We have been “taken over” again! Our parent company had accepted to be taken over by another company so it means we are the biggest “corporation” in the industry. Taking the largest market share but unfortunately our parent company is not doing that well. Anyway my group did a good job as we have increased our profit again which brings us positive news. As a HR manager, I am not satisfied with the result that we have too much idle time in manufacture. We have too much capacity and workers at the moment. In the following rollover, we need to either decrease capacity or increase production by increasing product demand. However, at this stage we have not met and discussed with other groups yet so we are not making any decision until we have compromise with them. We cannot keep our original strategy going regarding to change of situation since the last two rollovers. After the take-over, we also need to consider other group's concern and preference. Our strategy is flying blind as we seem not be able to stick with our original plan anymore.
According to this week's reading, Baghai, Smit and Viguerie examines how the world has become more granular. Using the granularity of growth theory, our team can adopt more granular approach to growth, especially on increasing our production scale. In the current market, there is no more new segment for the industry so we have to increase our economic scale and production scale in order to gain competitive advantage and make growth. By adopting this theory, one way that we can do is to “focus all firepower on one area of production” (Davenport, 2006). For example we can just focus producing one or two types of bikes to create the greatest competitive advantage. Real life successful examples such as American Airlines and Otis Elevator adopt groundbreaking systems for their electronic reservations and predictive maintenance issues. The transformation turns effort into profits to the company. Considering we are the subsidiary company to two other companies, we cannot produce similar products to them to avoid any possible conflict and competition.
In order to achieve this consensus among three companies with different strategies. Close communication is extremely important for sustainable development for everyone. In addition trust is an important element of firm-cooperation. For suggestion we can divide our products into three level in terms of quality: low, medium and high. Say if our company is going for low quality, low cost and low price strategy. Other firms just try not to overlap of what we do to maximise our revenues. It is the same to us as trying not to approach the higher quality segment because we maybe hurting others' profitability. Compromise needs to be taken when all firms within one corporation wants double profitability. Once conflict appears between firm, we may just suffer from each other's competition. It would be no good for everyone instead.
At this stage all of us will need a proper conversation between each other and decide our next move. Hopefully the turnover is an opportunity for us to grow more for the future.
Baghai, M., Smit, S., & Viguerie, P. (2009). Is your growth strategy flying blind? Harvard Business Review, 87(5), 86-96.
Davenport, T. H. (2006). Competing on analytics. Harvard Business Review, 84(1), 98-107.