Competing against low-cost products and services.

Explain why your products are more expensive. What is the core value of your product? Ferrari is not only as a car, but as a sign of recognition, opulence and confidence. Maybe you sell you experience in the field or post-purchase services like yearly maintenance (Swiss watch) for free.

Find the competitive advantage for the product. Maybe, it is produced in an environmental friendly way and could be remanufactured (Caterpillar with their scrap incentives and associated discounts).

Maybe the product is easier to use or contains more healthy substances.

78. Value disciplines: customer intimacy, operational excellence and product leadership.

Operational excellence - sustainability, is a value discipline which main goal is to provide products or services at lowest possible cost at least inconvenience, focusing on cost management and operational efficiency.

Product leadership - Those companies gained its competitive advantage through selling innovative products with new features. They core competencies are R&D capabilities, company structure flexibility that is adjusted to short product life cycles, as well us know how and innovative organizational culture. Good example is apple.

Customer intimacy - deep customer relationships for customized results. Production of customized clothes, computers (DELL) etc to build the base of long lasting, loyal customers through fulfilling their unique needs. Sometimes operational excellence can lead to customer intimacy.

79. Business objective of maximizing the long term shareholder value

Shareholder value is a business buzz term, which implies that the ultimate measure of a company's success is to enrich shareholders.

Management should first and foremost consider the interests of shareholders in its business decisions. Although this is built into the legal premise of a publicly traded company, this concept is usually highlighted in opposition to alleged examples of CEO's and other management actions which enrich themselves at the expense of shareholders – could dilute shares before acquisitions.

As shareholder value is difficult to influence directly by any manager, it is usually broken down in components, so called value drivers. Revenue, Operating margin, cash tax rate, capital expenditure, cost of capital.

Talk about CSR.

Example of Deutsche Bank Polska – customers are first who are served by managers, then shareholders, employees and stockholders.

Date: 2015-02-03; view: 635