Date Tags business

There was a time, not more than a few decades ago, if you were General Motors you would attempt to own every part of your business. The assembly lines, the parts manufacturing plants, the stamping units, the ancillary units and even such parts of the business as the software that runs the business, the dealerships that sell the cars, the steel mills or even the mines that produce iron ore for the mills. And for good reason - you either could not trust others to be savvy enough to produce and send you the material that you wanted when you wanted it or the margins in each of those businesses were big enough for you to try and own all those operations. There was only one thing wrong with this picture. Your business became an insular behemoth - far removed from the customers and moving slowly in a marketplace going through a rapid transformation. Your more nimble competitors, with loose networks of aligned companies, could easily run rings around you in no time - both in terms of developing and launching new products, as well as producing and selling high quality products at lower prices.Eventually, realizing the truism inherent in the folk wisdom of farmers when they say that you do not have to own the cow if all you want is the milk, you would investigate ways of carving out parts of your business into independent entities that could be run as loosely aligned network of businesses, similar to what your competitors had evolved into. This is not extolling the virtues of keiretsu or chaebols or similarly exotic-sounding Japanese or other Asian business structures. It is, however, useful to take some lessons from the evolution and success of these Business Networks. Over the past several decades, both the global economy as well as the business structures have evolved dramatically to such an extent that now most businesses have no recourse but to create Business Networks akin to those mentioned above. So what is the magic of these Business Networks? Why are they so important? What makes one business network better than another? Is there a way to systematically assess, measure, report upon and improve and monitor the quality of your Business Network?When the tsunami flooded the eastern coastal stretch of Japan in March, 2011, the ensuing nuclear disaster combined with the devastation caused by the ocean to disrupt businesses around the world. The Japanese economy sits right in the middle of the global business network and it was natural for businesses as diverse as auto manufacturing, electronics, chemicals, petroleum products, computers and metals to experience the disruptive shock. For example, the price of the Toyota Prius went up by nearly $2400 after rumours of shortages. While it is natural for a variety of businesses to experience the disruption, it was remarkable to note that those businesses which had the most responsive and resilient Business Networks were the ones to recover from this catastrophe the quickest. Later on, we will see how to recognize the quality of Business Networks and make them more resilient and responsive at the same time.Another stark example of the power of Business Networks is that of the fire that tipped the balance within an industry. Two stalwarts in the mobile phone industry in March 2000 were equally impacted by the same event - a lightning fire in the chip manufacturing plant of their common supplier, Philips, in New Mexico. Both Nokia and Ericsson experienced the business disruption to an equal extent as a result. Fire damage to their stocks was extensive. More importantly, the manufacturing capacity was damaged and it was difficult to estimate the time for repairs. Nokia has invested months, if not years, in creating and perfecting a robust and responsive Business Network, while Ericsson's Business Network was a relatively middle-of-the-line affair that worked well when things were good. After the fire, Nokia was able to see the full impact of the chip shortage on its own business, as well as the entire industry with a lot more clarity than Ericsson, or even Philips. Moving quickly, it activated other points of its Business Network to shore up supplies, to redesign some of the chips to manufacture them in other plants, and to take other preemptive steps in the network. Ericsson let the situation evolve at its own pace and made decisions more re actively. The resulting gain in profitability and market share for Nokia, and the loss of these for Ericsson, tipped the balance of the industry to an extent where within a few years, Nokia pulled far ahead of Ericsson, which never caught up with its rival. A listing in the business directory can help to boost your business' profile on the internet.