A change in marketing logic is underway. The perception that markets are a place where goods are exchanged for money is being replaced with a more nuanced view of service as the fundamental basis of exchange and value as subjective, consisting of multiple dimensions, and realized only through use.
Why is this shift taking place? Has the world changed? Or has our understanding of the world improved? Why didn’t we think of this before?
Continue reading “The time is right for service-dominant logic”
For many companies, the traditional way to set prices has been some form of cost-plus pricing. In other words, they calculate their costs, slap on a margin, and there they have a price. However, this pricing scheme has come under increasing pressure as of late, and exploration is underway into other pricing schemes.
The most prized goal at the moment is often value-based pricing: determining the value the customer is able to create with the service and adjusting the price accordingly.
In this post, I will look into what value-based pricing is and how a more sophisticated understanding of what value is can help companies on their journey towards value-based pricing.
Continue reading “Value-based pricing and the four dimensions of value”
Companies are constantly looking for ways to be more effective and more focused. This places a major strain on the support functions, as they need to prove their worth in creating value for the business or face more and more cost-cutting measures and outsourcing. This has led practically all support functions to seek a deeper partnership status with the core business units. However, therein lies a problem: how many partners can the core business units have? Is it viable for all support functions to become business partners? If it isn’t, which ones of them can reach this level?
Continue reading “Can all support functions become strategic business partners?”
The world is changing at an ever increasing pace. This is the mantra that we are relentlessly exposed to, and there is a fair bit of data to back up that claim as well, so clearly there are some challenges for businesses that need to be met.
One of the latest attempts to address these challenges comes from John Kotter, famous for his 8-step process for leading change, who has adapted his change leadership process into a more agile version that he calls the “dual operating system” of the firm in his book Accelerate: Building Strategic Agility for a Faster-Moving World.
In this post, I will look into what the dual operating system is all about and how it compares to other paradigms that also attempt to meet the same challenges.
Continue reading “Reaching for enterprise agility with a dual operating system”
The world is changing at an increasing pace. There is even some evidence pointing to that, such as the 2012 Innosight study that discovered that the lifespans of top companies have shrunk considerably over the years.
What has been most alarming for many managers is that plenty of companies have not been able to rebound after the Great Recession. With the Great Recession as a convenient cover story for years, it has been easy to miss that some companies are able to succeed regardless, and all poor performance does not result from the recession. Yet, companies can suffer from poor performance even if they have not become any worse. How is that possible?
Continue reading “Times change, can your company change with them?”
LEGO has been interested in online gaming for a long time. It first ventured into online gaming in 2005, when it commissioned work on LEGO Universe (released in 2010, shut down in 2012), and it has two newer ventures into that space going on with LEGO Legends of Chima Online and LEGO Minifigures Online.
In this post, I will examine the story of LEGO Universe, look into what success in online gaming looks like, take a look at LEGO Minifigures Online, and consider potential niches for the LEGO brand in online gaming.
Continue reading “Why LEGO Universe failed and can Minifigures Online succeed?”
I have been looking for ways to make sense of product life cycles in environments where there are no real products as such, but in which offerings are instead tailored to customer needs. Yet, even in such environments, it is not profitable to always start from scratch, so a form of product management needs to exist, even if that management is more concerned with modules, technologies, and general applications than mass produced products.
So far, the only model I have found that seems adequate for the purpose is Geoffrey Moore’s category maturity life cycle, which he presents in his book Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution.
In this post, I will examine this model.
Continue reading “Moore’s category maturity life cycle and innovation types”
The internet is full of corporate vision, mission, and value statements. What all of these statements contain can be ennobling at best, and downright bland and meaningless at worst. What each part should include is also a mess: one company’s mission is akin to another’s vision. Often it is impossible to even tell two companies apart based on their visions and missions, and at worst it can even be impossible to figure out what business they are in, when the statements are sufficiently general.
In this post, I will examine some aspects of these statements and their roles in a world characterized by change and multiple cultures. I will also propose a framework that is internally coherent and brings these statements to a practical and usable level.
Continue reading “Vision, purpose, and manners – a framework for strategy and culture”
It is a rare firm where managers are not encouraged to seek “best practices” in order to improve operations. But how effective are best practices, really? Such ways to arrange activities might not make the firm quite as competitive as desired.
In this post, I will examine best practices from a resource-based and dynamic capabilities point of view, partially based on the insights provided by Lynda Gratton and Sumantra Ghoshal in their 2005 article, Beyond Best Practice.
Continue reading ““Best practices” are not the best practices”
Michael Porter’s influence on strategic management can hardly be overemphasized. While his work has come under increasing criticism, it remains vitally relevant. Porter has been able to answer much of the criticism, but the critics have also been able to spot some holes in Porter’s frameworks.
In this post, I will examine Porter’s main frameworks for strategic analysis, the five forces analysis (industry analysis) and value chain analysis (relative analysis), and point a way towards a “Porter plus” approach that uses Porter’s frameworks as a basis, but adjusts and augments them with crucial insights from others, notably on dynamic capabilities.
For a comprehensive view on Porter’s strategic thinking that spans a large number of books and articles, I recommend Joan Magretta’s Understanding Michael Porter: The Essential Guide to Competition and Strategy, which collects and updates Porter’s thinking up to 2011. It also points at some of the criticism directed at Porter, although perhaps not to the most important pieces.
Continue reading “A Porter plus approach to strategic analysis”