Year three- Fema introduced. No R&D d. 321000 market research indicated it was a good sector. Fema emerged to revive the groups flagging market share. Efforts to develop a wider range have succeeded? Consumers found it chock-full of fancy electronics they did not want and thus overpriced; a cheaper m basic version is now being rushed out. Lack of understanding market segment. In year two, Um and small both increased, Lm decreased. But our lower medium did best that year!
Despite market research suggesting a fall in the industry was due in year by …% still saw a rise on market share. The market did actually decrease as market research suggested- small by 9.3%, lm by 6, um by 5.9%. Untouched by this change as far as we can tell. If we made more we might of only sold just a few more and been left with sock. Told us of shrink in industry so made less of all existing models in anticipation. All sold out but Aziz. Price ideas- raising prices is likely to remain tough even as the world economy rebounds managers setting prices- spent les than 0% of their time on setting prices. Raising prices by 1% can boost profits up by four times as much as a 1% cut in overhead and fixed costs.
Car cos- how they do it. Stealth increases. Charging extra for features, instead of standard. Offer huge menu of margin enhancing financing schemes, Give your customer plenty of choice and they will struggle to find the deal with the cheapest price. What we knew the market costs were, our own knowledge and also sheet. Set price according to what we thought people wanted. How much they would be prepared to pay. Didn’t really use sheet estimates as we didn’t know for what type of business they were talking about e.g. low cost, high market share or innovative like us? So didn’t worry that our prices looked to be more- we are a different sort of company offering consumers new ideals. Due to this our margins varied greatly. Could’ve looked more at margins.
Prices up n year two to cover costs of adding extra features. Cubix and Aziz up by 1000, Only 3400 for Sleek. Still wanted to keep it relatively low cost due to the market we were selling too. Also added most options to this one that year, compared to rest. Margin decreased. Experimented with Aziz price. Sleek generally up, cubix, up. Fema up, BFG, up. Aziz started high, did best when we cut price, kept it it and market share went up again. Then put it up slightly and market share fell. Avoided groupthink through diversity of membership but do suffer from one or two of the symptoms; self-censorship e.g. me saying loan no none else agreeing but didn’t say. Illusion of superiority- outsiders equal. Especially as we knew of many new entrants.
“Because all resources depreciate, an effective corporate strategy requires continual investment in order to maintain and build valuable resources.” “In corporations with a traditional divisional structure investment in the corporations resources often takes a backseat to optimising divisional profit” “Good corporate strategy requires continual reassessment of the companies scope” “Sharp eye on the dynamic industry context and competition situation” “When you arrive at a procedure that has involved everybody and taken their views into account, the chances are that the procedure is going to work”.
“Management as taken the time to develop systems which are geared to the future, not just catering for today” “discuss, debate, and argue” “Create new knowledge, disseminate I widely throughout the organisation and quickly embody it in new technologies and products- define a knowledge creating company, whose sole aim is continuous innovation” “The essence of innovation is to re-create the world according to a particular vision or ideal” “Making tacit knowledge explicit has direct implication for how a company design its organization and defines management roles and responsibilities”.
“Team is divided into competing group that develop different approaches to the same project and then argue over the ads and is of their proposals. This encourage the team to look at a project forma n variety of perspectives” “Under guidance of a team leader a team eventually develops a common understanding of the ‘best’ approach” Ability to create/look objectively/implement concepts Rotation between departments “Helps employees understand the business form a multiplicity of perspectives”. More fluid knowledge flow. R&D failed but made decision to continue trying- “to stop the project would mean giving up on the companies dream of revolutionizing” driving etc. “continuing the project reinforced the individual commitment of the team members to that mission and the organisation”.
“Conflict pushes employees to question existing premises and make sense of their experience in a new way” “Innovative companies are lead by innovative leaders” “Innovative companies have lots of experiments going on all the time” Encourages risk taking, as people don’t think they will succeed every time. 4 key inputs in order to foster creative activity: Champion who believes new ideas is critical Sponsor who is high up enough to marshal its resources Mix of bright, creative minds Process that moves ideas through quickly Innovative company- people important – ideas come form people not machines To innovate- improve/expand on what’s already there Make mistakes because of a lack of resources, not overspending on developing an innovation. Stretch resources to finance too many projects at once.
Hurry to get new product on market and neglect launch considerations. Manager- safe hands, steer through a crisis. Meet targets for improving/introducing etc. Teething problems, still not got it quite right as inconsistent results show but making profit. Too cautious? Under produced year on year. Will upset customers. Bad at sales foresting. If you don’t gamble you can loose! Hardly 0-60 in 30 seconds but.. Avoided shrinking luxury market. Haven’t decided on objectives.
Unnecessary loan in year… FUNCTIONAL INTEGRATION- how did we ensure it all worked together All aware of every department. All had a say. Quote- all working together bound to be better here. Automation and workers looked at together, not in isolation. Considered how one would affect the other. ADDING VALUE, VALUE CHAIN- customer value chain (automation leads to better quality products so why didn’t we use it?) Raising value of outputs delivered to customers Or lowering costs of inputs. We increased sales route.
Value chain: inbound logistics- receiving goods, storing etc Ops- procedures; Under produced Outbound; distribution. Infrastructure- planning and control. Hr- highly motivated staff- hard for competitors to copy. Guest here. Did we exploit the relevant resources of Ipc when compared with competitors? Auto etc. Does it? Doing r & d adds value to the model your developing it on. COMPETITVE ADVANTAGE Chosen area of activity should be related to the competitive advantage of the organisation. P 437 P 280 “Innovation likely to deliver a real breakthrough in ca that others will have difficulty matching for a lengthy time” Ahead of game, started r and d early. “Retention, exploitation and sharing if knowledge are extremely important to stay ahead of rivals” p287 knowledge company.
Technology can lead to competitive advantage. We didn’t do this. P 564-568 Porter Generic Cost leadership, differentiate, and focus. First two lead to ca. Ca and broad scope= differentiate. Therefore can charge a higher than average price. Market segment improved. Differentiation- better service, more luxury materials and better performance. Also good for brand recognition. But do customers recover the extra costs differentiation incurs. Costs associated with being the first e.g. spent ï¿½ on to find it didn’t work. Could’ve waited for others to do it then not bothered.