Recently I have come across many (not saying a lot) articles and heard people complaining about loosing out on deals and business in general due to a fact that someone has ‘stolen their industry’ or ‘their business model’. It seems that people are looking more for the ones to be blamed forgetting that also at the time when they started their businesses probably someone felt the same about them. But the purpose of this blog is not to justify anyone, just to impose probably retorical question – do you really think that once you have your business running, you own something more than profits earned (apart from assets)? The short answer would be – ‘No’.
Corporate strategy can be described as a formula that can be used to prepare a medicine. From my point of view this is how corporate strategies should be viewed and understood. Medicine, the outcome, should not be the one from past but the one from future. Attention should be paid on things that actually make strategy – decisions, abilities and goals, as these will be the key elements. Not all of the elements that initially are drown from surveys and other intelligent sources to build up strategy will be useful as corporate strategy must be executable by the company and should be in line with core competence of the company. It means that much attention should be paid to resources and knowledge that is already inside the company not forgetting that business environment is continuously changing. I would agree with opinion of Ram Charan (one of the authors of Forbes magazine) that there are two successful ways how to build your corporate strategy – outside in and future back thinking approaches. Outside In thinking means looking at the business through the lens of a leader sitting elsewhere and identifying global trends without the existing assumptions, biases and rules of thumb. Future-Back requires you to extend your time horizon as you assess the world and imagine what the competitive landscape will be some twenty years out. This longer time frame will help you see what trends are enduring, or unstoppable. Continue reading ““Successful corporate strategies need to be based on simple, measurable rules””
In order to have a competitive advantage company should have assets, knowledge and to identify its specific core competences. By applying corporate strategy company should be able to outperform others on a financial basis – it means having competitive advantage and thus being able to perform better than others. Even though core competence of the company is usually slowly changing over time if ever changing, for example, Kodak disability to change its core competence, corporate strategy should not remain the same for long.
According to The Guarding a federal judge has approved Kodak’s plan to emerge from bankruptcy protection. It seems interesting that company once so notorious in film and photo printing business has hit the bottom so harsh – but I suppose this is the price to pay for everyone who’s core competencies loses value in today’s world of business and who is over confidential to change. Continue reading “Turnaround that almost cost bankrupcy”
In highly competitive markets core competence is the central concept for corporate strategy. Core competences means particular skill or competence of a company that is fundamental to its business success, for example, McDonald’s probably has a skill in real estate management that allows company to locate their restaurants in the most densely populated areas. Or Lattelecom probably has a core competence in financing and monetizing infrastructure that leads to sustainable competitive advantage.
Recently I have come across many misuses or avoidance of using financial analyses in corporate governance by some CEOs or pretty large companies in Latvia. Each time I try to understand the point of a person that is avoiding financial analyses as some kind of ‘disease’. It turns out that arguments usually are more or less the same. Summarizing main arguments against using financial analyses or even using some KPI are that it is expensive or it takes much time. By such reasoning obvious it is easy to relay on data received from accountant rather than calculating KPIs. As I do not agree to such reasoning I give few arguments for using financial analyses.
Simple financial analyses can be done using pencil and paper or in more ‘sophisticated way’ by using excel spread sheet. In times of start-up businesses when new projects and creative ideas tend to get born each day it would not be wise to employ expensive tools however it is more than important to use financial analyses and see perspectives. It is more expensive not to use financial analyses for day to day business than using it. Continue reading “Myth about costs and time consumption of financial analyses”
Recently term ‘social sales’ have come to a spotlight. This week LinkedIn and HootSuite organized a webinar on the subject which was really easy to follow on HootSuite and twitter as well under hash tag #salesissocial.
What is a social sale? Social sale can be defined as a sales where sales person is informed about the person it is trying to sell to and tries to deliver a custom-fit solution, product or service for him or her. Social changes the sales games – allows us to customize the information we are delivering! Continue reading “Social sales – extend your reach”
US financial markets largely closed the last few days. It seems to be unprecedented case in history. It seems that large part of the world has stopped for few days. Continue reading “New York ground to a halt – Force Majeure in action”
Last couple of days I had a chance to be present at several events that tend to address some of the issues that are present in Latvia. For example, migration of people to other countries, level of education and is Latvia an attractive place to live. Yesterday Paul Krugman posted in The New York Times Opinion pages his conclusions based on real GDP growth and unemployment rate of Latvia. Continue reading “Success story of Latvia?”
Students of Stockholm School of Economics in Riga – leading business school in the Baltic/Nordic region, has donated income from a project developed during studies to animal shelter “Labās mājas”. Project aim was to develop a new brand – Ko?Nu, and to sell it to a specified product target group. Money donated will be used to buy new beds for dogs. Continue reading “Dogs will have new beds thanks to donations of studens”