Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Friday, February 16, 2007

Core vs Edge, Pt 18849

What happens at the intersection of global hypercompetition, maturity, and shifting consumer needs?

If you're pursuing a core strategy, you consolidate.

Of course, this is a strategy which is utterly out of sync with exactly the economic pressures listed above in the first place. It's a strategy which dominates the industrial economics of scale and scope in mass production.

What Detroit needs are edge strategies, focused around deconstructing value chains, achieving hyperefficiency (vs simple cost-sharing), and shifting control to customers.

Think how the most simple shift to decentralization - kaizen - revolutionized autos in the 80s/90s.

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-- umair // 12:58 PM // 1 comments


Consolidation is nearly always the strategic response to a perceived environmental threat. Often this response is "pre-programmed" as the management, who have reached this pinnacle after years of skills acquisition, now use those same response skills in another threat situation. Indeed, the reflex seems so deep seated, that it is sometimes easier to swop out management once it is realised that the consolidate reflex will not work. When you look back to the actual additional value delivered by M&A activity, the consolidation reflex rapidly becomes the gag reflex (sorry, couldn't resist it!)
// Blogger Paul Sweeney // 4:41 PM

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