strategos and Booz and Company the best.
World Class Strategy Execution – World Class Headaches – Part 2
In Part 1 of this article, I hopefully gave you justification to consider why world class strategy execution is vitally important and how it can help grow the market value of your firm. In Part 2, I will give you a glimpse of what some leading firms do to practice world class strategy execution. Let’s consider first though the disaster in strategy execution at Encyclopedia Britannica (EB) that unfolded from 1983 until it was sold in 1996.
World Class Strategy Execution – World Class Headaches – Part 1
Firms like Canon USA, Hilton, BMW, Tata Motors, Merck, Infosys, UPS, GTE, Lockheed Martin, Duke Children’s Hospital and Mobil are some of the leaders in trying to grow their firm’s value primarily through world class strategy execution. They all feel that while strategy formulation is important, strategy execution is the key element in growing a firm’s value.
Innovation: The Hot American Business Topic – Part 1
Innovation is at the top of the agenda of nearly every mid-sized and large publically traded American company. Here is a quick quiz: What is your firm’s percentage of each year’s revenue that comes from totally new products and services? If the answer is not at least 15-20%, your firm does not compare with the leading firms in the Global Innovation 1000, as measured by the consulting firm Booz and Company. Why do you need to care about innovation?
Your Firm’s Competitive Strategy: The Cornerstone for Firm Valuation
An organization’s competitive strategy is not just a description of its current products and services . Your current offerings help describe your current identity, but I hope to convince you that something much more is needed to describe your competitive strategy. Why is this important? A robust competitive strategy is the foundation point from which to grow the value of your firm, which is the central issue in this series of articles.
A New Series What Really Grows the Valuation of Your Firm
This article is a first in a new series that will discuss what the key dilemmas and opportunities are that face American business and CEOs trying to grow shareholder wealth. How do these issues compare to the issues for the mostly private, family businesses in our region of Northwest Louisiana? The series will help answer the question – what really grows the valuation of firms and a corollary.
Laws of Business Strategy Part 2
Does your sales force (I am not picking on them) almost always say “If we just offered this version of our product, or if we added more “bells and whistles”, more customers would buy it? Operations and production folks usually hate to hear this because they know it almost always increases the firm’s costs. If you add up the number of these kinds of “bolt ons” over say ten years, you could end up with a serious complexity problem. What is the problem? Figure 1 shows complexity affects both costs and revenues negatively.