Value Creation and Profit Optimization

The present paper develops a basic framework for evaluating and optimizing profits in a business operation. In developing a business we are often faced with an infinity of choices ranging from what products or services to sell and what customers to target to how to structure and manage the organization. To support the decision-making process a semi- quantitative dimension is here added to the traditional strategic scenario planning. It consists of a general-purpose seven-step evaluation process: (1) The starting point is a list of strategic options, as they may have been identified during conventional strategic planning. (2-3) The next steps are to identify who will influence the value creation process, and what value drivers each of them use to influence it. (4) For customers representative of different segments we can evaluate the value to the customer, the risk to the customer and the relative market power between buyer and seller. The paper explains how this can be related to the market price that each of these customers is likely to be willing to pay. (5) While the income is critical, so it the cost: the following step is to analyze the cost structure and understand how it scales with market size. (6) By combining the results from the two previous steps it is possible to find the optimal profit as a function of volume, value drivers and the other parameters. (7) In the final step the strategic implications of the various options are integrated with other knowledge to form the basis for selecting a winning business strategy. An example of a yet-to-be consumer product is used to illustrate the process.cost, customer specific cost, market power, pricing, profit optimization, profits, radical innovation, risk discount, strategic scenario planning, value chain, value creation, value drivers, value net

Evaluation of strategic information systems planning (SISP) techniques: Driver perspective

Strategic Information Systems Planning (SISP) literature reviews with a focus on the global dimension are considered in this research. The paper counters the evaluation of SISP techniques through information system (IS) strategic drivers. These techniques can be vital contributors in the IS strategy (ISS) designing process. Therefore, categorisation of the techniques of ISS planning will be developed. Keeping in mind the global dimension, the planning team needs to identify how it can cluster an organization’s ISS drivers. This may be achieved by analysing the drivers that can have an effect on IS for the organization, which may support categorisation of drivers against techniques being classified to understand which are needed to fit specific drivers. The contribution of this research is the taxonomy of SISP techniques, with a case study for X international airlines. This classification can benefit evaluation of the ISS planning processes to support decision-makers through the planning process

The Effects of Culture and Structure on Strategic Flexibility During Business Model Innovation

This study uses responses from 107 multinational firms to reveal CEO perceptions of the drivers of strategic flexibility during business model innovation. While the positive effect of creative culture is confirmed, partner reliance reduces strategic flexibility during business model innovation. Further, structural change is disaggregated into efforts that either focus managerial attention on core activities or reconfigure existing activities. CEOs perceive that structural flexibility requires structural simplification while retaining control of non-core functions. We find that the relative magnitude of business model innovation effort moderates the effect of reconfiguration on strategic flexibility. The implications for theories of organizational design and dynamic capabilities are discussed

The interplay of strategic and internal green marketing orientation on competitive advantage

This paper seeks to clarify and refine the relationship between strategic and internal green marketing and firm competitiveness. Despite the significance of corporate environmental strategy to firms adopting a triple-bottom line performance evaluation, there is insufficient focus on strategic green marketing and its impact on a firm’s competitiveness. This study fills the gap by providing a comprehensive view of strategic green marketing and its impact on competitive advantage. Findings also reveal the moderating role of internal green marketing actions towards the development of a sustained competitive advantage. Specifically, the findings build on contemporary green marketing literature suggesting that a significant interplay between strategy and people exists which enhances the creation of competitive advantage. This in turn increases financial performance. Finally, this research uses an updated approach to build on current literature concerning the drivers and outcomes of strategic green marketing. This provides managers with nuanced insights about environmentally-driven competitive advantage

On Shelf Availability: A Literature Review & Conceptual Framework

On-Shelf Availability (OSA) is a key performance indicator for the retail industry, greatly impacting profit and customer loyalty. Strong competition in the industry causes retailers and suppliers to put heavy emphasis on improving performance in an effort to satisfy consumers and keep them coming back to their store or product. Over 40 years of research has been done on OSA and its complement, out-of stock (OOS), however very little progress has been made in improving performance in these areas, leading to the belief that gaps in extant research exist. In order to solve the OOS problem, the key drivers of OOS events must first be identified and then addressed. This paper focuses on identifying the drivers of poor OSA performance through a three step process. First, a comprehensive literature review was performed to identify the drivers of OOS addressed in existing literature. Second, interviews with industry professionals revealed potential drivers of poor OSA performance that have been explored at an industry level. Finally, the two lists were examined against each other and the potential drivers identified in the interviews that had yet to be researched were highlighted. This paper gives strategic direction for future research to help solve the OOS dilemma facing manufacturers and retailers today

Quantitative analysis of strategic and tactical purchasing decisions

Purchasing management is a relatively new scientific research field, partly due to the fact that purchasing has only recently been recognized as a factor of strategic importance to an organization. In this thesis, the author focuses on a selection of strategic and tactical purchasing decision problems. New quantitative models are developed for these decision problems using a range of mathematical techniques, thereby contributing to the further development of purchasing theory and its appliation in practice.The selected purchasing decision problems are:-ROI improvement drivers from a purchasing perspective-allocation of cost savings in a purchasing consortium-strategies for tendering procedures-fixed-price contracts versus spot market buying-supplier switching strategies for single sourcing-electronic procurement roll-out strategie

Strategic focus areas and emerging trade arrangements in the South African agricultural industry since the demise of the marketing boards

This paper investigates the responses of agribusiness managers to drastic changes in the policy and marketing environment of South African agriculture. The process of deregulation and liberalisation of agricultural markets exposed agribusiness managers to international trends, which required new institutions and relationships. Based on a survey conducted among business managers, we explored emerging growth strategies, strategic focus areas and coordination preferences. Results suggest that managers prefer a growth strategy based on market penetration and market development. Important strategic drivers are value-adding and power drive. Managers expressed their preference for increased coordination and cooperation resulting in relation-based contracts and equity-based alliances.agribusiness, strategic focus areas, institutional arrangements, South Africa, Agribusiness,

Institutions, Institutional Change, Strategic Assets and Competitive Advantage of American and French Film Industries (1895-1998)

This paper uses neo-institutional economics (I.E.) to examine why French film production firms have lost their competitive advantage to their American competitors from 1895 to 1998. I.E. posits that major institutional changes result in changes in firms' strategic assets and strategies as well as in strategic industry factors. This causal path represents a bold shift in perspective from Industrial Organization, which considers the institutional environment as exogenous and largely beyond the reach of strategy. The same holds for the Resource-Based View. Several propositions stemming from neo-institutional economics are examined with a qualitative historical methodology. Robust evidence is provided to confirm the importance of neo-institutional explanations of strategic and industry changes over the whole period under study. However, institutions and institutional change have not been the sole drivers of industry and firms evolutions: chance (technologies and wars) and cognitive models of industry players also played their part, albeit complementary.neo-institutional economics; film industry; competitive advantage; France; USA