Biomedical subjects

Ian C MacMillan

Publications and source records attributed to Ian C MacMillan.

3 recordsLinked to original sources

PubMed2005

MarketBusting: strategies for exceptional business growth.

If company leaders were granted a single wish, it would surely be for a reliable way to create new growth businesses. Business practitioners'overwhelming interest in this subject prompted the authors to conduct a three-year study of organizational growth--specifically, to find out which growth strategies were most successful. They discovered, somewhat to their surprise, that even companies in mature industries found rich new sources of growth when they reconfigured their unit of business (what they bill customers for) or their key metrics (how they measure success). In this article, the authors outline these and other moves companies can make to redefine their profit drivers and realize low-risk growth. They offer plenty of real-world examples. For instance: CHANGING YOUR UNIT OF BUSINESS: Once a conventional printing house, Madden Communications not only prints promotional materials for customers but also manages the distribution and installation of those materials on-site. Its revenues grew from dollars 1o million in 1990 to dollars 133 million in 2004, in an industry that many had come to regard as hopelessly mature. IMPROVING YOUR KEY METRICS-PARTICULARLY PRODUCTIVITY: Lamons Gasket, with dollars 80 million in revenues, built a Web site that radically improved its customers' ability to find, order, and pay for goods. The firm's market share rose along with its customer retention rate. The authors also suggest ways to identify your unit of business and associated key metrics and recognize the obstacles to changing them; review the key customer segments you serve; assess the need for new capabilities and the potential for internal resistance to change; and communicate to internal and external constituencies the changes you wish to make in your unit of business or key metrics.

Commerce↗

PubMed2004

Making real options really work.

As a way to value growth opportunities, real options have had a difficult time catching on with managers. Many CFOs believe the method ensures the overvaluation of risky projects. This concern is legitimate, but abandoning real options as a valuation model isn't the solution. Companies that rely solely on discounted cash flow (DCF) analysis underestimate the value of their projects and may fail to invest enough in uncertain but highly promising opportunities. CFOs need not--and should not--choose one approach over the other. Far from being a replacement for DCF analysis, real options are an essential complement, and a project's total value should encompass both. DCF captures a base estimate of value; real options take into account the potential for big gains. This is not to say that there aren't problems with real options. As currently applied, they focus almost exclusively on the risks associated with revenues, ignoring the risks associated with a project's costs. It's also true that option valuations almost always ignore assets that an initial investment in a subsequently abandoned project will often leave the company. In this article, the authors present a simple formula for combining DCF and option valuations that addresses these two problems. Using an integrated approach, managers will, in the long run, select better projects than their more timid competitors while keeping risk under control. Thus, they will outperform their rivals in both the product and the capital markets.

Accounting↗

PubMed2003

Global gamesmanship.

Competition among multinationals these days is likely to be a three-dimensional game of global chess: The moves an organization makes in one market are designed to achieve goals in another in ways that aren't immediately apparent to its rivals. The authors--all management professors-call this approach "competing under strategic interdependence," or CSI. And where this interdependence exists, the complexity of the situation can quickly overwhelm ordinary analysis. Indeed, most business strategists are terrible at anticipating the consequences of interdependent choices, and they're even worse at using interdependency to their advantage. In this article, the authors offer a process for mapping the competitive landscape and anticipating how your company's moves in one market can influence its competitive interactions in others. They outline the six types of CSI campaigns--onslaughts, contests, guerrilla campaigns, feints, gambits, and harvesting--available to any multiproduct or multimarket corporation that wants to compete skillfully. They cite real-world examples such as the U.S. pricing battle Philip Morris waged with R.J. Reynolds--not to gain market share in the domestic cigarette market but to divert R.J. Reynolds's resources and attention from the opportunities Philip Morris was pursuing in Eastern Europe. And, using data they collected from their studies of consumer-products companies Procter & Gamble and Unilever, the authors describe how to create CSI tables and bubble charts that present a graphical look at the competitive landscape and that may uncover previously hidden opportunities. The CSI mapping process isn't just for global corporations, the authors explain. Smaller organizations that compete with a portfolio of products in just one national or regional market may find it just as useful for planning their next business moves.

Economic Competition↗