Ian Chaston

Vision, Mission and Strategy

The increasing complexity of managing very large companies has resulted in the need to seek new ways of developing a more structured approach to planning future actions and to effectively monitor actual versus planned performance. By the 1960s, lessons learned in business planning in major corporations, mainly those based in the USA, in sectors such as car manufacturing and fast moving consumer goods (FMCG) saw the adoption of what became known as ‘strategic planning’. In their 1965 text, Learned et al. proposed that the process should involve setting performance goals and defining a strategy that together provide a framework upon which to define the nature of future operations. These authors suggested that organisations should assess relevant internal strengths and weaknesses to decide which distinctive internal competences can ensure that the organisation’s strategy is aligned with the opportunities and threats in the external environment. Any subsequent plan should specify appropriate actions to ensure that functional departments act in an integrated fashion to optimise future performance. This approach is often described in management texts as involving the three questions: (i) Where are we now? (ii) Where are we going? (iii) How to get there?

Leadership and Structure

The success of an organisation is critically dependent upon the presence of an effective leader. This individual has the potential to exert significant influence over defining and sustaining a vision, performance objectives, organisational culture, morale and employee behaviour. Significant research effort has been expended on identifying the behavioural traits that distinguish an effective leader from an ineffective one—knowledge that could prove invaluable in selecting potential candidates for a leadership position (Keller and Weibler 2014).

Opportunity Emergence and Evolution

Kirzner (1997) described an entrepreneur as an individual ‘alert’ to opportunities. He posited that alertness is a key difference between entrepreneurs and non-entrepreneurs. Theories of entrepreneurial opportunity reflect an assumption that entrepreneurs either search to discover opportunities or create opportunities without searching. Alvarez and Barney (2007) opined that discovery and creation should be viewed as two conflicting theories of entrepreneurship. They noted that both perspectives seek to explain the actions that entrepreneurs take to exploit opportunities.

The Service Sector

For approximately 200 years since the advent of the Industrial Revolution, wealth generation and economic output in Western nations were dominated by the manufacturing industry. However in less than three decades after the end of World War II, manufacturing as a wealth generator had been overtaken by service sector organisations. The importance of the service sector in Western nations in terms of contribution to GDP and as a source of employment has continued to increase to the present day (Gerrath and Leenders 2013).

New Knowledge Acquisition

A key driving force since the beginning of the Industrial Revolution has been the activity of entrepreneurs engaged in the discovery and application of new knowledge as the basis for innovation in existing industries and the creation of totally new industries. In the twentieth century there was an exponential increase in the rate of new scientific and technological breakthroughs. Current evidence would suggest that this pace of new knowledge creation will be sustained in the twenty-first century. The implication of this scenario is that the exploitation of new knowledge will remain a critical competence within organisations seeking to sustain long-term growth (Sheehan 2005).

The Online World

The birth of an entirely new industry is usually the result of a visionary idea for a new product, service or industrial process. Evolving the idea into a viable commercial proposition will often involve solving significant scientific or technological problems. Zott and Amit (2007) noted that in the early years of a new industry there is only limited understanding of what market opportunities exist and how these might be exploited. Over time, as summarised in Figure 1.1, interaction between identified opportunities, the nature of the technology and organisational capability leads to the emergence of one or more new business models. Open image in new window Figure 1.1 Business model emergence

Big Data and Analytics

Marketing has long relied upon using data to generate understanding of customer needs. In recent years the effective utilisation of all data sources has become an increasingly important organisational competence. This is because the generation and exploitation of new knowledge is fundamental to sustaining competitive advantage (Bughin et al., 2010).

Online Service Firms

Many service businesses are involved in the provision and transfer of information. Consequently, some of the first companies to generate significant revenues from the World Wide Web were service firms. Examples include online retailers, the travel industry, finance organisations and search engines. Further opportunities arose following the digitisation of data which created new opportunities in the entertainment industry. Internet technology improvements in areas such as download speeds and multi-media software tools caused many service businesses to migrate online as a whole range of new opportunities became apparent. The Internet permitted greater real-time and synchronous interactions between customer and provider. Additionally, as an interactive medium, the web allowed the merger of mass production and mass customisation to deliver the added customer benefit of one-to-one marketing.

Future Market Innovations

Europe was the original crucible in which the Industrial Revolution was forged, with the nature of national- and organisational-level wealth generation being changed forever. Although Europe was the initial centre of industrial innovation, by the end of the 19th century a new age was emerging in which technologies based upon advances in areas such electricity, electronics, computing, the internal combustion engine, jet propulsion and healthcare would totally alter wealth generation.

Public Sector Online

By the mid-1980s, inflation and rising unemployment were problems confronting virtually every Western democracy. With welfare services costs rising faster than tax revenues, reform of the public sector was implemented under the banner of ‘New Public Management’ (NPM). (Graham, 1994). As problems over implementing genuinely customer-orientated strategies began to emerge, some academics questioned the potential of NPM to achieve fundamental reform. Hood and Jackson (1992) concluded that NPM was a ‘disaster waiting to happen’, and Farnham and Horton (2007) perceived NPM as a ‘failed paradigm’.