Search results

Strategy Question: How do I assess the “business health” of my products or services?

Summary: The Product–Volume–Margin Chart tool is used to construct a picture of the “business health” of a product or service. The one-page chart is designed to provide a clear and concise “current state” business profitability picture by casting revenue of key product/service forms in Pareto fashion against a corresponding profit metric for each (we use Gross Margin) plotted in bullet point form. Concurrently the chart structure provides a means for quickly developing a deeper insight to product/service profitability issues that may exist. The PVM analysis is among the most helpful tools in our arsenal, and is one of the first, if not the first tool we use entering a new situation. Many companies we encounter simply have not pulled information together in this way, for a variety of reasons (numbers being held close to the vest, legacy ERP shortcomings, sales reporting buckets being different, etc.) The tool shows the user, especially those who have never done a comparison like this, how to structure the product/service forms, how to choose profit metrics and construct them if necessary.

Over the past years, traditional manufacturers of capital goods, such as Siemens, ABB and GE, have seen their business environments transform. As a response to these changes, firms began to change their business models from providing singularly developed, integrated one-off solutions to offering modular, mass-customizable systems, including increasingly sophisticated services. This paper aims to support such manufacturers in overcoming uncertainties in designing innovative profit formulas in this new approach.

This study is based on an 18-month research project at a multinational, multi-scope manufacturer in the capital goods industry.

To innovate profit formulas, this study recommends a three-step approach: first, categorize your customer requirements along new dimensions for each project; second, apply smart and novel combinations of competition- and value-based pricing and cost strategies within projects; and third, calculate your profits at the feature level instead of the aggregated project level. Based on this approach, managers can categorize projects through an introduced matrix tool and identify ways to improve profitability.

Findings are applicable to the capital goods industry and to comparable sectors where vendors can tailor product features for each customer individually.

This study will help managers to overcome the challenge of rethinking ways of operating that are long established and, until now, very successful. It sets out a methodology – the profitability matrix – that managers can use to analyze the profitability of a specific customer offering and suggests ways to improve it based on a novel three-step approach for designing new profit formulas.

In the literature, there are many methods that can be helpful in strategic management of universities. Some of them are related to the aspect of sustainability, in terms of balancing the level of fulfillment of different, often conflicting objectives, which must be considered when building strategies. These methods include product/service portfolio ones. However, their use is often intuitive and detached from the quantitative aspects of management. The purpose of this paper is to present a proposal of the modification of the portfolio methods through the use of one of discrete optimization problems, namely, the multiple knapsack problem. The proposal is applied to a selected university. The results are presented and discussed.

The research methodology consists in a conceptual work: combining non-quantitative portfolio methods used in strategic management and the quantitative multiple knapsack problem. The analogy is established between a market sector (capacity) and a knapsack (capacity), a university department value and an object value, the university improvement budget and a knapsack, an object cost and an improvement measure cost. Then, the case study is used to conduct an initial validation of the proposed approach.

A quantitative model for strategic management of university as a whole or university departments is proposed. It allows to plan and control the application of improvement measures, allowing the university units to take on a better position in the educational market. It has been initially applied to a small university.

The model requires much more real-world case studies. Also, it will usually be difficult to establish the cost of running individual university units as well as the cost of corrective measures. The capacity of knapsacks – here of market sectors – will also be difficult to calculate. The method to be used here is activity-based costing, but it will not solve all the problems immediately, as its practical application is difficult.

The proposed model will allow to plan and evaluate strategic changes of university as a whole and its units’ position using quantitative values and to consider various strategic scenarios.

In order to establish the data necessary to construct the model, various stakeholders will have to cooperate (the university promotion department, the accounting representatives, the student and industry representatives etc.), probably for the first time. Such cooperation will improve the university position even if the model itself will not be able to be applied immediately.

The link between portfolio methods and a quantitative optimization method for university management purposes has been established in the paper for the first time in the literature.

The purpose of this paper is to explore both the strategy types and strategic growth trajectories of new ventures and examine the relationship between these trajectories and new venture performance.

The paper uses evidence from six case studies of Greek high technology new ventures over a lengthy time frame. The longitudinal research design of the study allowed for the complexities of the growth phenomenon to be captured in an effective and efficient manner.

Based on an integrative three‐dimensional framework of new venture strategies, four strategy types are identified. At a static level, evidence suggests that the more strategic dimensions are emphasised in a venture strategy, the more balanced the venture's strategic position and thus, the higher its performance. With respect to the venture's dynamic trajectories, among all possible alternatives, it was found that two are the most successful. The first secures growth through focusing first on a specific innovative product/service in the domestic market and then expanding in the global market. The second secures growth through focusing first on a specific innovative product/service in the global market and then expanding the venture product scope.

The findings imply that the product and geographic dimensions of new venture strategies are the main performance differentiators, while the innovativeness dimension is a sine qua non of new ventures growth and performance. Implications for theory, business practice and policy making are discussed.

The paper contributes to knowledge in the area of new venture growth by developing a strategic typology in a catching‐up economy, where little research can be found.

The aim of this study is to gain important insights on integration oriented servitization identifying essential dimensions of effective structures, coordination approaches and management controls adopted by manufacturing firms that integrate forward towards distribution, sales and services.

The study adopts a theory-guided qualitative abductive methodology to conduct a comparative case-study of two manufacturing firms in the same industry integrating forward to enhance servitization but with significantly different performance outcomes. The findings are uncovered from a broad spectrum of primary and secondary data spanning two decades.

The consistently high-performing firm puts equal emphasis on production and downstream distribution, sales and services and motivate individuals to engage in entrepreneurial efforts to develop combined product-services offerings that are valued by customers. The underperforming firm prioritizes operating efficiency driven by engineering prowess and managed through planning, standardization, authority and central controls.

The study is based on two representative firms operating in a specific industry context, which has ramifications for the generalizability of results and calls for replication studies to substantiate and extend findings.

Forward integration from manufacturing into distribution, sales and services represents a specific servitization strategy that needs structure and particular coordination approaches to be effective in complex dynamic product-markets. The characteristics of the outperforming case company provide useful insights on effective integrated servitization efforts.

Forward integration is a commonly adopted strategy among manufacturing firms that constitute the backbone of modern economies and effective governance of these integration oriented servitization efforts has important implications for societal value creation.

This study builds on rationales from management science including economic theory, corporate strategy and different micro-foundational lenses and thereby hone recent calls for broader theoretical foundations to enlighten studies of the servitization puzzle.

Companies operate and compete in a highly and aggressive global climate. This climate has led to an increased emphasis on quality. TQM focuses on the integration and co‐ordination, as well as on the continuous improvement of all activities and processes. Total relationship management (TRM) is a very recent marketing strategy and philosophy. It focuses on and is concerned with all integrated internal and external activities within and between organizations. TQM in marketing can have a major impact upon an organization by improving customer relationships and satisfaction, reducing marketing expenses, increasing sales as well as providing a competitive edge. This paper, is a theoretical and conceptual one, provides marketing and management implications on how to integrate TQM and TRM in order to achieve better quality of the relationships, product/service and the process. The aim of this paper is to shed light on how these approaches, i.e. TRM and TQM, can be integrated, and to suggest how the work on TQM can add impetus to successful TRM. First, the definition and the main philosophy behind TRM are discussed. The common grounds of TQM and TRM are identified. Then some TQM tools are suggested to be used by TRM approach to improve its functions.

The study seeks to examine the effectiveness of implementing the ISO 9001 quality management system (QMS) on small and medium enterprises (SMEs) performance in Saudi Arabia. It explores ISO 9001 usefulness through the dimensions of continuous improvement, customer satisfaction focus and prevention of nonconformities. The study investigates two dimensions of firm performance's: operational performance and product/service quality.

The study employs a quantitative method. A simple random sampling technique is used to collect study samples. A self-administered questionnaire is employed as the data collection tool. The study was based on 263 samples from SMEs in Saudi Arabia. Statistical analysis was carried out using SPSS/AMOS.

Prevention of nonconformities, customer satisfaction focus and continues improvement had a positive significant correlation with operational performance and product/service quality. Moreover, the ISO 9001 QMS effectiveness construct showed a helpful and important correlation with the performance of the company.

The study offers empirical evidence to clarify ambiguous findings from past studies, as well as expounds knowledge on the effect of ISO 9001 on SMEs' performance through the lenses of operational performance and quality/service quality.

The purpose of this research is to empirically investigate the role of firm size in the use of e‐procurement applications that vary in their ability to facilitate supply chain integration.

The sample was drawn from members of the Institute for Supply Management (ISM). Purchasing professionals employed in 33 different industries completed a self‐administered questionnaire.

A total of 128 useable surveys were received. The data revealed a significant relationship between firm size and e‐procurement application. Specifically, larger firms were more likely to use integrative types of e‐procurement.

The study was limited in that it excluded purchasing professionals employed in the service sector. In addition, it only focused on the relationship between a single variable and e‐procurement application.

This research provides support for studies that suggest that firm size is related to IT use. In addition, it tests the framework developed in a previous research study conducted on supply chain IT. Finally, previous research has linked supply chain process integration with operational agility, lower costs, superior product/service design, and enhanced profitability. The findings of this research might prompt decision‐makers to ask themselves if their firms forgo such potential benefits when integrative forms of e‐procurement are not used.

This research contributes to the understanding of an emerging phenomenon by investigating firm size as an explanatory variable in the e‐procurement application decision. In addition, evidence is still lacking with regard to the prevalence of actual implementation of e‐procurement in firms. This study examines actual usage of 13 different e‐procurement applications across various industries. Finally, this research focuses on the use of e‐procurement in achieving integration. This is important to practitioners, as effective supply chain integration has been linked to enhanced business performance.

Describes a study which examined the environmental scanning systems in 226 Russian companies. Reports the findings which indicate that more advanced scanning systems were associated with higher performance levels in Russia. Comparative analysis which followed the analysis of statistical data suggested that there were a number of Western management concepts which could be used to promote the development of more sophisticated environmental scanning systems in the context of the Russian culture. Argues that this could lead to improved business performance in Russia.