Become a PowerPoint Guru by Dave Tracy
Learn the methodologies, frameworks, and tricks used by Management Consultants to create executive presentations in the business world.
Currently viewing the tag: "Business Model"
Early 2000s saw a change of mind regarding the Globalization of commerce by members of the political and economic arenas. This change of mind was instigated by myths perpetuated against commerce Globalization because of the dichotomy that appeared between existing Operating Models of companies and needs of the emerging markets.
These perceived trade-offs that were myths included ideas like choosing between centrally-controlled Operating Model and local responsiveness model.
Proponents of the central model had the view that intellectual power and Innovation capability had to be centralized, all products and services brought in line everywhere, foregoing catering to diverse needs and demands of customers in every emerging market.
The converse view was that in order to have locally applicable distribution systems, proactive Supply Chains, and reduced costs of emerging-market management, it was necessary to devolve the company and operation as a loose federation.
This trade-off incompatibility was addressed by the Hub Strategy where, in place of a single center, companies set up principal office “hubs” in as many of the 20 gateway countries of the world as required—a global corporate structure with no headquarters.
These 20 gateway countries represent 70% of the world population and generate 80% of the world income. The gateway countries include Australia, Canada, France, Germany, Italy, Japan, the Netherlands, Spain, the United Kingdom, and the United States from the developed economies. Rest of the 10 are emerging markets of Brazil, China, India, Indonesia, Mexico, Russia, South Africa, South Korea, Thailand, and Turkey.
This new Business Model covers both the recognized advantages of developed markets and the possibilities of emerging economies. A model that handles decentralization, centralization, existing practices, and possible disruptions not as trade-offs, but as complements.
It is, however, important to understand that for the model to have its full impact, 3 core pillars have to be integrated and pursued simultaneously. The 3 Pillars of Globalization are:
- Customization
- Unity
- Arbitrage
Only business leadership that has taught itself and its teams to be very careful about where to customize, how to develop capabilities, and what to arbitrage are the ones reaping benefits from this model.
Let us delve a little deeper into the details of the 3-pillar Business Model.
Customization
Variation in needs, wants, and cultures of consumers makes it impossible to customize centrally. Providing products and services in a locally competitive manner is therefore central to become a global enterprise.
Customization entails fulfilling the requirements and wants of varied consumers, in areas such as product or service features, affordability, and cultural alignment. Hub Strategy provides the leverage to fulfill this demand by enabling companies to customize only in the 20 gateway countries.
Unity
Unity entails worldwide alignment of the company with, a unified central purpose, a body of exclusive first-rate knowledge, and capabilities that differentiate the company from all others.
Core purpose must be understood in the same manner by all functions of the company, in every geographical location.
Arbitrage
Arbitrage is a methodical initiative that consists of increasing effectiveness and Cost Reduction by discovering materials, manufacturing methods, logistics practices, funds sourcing, or infrastructure that are less expensive.
Interested in learning more about the 3 Pillars of Globalization and its Case examples? You can download an editable PowerPoint on 3 Pillars of Globalization here on the Flevy documents marketplace.
Do You Find Value in This Framework?
You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:
“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”
– Bill Branson, Founder at Strategic Business Architects
“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”
– David Coloma, Consulting Area Manager at Cynertia Consulting
“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”
– Roderick Cameron, Founding Partner at SGFE Ltd
Editor’s Note: If you are interested in becoming an expert on Supply Chain Management (SCM), take a look at Flevy’s Supply Chain Management (SCM) Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can stay ahead of the curve. Full details here.
The conventional Business Model for Manufacturing is in the process of Transformation. Centralized production has given way to dispersed manufacturing that is customized. Conventional operating practice at large-scale manufacturers is to keep the high-cost R&D distinct from the low-cost production. Digital Fabrication is changing this operating practice.
More and more Digital Fabrication Tools are being developed and used every day which is laying the foundation for Digital Transformation revolution. These tools are being used to develop customized end-products by small-scale manufacturers and in some cases single-person manufacturing concerns. Digital Fabrication tools may be 1 of the following 2 types:
- Programmable Subtractive Tools—designed to carve shapes from raw materials. Examples of such tools include laser cutters, CNC routers and milling machines, plasma or water jet cutters.
- Additive Rapid Manufacturing Tools—which are predominantly computer-operated 3-D printers that chiefly construct objects layer by layer but may also be designed to use laser or electron beams.
The impact of the community of individuals dealing in Digital Fabrication tools in disrupting the conventional manufacturing model, is more than the tools themselves. The community is, essentially, a self-established, worldwide Supply Chain, involving quite a few interconnected setups, user clusters, cybershopping sites, and social media environments.
The creators have fashioned open-source collaborations that leverage dropping costs of Digital Fabrication and current social media connectedness. Distributed manufacturing networks allow customers to post job requests that can be taken up directly by fabricators.
In the fabricator-culture, individuals are supposed to make their plans and specifications public, usually under an open-source license, which permits anyone to replicate, adapt, and learn from the designs; always giving credit to the creators and common access to ideas. Collaborators share information mutually, assist each other in progressing, and nothing is owned or controlled centrally. Accessible repositories allow creators to trade plans and instructions, align production, and sell their designs and fabricated articles straight to the society.
Considered holistically, Digital Fabrication and information sharing is ushering in a broadening of the manufacturing environment.
Big manufacturers will have to undergo Business Transformation by adopting open-source innovation, adaptable production, and knowledge-intensive production lines in order to move towards Digital Manufacturing. Large-scale manufacturers desirous of taking advantage of the Digital Fabrication Transformation will find the following 5 principles indispensable in transforming their operating practices:
- Cultivate Digital Capabilities.
- Establish a Hybrid Product Line.
- Embrace Open Innovation.
- Develop New Fabrication Materials.
- Prepare for Misuse and Infringement.
Digital Fabrication’s effect on manufacturing has been similar to that of the internet on information-centric solutions and services or like video content platforms’ effect on television networks.
Let us delve a little deeper into some of the principles.
Cultivate Digital Capabilities
Investing in technology that enables the business to make part of the product portfolio using printable composites, in a back room, will give it a Competitive Advantage.
Gaining Digital Fabrication skills and experience now will set the launch pad for leveraging when the time is right.
Establish a Hybrid Product Line
Start a product line that is mixed—with corresponding mass-production and individual-production articles. New feature substitution, alteration in production line, or restarting production of old products can easily be achieved with Digital Fabrication tools, at a profit.
Certain commonly used products that are consumed in large quantities are better off produced on large scale.
Embrace Open Innovation
Offset reverse engineering and modification culture being driven by the ease of Digital Fabrication with Open Innovation.
Interested in learning more about Digital Fabrication Transformation? You can download an editable PowerPoint on Digital Fabrication Transformation here on the Flevy documents marketplace.
Want to Achieve Excellence in Supply Chain Management (SCM)?
Gain the knowledge and develop the expertise to become an expert in Supply Chain Management (SCM). Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.
Supply Chain Management (SCM) is the design, planning, execution, control, and monitoring of Supply Chain activities. It also captures the management of the flow of goods and services.
In February of 2020, COVID-19 disrupted—and in many cases halted—global Supply Chains, revealing just how fragile they have become. By April, many countries experienced declines of over 40% in domestic and international trade.
COVID-19 has likewise changed how Supply Chain Executives approach and think about SCM. In the pre-COVID-19 era of globalization, the objective was to be Lean and Cost-effective. In the post-COVID-19 world, companies must now focus on making their Supply Chains Resilient, Agile, and Smart. Additional trends include Digitization, Sustainability, and Manufacturing Reshoring.
Learn about our Supply Chain Management (SCM) Best Practice Frameworks here.
Do You Find Value in This Framework?
You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:
“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”
– Bill Branson, Founder at Strategic Business Architects
“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”
– David Coloma, Consulting Area Manager at Cynertia Consulting
“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”
– Roderick Cameron, Founding Partner at SGFE Ltd
Financial crisis, adverse supply shock, technological disruption, or natural hazards and disasters significantly affect global businesses. Recessions caused by these global incidents and problems have serious outcomes on commodity prices, stock markets, economies, and even countries.
A Downturn can be described as a contracted business cycle with a significant decline in economic activity across markets with subsequent drop in spending, GDP, real income, employment, and manufacturing. Downturns cause inflation, decline in sales revenues and profits, and cutbacks on R&D and other crucial expenditures. The scenario challenges businesses because of tightening credit conditions, slower demand, layoffs, and general insecurity.
The organizational readiness to manage and curtail the adverse effects of downturns is the top agenda for the senior executives. However, the uncertain nature of an economic crisis often triggers rash responses or even inaction.
Any haphazard responses or inaction can make recovery of an organization from a downturn costly later on. Downturn management necessitate a calculated approach to confront the uncertainties, anxiety among the employees, and to unlock opportunities out of such crisis. An effective approach to deal with the downturn crisis encompasses 2 key phases:
- Stabilize
- Determine Exposure
- Minimize Exposure
- Capitalize
- Invest for the Future
- Pursue M&A Opportunities
- Redesign Business Models
Let’s dive deeper into the 2 phases.
Stabilize
This phase entails a series of actions to safeguard the organization from downturns and maintain the liquidity required to sustain the period of uncertainty. Leading organizations take downturns as an opportunity to deploy planned yet urgent, high-priority interventions to maintain standard functioning of the enterprise. They carry out careful analysis to appraise and curtail the risks of exposure. Key steps required to stabilize the organization during a downturn include:
- Determine Exposure
- Minimize Exposure
Determine Exposure
This step demands a methodical assessment of risks associated with exposure. This necessitates evaluating various scenarios and their impact on the organization as well as on the industry. The step helps in ascertaining the units that are more susceptible to downturn risks and warrants prompt action. The analysis of various scenario assists in highlighting and communicating the rationale—for interventions required to manage the downturn—to the people across the organization.
Specifically, the step involves initiating 3 fundamental actions:
- Conduct Scenario Analysis
- Quantify Impact
- Analyze Competition
Minimize Exposure
Once the executives have determined the impact of downturn exposure on their business, it’s time to work on reducing the exposure from crisis risks. An understanding of the effects of a downturn exposure on the business helps the senior executives discern the most appropriate method to subsist and make the most of their organizational performance during the downturn.
In order to subsist and minimize downturn exposure risks senior leadership needs to maintain enough liquidity and access to capital to make sound investments in future, keeping a check on cash flows by generating weekly / monthly cash reports, cutting down or delaying discretionary spending, carrying out interventions to improve fundamental business, improve business processes, and maintain the organization’s market value and positive outlook for the investors.
Specifically, the executives have to work on achieving these 3 objectives:
- Protect Financials
- Protect Existing Business
- Maximize Valuation.
Capitalize
The Capitalize phase focuses on growing the business and making the most of the economic situation. Leading organizations prudently manage downturns with greater diligence and immediate, well-thought-out response. Downturns do not preclude executives from investing in critical interventions. Most investments take time to fruition and postponing crucial investments may put an organization on the back foot when economic conditions normalize.
To capitalize on these hard times, senior executives need to carefully think about and prioritize the various investment options and endeavors critical for improving productivity and revenue, consolidate the business through mergers or acquisitions, hold back spending on projects with unclear results, shelve the endeavors that do not have a key role in future success, and invest in developing their people.
Specifically, they should chart out 3 key actions to take advantage of the crises and emerge rejuvenated after these tough times:
- Invest for the Future
- Pursue M&A Opportunities
- Redesign Business Models
Interested in learning more about the phases and key actions required to manage Downturns? You can download an editable PowerPoint on Downturn Management and Transformation here on the Flevy documents marketplace.
Are you a Management Consultant?
You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.
