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Successful companies develop a strategic intent to learn, a commitment to continuous experimentation, and a willingness to learn from experiences.
The Akihabara section of Tokyo is probably the most advanced customer electronics shopping mall in the world. Ten percent of all electronics sold in Japan are purchased in this vibrant retailing district that covers about eight square blocks. It is a staggering display of Japanese manufacturers' ability to produce and market seemingly endless varieties of electronic gadgets with remarkable speed. People from all over the world shop here for the hottest new electronic products.
As soon as you step off the JR train, you are confronted with a labyrinth of shops and vendors selling everything from batteries to stereos, refrigerators to microwave ovens, cordless telephones to air conditioners. The blare of stereos, televisions, and salespeople selling endless items creates a dazzling experience even for the most jaded shopper. Customers push shopping carts through narrow alleyways where vendors in tiny stalls sell their wares. Buyers dicker over prices as business is conducted in all the world's languages. Computer chips are sold by weight, much like rice or potatoes. An enterprising person can buy parts to assemble his or her own computer. New products, such as Sony's Scoop Man (a Walkman that fits in the palm of your hand and plays postage stamp-sized disks with resounding quality) appear daily--and are taken off the shelves just as quickly if customers show little interest. A customer can choose from more than 250 varieties of Walkman or from dozens of coffee makers that can fill two cups simultaneously, so partners can enjoy their first cups of coffee together. Sanyo offers customers a choice of more than 24 different colors on any of its refrigerators and promises delivery within two weeks. It also makes ambidextrous refrigerators for those customers who desire to open the door from either the left or right. Like everything on display in Akihabara, these refrigerators not only are user friendly and customized, but also carry the latest technical advances.
Very few manufacturers and retailers make money in Akihabara. Despite all the customers, salespeople, and electronic gadgetry, only the hottest products survive. No one knows exactly what the customer will want from one day to the next, and therefore, manufacturing managers do not know exactly what their companies will be creating. Under these circumstances, no one knows what market-opportunity windows will open. Managers find it difficult to create long-term strategies in such markets. What companies do know is that customers will want something, sometime, and that the next market opportunity is out there somewhere.
Akihabara is the ultimate market test and a metaphor for the emerging global marketplace. And the strategies that companies need to survive and flourish in Akihabara's brutally competitive environment--flexibility, agility, and speed--are emerging as the strategies for competing successfully in the global marketplace.
Companies are using words like anytime, anywhere, and anything to describe how they will compete in the future, according to Peter Kann, CEO of Dow Jones. His organization's strategic goal is to provide "business and financial news and information however, whenever, and wherever customers want to receive it." Nissan's vision for the year 2000 is the "Five A's": any volume, anytime, anybody, anywhere, and anything. Nissan's new-product teams work to commercialize all types of electronics and automated manufacturing systems to make this vision come true. Motorola's pager group has a TV ad that asks "How do you use your Motorola pager?" Customers respond with phrases like "Anytime," "For anything," and "Anywhere I want." Motorola's Bandit Pager team, operating out of Boynton Beach, Florida, is introducing new flexible manufacturing techniques throughout Motorola's other businesses. Project Bandit combines Motorola's nimble manufacturing with fast customer response: it can deliver a custom-made pager in under 48 hours.
Similarly, furniture manufacturer Herman Miller practices customer intimacy to reduce new-product introduction time. It involves customers in every product development phase, from design to manufacturing. Since 1993, a cross-functional team of ten Herman Miller employees has been working with a software developer to design office furniture that makes the most effective use of its technology. Prototypes are tested in customers' offices. According to Gary Miller, senior vice president of design, this process cuts in half the lead time ordinarily required. These innovations have helped boost sales when the industry was sluggish and reduced the volatility of the firm's sales over time.
These scenarios illustrate organizations' strategic responses to marketplace competition. These firms cultivate their capabilities to give customers what they want, when they want it, and where they want it. As global competition intensifies, firms will have to conceive, design, produce, and deliver a wide array of new products in unlimited combinations to capture and satisfy the desires of ever smaller market niches. To develop the flexibility, responsiveness, and rapid learning they will need, organizations will have to implement practices that facilitate both customer intimacy and experimentation with new products and processes. This pursuit of continuous learning is the route to achieving renewable competitive advantage through "anything, anytime, anywhere" strategies. This is a dramatic change from traditional ways of thinking about strategy, and it requires unlearning preconceived notions.
Managers crafting a learning strategy today face a far more difficult task than their fore-bears. Historically, crafting a strategy centered around three elements: (1) the "fit" between the company and its industry; (2) allocation of limited resources among investment opportunities; and (3) a long-term perspective. These elements created a frame of reference for many managers that, more than anything else, has bound them to approaching strategy as if they were going to war. Unfortunately, they often use the most recent "war" as their guide to framing tomorrow's problems and solutions. Led into this type of war game, managers believe sheer weight and mass overcome speed and agility. But resources (that is, weight and mass) alone no longer can guarantee industry leadership. During the 1980s the U.S. auto industry spent close to $100 billion on automation, acquisitions, and restructuring their operations. However, none of the Big Three was able to satisfy customer demands for a high-quality, low-cost car that could match Japanese standards until the early 1990s. Regardless of how much GM, Ford, and Chrysler "strategically" planned their future investments, their earlier organizational structures were not geared toward speed and learning. Some of the strategic practices that have hindered large U.S. companies like GM from pursuing new opportunities quickly include excessive vertical integration, broad diversification, and over-reliance on generic strategies.
For most of this century, views of corporate strategy were shaped by industrialists such as Andrew Carnegie, Jay Gould, Cornelius Vanderbilt, and Henry Ford--all of whom believed that vertical integration could guarantee sources of supply and secure leverage on vendors. Vertical integration can help firms build and protect their competitive advantage when …