Wednesday, September 16, 2009

Learn Cheaper and Better Strategy from Japanese.

Cheaper and Better

Back in the 1970s it was generally accepted that a good strategy involved clear choices. You couldn't be all things to all people. You couldn't keep all your options open.
In particular, you couldn't be cheaper and better. As Michael Porter put it back then, you had to choose between a low cost strategy and a differentiation strategy. Differentiation generally meant being better (or being perceived as better) and more expensive. This polarized choice was seen as capturing how customers behave and how firms have to compete. It was even seen as true of countries. You could choose high-quality and very expensive machine tools from Germany or cheap and not very reliable tools from (this was the 1970s) Japan.

Then the Japanese changed the whole game. They moved up from low cost entry points and became the benchmark for quality, reliability, top-end design, branding — everything associated with differentiation. Honda and Toyota set new quality standards in cars, trouncing GM and Ford. The same story played out in televisions and audio, in cameras, in bicycle gears. The Japanese showed that the killer play was to be cheaper and better.
More recently, New World wines have knocked the French off the top of the heap on quality and cost. Dell's 1990s leadership in PCs was based on high efficiency and low cost combined with superior customer service.

There are exceptions where customers still need to see high cost as a signal of quality, like perfume, cosmetics, high-end fashion goods; or like investment banking, consulting, legal services. But most businesses now strive to be cheaper and better; customers look for products and solutions that are cheaper and better. Tight cost management is seen not as opposed to high quality but as part and parcel of it.

The same polarization used to be discussed around company cultures. You could either be a caring, nurturing company or you could be a hard-ass cost cutter. Who would want to work for the latter? How could you expect to attract and retain talent?
Nevertheless, this is another false choice. It turns out that talented employees generally prefer demanding employers. They want to work in well-managed, profitable businesses. They don't want underperformers cuddled and cosseted.



Post a Comment

Place Your Comments Here

Recent Posts

Make Money Profit

Smart Money Success. Financial Success. Business Success.

Online Success Center. Professional Resources for Online Success.

Yahoo MyWebLog Recent Viewers

Business & Life Success Resources Centre

Support Us

1. Rate Me 5 STARS-->

2. Favourite my Blog --> Add to 

Technorati Favorites
3. Vote me --> Top Blogs
4. Vote me -->
5. Just Click this one only--> the best
6. Just Click this one only --> Blog Directory
7. Click "HOME" -->
8. Rate me --> blog search 

9. Rate Me --> Rate My Blog

Verified Blog

Total Pageviews


Learning Corner.Engineering Books.Management EBooks.Business Books.Computer Book.Discount Bookstore. Copyright 2008 All Rights Reserved Revolution Two Church theme