Posts belonging to Category Business Strategy



Developing Fair Trading Practices

In his famous book, “The Jungle”, Upton Sinclair narrated the terrible consequences of the trusts and monopolies in America in the late 19th century. Known as the “Robber Barons” the owners of these large corporations had unbridled power and thus were able to gain domination over the means of production, distribution and marketing to such an extent that they controlled ordinary worker’s lives and very often impoverished their workers to serve their own greed. These actions were possible for two reasons. First, there were no real regulations other than the “market forces.” Second, the American public abhorred any kind of government intervention.

In this day and age it seems that such practices are no longer acceptable. Strict laws have been introduced by most western countries in order to prevent the market place from returning to the jungle that Sinclair wrote about in his book. Fair play is of the utmost importance and hence no large corporation can gain total control in the market. These laws have been designed as a safeguard to prevent unfair business practices such as, price fixing. Secret transactions have also been eradicated and businesses must now be open and accountable.

Thus it appears that the market place is now impartial and open-handed. Unfortunately, the theory and the reality have little in common. Logically for these rules and regulations to function as they were meant to, it is necessary for them to be applied objectively to all sectors of business – not just the least preferred businesses. And because the laws are not applied uniformly, they become a mockery. The agricultural sector is an instance of a group of powerful people (land-owners,farmer’s unions, and multinational food producers, etc.) who are allowed to flout the regulations. Any opposition, either at home or abroad, is obstructed. And even when they grow uneconomic produce, they are supported by government subsidies, and thus the government has a vested interest in persuading the public to consume these items.

These claims are exemplified by the case of sugar. Deriving sugar from cane grown in tropical climates is the most cost efficient system. But many countries that have cold climates use beets as their source of sugar, even though it is a much more expensive way of obtaining the material. And since it costs them more to acquire the finished product in this way, they need help to make sure that they can compete with the more cheaply produced sugar coming from the third world. And the help they need is given to them by the government, who tax all sugar coming into the country very highly. This means it is no longer profitable for the underdeveloped countries to sell their sugar in such a market. And so they lose the opportunity to develop their business and the consumer pays more for sugar – but those in the agricultural sector are happily getting richer albeit at someone else’s expense.

Another area where the trading practices are unfair is the fashion industry. This hugely profitable sector has government support that ensures that certain countries will be given an advantage. Certain countries in this instance happen to be first world countries. While the fair trade laws that have been set up to control the internal market do not necessarily apply to trade agreements with foreign powers, the clear discrimination against the developing world, which also provides the consumer with cheaper goods, is disturbing. How can it be justified to charge 20% import tax on every clothing item that comes from Bangladesh, 19% on those from India and 1% or even zero on those coming from developed countries such as France or England.

A frequent assertion among managers in developed countries is that “fair” trade practices make it difficult for firms from developed nations to compete with products from lower-cost developing markets. It is this claim that led to trade regulations which clearly favor the developed markets. The rationale behind these regulations is that the only way for developed markets to compete on the world stage is to significantly reduce the taxes and tariffs. From a global perspective, however, these differences should be seen as an opportunity. The system should provide incentives to firms from developed countries to manufacture, assemble, sub-assemble, distribute and store in the under-developed countries. And as long as the firms involved pay proper salaries and give the same genuine benefits a worker in the developed world would get, then, everyone would benefit. The underdeveloped countries would get the chance to develop their industries and hence their economy as a whole and the consumer would get cheaper goods. But as long as some of the larger corporations with a great deal of political clout are against such a move then unfair trade will continue and the robber barons will continue to rule, if not the poor in their own country then the poor in another part of the globe.

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How To Develop Your Organization Relationships Better

Relationship advertising and marketing can be defined as a kind of marketing that may be a outcome of useful marketing and advertising campaigns that encourages and supports lengthy term client retention. It can be unique from other types of marketing and advertising as it sees the value in creating a relationship with an buyer over time that’s beyond advertising and overt communication. It really is not just about obtaining new customers via the door.

There are a lot of various ways that relationship marketing and advertising is utilised in today’s small business world. Some is much more explicit than other folks, but some some relationship advertising examples may be observed in the following;

A recruitment company sends a client a basket filled with fruit, chocolates and wine plus a note saying ‘This is often a than you for becoming our client for 1 year.’ The client is pleased to receive mentioned basket and is reminded about the excellent occasions using the recruitment firm. As a outcome, the client will probably be much more likely to send a lot more enterprise towards the recruitment corporation.

Customers at a coffee shop are given a card whereby they get a free of charge coffee following 10 drinks are purchased. The customer has far more incentive to go back towards the coffee shop than to go to a different shop and will propose the shop to their friends and colleagues, thus growing business.

Relationship marketing is usually a prosperous and effective technique of marketing. It guarantees longevity of customers or clients and pleased clients mean more business. Corporations utilizing this technique will find prosperous relationships will create with ongoing and expanded small business opportunities.

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Those Who Dare Win – Leadership Strategies For 2011

2010 – The Euro is in free-fall, and the global uncertainty continues. After battling through 2009, with your business bruised, but intact, you consider yourself amongst the fortunate ones, having survived the “perfect storm”. But now, the uncertainty continues, resulting in more nervous investors, more caution and more doubts about how we position our businesses to meet the challenges of 2011.

3rd Quarter – The time for Visionary Leadership!

This point in the global economic flux is not a time for timidity. In this article, we argue that visionary planning and aggressive action will distinguish those who thrive, from those who falter.

Q3 2010 – strategic planning time… and time to get really creative! Consider these suggestions – they may be painful, and they may not be for you…. BUT…..

Consider a Blue Ocean Approach.

How cautious were you in 2010? Did you attempt significant revenue growth, or were you content to ‘survive’? Did you consider any new major acquisitions? or developing new products and services? Did no opportunities in emerging markets present themselves?

Dunkirk this is not – Survival is not Success. BLUE OCEAN Strategy – there is no better time than now:
* locate un-served market segments;
* locate innovative technologies;
* break the value-cost trade off in your supply chain;
* Create uncontested market space, by challenging market boundaries.

Blue Ocean – An Illustration

TATA built the NANO, focusing on an un-served market segment in India of potential car owners who can only afford $2500 – building modest unit level profits, but enormous market presence. TATA applied Blue Ocean thinking to its supply line.; building partnerships with a limited number of suppliers and putting everyone in the same room to work through problems and innovate- thereby delivering a unique value proposition, which makes the NANO viable.

Re-Align

Did the recession require you to combine business units, re-align teams, and divest layers of management? Or did you simply tighten your belt?

In the climate of uncertainty, how do you ensure that you remain competitive? How do you structure your organization so it is most effective and manage resources, so the company is most profitable? Winning companies will take this planning opportunity to realign their structures by consolidating, merging, acquiring and investing now in capabilities that will best differentiate them from their competitors.

Managing your portfolio for success requires that you make decisions that:
1. Capitalize on their core and unique competencies;
2. Seek complimentary acquisitions which build on their core capabilities, and
3. Drive down costs by divesting businesses which increase complexity through use of unique competencies

What’s has been clear from our experiences in 2010, as in 2009, is that there is the potential for discontinuous change in the structure of most industries. Your, success hinges on your ability to adapt immediately and continually to structural changes, and seize strategic opportunities. These opportunities are likely to be present in front of you now.

Senior Leaders must ask themselves:
* Are these lines of business vital to the future of the company?
* Will this business generate sustainable growth opportunities for the company?
* Does this business offer potential for returns greater than investors could achieve in other areas of their equity portfolio?

Divestment of an line of business in a portfolio often sends shivers up the spine of a CEO, in fear that the loss of a revenue stream may be irrecoverable. However, the more likely outcome of divesting a non-performing asset or line of business, will be the freeing up of capital and time to growth more promising lines of business.

Tweak your Organization Culture

Fear permeated all workforces in 2009. Fear crushes motivation and energy. Creativity and innovation are inextricably linked to energy, and motivation. The creative spirit is essential to drive your organization out of the current economic and emotional malaise.

Organizational behavior therapist will claim that by applying “engagement”, motivational stimuli” and engendering “discretionary effort” etc. we will be able to extract more out of our demotivated and diffident workforces.

The truth is that in these times, trust will be hard to build. Leaders will need to work hard to make up for the goodwill that will have been lost, and this will be even more demanding when seeking to re-align and divest (human or other) assets

First – understand your culture….is it cohesive, is it participative? Does you workforce feel aligned with your values and your vision? (Affiliation). Or is it overtly performance focused? Failure to deliver bites hard in times of downturn. Performance – focused cultures feel this pain the most.

It is vital before you proceed on a major organizational transformation initiatives, that you have clarity on the norms and values which prevail in your organization today. IN conducting an organization culture survey, you will be able to plan for organizational improvement initiatives, which make the process of restructure and change much smoother, and with greater chance of success.

Build Leadership Competence

Your talented high performers will probably be very skeptical of simplistic approaches to “cultural engineering”. Indeed, it is our contention that high performers are often turned off by bureaucratic process, by internal politics, by smoothing over the ‘crack’s with statements of “shared cultural values”, and – above all -, they will be disenchanted by inadequate leadership.

Ineffective leadership is immensely costly – we only have to look around the global business landscape today to see the remnants of companies which were once dominant. Much of the blame for their demise lies squarely in complacent, short-termist and poorly educated and trained leadership.

We often consider the role of the leader to provide certainty in what are uncertain times. Certainty is, as has been seen, an illusion. The truly great leaders will instill the ability to ‘adapt’ and cope with the constantly changing environment which our economies face in the coming years.

We recommend investing in developing your leaders as a matter of high priority. The leadership of the future must be able to adapt to rapid change, to think strategically, and to manage continuous change in the workplace.

Go Web 2 – embrace the future

Are you aware of the potential of Web 2 technologies today. Do you know how much your legacy systems are costing you, your ERP, your CRM system – what is the true total cost of ownership of these systems? Have you spent the typical 5 times the original price of the software cost in operating and maintaining the systems (the normal TCO)? Do you know there are alternatives?

Today, SaaS (Software as a Service) offers vastly lower Total cost of ownership, and delivers much, if not all the functionally of conventional locally hosted software – at a fraction of the price. (Salesforce.com etc).

Do you use Web2 communications? How often do you use wen-conferences for Quarterly Performance Reviews, or do you fly managers in from remote locations? Does the organization enable collaboration on projects through virtual networks? Do you create channels for employees to collaborate across time zones, and physical locations with having to leave their offices?

Today, Web 2 technologies enable us to manage major parts of our businesses offshore. Take technical drawing for example – why keep in in-house when it can be done offshore and managed fully effectively at a fraction of the cost on local services?

We must not forget Web2 Marketing – Facebook, Twitter, Squidoo are only the beginning.

Make 2011 your Year!

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