It doesn't matter much where your company sits in its industry ecosystem, nor how vertically or horizontally integrated it is - what matters is its relative 'share of customer value' in the final product or solution, and its cost of producing that value.
Interpretation
The location of a company within its industry is less important than how much value it provides to customers and how efficiently it can produce that value.
Gary Hamel emphasizes that a company's position within its industry and its level of integration are secondary to its ability to deliver value to customers and manage production costs effectively. This perspective challenges traditional views of business success, urging companies to focus on the quality and cost-effectiveness of their offerings rather than their relative industry status.
In practice
During a conference on entrepreneurship, this quote can be used to motivate startups to focus on customer satisfaction.
The real damper on employee engagement is the soggy, cold blanket of centralized authority. In most companies, power cascades downwards from the CEO. Not only are employees disenfranchised from most policy decisions, they lack even the power to rebel against egocentric and tyrannical supervisors.
The biggest barriers to strategic renewal are almost always top management's unexamined beliefs.
To create an organization that's adaptable and innovative, people need the freedom to challenge precedent, to 'waste' time, to go outside of channels, to experiment, to take risks and to follow their passions.
If customer ignorance is a profit centre for you, you're in trouble.
The single biggest reason companies fail is they overinvest in what is, as opposed to what might be.
The only thing that can be safely predicted is that sometime soon your organization will be challenged to change in ways for which it has no precedent.
Business today consists in persuading crowds.
Thinking about starting a small business? Assume everything will cost twice as much and take twice as long as you think it will.
As an entrepreneur, I've learned how crucial it is to be able to call a spade a spade and avoid falling in love with a particular strategy or product. Instead, you need to let the customer tell you what she needs - and to change her as she changes.
To those who are engaged in commercial dealings, justice is indispensable for the conduct of business.
A business is not defined by its name, statutes, or articles of incorporation. It is defined by the business mission. Only a clear definition of the mission and purpose of the organization makes possible clear and realistic business objectives.
What business strategy is all about-what distinguishes it from all other kinds of business planning-is, in a word, competitive advantage. Without competitors there would be no need for strategy, for the sole purpose of strategic planning is to enable the company to gain, as efficiently as possible, a sustainable edge over its competitors.
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