After an exhausting 700+ case studies at business school it’s a wonder that anyone would remember one as standing out, but for me it was the FedEx case study.  The case follows Fred Smith’s creation of the iconic company, an idea he formulated as a student at Yale where he …

In the world today where business results are tabulated in real time, the only constant we can count on is change.  When Dorothy, in the Wizard of Oz, proclaimed, “Toto…I don’t think we’re in Kansas anymore,” she could have very well been talking about business today as the landscape continues …

It’s often the way that a business is created by the brilliance of a single person.  Edison, Pfizer, Ford, Marconi, Jobs, Gates etc. all created businesses based on a single idea.  In this traditional view of affairs, the focus of most managers is on execution and efficiency, muting the need …

Working hard for something you don’t care about is called “Stress”.   Working hard for something you do care about is called “Passion”.[1]   Tapping into that passion has a lot to do with how you develop and execute your strategy.  It’s called “pushing strategy into the organization” and it works because …

Balancing a portfolio strategy with a segmentation strategy is the core of any business strategy and like Goldilocks – you need to get it “just right”.  Segment the market too coarsely, offering too few product choices and watch your market share go as cold as mama bear's porridge as customers …

Cleveland, Ohio is ground zero for a region called the Rust Belt.   This area is known for its steel and manufacturing production that once dominated the American landscape.   Many of these businesses have long since disappeared as manufacturing jobs have emigrated to other centres of cheap labour.   In the midst …

Jose Mourinho was one of Europe’s most successful football (soccer) coaches.   After starting his career in Porto and Lisbon and winning Portuguese league titles he moved to Barcelona enjoying more success.  The English football club, Chelsea, came calling in 2004 and in his inaugural campaign Mourinho brought Chelsea their first …

A key factor in crafting a new strategic direction is to ensure that the vision and objectives of the strategy are communicated throughout the company.   Failure to do so almost always results in mass confusion.   A case in point is the Asian division of the makers of the famous wrinkle …

Herb Kelleher, co-founder and CEO of Southwest Airlines, passed away in January of 2019.  His inspiring story is one of perseverance, sticking to his strategy and aligning incentives with long term goals. In 1966, Herb was a young lawyer when a client approached him with the idea of starting a regional …

What do the companies Best Buy, Blockbuster, RadioShack and Circuit City all have in common?   They were all rocked by aggressive online enterprises that destroyed their business models.   Of these four companies only one survives and is thriving today – Best Buy.   This is the story about how they did …

It is the biggest passenger plane to ever fly carrying an incredible 800+ passengers on two decks.   Airlines that ordered one of these monsters had to negotiate with airport authorities to upgrade their infrastructure in order to accommodate these beasts as unlike other aircraft the Airbus A380 loaded passengers from …

Volume 19 Newsletter 1   A new product launch represents a moment of truth for any enterprise.    Successfully launch and you create new value that propels both the firm and your career into orbit; screw it up and you’ll forever be “that person”.   With so much on the line, why do so …

Volume 18 Newsletter 11 Most companies today operate on a Sales Model.  They create great looking web pages and dispatch armies of sales people to pound on customer doors in an all-out effort to convince them to make a one time purchase.   However, in many industries today the product offerings have …

Volume 18 Newsletter 10 How do you segment your market place;  by customer size, maybe by industry type or perhaps geographically?     At a recent talk, Wharton Professor David Reibstein suggested that if you aren’t segmenting by customer needs you’re making a big mistake.    Here’s why …. A large computer hardware supplier was …

As students head back to school this month I thought it would be a good time for us to check in on the educational needs of our business teams.  When was the last time you invested in your team’s strategic leadership skills?  If it’s been a while it might be …

With the World Cup Soccer beaming in from Russia I've been catching some of the action with my morning coffee. My favorite team, Iceland, exited early but they were in good company when Germany, the 2014 champions, suffered the same fate. What I enjoy the most about the World Cup games …

Business strategy may sound simple but it's also the single most important activity you'll engage in in your career. A business strategy will determine success or failure, launch careers and destroy others. For anyone who may doubt the importance of developing a sound strategy, take the case of this large …

In 2016, after years of declining profits and shrinking market share GE Appliances threw in the towel and sold to the Chinese. Today, Haier USA is profitable but not necessarily for the reasons you might think. The easiest conclusion to jump to is that Haier turned the business around by …

Mary Shelley's classic story of Victor Frankenstein should now be a "must read" for any firm that collects data. The story of Frankenstein follows a young, idealistic, scientist who sets out to create a life form immune to disease. Using chemistry, electricity and the ethically questionable acquisition of a few …

Talk about turning lemons into ... well ... fizzy lemonade. Ever heard of the company named SodaStream? It's a company located in Israel and is a United Nations of workers who, politically, are supposed to be bitter enemies but in reality are a testament to the strength of diversity and …

Novo Nordisk has long been a world leader in diabetic therapies. In past newsletters we've looked at the innovative Novo pen that allowed diabetics to click and prick rather than use a needle to inject their insulin. What many don't know is that Novo Nordisk was one of the early …

Like many families, during the holidays we gather together with friends and devour wayyyyy too much food. This year was no different and afterward we relaxed and played games, one of them being "The Parcel Game". The parcel game is very simple. In the middle of the room is a giant, …

Think launching a new product is exciting? Launching a new business model adds a whole new level of excitement, not to mention anxiety and risk. Advancements in Artificial Intelligence, Big Data, Internet of Things and Mobile Tech are creating new opportunities to redefine business. Should you be involved developing and …

Mention the mobile phone industry in North America and prepare to watch the ire of many people surge. In 2012, in what seemed to many customers like a never-ending game of double billing, double dealing and eye-popping overage charges, T-Mobile found themselves in a market which tended to leave exasperated …

We've all heard of IQ - Intelligence quotient - as a measure of smarts. EQ - Emotional quotient - is a measure of how well you work with others. Equally important is a manager's BQ - Business quotient (or business acumen) a measure of ability to run a business. Here's …

"The Art of War" was written almost two thousand years ago. As a general for the King of Wu, Sun Tzu and his army dominated the enemies of the empire for two decades. Today, General Tzu's lessons in strategic warfare are still taught in military schools around the world and …

Whether you're pumping oil or pumping water, scale in the pipe is bad news. Scale builds up in the pipe to a point where fluid will no longer flow and suppliers are left with the choice of leaving oil or water in the ground or replacing the pipe. Because pipe scaling …

What started as a presentation to Siemens turned into a classic business book published back in 1982 called "In Search of Excellence". In their book the authors, Bob Waterman and Tom Peters, analyzed 62 organizations for financial performance and cataloged their best practices. Back then there wasn't an Uber, Tesla, …

What is the difference between Sales and Marketing? Go online and you'll find a lot of interesting answers that do little to quell the debate. In many organizations marketing is nothing more than sales support developing fancy brochures and placing media advertisements in traditional and online channels. Here's one definition …

Thinking of launching a new product? It's important to have a keen understanding of the market forces that will drive adoption. What may work in one market may not work in another so it's important to do your homework first. Presuming markets will be the same is often a bad …

Ever been bogged down by the pace of bureaucracy? Many companies make themselves less effective by instituting too many internal rules and procedures in a vain attempt to keep the company on its strategic course. In today's world where disruption is the norm and employees have access to market information …

Ever tried to impress someone by being someone you're not? It's exhausting trying to swim against the tide that's your own personality and if your experience is anything like mine it probably didn't work out too well. The same can happen to a business; in pursuit of more profits businesses …

"Build a better mouse trap and the world will beat a path to your door" said Ralph Waldo Emerson in the late nineteenth century. The statement, at times the mantra of scientists and engineers, contains a fatal flaw as it violates the first principle of marketing. If one expects to …

Ever wondered how some people can see their way through a problem that stumps so many others? How some people can step away and calmly assess a situation that has everyone else in a panic? This is called the strategic mindset and Santa Claus has it in spades. Remember Rudolph - …

As Forest Gump reminded us some things just go together like peas and carrots, apple pie and ice cream, bacon and eggs and chocolate and caramel ... ok, I made the last one up because it's my favorite but you get my point. In business some things just need to …

Remember Porter's five forces? How about TQM, Blue Oceans, Big Hairy Audacious Goals, Balanced Scorecard, Net Promoter Score and Six Sigma......need I go on? While each of these business tools may well have merit, its only in the right context that they can be successful. These ideas are generally presented …

Sometimes we get so locked into our traditional selling model we forget to step back and develop a "real" strategy. This is all the truer when launching a new product and you're asking your customer to change the way they do business in order to derive the value. Take the …

A few months ago we were fortunate enough to be doing a course for a major drinks provider in Asia. To kick off the programme we asked the Chief Marketing Officer (CMO) to say a few words to the marketing team. Expecting the usual presentation about how market share and …

Tactics always follow strategy. That is to say that portfolio strategy, segmentation strategy and positioning strategy must be translated into something meaningful to the customer - these are the tactics (remember the four P's?). Tactics must fit the target segment, not the other way around. In designing your tactics - …

Ever heard of Thunder Bay Ontario? Didn't think so; but there in a remote part of Canada, where the moose population outnumbers humans, the game of supremacy for the world payment market will tip off in mid July. As of July 18th the three Walmart stores in Thunder Bay will …

Anyone who's attended a university business lecture has been subjected to Michel Porter's Five Forces. If you were able to work in "bargaining power of suppliers", "bargaining power of customers", "threat of new entrants", "threat of substitutes" and "competitive rivalry" into your university paper, profs would trip all over themselves …

Lydia was a region in Asia Minor famed for its great wealth. Lydia prospered in the 7th and 6th centuries BC and grew most powerful during the reign of King Croesus. Wanting to expand his empire Croesus looked for a forecaster who could help him make a decision. He asked …

Campbell's had a problem. Focus group after focus group told them that their Prego spaghetti sauce tasted better than the competitor's Ragu Spaghetti Sauce. On every aspect, consumers told Campbell's that Prego was better. The taste was better, the colour, was better, the texture was better! When you poured Prego …

Many of you reading this have been involved in at least one takeover. Data tells us that most of these have gone poorly and the expected value promised by consultants and senior management largely fails to materialize. Fact is takeovers have a higher probability of destroying value than creating it. …

Remember Xerox, the massive photocopier company that seemed to charge an arm and a leg for every sheet of paper that went through their copy machine? Invented in 1959, the Xerox photocopier owned the market for decades before competitors from Japan moved in and commoditized the business. The big bulky …

We've all done it - enthusiastically gone off on some executive leadership/strategy retreat only to return Monday morning and nothing - zip - zero has changed. It's as if the fairy dust that was to transform us into strategic thinkers and business leaders was only icing sugar. Most managers who …

If price discounting is your brand strategy think again. Any monkey can cut the price! Brand building is a tough business. It takes time and discipline and yet a good brand can quickly be destroyed by what may seem at the time to be good business decision making. Specifically we …

What is the mystery behind a successful merger? Optimistic estimates place the odds of a merger being successful at about 40%. What's going wrong and is there a better way to execute one? Let's start by dispelling the notion that it's a merger - most often it's a takeover which generally …

It may have taken a new CEO and a few years but the much maligned Blackberry might finally be catching some traction in the market place. Lest you think you will be buying a Blackberry to replace your iPhone anytime soon think again. Blackberry has become all but a bit …

Companies have all the managers they need.........the question is, can you turn them into leaders? A business strategy is the means by which a company sets out to achieve its desired goals. A strategic plan allocates scarce resources, achieves objectives, creates value and involves everyone. Strategy development skills are lacking in …

As marketing strategists we're often looking for major breakthrough ideas that will revolutionize the market but the reality is value can be created in many ways. Often there is high value in looking at the industry differently and discovering new ways to deliver value. The advantage of having a strategic …

Talk about a marketing challenge. The EU had decided to deregulate the power grid and almost immediately providers started offering discounts at 20% below the current market rate for residential users. One's imagination didn't need to wander too far to see how this was likely to play out. A few …

Often in the business world well-meaning businesses try to enter new markets or launch new products by building large infrastructure and hiring on huge local sales teams. Trying to replicate what they've done successfully in another market, they end up pushing against the local business infrastructure rather than working with …

Not too long ago the world was in a panic about running out of fuel. Conservation was the name of the game and politicians in some countries even regulated the use of light bulbs to those that consume less power while we searched the earth for more oil. Today the …

Creating market demand where previously there was none is at the heart of any new product launch strategy and many experienced marketers miss this vital point. To create market demand, you need to create the "whole product", the minimum set of product, and services necessary to ensure that the target customer …

Are you marketing or are you just selling? When selling you're trying to influence a customer's decision to choose a particular product or service. Marketing is about trying to change consumer behavior. While good salesmanship may result in a purchase, good marketing has the potential to gain a lifetime customer …

Target Stores were enjoying such great success in the USA retail market that they decided to expand to the "Great White North". Taking a page out of Wal-Mart's text book they bought the retail properties of a failing Canadian discount retailer, Zellers, and with great fanfare and an already highly …

Many ignore it, some fight it, a few embrace it ... the future. It has a way of creeping up on us. Most of us think we're progressive but the reality is that many of us ignore the future and don't actively search out new opportunities that changing technology can …

"Innovation" often means new products or services but really an innovation is anything that ultimately delivers more value to the customer. An innovation can simply save the customer money, or it can bring market differentiation, meaning customers can be charged a premium for a product or they buy more of …

Everyone remembers the sinking of the Deep Water Horizon oil rig in the Gulf of Mexico in 2010 and the devastating oil spill. Many questions still remain as to how this could have happened, especially to a company like BP which so publicly declared itself a friend of the environment …

Hockey is a brutal sport! To the uninitiated it can look like a bunch of goons racing up and down the ice crashing into each other. If skating at 50kph and hurling a puck at someone at 150kph doesn't get your juices flowing, just wait... down go the gloves and …

One of the biggest and most persistent challenges facing a successful company is how to respond to a new generation of technology aimed at destroying the company's core profit engine.1 Fracking technology, for example, has radically changed the oil industry, shifting the focus (and growth) from offshore to land. Electric …

To intimidate Coca Cola you had better be good.....and Red Bull is! Red Bull dominates the energy drinks market like no other. It was developed by an Austrian entrepreneur who based the drink on a similar product he discovered helped to cure his jet lag on a trip to Thailand. …

Pricing ... it drives everyone nuts!! Customers complain about paying too much and companies complain about leaving money on the table. Too often companies and customers are locked in a power struggle in some vain attempt to extract as much value from each transaction as possible. But companies that view …

In today's landscape where customers are becoming more sophisticated and brands have proliferated, the battlefield in many markets has now moved to the point of distribution. To win in this ecosystem requires a high level of business and market intelligence at the regional and territorial level. This unprecedented environment calls …

Feedback is a powerful tool. Many of you reading this newsletter know that I was a speed skater and represented Canada internationally. When I first came on the speed skating team there were no such things as video cameras and instant replay. We had to rely on our coaches to …

New product innovation is at the core of any business strategy and it's scary stuff. It is where big bets are made on the future and real money is placed on the table. Develop and launch a successful new product and watch the money roll in......launch a bomb and start …

Former football player, Kevin Plank, wanted to create a better T-shirt - one that would wick perspiration away from the body. After starting his company camped out in his grandmother's town home and experimenting with many different fabric blends, he has gone on to create a billion dollar athletic brand …

In the fall of 2011 the famous designer of Apple stores, Ron Johnson, was named CEO of the American discount retail chain, JC Penny. What ensued can only be described as a nuclear meltdown. Upon being named CEO, Mr. Johnson determined that over 50% of JC Penny's merchandise was being sold …

Innovation is a very important word in most companies. Building a better mouse trap is at the core of many engineering driven companies and although new product innovations can create a competitive advantage they are not the only source of competitive advantage. Discovery in the lab is only the beginning …

We're still coming out of what can only be described as the worst financial downturn in several generations. In 2009, some Harvard MBA's wondered if they and their like were part of the solution or part of the bigger problem. These MBA's realized that the people they were aspiring to …

The internet has turned everything on its head. Knowledge is readily available and companies are competing as much against their customers' ability to find information as they are against their competitors. In an information rich world, customers are well informed about their needs and what they can expect and/or are …

P&G, the maker of Pampers diapers, Gillette razors and Head and Shoulders shampoo is struggling to regain its market footing after firing CEO Bob McDonald and bringing back former CEO A.G. Lafley. For three and a half years former CEO Bob McDonald declared that P&G "wanted to touch and improve …

A pharmaceutical company had a big problem on their hands. They had licensed the same molecule as a much bigger competitor. Both companies would be launching exactly the same product to exactly the same doctors at exactly the same time and the big competitor had four times as many sales …

In 1888 Richard Sears sent out a printed mailer advertising watches and jewelry with a guarantee to keep the watches running "in perfect order free of charge for six years". Over the years the now famous Sears catalogue expanded adding new products and then in 1896 the catalogue offered both …

It easy to observe the pace of competitive advantage in some industries. For example our favorite phones have switched from Motorola to Nokia to Blackberry to Apple and now to Samsung and likely soon to someone else - all in the last decade. Competitive advantage may not be shifting as …

Here's the reality for most businesses large or small: 10% of your customers drive 30% of your business 20% of your customers drive 50% of your business 50% of your customer drive 80% of your business The last 50% of your customers account for 20% of your business (and likely …

Long before roads and supply chains existed and two hundred years before Christ, a ragtag army marched over the most dangerous mountains in Europe and challenged the Roman Empire for control of the ancient world. With their horses and elephants in tow and against all odds, this band of Carthaginian …

In the 1990's pharmaceuticals were launching blockbuster after blockbuster. Drug companies hired droves of sales reps to march into physician offices to promote their latest new life saving compound. Sales rep numbers in North America alone ballooned from three hundred thousand to over one million. Each rep was instructed to …

Without good teamwork any strategy, no matter how brilliant, unravels quickly. Consider the following; after three years of R&D a company was poised to launch a significant new product that could revolutionize its industry and save its customers tens of millions of dollars. As per other product launches in the …

"Strategy without tactics is a slow road to victory Tactics without strategy is the noise before defeat"1 Watching Blackberry is like watching a shooting star slowly flame out. In 2007 the iPhone debuted and since then Blackberry (RIM) has lost 70% of its value. Perhaps they'll get some of their mojo back …

To help you prepare for 2013 take the Strategy test below. If you send meyour answers I'll break out your scores into categories and send them back to you. As a reminder - Business strategy defined: A business strategy is an organization wide focus on creating value for the customer, the company …

My Uncle was a bush pilot flying in Northern Ontario and Manitoba. One day, with a fully loaded plane and clear skies, he took off from the ice. Since it was early spring, the ice was starting to melt and he had a short runway. As he took off he …

A global brand can experience local problems when the brand is seen as an extension of the country from which it originates. The recent backlash in China against Japanese made goods is perhaps indicative of what can happen when a company is expanding a product line but has failed to …

In China you can purchase fast food in thousands of different ways in hundreds of thousands of outlets ranging from street vendors to restaurants in high rent districts. So how does an American fast food restaurateur enter the Chinese market and totally dominate with over 40% market share? Lest you …

You can purchase it in 16 flavours, it comes individually portioned and it's a 3.2 billion dollar a year business for Nestle. We're talking about the Nespresso coffee business that uses George Clooney as its spokesperson. Selling to both individuals and business customers, Nespresso is Nestlé's fastest growing business unit. …

You've stepped on them, played with them and if you have kids you probably have a bucket or two of them at home. The now ubiquitous, interlocking toy brick, Lego, was founded by a wooden toy maker, Ole Kirk Christiansen in Billund Denmark the 1930's. After WWII Christiansen bought a …

You've always heard that what you focus on determines your actions. Well, it turns out that the old adage is true and it has big implications for you as a leader. A few years ago Disney World in Orlando hired a cultural anthropologist to find out what captured kids attention. They …

Baseball is a very competitive sport. Each team uses the same approved equipment, has a maximum number of players and has minor league teams to supply them with backup participants when their main players get hurt. The only competitive weapon is to purchase the best players and managers making the …

All businesses need growth. Growth requires a strategy; and the backbone to any business strategy is a good market analysis. Even a brilliant strategy based on a superficial market analysis will still fail. The trouble for many is that after a few years of working in the same market we think …

Revenue growth was slowing, new product line extensions weren't bringing in the desired growth, competition was increasing and customers were applying strong pressure to reduce costs...sound familiar? That's the situation that was facing a medical equipment supplier. The challenge they faced was how to demonstrate that their premium products delivered …

GSE medical imaging equipment was fast falling into the commodity race with other suppliers around the world. Sales were mostly based on low price and the ability to grant financing to the hospitals who forced suppliers to submit bids. Service contracts, where the real money was made were also eroding …

Kodak the once mighty leader of photography has filed for bankruptcy protection. Ten years ago Kodak employed approximately 64,000 people worldwide - today that number has plummeted to 17,000. What happened that made the stock market darling of the 50's, 60's and 70's come crashing down? Founded in 1880, Kodak started …

As we enter 2012 many of you will be thinking about your business strategies. As you do please be careful - once a course for a business is set it can become the path of least resistance. The question to ask as you head into 2012.... "is this path leading …

The old saying that every cloud has a silver lining is certainly true today. With the recent service outage of Blackberry smart phones, traffic accidents in Dubai dropped by 20% while Abu Dhabi reported a 40% decrease in fender benders. Police attribute the temporary decrease to the fact that fewer …

Much has been written about Steve Jobs and about his accomplishments. Jobs once said he wanted to make a "ding" in the universe.1 It's quite possible that he achieved his goal. For all his brilliance it's important to point out he had more than his share of challenges. It's also important to …

Remember the Maytag repair man - bored to tears because he had nothing to do? Maytag's success was built on their durable, reliable, "never break down" washers and dryers. Maytag had a good thing going - that is until someone decided they needed to leverage their brand name to other …

Copy cats with cheaper materials, inexpensive labor and knock off technology will eventually appear ready to attack your market share. Continued success in business requires a work environment where innovation takes place, customer value is created and strategies are developed to take those new innovations to market. So how does …

Leading involves looking out into the future and defining how your company will prosper from it. In times of turmoil when traditional approaches begin to fail great leaders see new opportunities, adapt to the changing reality and adjust their course accordingly. Nokia, originally a paper mill, transformed itself into a …

The most success retailer in the world has a very serious sales training program that can be summed up with the acronym Apple: A: Approach customer with a warm welcome P: Probe to understand customer needs P: Present a solution to their needs L: Listen for any concerns E: End with a sincere farewell and encourage to them come back …

Don't let past success cloud your vision Commodore computer was founded by Jack Tramiel - a native of Poland and a survivor of Auschwitz. After WWII, Tramiel moved to the USA and became a typewriter repair technician. By the mid 1950's he moved to Canada and set up a company selling …

The cool Flip video recorder that easily records videos for quick uploads to YouTube and other social networking sites has just been jettisoned from Cisco's product portfolio. Cisco paid $590 million to acquire the company in 2009. What Cisco saw back in 2009 was a device that could load up …

Timberland had a big winner on their hands when they developed a new footwear line targeted at active vacationers and trekkers called TravelGear. Many travelers want to engage in an array of activities on their vacation but the selection of shoes they bring is often inadequate for all their pursuits …

Even the most successful products will sooner or later run out of steam. As commoditization sets in, the demand curve flattens and profits get squeezed the need becomes urgent to "reinvent" and rejuvenate the market. Most companies wait until it's too late.... Blockbuster did. When the oil industry crashed in the …

Marketing strategy mistakes are often irrevocable, and as we've witnessed over the past several years, successful marketing strategies are becoming increasingly elusive. Here's a half baked strategy that totally flopped.... Every day, every decision made by you and your team either adds value or destroys value. For all those who think …

Ok I have to admit I did pretty good this Christmas...lots of great presents but the best gifts Santa brought were my two kids home for the holidays (albeit delayed by snowstorms in Europe and NA). As cool as my 21 and 18 year old appear to be on the …

Who is your primary customer? A simple question that should have a simple response but many businesses struggle with the answer. Trying to have more than one primary customer can often lead to headaches. Home Depot is a case in point.1 In 2000 Bob Nardelli of GE fame took over as …

Using a Conjoint study to establish a beachhead market. Can how a product is launched really produce hugely different results? Read on! The R&D department of a medical device company developed a new version of an established product. Unfortunately, R&D neglected to ask the doctors what they wanted. R&D missed the mark …

A large mineral processing company was receiving endless complaints about the quality of its products. After numerous apologies to customers and much berating of the offending managers there was still no change in the situation. Process meetings were convened, discussion groups started and numerous promises made yet still there was …

How do you connect good strategy with good execution? Too often strategy is seen as something upper management creates and lower management and workers execute. Using this strategic model means that upper management is charged with coming up with all the good ideas - that's stressful! A good strategy connects …

This moment is likely the most challenging commercial environment that most of us will ever see. The slow return to economic growth is not bringing the return to the old customer environment many of us hoped for. Instead customers that have survived the last three years have irreversibly changed what …

Research suggests that 85% of market leaders lose their leadership position during a recession. Consider the following: Over a two year period, Sony, in the early stages of the 2000 dot com recession reduced R&D expenditures by 12%. The workforce was chopped by 11% and capital expenditures were sliced by …

Business is always evolving. Since strategy is always situation specific a good strategy today may be an awful strategy tomorrow. As any good strategist knows it's important to keep trimming back the weak and underperforming businesses so the stronger ones can survive and thrive. It's called Portfolio management and when it's not …

In 2003 Genentech launched their star product, Xolair, which had proved to be effective in preventing Asthma attacks. Since Asthma is a pretty wide spread medical condition they were expecting stellar results. The trouble was that after six months there was about 90 degrees of separation between sales projections and …

In 1987 the Swedish Asea Group merged with the Swiss Brown Boveri Group and formed ABB. In their first two years ABB purchased fifty five companies! ABB continued on this blistering expansion pace for about eight years with more acquisitions and steady growth each year. Then the wheels started to …

As faint signs of a pulse are detected in our economy many companies are reassessing their markets and re-building their strategies. But just how in touch are executives with the realities of their own markets? When asked to do an assessment of their own products most executives rated themselves as …

How do you know when your business model is tired? Most new ideas are born out of necessity - usually the need to stay in business. Much has been written in business journals about the Swedish furniture manufacturer IKEA. The owner of IKEA didn't originally set out to manufacture furniture - …

Operating from a remote location at the North Pole, Santa serves billions of customers around the world. He oversees a fleet of delivery animals (eight +1 to be exact), has a factory that produces all sorts of toys and he supervises an unruly production team of elves that would make …

Developing and executing a strategy as a single enterprise can be very challenging. Developing a strategy that aligns your goals with those of your customers can quickly drive a strategic plan forward. Take the case of Illy, the Italian coffee maker and their battle to take on Starbucks. Illy has traditionally …

Poor wheel alignment on your car wears out your tires and can leave you stranded by the side of the road. Likewise poor strategy alignment will leave your product, and worse, your company equally broken down. Remember Napster, the music download program that hit the market in 1999? In its heyday, …

Consider the following true story... one product, three continents, very different results. A new replacement electronic device was created for a medical market gobbling up millions of dollars of R&D funding. The product was launched in North American with all the major physicians contacted in an expensive market blitz campaign... …

"Wisdom is the anticipation of consequences" Anon. When the European Union was coming together companies were mandated to resize their packaging to conform to standard units of measure. One company who had to resize their product packaging triggered some unexpected consequences. To meet EU standards the company meticulously planned their repackaging …

Ford Motor Company along with all the other auto makers is losing money. Weathering the current economic storm by buttoning down the hatches and waiting for the worst to pass is tempting but foolhardy. Short term fixes of across the board cuts and restructuring plans give the illusion of "taking …

Remember those slimy bars of soap that used to sit beside the sink in a small puddle of goo? Sometimes they could leave you wondering if you were washing things onto your hands rather than off. Also, if left long enough, the soap would cement itself to the sink making …

After decades of duking it out over who could make the lowest cost computer HP finally threw in the towel and conceded victory to Dell. Instead of retreating to the background however, HP returned to their roots and started working with customers on some innovative projects. Working with a design …

In 1969 Ford Motor Company was getting crushed by small fuel efficient Asian imports (sound familiar?). In response, then CEO Lee Iacocca, set a goal of designing a car under two thousand pounds, under two thousand dollars and ready for sale in one year. What resulted was a huge lesson …

In 1985 SAS airlines won the dubious crown of "Worst Airline of the Year" ranking dead last in a customer poll in both customer service and dependability. Adding further to the insult SAS also ranked last in profits as a percentage of sales. To round out their stellar year they …

Think you're in turbulent times? The Swiss watch industry back in the 1970's had poured millions into quartz technology only to have Japanese companies like Seiko and Casio exploit it. In 1982 alone Swiss watch sales dropped by 25% and overall the Swiss saw their global market share drop from …

"Forgetting our objectives is the most frequent of all acts of stupidity" 1 Many industries are dominated by large incumbents followed by a number of fringe players. In recent years, a number of industries have become more competitive as many well known products have come off-patent. Consequently, the key players have been …

Strategy execution is the result of thousands of decisions - made by hundreds of managers every day who act both on the information provided and their own self interests. Many a new strategy is poorly implemented as managers default for self preservation. Remember Polaroid, the world leader in instant photography? One …

Xerox roots go back to the late 1940's when a photographic paper supplier, the Haloid corporation, developed the process of xerography. It would take another decade before the idea was fully commercialized and the first Xerox machine, the 914, was rolled out in 1959. Over the next 25 years two …

Remember the opening scene of the Wizard of Oz? Dorothy is swept up in a tornado and whisked away from the safety and comfort of her home to a land far away - the Land of Oz. As today's volatile economy throws us around like a tornado and makes the …

"Why a strategy is so important - especially in tough times!" Quick - write down three key things you and your team want to accomplish this year. Now ask some team members to do the same. Can't do it? Goals don't line up? You're not alone! When Agilent Technologies decided to create …

The hot drinks industry is a $70 billion global market place and over the last decade the coffee market has led a huge global expansion. The big loser in this category has been the tea industry which has struggled to add value to their "brewed cup of goodness". Over a …

"Take two and call me in the morning!"  A major pharmaceutical company had a real marketing challenge. They had two pain relief drugs that customers saw as interchangeable. One was an ibuprofen based drug, the other was an acetaminophen and a traditional questionnaire research tool suggested that customers did not distinguish …

With the Olympics fast approaching, our TV screens will soon be filled with high performing athletes executing flawless routines, pushing themselves past mind numbing limits. As we watch world records fall and the athletes receive their metals few of us can fathom the preparation that goes into each athlete's performance. …

Remember the Apple Newton? Perhaps ahead of its time the Newton was the precursor to the Blackberry and PDAs we know today. The Newton had a touch screen, used a pen based stylus allowing the user to write messages right on the display and send them off in a fax …

Some of you may remember IBM back in its heyday when they were selling Selectric typewriters and big main frame computers. In the late 1980's IBM recorded the highest profit of any corporation ever. By the early 1990's they came crashing back to earth and the crater left shocked the …

In the "this may be hard to believe category", Old Spice is now the number one selling antiperspirant, deodorant and body wash brand in the United States. Old Spice 'Red Zone' products have found their way into my household not as my cologne but as my son's. Originally founded in 1937, …

After acquiring company after company, ConAgra had grown from a few million dollars a year in revenue to over a 27 billion dollar enterprise. It was a huge food supply company with multiple autonomous business units, each having its own P&L and a firm belief that their products were the …

Xerox was having difficulties when newly appointed CEO Anne Mulcahy took over the helm in 2000. It got into even deeper trouble the day she was announced as the new CEO when the stock took a 15% plunge on the NYSE. Not exactly a vote of confidence. A 27 year …

When we think about business management today we tend to think that we live in the most revolutionary of times. We're right in thinking this but so too has every generation of business leaders that has preceded us. In 1668 Johann Goethe wrote "People of this age have a false …

The problem with mature markets is that the market share of the major competitors is usually set in concrete. Since price is often seen as the only differentiating factor companies generally try to run leaner and meaner but rarely is there any significant change in market share. To break this …

John Robertson was concerned with the report that he was reading. Recently his rapidly growing business unit had divided one of their regions in two. He promoted one manager internally and hired another externally to handle the newly created regions. While the regions were equally divided according to geography and …

How do you turn a little known drug approved for a rare eye muscle disorder into a 440 million dollar a year product? Use word of mouth advertising, add some key opinion leader support and inject extensive "off-label"1 usage as an anti-wrinkle agent and you are well on your way. Allergan received …

Eyes that look are common - eyes that see are rare - J Oswald Saunders There are three phases to business strategy; market analysis, strategy development and strategy execution. Each phase builds on the next so a poor market analysis leads to ineffective strategies, closely followed by weak execution. Here's a …

Over time, as a company grows, the skills and systems that made the company and spawned the original success can be the Achilles heel of the company's future growth. In Corning's case, it was a brilliant discovery that spawned colored television which eventually left them arrogant and unresponsive. Author and turnaround …

When rolling out significant new products, the "Go Big" approach can have some significant pitfalls. Remember the Motorola Iridium phone that was supposed to take over the cell phone world (see news letter July 2006 "No Connection - Iridium Phones") Sometimes a stepped approach is more appropriate and can reveal …

After a decade of clashes, skirmishes and sometimes outright war, peace has finally been declared in one of America's fiercest struggles with a foreign power. You may have heard the news that a ceasefire has been hammered out in Detroit as DaimlerChrysler agreed to sell off an 80% stake in …

A company we worked with had a brilliant scientist in their R&D sector. He developed a product that saved clients' buckets of money and today the product sells close to one half billion dollars world wide. That's the good news. The company promoted the rising star to manage his own …

A coffee distributor we'll call 'CoffeeMax' operating in a major metropolitan area was fighting it out with a tough competitor, 'HotDrinks'. The business involved selling coffee to restaurants, coffee houses and other institutions in and around the city. Although HotDrinks was profitable in other markets they were under extreme pressure …

As "a vacant mind invites dangerous inmates"1 an absent vision and strategy invites dangerous outcomes. Remember, that in order to see the end one must have a clear beginning.2 Here is a story about someone who started with a clear beginning which drove a successful product development strategy. Video phones came out in …

There's a story, recently retold in HBR1 about an accountant who was confused by a request for capital funding for a chimney - just a chimney. Curious, the controller went to see the site of the proposed chimney and discovered that the divisional managers had constructed a new plant (without a …

Like too much Christmas turkey, companies bloated with too many brands in their portfolios can lead to a bad case of market indigestion. Mergers and acquisitions can leave firms stuffed with too many products fighting for too few resources. Often managed as a collection of individual brands, the ability to …

Arrow Electronics was onto something "really big". In the early 2000's they saw the opportunity to create a new distribution channel through which to sell their products. They started an internet sales venture. OK, so they weren't the first company to develop an internet sales channel but they did really …

Cirque du Soleil has performed in over ninety cities and has been seen by over 40 million people worldwide. Show revenues are equal to Ringling Bros and Barnum & Bailey; a feat they achieved in just twenty years. All this was accomplished in an unattractive industry in steep decline facing …

You've all seen the movies that show the underdog fighting to get his/her moment of glory and/or riches. It is the poor boy who makes it against all odds to the top. It is the oddball or the outcast who pushes his or her way through the establishment to single …

Remember the Iridium phone? Originally developed by Motorola, the Iridium phone was to use 77 satellites to transmit voice and data to millions of satellite phones around the world. Iridium is the element with an atomic number of 77 - thus the name. To bad they didn't change the name …

Every industry will go through periods of instability. It's during these periods of instability that market leaders are re-established and the "New Order" is established. Once the "New Order" is established moving market share significantly is extremely difficult. One industry in the middle of turmoil right now is the music industry. …

Novo Nordisk, the Danish pharmaceutical company and a market leader in insulin, could only sit, wait and watch their leadership position erode. After all, they were the market leader and of course the competition was going to copy them and close the gap. Novo Nordisk had developed an insulin that was …

A chemical division of DuPont had a problem on its hands. The customer base was growing but sales were flat and profit margins were being squeezed. After much frustration DuPont decided to look at their market differently and developed the following chart. Since DuPont sold the same chemicals at various …

Sometimes we get so busy being busy that we forget to poke our heads up to see that there really is an evolving market out there. Take the case of the magazine publishing industry. From a consumers' perspective not much has changed since the 1990's. Magazines like Time, Business Week and …

Sometimes the competition in an industry can get so fierce that the competitors try to outdo each other rather than win customers. Such is the case in the airline industry where Airbus and Boeing have been in a bitter battle for the last decade. Boeing had spent years in a leadership …

"Eyes that look are common. Eyes that see are rare." - J. Oswald Sanders Caterpillar tractor had delivered rock solid profits for nearly 60 years when suddenly the tracks fell off in the early 1980's. Like the Detroit Auto manufactures, the heavy industrial equipment market was under attack from Asian competition. "Eat …

Kodak once dominated the film industry like Canadians once dominated ice hockey. "You press the button we'll do the rest" had been Kodak's line for more than a century. Today, with Digital technology, the photographic film industry is in a steep decline forcing companies like Kodak to transform themselves in …

It used to be said that only the French could make wine. Other countries tried to compete but all wines were largely compared to the gold standard French wines. Approximately 30 years ago in Paris the French myth was debunked. With French judges sipping the wine, the California wines won …

Elevators are a great modern convenience. Unfortunately they're costly to install, need a roof top structure to support an engine room (which is non rentable space) and they are energy hogs. In 1996, Kane, the German lift manufacturer, developed a new elevator lift called the "MonoSpace"1. Kane's new design placed all …

Experience is what you get when you don't get what you want... Anon As his stomach twisted into a knot the corporate manager slammed his fist on the desk in frustration. He had sworn that he would get prices up if it killed him. He had pushed through a price increase several …

A good business strategy exploits and strengthens a competitive advantage and must be communicated throughout the company. Business units might then adapt or modify the corporate strategy but in the end everyone must be completely clear about the tasks that must be done. They must be certain who will do …

Customers are fickle! So when Motorola was developing a new version of its popular TalkAbout two way radio for the recreational and industrial market it was trying to determine what customer groups might want in a two-way radio. Motorola couldn't possibly fit all the new features they envisioned into the …

In 1985 Gordon Moore, Intel's president and Andy Grove, the company's CEO were discussing the decline of memory chips - then Intel's core business. Andy Groove asked Gordon Moore "if we get kicked out and a new CEO came in what do you think he would do'? Moore's reply was …

"We will either find a way or we will make one" Hannibal John Patterson's friends burst into laughter when they heard that their colleague had purchased a local manufacturing company. John Patterson bought a company from James Ritter, a local café owner, who had invented a machine to protect against his bartenders …

As I watched the amazing shot made by Tiger Woods a few weeks ago... with the ball paused on the edge of the hole as if choreographed by Nike, I couldn't help but think about how Nike got its start and took on some giants in Adidas and Puma. In 1963 …

A prudent person foresees the danger ahead and takes precautions. The simpleton goes blindly on and suffers the consequences. Proverbs 27:12  The Swiss have such a passion for timeliness that it only seemed right they would dominate the world's watch industry. In the early 70's the Swiss owned over 43% of …

As the star takes the stage and the cameras flash don't think it's just the press taking pictures. Before the concert is over hundreds of images of Britney Spears, Christina Aguilera or who ever the star performer is will be electronically transmitted to Zara design houses. As the concert goers …

On October 20th, 1978, Firestone recalled 10 million steel belted radial tires. The infamous Firestone 500's broke up at high speeds leaving vehicles careening down the highways. One can imagine the result. However, admitting nothing, the company chairman of Firestone at the time agreed to recall the tires not because …

Some claim it's to die for while others claim it's to live for. Long known as a medical drug, love potion, nourishing food and war ration, chocolate has won the hearts of many over the last century. In 1894 Milton Hershey decided to produce sweet chocolate as a coating for …

"The general who wins the battle makes many calculations in his temple before the battle is fought... The general who loses makes but a few calculations before hand... It is by attention to this point that I can foresee who is likely to win or to lose" Over the holidays I …

Back in the early 1990's, Apple's founder Steve Jobs was fired from Apple and replaced by John Scully, an import from Pepsi. Under Scully's tenure, Apple abandoned its strategy of being unique and pursued a "me too" strategy of making Apple/IBM type computers. Predictably, Apple's cool machines that appealed to …

For most executives this Halloween the only thing scarier than the USA presidential election campaign is the development and launch of a new product. Heroes have created successes like the MAC computer, the Zip drive, Fiber Optic cable and more recently the iPod. Equally spectacular, however, are those, somewhat less …

Good strategy sometimes involves being selective about the opportunities that you pursue, and being aware that the best opportunities may require a change in course. In 2000, both Airbus and Boeing were planning the production of their new aircraft models. The Airbus A380 is the new monster aircraft that can carry …

"Make wisdom your own - insight is the crown of the wise." [1] In 1955 RCA developed the all glass picture tube. This radical new design drove out companies that could not master the new technology. The 74 picture tube manufacturers in 1955 were reduced to 52 four years later and …

In 1988 Paul Newman and a few friends created a place for kids called the "Hole in the Wall Gang Camp". The camp is for special needs kids who because of their illness have a lot more to deal with than any kid should. The camp now serves over a …

In the late 1990's Polaroid pumped millions into their R&D department to come up with innovative new products. Likewise, Maytag, the dependable washer and dryer people, invested heavily in 2001 into new product innovations. The unfortunate result of both strategies was that Polaroid went into Bankruptcy in 2001 and Maytag's …

It may be hard to feel sorry for the world's fourth largest car manufacturer, but perhaps some sympathy is in order. Volkswagen just announced that they will delay the launch of their new microbus until 2007 as they try to make the bus less expensive. The delay is yet another …

CEMEX is Mexico's largest cement manufacturer and the third largest cement supplier in the world. This highly sophisticated company found a very basic yet effective strategy to deal with a significant change in the market place. CEMEX sells to two distinct markets the "Do It Yourself" market and the "Construction Industry" …

The BOC Group based in the United Kingdom is a major supplier of industrial and medical gases. In 2001 BOC embarked on a program to improve its service offering yet at the same time drive down delivery costs - two seemingly conflicting strategies. BOC started by segmenting their market. Customers were …

Two Vancouver women who met at a party decided to start a high end company making hand made T-shirts. One was a hat designer who had some great design ideas but hated the business end of business. The other was a former banker who couldn't stand working in a bank …

When it comes to generating new product ideas, rarely do they come from senior executives - nor should they. Senior managements' job isn't to create new product and service ideas but rather to create an environment where new ideas can bubble to the surface and then catch them. Although the mobile …

Electrolux had a big problem. Operating in multiple countries with decentralized operations was giving this food services division a stomach ache. In Western Europe Electrolux was competing with 15 - 25 rivals in each country in the professional food services market. The company had 15 product brands only one of …

When it comes to developing next generation products only a small percentage of companies seem to get it right. A study followed 28 projects - derivatives of existing successful products on which the future business success depended. Of these next generation products only four successfully met expectations (14%). Five had …

It was 1982 and Scott Cook was sitting at his kitchen table when his wife started complaining about balancing her check book. Personal computers were still somewhat of a novelty and people were looking for other applications besides word processing and spread sheets. It occurred to Scott that a software …

New product development is a dance between marketing and R&D. In 1957 Earl Bakken patented the first heart pacemaker and in so doing improved and lengthened the lives of hundreds of thousands of people worldwide. The pacemaker was declared one of the ten most outstanding achievements over the last 50 years …

"Failures are divided into two classes - those who thought and never did, and those who did and never thought" John Salak Up until a few weeks ago things were looking fine. The relationship with the client was great and you felt you were definitely in the lead to win the …

Strategy is about creating value - value for Shareholders, for Customers, for Employees and yes for Society. A good strategy executed well is relentless - it accomplishes a central set of objectives through a continuously changing set of circumstances. Schlitz beer used to rule over the USA beer market with the …

Profit is the payment you get when you take advantage of change - J Schumpeter In the retailing world shelf space and shelf location are everything and Proctor and Gamble (P&G) had organized themselves to maximize their share. P&G had traditionally been organized into thirteen business units with thirteen different sales …

Lafarge, the large French building products manufacturer had a winner on its hands. In the mid 1980's the company thought it had developed a new method of producing gypsum used in the making of paint and paper. The R&D group thought it could replace expensive ground up minerals with crystals. …

Next to oil it is the second most traded commodity in the world. It's been used as a health drink and at other times been labeled a health risk. It's been around for centuries and yet today it is one of the hottest market opportunities - coffee. Coffee has been traded …

Operating physicians called it the Holy Grail. A diagnostic machine that could give them the level of detail needed to detect the fine nerve endings so they could avoid these while completing the needed spinal operation. Accidental severing of these fine nerve endings meant the patient would have to endure …

Pity poor Home Depot. Recent articles have been written about the declining state of this market darling. The big box store with all the items you'll ever need to build or renovate a house is suffering. It seems that a few years ago the company brought in a new CEO …

April 1, 1993, Lou Gerstner left RJR Nabisco and took over from John Akers as head of IBM. When Mr. Gerstner took over, IBM had just lost 8 billion dollars and was forced to cut 73,000 jobs. Mr. Gerstner spoke about his time at IBM in an interview with Business Week …

Santa Claus is no fool - he has a clear segmentation strategy. First he has the world broken into "time zones" so he can deliver on time. Next he segments by "boys and girls" then finally "naughty and nice". It's simple but it works. Documentum took four years to learn …

As the last of the rubble is cleared away from the dot com bust perhaps some perspective is needed. According to author Donald Sull back in 1920 there were over 400 tire manufactures and in one city alone 122 tire company owners were millionaires. Then, in similar fashion to the …

Wisdom is better than weapons of war and one mistake can undo many things done well. The strategy was brilliant, the market segmentation was perfect and the product was going to be well positioned to move from a niche product to a mass market. Developed in the back of a pickle …

Often, managers get so involved in their day to day business that they forget to lift their heads long enough to take a breath of air. Fortunately, breathing isn't an optional activity but developing a strategy for your business is. Failing to stop long enough to develop a strategy for …

Netscape Corporation was founded in April, 1994 by Jim Clark and Marc Andreessen. Jim Clark had previously founded the company Silicon Graphics and Marc Andreessen had recently graduated from the University of Illinois and was the developer of Mosaic, the first mass-market browser for the World Wide Web. Netscape Navigator 1.0 …

The job of marketing is to challenge new frontiers by understanding the needs of the customers. This is not something that is done with gut feel but rather through observation, interviews (formal and informal) and with tools like perceptual mapping and conjoint analysis. Sometimes doing the obvious can have a …

A market-driven strategy is the planning and deployment of business resources to achieve a central set of objectives through a continuously changing set of circumstances. It is customer focused and organizational wide with every level of the organization having its business unit strategy nested within the larger corporate strategy. Finally, …

He was energetic, enthusiastic, just out of school and ready to take on the world. The hard work was quickly rewarded. Promotions came easily and up the ranks he moved. Before long he was a Specialist Rep / Field Manager / Lead Scientist / Market Research Specialist etc. Up until this …

Every business leader eagerly examines their R&D pipeline for the next wonder product that will blast their company into orbit. Sometimes, however, great opportunities are sitting on our doorsteps; great products, already launched but poorly marketed. Loctite Corporation had such a product. The product, called RC 601, was technically very good. RC 601 could bond …

In the late 1980's Federal Express was experiencing exponential growth. Started by Fred Smith in the early 70's Federal Express had nearly gone bankrupt in 1975. But they persevered and in 1975 they launched the FedEx Courier Pak over night mail delivery service. The envelope size package would drive the …

(Wise men learn by other men's mistakes; fools by their own - anon) Someone once described insanity as doing the same thing again and again and expecting a different result. This probably accurately describes most companies when it comes to new product launches. Last month I was teaching with a colleague from …

The factory smelled of it, workers got skin rashes because of it and for employers and workers alike it was a big headache. For years the owners of small metal working shops had to endure the constant smell of decomposing metal working fluids needed to cool and clean the products …

He's only open one day a year but demand for his products are high. His customers' wait in anticipation for that special day and they always seems to get what they want. The excitement he creates is always infectious and spreads to many. He delivers to his customers' homes on …

It was perfect. Customers needed it...R&D developed it...manufacturing produced it, marketing priced it and sales had glossy brochures of it and now it sits in the warehouse ... by the hundreds. This product was supposed to fly! Was it the product, the marketing, the price - why had another perfect …

The International Institute for Business Development conducts courses in Marketing Strategy. This newsletter is coming to you as someone interested in strategic marketing or someone who has attended a course conducted by IIBD. The goal of each of the monthly newsletters is to review and reinforce the principles of strategic …