BCG - The Boston Consulting Group

In their quest to become more innovative, most firms fail to leverage a potentially powerful asset: the IT department. This article looks at the actions of several companies that have managed to get it right. It focuses in particular on steps that the IT organizations within these companies have taken to raise their profile internally and, having established themselves as innovation players, maximize their contribution.

Succeeding with both value and premium brands is tricky. When companies try to increase sales by adding features to value brands, it can end up cannibalizing the premium offering. Sometimes, the new features destroy the benefits consumers care most about. By giving value brands more of the features value-seekers really want and none of the features they don’t, companies can realize higher prices, even for high-volume brands, and customers pay only for the features they truly desire. Everyone wins.

Employees come and go with greater frequency than ever before. When they leave, years of invaluable experience and knowledge are lost. Companies that systematically identify “key knowledge holders” and work to retain the knowledge of these employees will gain an advantage over their less farsighted peers. The retention of key knowledge takes on even greater importance as the Baby Boom prepares to retire.

Across the passenger car industry, events underway in developing markets are changing the rules of the game—and affecting players’ prospects well beyond those regions. New markets, new segments, and new players are challenging old certainties and demanding the creation of new business models and capabilities. What will happen, for example, when entry-level cars developed in Asia and carrying price tags of $4,500 (or less) arrive in Triad markets, where entry-level cars currently sell for $7,000 and up?

The economic boom in emerging markets has bypassed a distinct group of the next billion consumers whose potential to become viable customers has been greatly underestimated. Sitting on the brink of commercial viability, these consumers are stranded between the formal and informal sectors. Companies that embrace them can grab a disproportionate share of a massive revenue and profit pool. In fact, the next billion could determine the winners and losers in many industries and herald the rise of new commercial giants.

Many companies allocate as much to advertising as they do to capital expenses, but they can only guess at the return on their marketing investment. BCG’s holistic approach, which is founded on zero-based budgeting, differentiation of investment levels by brand and market segment, and precise metrics, ensures that dollars are well spent. Applying it has helped companies free up as much as 20 percent of their marketing investment, allowing them to focus spending where it will have the greatest impact.

The second generation of the commercial Internet is about more than social networking for teens. Web 2.0, as it is commonly called, has the potential to strengthen competitive advantage while lowering costs, up-end entire industries, and even redefine some of the traditional rules of strategy. This Perspective defines the key principles of Web 2.0 and describes their implications for supply chain, enterprise collaboration, and the mobile telephony industry. It argues that incumbents are well positioned, but only if they act.

China sourcing has been proven as an effective means of generating procurement savings for multi-national corporations. However, how much impact China sourcing can generate depends on how this initiative is embraced by all within the organization. How to maximize the impact and beat the competition in China sourcing is the strategic question for senior executive to ponder.

It’s hard enough to turn around a failing company. Try steering a successful one into the headwind of elective change. Naysayers and obstructionists will land all around you. Yet companies that don’t understand how fragile their success is will lose it soon enough. In a constantly changing world, a turnaround strategy must always be in play. This Perspective spells out the five rules of engagement that are needed to produce the kind of success that has staying power.

Culture often underpins the successful execution of strategy. How do high-performing organizations motivate and engage their employees and create a productive culture? They apply the same rigor and analysis to employee motivation and engagement as they do to business performance. They know how to build employee skills and creativity, where to encourage collaboration, and when to celebrate success. This publication analyzes how companies can systematically change culture, improve business performance, and fulfill their strategy.