- Email: [email protected]
The world's largest industrial enterprises
Book make use ofwhat is called their strategic Driving Force. While other strategists extol the virtues of strategies based on exploiting opportunities, or on innovation, or on identifying new markets, or on strength and weakness analysis, Tregoe and Zimmerman point instead to the need to discover what one’s company’s Driving Force is and to build on that and on that alone. What is this Driving Force, this secret ingredient that these authors claim to have unearthed? It has to be said that they nowhere make this sufficiently clear. True they list no less than nine areas where it may be found: products offered, market needs, technology, production capability, method of sale, method of distribution, natural resources, size/growth and return/profit. True also they give a number of examples but these are so brief and so disguised (to preserve anonymity) that they lack the substance that leads to conviction. So, to this reader at least, the Force remained an elusive concept. This is a great pity. This reader’s own experience confirms the views of the authors; for there does ‘seem to be a je ne sais quoi about strategically successful companies; they do seem to have outstanding verve and flair in one and only in one main area such as their product or their method of sale or their drive for size/growth. Furthermore this reader had previously only dimly recognized this fact, as no doubt has everyone else, and had kept it darkly at the back of his mind; these authors have dragged it out into the light and pointed at it. But that is all; they have not analysed it and described it and explained how to use it with sufticicnt rigour to satisfy this reviewer. This then is a book that must company’s long term steps; compelling to say even if it completely as its importance
be read by all who direct their it undoubtedly has something does not say it as clearly and seems to demand.
JOHN AHC.ENTI, Woodbridge,
Suffolk
(809)
Des&l and Marketiq of New Products, G. L. URBAN and J. R. HAUSER, Prentice-Hall, Hemel Hempstead (1980), 618 pp. ~15.00 (hardback). Many years ago I was discussing with a distinguished American academic and businessman the prospects in the American book market of a fairly lengthy book I had just written and at what price it should be sold. ‘How many pages are there?‘, he asked and then added, ‘the more the better. Americans like to buy their learning in bulk.’ Judged against this criteria, ‘Design and Marketing of New Products’ is certainly a weighty tome. Whether it will become essential reading for marketing personnel depends upon how many can understand the mathematical formulae sprayed at you throughout the text. Indeed one of the prerequisites to reading this book assumes that you will have some familiarity with algebra and market research at a fairly advanced level. Which means it will remain a closed book to many of the older generation ofmarketing men in the U.K. but hopefully comprehensible to the growing number of numerate graduates with MBA’s emerging from our business schools. The authors have approached their task from a managerial standpoint for which I am thankful. Too many product managers see their job in technical terms, too few bring to it competent management. Each section takes you systematically through the strategy, opportunity identification,
design, testing development.
and implementation
Reviews stages
91
of new
product
The text is divided into six parts; Part I discusses how to recognize the clues to initiating the new product process. Part II covers the procedures for identifying market opportunities and generating new ideas; Part III provides techniques to assess how consumers perceive products and how to measure consumers’ preferences so that you can engineer and design a better product. Part IV discusses methods for testing a new product’s physical characteristics and its advertising. Part V considers how to introduce a new product and to manage it’s profitable transition to a mature product. I was disappointed really for the first time in my reading at the absence from this part of any mention of the ‘commodity’ element that tends to characterize products as they move through maturity into saturation stage of their life cycle. There was no mention of negotiation skills that come forward in place of selling as a prime skill in a strategy to sustain both sales and price levels. Perhaps that is the perfidious Albion in me. The British are better negotiators than the Americans. Part VI deals with the issues of implementing the development process. The authors then close with a managerial review of product development strategy. Each chapter bristles with ‘Live ammunition’ examples of successful and not so successful new products and ends with a number ofreview questions as a self testing mechanism for the reader. Urban and Hauser, like Kotler, suffer from either an ignorance or a disinclination to discuss products that have been developed by and are familiar to Europeans. This is why Peter Drucker is always so readable. His canvas is international in it’s sweep and example. This is an excellent textbook for the MBA student and for the numerate marketing planner who needs a detailed map to enable him to find his way through the maze of new product development. It is thorough where Krausher’s ‘New Products & Diversification’ is superficial. When product managers and new product specialists emerge from this technician’s phase of their marketing career and aspire to marketing management, they will be ready to absorb the less weighty (only in length) but widely acclaimed Wilson’s ‘Management of Marketing’. JOHN ‘LIIXTONE,
Improvements,
Deputy London
Managing
Director,
Marketing (791)
The World’s Largest Industrial Enterprises, J. H. DUNNING and R. D. PEARCE, Gower Press, Aldershot (1981), 164 pp. A27.50 (hardback). The reader may be forgiven for thinking that The World’s Largest Industrial Enterprises is yet another reference book on multinationals. Closer inspection reveals that this is, in fact, a statistical study over the period 1962-1977 of the largest industrial enterprises in the non-Communist world. The authors have been honest enough to admit that the basic data has been taken from figures published annually by Fortune on the largest U.S. and non-U.S. industrial companies and then elaborated on these.
92
Long Range Planning Vol. 14
December
The summary of the main findings of the study is followed by a more detailed account of the data which is arranged in six parts. The introduction sets out the structure and aims of the study, discusses the data and its organization, i.e. country of origin and industrial classification, and the nature of the samples. The second part describes the data for 1978 followed by the relevant tables. Although the authors explain that the information became available after the completion of the main part of the study and that it bears no relation to the period 1962-1977 but is comparable, one wonders why this section appears here and not at the end since Part III describes the changes in the sample composition from 1962 to 1977! Concentration, size and diversification are covered next followed by the profitability and growth. The final part is concerned with the international operations of the world’s largest industrial firms, showing the extent and pattern of their foreign production and exports from their home countries. A welcome addition to the library shelves, especially of the corporate planner, the book is well produced and the tables clearly presented and detailed. Projections of the possible future growth of multinational enterprises can be deduced from this very useful study. I hope, however, that the authors will consider a further update as it would be interesting to see the latest data in the light of the present economic climate. GAII. V. THOMAS, The Librarian, College, Henley-on-Thames
The Administrative
Staff
1983
production, intended to exploit economies of scale, is the highroad to success. A second, more controversial point made is that it is concentration on the often fruitless effort to reduce current cost units, and prices, in Britain by contrast with Germany, which has depleted profits and so drained away the resources needed for the future. The authors indeed suggest that if British industry had succeeded better in moving upmarket, it would have been possible to avoid the vicious circle ofunprofitable prices, lack of funds for innovation and quality improvement, and so a continuing lack of competitiveness. From their statistical analysis, the authors boldly suggest certain ‘norms’ or guidelines, for the balanced allocation of funds. Thus, for an industry to be viable about IO per cent of sales revenue should be available for innovation, for investment in the wide sense used herein. Except in chemicals, the British industries analysed show proportions well below this level throughout the 1970s while the German industries (except textiles) kept well above it in most years before the recent recession. One is free to question whether such rules of thumb can be applied as generally as the authors appear to suggest. But as a first approach for a management team scrutinizing a company’s flow of funds for the future such ‘norms’ could serve as a challenge. Many managers may react by saying ‘if only we could’ achieve these desired ratios! This need not inhibit an effort to answer the more important question: ‘How could we?’
(822) CHRISTOPHER SAUNDERS, European Research Centre,
Growth, Innovation and Employment: An Anglo-German Comparison, JOAN Cox with LERBERT KRIEGBAUM, AngloGerman Foundation, London (1981), 77 pp. A3.50 (softback). The authors of this short book have devised an original and useful way of presenting industrial statistics for Britain and West Germany in order to exhibit some basic aspects of comparative ‘performance’. Four industries are selected: mechanical engineering, motor vehicles, chemicals and textiles. The analysis sets out certain financial ratios derived from company accounts and industrial statistics. Aggregate results are given for each industry in each of the two countries. Planners in an individual firm could well adopt the same scheme for comparing their own firm’s performance with the totality for their industry or with that for their foreign competitors. The first message of the analysis is concerned with the basic problem of management: how to allocate the flow of available funds between assuring current output and providing for the future. The main point is made that providing for the future does not mean just the purchase of new plant and equipment. Even more important is provision for improving the product and its saleability in highly competitive markets; this means not only spending on R & D-which is well documented-but also on design, marketing, servicing and on market intelligence. These are just the items on which expenditure tends to be cut first in times of stress. Unfortunately, the financial data for these missing components of ‘investment’ are largely hidden away in current costs (making economies appear less dangerous). This way of looking at the allocation of resources reinforces the growing realization that competitive success in the old industrial countries depends on moving the product ‘upmarket’. The authors attack with vigour the belief (due to U.S. influence?) that labour saving, automated, standardized
BOOKS
Professor Brighton
of
Studies,
Sussex (807)
RECEIVED
Culture’s Consequences: International Differences in WorkRelated Values, G. HOFSTEDE, Sage Publications, London (1981), 475 pp. Al8.75 (hardback). Received May 1981.(841) Swedish Export Directory. Swedish Trade Council, Stockholm (1981), 784 pp. no price quoted (softback). Received May 1981. (844) Creating the Corporate Future, R. ACKOFF, Wiley, Chichester (1981). 297 pp. AlO. (hardback). Received May 1981.(845) Transfer, Innovation and International Technology Competitiveness, S. GEF,, Wiley, Chichester (1981), 288 pp. Al5.00 (hardback). Received May 1981. (846) Policy Analysis and Policy Innovation: Patterns, Problems and liotentials, Edited by P. R. BAEHR and B. WITTRO(:K, Sage Publications, London (1981), 238 pp. Al2.50 (hardback) and A5.50 (softback). Received May 1981. (848) Bureaucracy and Innovation: An Ethnography of Policy Change, G. M. BRITAN, Sage Publications, London (1981), 167 pp. 612.50 (hardback) and L5.50 (sof‘tback). Received May 1981. (849) The Local Fiscal Crisis in Western Europe: Myths and Realities, Edited by L. J. SHARE, Sage Publications, London (1981), 272 pp. Al4.00 (hardback). Received May 1981. (850) Technological Innovation in London, A Report to the Greater London Council, March 1980, by General Technology Systems Ltd., London, 342 pp. A25.00 (softback). Received May 1981. (851) Strategy for Stimulating Micro-electronics-based Growth in the Greater London Area, A Report to the Greater London Council Area, June 1980, by SRI International, London, 173 pp. A20.00 (softback). Received May 1981. (852)
be read by all who direct their it undoubtedly has something does not say it as clearly and seems to demand.
JOHN AHC.ENTI, Woodbridge,
Suffolk
(809)
Des&l and Marketiq of New Products, G. L. URBAN and J. R. HAUSER, Prentice-Hall, Hemel Hempstead (1980), 618 pp. ~15.00 (hardback). Many years ago I was discussing with a distinguished American academic and businessman the prospects in the American book market of a fairly lengthy book I had just written and at what price it should be sold. ‘How many pages are there?‘, he asked and then added, ‘the more the better. Americans like to buy their learning in bulk.’ Judged against this criteria, ‘Design and Marketing of New Products’ is certainly a weighty tome. Whether it will become essential reading for marketing personnel depends upon how many can understand the mathematical formulae sprayed at you throughout the text. Indeed one of the prerequisites to reading this book assumes that you will have some familiarity with algebra and market research at a fairly advanced level. Which means it will remain a closed book to many of the older generation ofmarketing men in the U.K. but hopefully comprehensible to the growing number of numerate graduates with MBA’s emerging from our business schools. The authors have approached their task from a managerial standpoint for which I am thankful. Too many product managers see their job in technical terms, too few bring to it competent management. Each section takes you systematically through the strategy, opportunity identification,
design, testing development.
and implementation
Reviews stages
91
of new
product
The text is divided into six parts; Part I discusses how to recognize the clues to initiating the new product process. Part II covers the procedures for identifying market opportunities and generating new ideas; Part III provides techniques to assess how consumers perceive products and how to measure consumers’ preferences so that you can engineer and design a better product. Part IV discusses methods for testing a new product’s physical characteristics and its advertising. Part V considers how to introduce a new product and to manage it’s profitable transition to a mature product. I was disappointed really for the first time in my reading at the absence from this part of any mention of the ‘commodity’ element that tends to characterize products as they move through maturity into saturation stage of their life cycle. There was no mention of negotiation skills that come forward in place of selling as a prime skill in a strategy to sustain both sales and price levels. Perhaps that is the perfidious Albion in me. The British are better negotiators than the Americans. Part VI deals with the issues of implementing the development process. The authors then close with a managerial review of product development strategy. Each chapter bristles with ‘Live ammunition’ examples of successful and not so successful new products and ends with a number ofreview questions as a self testing mechanism for the reader. Urban and Hauser, like Kotler, suffer from either an ignorance or a disinclination to discuss products that have been developed by and are familiar to Europeans. This is why Peter Drucker is always so readable. His canvas is international in it’s sweep and example. This is an excellent textbook for the MBA student and for the numerate marketing planner who needs a detailed map to enable him to find his way through the maze of new product development. It is thorough where Krausher’s ‘New Products & Diversification’ is superficial. When product managers and new product specialists emerge from this technician’s phase of their marketing career and aspire to marketing management, they will be ready to absorb the less weighty (only in length) but widely acclaimed Wilson’s ‘Management of Marketing’. JOHN ‘LIIXTONE,
Improvements,
Deputy London
Managing
Director,
Marketing (791)
The World’s Largest Industrial Enterprises, J. H. DUNNING and R. D. PEARCE, Gower Press, Aldershot (1981), 164 pp. A27.50 (hardback). The reader may be forgiven for thinking that The World’s Largest Industrial Enterprises is yet another reference book on multinationals. Closer inspection reveals that this is, in fact, a statistical study over the period 1962-1977 of the largest industrial enterprises in the non-Communist world. The authors have been honest enough to admit that the basic data has been taken from figures published annually by Fortune on the largest U.S. and non-U.S. industrial companies and then elaborated on these.
92
Long Range Planning Vol. 14
December
The summary of the main findings of the study is followed by a more detailed account of the data which is arranged in six parts. The introduction sets out the structure and aims of the study, discusses the data and its organization, i.e. country of origin and industrial classification, and the nature of the samples. The second part describes the data for 1978 followed by the relevant tables. Although the authors explain that the information became available after the completion of the main part of the study and that it bears no relation to the period 1962-1977 but is comparable, one wonders why this section appears here and not at the end since Part III describes the changes in the sample composition from 1962 to 1977! Concentration, size and diversification are covered next followed by the profitability and growth. The final part is concerned with the international operations of the world’s largest industrial firms, showing the extent and pattern of their foreign production and exports from their home countries. A welcome addition to the library shelves, especially of the corporate planner, the book is well produced and the tables clearly presented and detailed. Projections of the possible future growth of multinational enterprises can be deduced from this very useful study. I hope, however, that the authors will consider a further update as it would be interesting to see the latest data in the light of the present economic climate. GAII. V. THOMAS, The Librarian, College, Henley-on-Thames
The Administrative
Staff
1983
production, intended to exploit economies of scale, is the highroad to success. A second, more controversial point made is that it is concentration on the often fruitless effort to reduce current cost units, and prices, in Britain by contrast with Germany, which has depleted profits and so drained away the resources needed for the future. The authors indeed suggest that if British industry had succeeded better in moving upmarket, it would have been possible to avoid the vicious circle ofunprofitable prices, lack of funds for innovation and quality improvement, and so a continuing lack of competitiveness. From their statistical analysis, the authors boldly suggest certain ‘norms’ or guidelines, for the balanced allocation of funds. Thus, for an industry to be viable about IO per cent of sales revenue should be available for innovation, for investment in the wide sense used herein. Except in chemicals, the British industries analysed show proportions well below this level throughout the 1970s while the German industries (except textiles) kept well above it in most years before the recent recession. One is free to question whether such rules of thumb can be applied as generally as the authors appear to suggest. But as a first approach for a management team scrutinizing a company’s flow of funds for the future such ‘norms’ could serve as a challenge. Many managers may react by saying ‘if only we could’ achieve these desired ratios! This need not inhibit an effort to answer the more important question: ‘How could we?’
(822) CHRISTOPHER SAUNDERS, European Research Centre,
Growth, Innovation and Employment: An Anglo-German Comparison, JOAN Cox with LERBERT KRIEGBAUM, AngloGerman Foundation, London (1981), 77 pp. A3.50 (softback). The authors of this short book have devised an original and useful way of presenting industrial statistics for Britain and West Germany in order to exhibit some basic aspects of comparative ‘performance’. Four industries are selected: mechanical engineering, motor vehicles, chemicals and textiles. The analysis sets out certain financial ratios derived from company accounts and industrial statistics. Aggregate results are given for each industry in each of the two countries. Planners in an individual firm could well adopt the same scheme for comparing their own firm’s performance with the totality for their industry or with that for their foreign competitors. The first message of the analysis is concerned with the basic problem of management: how to allocate the flow of available funds between assuring current output and providing for the future. The main point is made that providing for the future does not mean just the purchase of new plant and equipment. Even more important is provision for improving the product and its saleability in highly competitive markets; this means not only spending on R & D-which is well documented-but also on design, marketing, servicing and on market intelligence. These are just the items on which expenditure tends to be cut first in times of stress. Unfortunately, the financial data for these missing components of ‘investment’ are largely hidden away in current costs (making economies appear less dangerous). This way of looking at the allocation of resources reinforces the growing realization that competitive success in the old industrial countries depends on moving the product ‘upmarket’. The authors attack with vigour the belief (due to U.S. influence?) that labour saving, automated, standardized
BOOKS
Professor Brighton
of
Studies,
Sussex (807)
RECEIVED
Culture’s Consequences: International Differences in WorkRelated Values, G. HOFSTEDE, Sage Publications, London (1981), 475 pp. Al8.75 (hardback). Received May 1981.(841) Swedish Export Directory. Swedish Trade Council, Stockholm (1981), 784 pp. no price quoted (softback). Received May 1981. (844) Creating the Corporate Future, R. ACKOFF, Wiley, Chichester (1981). 297 pp. AlO. (hardback). Received May 1981.(845) Transfer, Innovation and International Technology Competitiveness, S. GEF,, Wiley, Chichester (1981), 288 pp. Al5.00 (hardback). Received May 1981. (846) Policy Analysis and Policy Innovation: Patterns, Problems and liotentials, Edited by P. R. BAEHR and B. WITTRO(:K, Sage Publications, London (1981), 238 pp. Al2.50 (hardback) and A5.50 (softback). Received May 1981. (848) Bureaucracy and Innovation: An Ethnography of Policy Change, G. M. BRITAN, Sage Publications, London (1981), 167 pp. 612.50 (hardback) and L5.50 (sof‘tback). Received May 1981. (849) The Local Fiscal Crisis in Western Europe: Myths and Realities, Edited by L. J. SHARE, Sage Publications, London (1981), 272 pp. Al4.00 (hardback). Received May 1981. (850) Technological Innovation in London, A Report to the Greater London Council, March 1980, by General Technology Systems Ltd., London, 342 pp. A25.00 (softback). Received May 1981. (851) Strategy for Stimulating Micro-electronics-based Growth in the Greater London Area, A Report to the Greater London Council Area, June 1980, by SRI International, London, 173 pp. A20.00 (softback). Received May 1981. (852)