Why should managers care about IT and how can companies use IT as a strategic advantage

How IMD helps companies innovate

Live on Sky TG 24 Milan, November 10, 2011

Programma di approfondimento economico condotto da Paola Saluzzi

Special webcast with Professor Arturo Bris

Business managers are finding it increasingly difficult to distinguish their products or offerings in the marketplace. To differentiate, organizations typically push new features -- features that are then copied and re-worked by competitors. It's a process that throws an industry into a looping cycle where competitors never manage to really get ahead. IMD Professor Howard Yu looks at how companies can get out of the endless game by examining the relationship between modularity and commoditization. He says companies must reframe their value propositions and better understand the needs of customers if they wish to get out of the rat race.

Major corporations are very good at maximizing revenue capture for their owners -- but they do so by externalizing costs to society. This drives many of the fundamental problems we currently face, from environmental degradation to economic inequality. IMD Professor Michael Yaziji discusses limitations to the three current solutions to this root challenge: the free market, regulation and socialization. He also proposes a new fourth solution that deconstructs the concept of capitalism to maximize the benefits of market competition and minimize the societal impact of current systems: changing company ownership and governance structures to internalize the interests, and so create value for all stakeholders.

The global economic crisis clearly showed that the old financial model can no longer be maintained. This model typically saw the company trying to create value through business models and strategies that kept its surrounding network of customers, investors and communities at arms' length. This is beginning to change, with companies now removing some of their boundaries to include major stakeholders and co-create value with them. IMD Professor Salvatore Cantale examines this shift, looking at the examples of Twitter and Grameen Bank as well as the role of consumers in driving capital flow according to their values.

A recurring theme in our recent series of webcasts on leading in turbulent times has been to look beyond the current financial crisis and anticipate more permanent changes that it will bring to the business landscape.

During the recent Orchestrating Winning Performance (OWP) program at IMD, we surveyed the attending CEOs on what they saw as the contours of this emerging landscape and what it meant for managing their businesses. The table below lists some of the questions asked, and a summary of their responses.

To recap, industry clusters in China are on a different scale to their equivalents in other parts of the world. Here they can represent several thousand enterprises, from small to large, in a limited geographic area and all engaged in the same sector. From silk ties to socks to auto accessories - each industry has its cluster in China.

Many of us are familiar with the concept of industry clusters and may be aware of Michael Porter’s framework, The Competitiveness of Nations. But industry clusters in China are altogether different. Rather than a grouping of a few major firms by region or country, industry clusters in China can represent several thousand enterprises, from small to large, in a limited geographic area and all engaged in the same sector. From silk ties to socks to auto accessories - each is part of a cluster in China.