R R&D applying and testing ideas 310–11 big data analysis 316–17 and differentiation strategy 181–82, 183 and market research 310–11 multidisciplinary aspect 311 reinvesting profits 301 see also innovation Ratners 238 Reeves, Rosser 29, 31 risk management 40–41, 157 bankruptcy, protection against 141–42 black swan events and future forecasting 198 capability maturity model 218–19 contingency planning 210 diversification 257 employees, and firm failures 142–43 equity and performance 142–43, 156–57 executives and CEOs 143–44 feedback, relevance of 109 and financial crises 151, 154 financial risk and other people’s money 140–45 and income inequality 145 and learning organization 207 leverage and debt levels 150–51 micropreneurism 63 off-balance-sheet risk 154 organizational culture see organizational culture pre-pack administration 141–42 return on equity (ROE), maximizing 155 sales forecasting 278–79 scenario planning 211 shareholders 140–41, 144, 145 start-ups 20–21, 41 taxpayer bailouts and too-big-to-fail firms 144–45 unconsolidated subsidiaries 154 see also complacency avoidance; strategic management organizational culture (cont) risk management see risk management Shamrock Organization theory 77 tolerant 74–75 visual aspects 108 see also equity and performance; leadership; management; shareholders P Paccar 215 Page, Larry 174 Pears soap 273 performance, and equity see equity and performance Peters, Tom 55, 221, 298, 307, 338 Pixar 83 Ponzi schemes 153 Porter, Michael 180–82, 184, 197, 212–15, 218–19 Post-it Notes 42, 165 Prahalad, C. K. 171, 256, 338 price-fixing, and competitiveness 222–23, 239 Primark 136–37 Procter and Gamble 38–39, 72–73, 89, 233, 260, 273 production Business Process Reengineering (BPR) programs 308–09 cash cow and product assessment 252–55 custom production 298 direct-selling 298–99 distribution system 239 growth-share matrix and product portfolio 253–55 improvement and innovation 296–99 lean production 290–93, 307–08 mass production 297–98 new features, promotion of 325 production (cont) planned obsolescence 324–25 process simplification 296–99 product quality and customer loyalty 265–67 product superiority and technological change 36, 37–38 quality products and design 320–23 simultaneous engineering 326–27 time-based management 326–27 see also waste reduction profit levels and business ethics 122–23 multinationals and profit shifting 222 price-fixing and competitiveness 222–23, 239 pushing to highest feasible point 121 quality and premium prices 266–67 reinvesting profits 301 shareholders and profit maximization 124–25, 237–38 stock management 294–95 versus cash flow 152–53 see also financial strategy Progressive Corp. 316–17 Q quality circles and teamwork 305–06, 308 and premium prices 266–67 product quality and customer loyalty 265–67 product superiority and technological change 36, 37–38 products and design 320–23 products and value analysis 323 provision and customer service 322–23 Total Quality Management 56 INDEX 349
Rockefeller, J. D. 164–65, 222 Roddick, Anita 262, 263 Rover 307–08 Royal Bank of Scotland 74, 127, 144 Royal Dutch Shell 211 Rumelt, Richard 184, 185 Ryan, Arthur 137 Ryanair 182–83 S Samsung 31, 38, 51, 56–57, 321–22, 325 Selfridges 265–66, 267 Semco 137 Senge, Peter 204–05, 206, 207 Shamrock Organization theory 77 see also organizational culture shareholders boom and bust markets 146–47 bull market 121, 146–47 and corporate accountability 130–31 customer priority, importance of 238 dividends 126–27 herd instinct, ignoring 146–49 pressure and partnership development, start-ups 60–61 private limited companies 125 and profit maximization 124–25, 237–38 public limited companies 191 risk management 140–41, 144, 145 share buybacks 155 share certificates, first 127 see also equity and performance; financial strategy; organizational culture Shingo, Shigeo 291–92 Siemens 62, 95–96 Singapore Airlines (SIA) 183 Slim Helú, Carlos 338–39 Sloan, Alfred 339 Smith, Adam 124, 180, 218, 219 Snapple 23 social media and crisis management 188 crowdsourcing 313 social media (cont) websites 54, 57 word-of-mouth marketing 274–75 see also Internet business; technological change Sony 168, 307, 311, 337 Speedo 27 Spotify 61 Starbucks 262 start-ups bureaucracy and red tape 60 business expansion 43–45 business plan 21 commitment of time and effort 62–63 competitive advantage see competitive advantage crisis of control 60 focus strategy 182 growth crises and Greiner Curve 58–59 Long Tail benefits 209 micropreneurism 63 new entrants, strategic planning threat to 214–15 opportunism, and luck 42 risk management 20–21, 41 self-financeable growth rate (SFG) 44–45 shareholder pressure and partnership development 60–61 see also entrepreneurship Stevens, Brooks 339 strategic planning 184–85 Ansoff’s matrix 256–57 buyer power 214 chaos theory 220–21 and consumer choice 180, 181 core business protection 170–71 cost-leadership strategy 180–83 crisis management 188–89 critical path analysis 328–29 differentiation strategy 181–82, 183 Five Strategic Forces model 212–15 focus strategy 180, 182 industry positioning 215 MABA (market attractiveness/ business attractiveness) framework 192–93 new entrants, threat to 214–15 outsourcing 171 strategic planning (cont) secondary interests, selling off 171 statements and actions, differences between 198–99 strategic inflection point 196–97, 200–01 substitutes, threat of 214 supplier power 214 takeover bids 148 see also business adaptation and growth; competitive advantage; complacency avoidance; financial strategy; risk management Superdry 30, 45, 122 sustainability 31, 45, 50–51, 57 see also business adaptation and growth Swiss Pocket Knife 200 SWOT analysis 25–27, 184 T T-systems International 125 Tata Group 108, 131, 308 Taylor, Frederick Winslow 159 teamwork and anomie 70, 71 Belbin Team Inventory 82, 84 benefits 82 collaboration and creativity, encouragement of 71, 206–07 collective work products 85 effectiveness factors 83–84 group dynamics (groupthink) 114, 115 groups and sense of belonging 70–71 and learning organization 205 quality circles 305–06, 308 storming and norming 82–83 talent management 84–85 time-based management 326–27 see also leadership; management technological change Apple see Apple business adaptation, importance of 54–55 350
351 technological change (cont) information technology (IT) 314–17 marketing and technological advantage 167–68 and product superiority 36, 37–38 see also Internet business; social media Ted Baker 227 terrorism, impact of 200 Tesco 165, 181, 257 TiVo 317 Toffler, Alvin 54, 339 Total Quality Management 56 Toyota 44, 108, 135, 155, 169, 189, 199, 290–93, 304–06 Toys R Us 37, 147–48 Tune Hotels 21, 29, 293 TWG Tea 27 Twitter 22, 54 U UK bank bailouts 122 pre-pack administration 141–42 UN, Brundtland Report 269 Unique Selling Proposition (USP) 29, 31 US family spending pattern 135–36 Generally Accepted Accounting Principles (GAAP) 122, 123 V value analysis kaizen and efficiency improvement 304–06 and lean production 290–93, 307–08 and quality products 323 value chain and competitive advantage 216–19 Victorinox 200 vision brand creation 261–62 broadening and realization 43, 50 crisis management 188–89 and leadership see leadership shared, and learning organization 204–05 Volkswagen 301, 324 W Wal-Mart 265, 279 Wang, Cher 339 waste reduction and competitiveness 301 Juran’s production ideal 300–01, 336 lean production 290–93, 307–08 see also production Wedgwood 308 Welch, Jack 69, 75, 190, 191, 206, 216 Wikipedia 313 Wonga.com and payday loans 123 XYZ Xerox 331 Yang Yuanqing 339 Zappos 267 Zara 283 Zhang Xin 339 Zhang Yin 47 Zurich Insurance Group 322–23
ACKNOWLEDGMENTS Dorling Kindersley would like to thank Chris Westhorp for proofreading; Margaret McCormack for the index; Harish Aggarwal for jacket design; Alex Lloyd and Ankita Mukherjee for design assistance; and Alexandra Beeden, Henry Fry, and Miezan van Zyl for editorial assistance. PICTURE CREDITS The publisher would like to thank the following for their kind permission to reproduce their photographs: (Key: a-above; b-below/bottom; c-center; f-far; l-left; r-right; t-top) 21 Getty Images: Bloomberg (bl). 27 Getty Images: Al Bello (tl). 30 Getty Images: Bloomberg (bl). 35 Alamy Images: DPA Picture Alliance (tl). 36 Corbis: Bettmann (tl). 38 Corbis: Lucidio Studio Inc. (bl). 39 Corbis: Karen Moskowitz (bl). 41 Alamy Images: Everett Collection Historical (bl). 43 Alamy Images: Ashway (br). 45 NASA: JPLCaltech (tr). 47 Getty Images: MN Chan (bl). 50 Corbis: Jenny Lewis (bl). 56 Alamy Images: Eddie Linssen (bl). 57 Corbis: Bettmann (tr). 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