Page 187 - (DK) The Business Book

WORKING WITH A VISION 185

See also: Protect the core business 170–71 ■ Avoiding complacency 194–201 ■ Richard Rumelt
Porter’s five forces 212–15 ■ The value chain 216–17
Professor Richard Rumelt
(1942–) studied electrical
engineering at the University
Company A sets out to ...its strengths, of California, Berkeley, before
define its strategy for the going on to receive a doctorate
coming years. It conducts such as quality of
manufacturing... in business administration
analysis to understand... from Harvard Business School
in 1972. He worked as a
systems engineer at NASA’s
Jet Propulsion Laboratories
while also serving on the
...its opportunities, ...its weaknesses, faculty of Harvard Business
such as developing new such as manufacturing
School. In 1976 he joined
products or going into capacity or the availability the Anderson School of
different markets... of skilled labor...
Management at the University
of California, where he has
remained ever since, rising to
become Professor of Business
and Society. From 1993 to 1996
...and its threats, Company A must he taught at INSEAD, the
such as the strength of the set clear goals and leading French business
competition, or shortage decide where to focus school at Fontainebleau, near
of raw materials. its efforts.
Paris. Rumelt also works as a
consultant to several
companies and governments.

The essence of strategy is choosing Key works
what not to do.
1982 Diversity and Profitability
1991 How Much Does Industry
Matter?
2012 Good Strategy/Bad
be blinded to the choices available. digital camera, but the senior
Strategy
Rather than making tough decisions, management of Kodak ignored the
they will try to accommodate a opportunity presented by this new
multitude of conflicting demands technology. They believed they
and interests to stick to a plan. were in the chemistry-based film
Managers in these circumstances business and were not prepared to
risk following old ideas and paths “kill the golden goose.” Executives
that no longer work, rather than failed to see that digital photography
leading with new ones. would make film redundant and
challenge their near-monopoly Good strategy honestly
Film is dead business. Japanese company acknowledges the
The demise of Kodak is a prime Fujifilm, however, recognized the challenges being faced
example of a company following threat and diversified successfully. and provides an approach
bad strategy. Founded in 1890, by Kodak began its shift to digital to overcoming them.
the 1970s Kodak was the US market cameras too late, as smartphones Richard Rumelt
leader in the photographic sector, and tablets replaced cameras.
with nearly 90 percent of the film The senior executives’ inability to
and camera market. It was rated as make the tough decision to change
one of the world’s top brands. In course led to the company being
1975 Kodak engineers invented the declared bankrupt in 2012. ■