Creating Corporate Advantage

Creating Corporate AdvantageThe triangle of corporate strategy

The resource continuum

Competitive Advantage:Specialized in optoelectronics technologyCreation of LCDLCD viewfinder in video recorders, capturing 20% of Japanese market within six months of product launch.Atsushi Asada, senior executive believes, Sharp can successfully extend its scope into many new businesses as long as competitive advantage depends on one of its core technology. E.g. extension of its screen technology.

Coordination:Depends on shared technological activitiesDivision of functional units rather than production divisionsHence providing responsibilities rather than authoritiesCorporate committees to ensure shared activities that includes R&D unit and sales forces are optimally configured and allocated among the different product lines.

Control System:Needs control system that focuses on human behavior than on short-term financial outcomes achieved.Believes on promotion rather than annual compensation.Promotion on the basis of seniority and skills.Reinforces on the view that the company is a family or community whose members should cooperate for the greater good.

The resource Continuum-SharpNature of resources Scope of businessesCoordination mechanisms Control systemCorporate office sizeGeneralwidetransferringfinancialsmallspecializednarrowsharingoperatinglarge

Competitive Advantage:Wide range of business of low-tech businesses.

tCoordination:Transferring coordination.Based on performance rather than human behavior.Fails to perform Tyco will look for replacementSmall entrepreneurs within small groups focusing on business expansion and profitability.no meetings, no memos

tControl System:Financial control system offering powerful incentives to achieve extraordinary results.Division executives are held strictly accountable for a limited number of financial measures.

The resource Continuum-TycoNature of resources Scope of businessesCoordination mechanisms Control systemCorporate office sizeGeneralwidetransferringfinancialsmallspecializednarrowsharingoperatinglarge

Failure at SaaTcHI and SaATchiFailureInconsistencyCompetitive advantageCustomer relationships/creative advertismentBusiness expansion to merchant and commercial bank.General resourcesBut no financial control systemUnwanted growth in employees and lease office spaceFindingsSharp, Newell and Tyco at different position on The resource continuumDifference in the business context, difference in company start point and different kind of resources.Different philosophySharp-technology as nucleusTyco-no meetings, no memosNewell-Lesson learnedAn outstanding corporate strategy a carefully constructed system of interdependent parts and not a random collection of individual building blocks.Importance of consistency (alignment of resources) in maintaining competitive advantageProcess of continual upgradingCreativity and intuition are hallmarks of great corporate strategies.Importance of resources in competitive advantage, coordination and control system.The importance of resource continuum in providing corporate from the highly specialized at one end to the very general at the other.one size does not fit all.Thank you