Nature of High Performance Businesses Tuesday, August 27, 2019

Stakeholders – A company should strive to perform above the minimum expectations of all of it’s stakeholders, including the employees, customers, suppliers so that this dynamic relationship ultimately leads to higher profits and hence stockholder satisfaction.

Processes – The trick lies in overcoming the problems posed by departmental organization. The successful companies are those which achieve excellent capabilities in managing core business process through cross – functional teams.

Core processes here could be new-prod development, customer attraction, order fulfillment, etc

Resources – The major businesses are nowadays trying to own and nurture only their respective core resources and competences, while out sourcing the rest of the processes.

Companies are paying increasing focus on their core competences and distinctive capabilities. One should go in for outsourcing, if through outsourcing, better quality can be obtained, lower costs are incurred, if  resources are less critical

Core competence has 3 characteristics

1.      Difficult for competitors to imitate

2.      Source of competitive advantage if it makes significant contribution to perceived customer benefits

3.      Potential breadth of application to a wide variety of markets

Set strategies to satisfy key stakeholders	Stakeholders
By improving critical biz processes	Processes
And aligning resources and organization	Resources  and Organisation

Organization and Organizational Culture –

According to the article Built to Last, there are 3 commonalities amongst the visionary companies –

They all held a core value system from which they did not deviate

They expressed their purpose in enlightened terms

They have developed a vision for their future and they strive towards it. They communicated it to their employees and embrace a higher purpose beyond making money

Senior management must encourage fresh ideas from 3 groups with respect to strategy making

Employees with youthful perspectives

Employees away from headquarters

Employees new to the industry

Delivering Customer value and satisfaction

Here are two important concepts from the customer value point of view –

Value chain – Michael Porter defined 9 processes as vital to a value building network of a company, viz.

Primary Activities: Inbound logistics, Operations, Outbound logistics, Marketing Sales and Service.

Support Activities: Infrastructure, HRD, Technology development, Procurement.

A firm’s task is to examine all costs and performance of these processes and try and improve them for better value-creation. Also a firm’s success depends upon how each of these processes are coordinated to seamlessly perform the following core business processes –

New – product realization

Inventory management

Customer acquisition and retention

Order-to-remittance

Customer service

Value delivery network – A firm needs to partner with its suppliers, distributors and customers to gain significant competitive advantages by creating a superior value-delivery network.

Quote : Marketing Management by Philip Kotler 10th Edition