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    Reinventing Organizations

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    What is your organization doing to reinvent itself from a strategic marketing standpoint?

    MKT 421
    Week One Lecture
    A Regenerating Market Plan

    In a recent survey, nearly 80% of U. S. managers polled believed that quality would be a fundamental source of competitive advantage in the first decade of the twenty-first century. Yet, barely half of the Japanese managers predicted quality to be a source of advantage in this same time period, though 82% believed it was currently an important advantage. Rated first as a source of competitive advantage for this decade by Japanese managers was a capacity to create fundamentally new products and businesses. Does this mean that the Japanese managers are going to turn their back on quality? Of course not. It merely indicates that by the year 2010 quality will no longer be a competitive differentiator; it will simply be the price of market entry. These Japanese managers realize that tomorrow's competitive advantages must necessarily be different from today's?
    We come across far too many companies where top management's advantage-building agenda is still dominated by quality, time-to-market, and customer responsiveness. Although no one questions that such advantages are prerequisites for survival, to be still working on the advantages of the 1990's into the 2000's is hardly a testimony to management foresight. Though managers often try to make a virtue out of imitation, dressing it up in the fashionable colors of "adaptiveness," what they are adapting to all too often are the preemptive strategies of more imaginative competitors.
    Again, let us be clear. Catching up is necessary, but it's not going to turn an also-ran organization into a leader. Divisions of IBM, GM and Xerox have all won Baldridge awards for quality - an award for better, not different. Becoming smaller, better and faster are not enough. Think again about the laggards of the 1990's: Sears, TWA, United, American, Westinghouse, Sanyo, and Upjohn. Could Sears retake the high ground by getting even better at "bait-and -switch," convincing even more customers that they really wanted the $600 washing machine when they came in to buy the $300 model? Would it have helped Sears to become even more efficient to become an even more efficient and customer-focused catalog retailer (instead of killing off its encyclopedia catalog)? What if IBM created a lightning-fast mainframe development process, and won even more loyalty with central data-processing managers? The point is simple: It is not enough for a company to get smaller, better and faster as important as these tasks may be; a company must also be capable of fundamentally re-conceiving itself, of regenerating its core strategies, and of reinventing its industry. In short, a company must be capable of getting different.
    Just as some companies have gotten smaller faster than they've gotten better, others have gotten better without becoming much different. Consider Xerox. During the 1970s and 1980s Xerox surrendered a substantial amount of market share to Japanese competitors such as Canon and Sharp. Recognizing that it was on a slippery slide to oblivion, Xerox benchmarked it competitors and fundamentally reengineered its processes. By the early 1990s Xerox had become a textbook example of how to reduce costs, improve quality, and satisfy customers. But in all the talk of the new "American Samurai," two issues were overlooked. First, although Xerox succeeded in halting the erosion of its market share, it failed to recapture much share from the Japanese competitors. Canon still produces more copiers than any company in the world. Second, despite a pioneering role in laser printing, networking, icon-based computing, and the laptop computer, Xerox has failed to create any substantial new businesses outside its copier core. Although Xerox may have invented the office as we know it, it profited very little from its inventiveness. In fact, Xerox would have had to regenerate its core strategy and reinvent its very concept of self: its channels, manufacturing processes, customers, criteria for promoting managers, and metrics for measuring success, and so on. A company surrenders today's businesses when it gets smaller faster than it gets better. A company surrenders tomorrow's businesses when it gets better without getting different.
    It is entirely possible for a company to downsize and reengineer without ever confronting the need to regenerate its core strategy, without ever being forced to rethink the boundaries of its industry, without ever having to image what customers might want in ten years' time, and without ever having to fundamentally redefine its "served markets." Yet without such a fundamental reassessment, a company will be overtaken on the road to the future. Defending today's leadership is no substitute for creating tomorrow's leadership.
    I have met many managers who describe their companies as "market leaders." (With enough creativity in delimiting market boundaries, almost any company can claim to be a market leader.) But market leadership today certainly does not equal market leadership tomorrow. Think about these two sets of questions:

    Today 5 to 10 Years in the Future

    Which customers are you serving Which customers will you be serving
    today? in the future?
    Through what channels do you reach Through what channels will you reach
    customers today? customers in the future?
    Who are your competitors today? Who will be your competitors in the
    What is the basis for your competitive What will be the basis for your compet-
    advantage today? itive advantage in the future?
    Where do your margins come from Where will your margins come from in
    today? the future?
    What skills or capabilities make you What skills or capabilities will make
    unique today? you unique in the future?
    In what end product markets do you In what end product markets will you
    participate today? participate in the future?
    If senior executives don't have reasonably detailed answers to the "future" set of questions, and if the answers they do have are not substantially different from the "today" answers, there is little chance their companies will remain market leaders. Whatever market a company might dominate today, it is likely to change substantially over the next ten years. There is no such thing as "sustaining" leadership; it must be reinvented again and again.
    What is your organization doing to reinvent itself from a strategic marketing standpoint?

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    One of the ways to reinvent marketing is to build long term customer relationships. Although most companies have the most powerful technologies for understanding and interacting with their customers, they still depend on traditional ways of promotion and communication. They need to shift their focus into pushing individual products and building long term relationships with their employees. Gone are the days that ...

    Solution Summary

    How an organization has reinvented itself from a strategic marketing standpoint is determined. References are included in the solution.