Doughnut Structure


Although most organization charts are constructed in the shape of a pyramid, extending downward from the board of directors or president, some firms have doughnut structure—an organization chart made up of concentric circles that represent top management, staff personnel, and functional areas and that reflect a more flexible structure—people see themselves working in a circle as if around one table. One of the positions is designated chief executive officer, because somebody has to make all those tactical decisions that enable an organization to keep working. The doughnut design is made up of concentric circles, in which the center ring consists of top management. The second ring is composed of important staff personnel, such as legal, personnel, research and development, and electronic data processing, whose services are used by all departments. The third ring consists of managers of functional areas, while remaining rings comprise department and other supervisory managers

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Concentric Diversification


Grand strategies involving diversification represent distinctive departures from a firm’s existing base of operations, typically the acquisition or internal generation (spin-off) of a separate business with synergistic possibilities counter-balancing the strengths and weaknesses of the two businesses. Diversifications occasionally are undertaken as unrelated investments, because of their high potential and their otherwise minimal resource demands.

Concentric diversification involves the acquisition of businesses that are related to the acquiring firm in terms of technology, markets, or products. With this grand strategy, the selected new businesses possess a high degree of compatibility with the firm’s current businesses. The ideal concentric diversification occurs when the combined company profits increase the strengths and opportunities and decrease the weaknesses and exposure to risk. Thus, the acquiring firm searches for new businesses whose products, markets, distribution channels, technologies, and resource requirements are similar to but not identical with its own, whose acquisition results in synergies but not complete interdependence.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Generic and Grand Strategies


Many businesses explicitly and all implicitly adopt one or more generic strategies characterizing their competitive orientation in the marketplace. Low cost, differentiation, or focus strategies define the three fundamental options. Enlightened managers seek to create ways their firm possesses both low cost and differentiation competitive advantages as part of their overall generic strategy. They usually combine these capabilities with a comprehensive, general plan of major actions through which their firm intends to achieve its long-term objectives in a dynamic environment. Called the grand strategy, this statement of means indicates how the objectives are to be achieved. Although every grand strategy is, in fact, a unique package of long-term strategies, some basic approaches can be identified: concentration, market development, product development, innovation, horizontal integration, vertical integration, joint venture, strategic alliances, consortia, concentric diversification, conglomerate diversification, turnaround, divesture, and liquidation.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Delighting the Customer


Companies need to delight customers to gain a competitive edge. The delight is referred to as a profoundly positive emotional state that results from having  one’s expectations exceeded to a surprising degree. The type of service that results in delight is “positively outrageous service”—that which is unexpected, random, extraordinary, and disproportionately positive.

A way that managers can conceive of delight I to consider product and service features in terms of concentric rings. The innermost bull’s eye refers to attributes that are central to the basic function of the product or service, called musts. Their provision isn’t particularly noticeable, but their absence would be. Around the musts is a ring called satisfiers: features that have the potential to further satisfaction beyond the basic function of the product. At the next and final outer level are delights, product features that are unexpected and surprisingly enjoyable. These are things that consumers would not expect to find and are therefore highly surprised and sometimes excited when they receive them. For example, in your classes the musts consist of professors, rooms, syllabus, and class meetings. Satisfiers might include professors who are entertaining and friendly, interesting lectures, and good audio-visual aids. A delight might include a free textbook for students signing up for the course.

Delighting customers may seem like a good idea, but this level of service provision comes with extra effort and cost to the firm. Therefore the benefits of providing delight must be weighed. Among the considerations are the staying power and competitive implications of delight.

Staying power involves the question of how long a company can expect an experience of delight to maintain the customer’s attention. If it is fleeting and the customer forgets it immediately, it may not be worth the cost. Alternatively, if the customer remembers the delight and adjusts her level of expectation upward accordingly, it will cost the company more just to satisfy, effectively raising the bar for the future. Delighting customers does in fact raise expectations and make it more difficult for a company to satisfy customers in the future.

The competitive implication of delight relates to its impact on expectations of other firms in the same industry.if a competitor in the same industry is unable to copy the delight strategy, it will be disadvantaged by the consumer’s increased expectations. If you were offered that free textbook in one of your classes, you might then expect to receive one in each of your classes. Those classes not offering the free textbook might not have high enrollment levels compared to the delighting class. If a competitor can easily copy the delight strategy, however, neither firm benefits (although the consumer does), and all firm may be hurt because their cost increase and profit erode. The implication is that if companies choose to delight, they should do so in areas that cannot be copied by other firms.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight