Developing Global Capabilities Dr. Elijah Ezendu FIMC, FCCM, FIIAN, FBDI, FAAFM, FSSM, MIMIS, MIAP, MITD, ACIArb, ACIPM, PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CSOL, CCIP, CMC, CMgr
Oct 19, 2014
Developing Global Capabilities
Dr. Elijah EzenduFIMC, FCCM, FIIAN, FBDI, FAAFM, FSSM, MIMIS, MIAP, MITD, ACIArb, ACIPM,
PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CSOL, CCIP, CMC, CMgr
Requirements for Developing Global Capabilities
Source: Elijah Ezendu, Global Trends in Business Development
Global Efficiency
Efficiency = Outputs Inputs
Increase in efficiency can be achieved by acting on one or both variables.
Cost Efficiency
This gives rise to the following:
Greater opportunity for promotional responsibility
More product features without price increase
Lower Prices
Sources of Cost Efficiency
Supply Costs
Experience
Economies of Scale
Product/ Process Design
Cost Efficiency
Drivers of Global Innovation
i. Increase in Complexityii. Customer-centricityiii. Offshoringiv. Emergence of Innovation Networksv. Open Innovation
Global Intelligence Imperative
This is underscored by extensive web of inter-relationships connecting key players, as well as the complexities of regionalization, continentalisation, and consumer sophistication.
Responsiveness to National Differences
Take advantage of local comparative advantages to improve inputs.
Calibrate output with due consideration to differences in tastes, preferences, and channels.
Global Learning
Optimizing and harnessing learning systems through processes and practices that ensure proper codification and transfer of knowledge.
Distinctive Competencies, Resources and Capabilities
ResourcesResources
HigherProfits
DistinctiveCompetencies
Capabilities
Differentia-tion
Low Cost
ValueCreation
Superior
•Efficiency•Quality•Innovation•Customer Respon- siveness
Source: Jeff Shay, International Business.
Strategy Model of a Multinational
OrganizationalStructure:Centralized
Decentralized
ManagementProcesses:CoordinationConfiguration
Performance:Market share
Profits
Formalization:HighLow
IndustryGlobalization
Drivers:Market
CostGovernmentCompetitive
Strategy:Multidomestic
GlobalInternationalTransnational
Industry Globalization Drivers
Cost Drivers
Good Logistics
ICT
Global Economies of Scale
Competitive Drivers Realizable Competitive Advantage
Market Drivers
Global Customers
Global Channels
Global Customer Needs & Wants
Government Drivers
Policies
Regulations
Tools for Developing Global Capabilities
Value Chain Analysis Benchmarking Activity System Mapping Cost Management Analysis Network-Structure Analysis Intellectual Capital Analysis SWOT Analysis
The Value Chain Concept
Source: M.E. Porter, Competitive Advantage, Creating and Sustaining Superior Performance
Value Chain
The value chain describes activities that are within and around a firm which contribute value towards the creation of product or service.
Value Chain Analysis
Identifies inefficient activities. Identifies distinctive roles of activities Identifies activities that are value-adding to
customers. Provides room for ascertainment of
cost/value of activities.
Value Network
Value network shows the inter-organizational links and relationships which are required to create a product or service.
A Simple Value Network
Organization'sValue Chain
Supplier Value Chains
Channel Value Chains
Customer Value Chains
Identifying Capabilities Through Value Network
Profit pool.Fitting partner.Activities that should be outsourced.The most relevant activities.
Benchmarking
It’s the process of identifying, learning and adapting exceptional practices and processes with the intention of enhancing an organization's performance.
Advantages of Benchmarking
Useful for identifying best practices. Aids in detection of performance gaps. Advances knowledge of competition. Gives room and reasons for positive change. Boosts managerial objectivity. Facilitates discovery of drivers and enablers of top
performance. Provides a baseline for measuring improvement. Encourages new ideas, innovation and creative
thinking. Aids initiation of effective budget process.
Benchmarking of Capabilities
i. Historicalii. Industry/Sectoriii. Best-in-Class
Feasible Questions During Analysis
Is this other organization better than we are?
Why are they better? By how much? What best practices are being used now or
can be anticipated? How can their practices be incorporated or
adapted for use in our organization?
Activity System Mapping
i. Provides for consistencyii. Identifies critical success factorsiii. Gives room for reinforcementiv. Identifies resource-flow
Techniques for Cost Management Analysis
Activity Based Cost Analysis Lean Business Analysis Process Analysis Capacity Analysis Customer Value Preference Analysis Target Cost Analysis Product/Service Value Analysis
Network-Structure Analysis
This focuses on determination of the right inter-firm network–structure that would serve as strategic fit for development of required capabilities, through simple and complex alliances as well as mergers and acquisition.
Skandia Concept of Intellectual CapitalMarket Value
Financial Capitalvalue of all physical and monetary assets
Intellectual Capital
Human Capital‘thinking’• competence (knowledge and skills)• attitude (motivation, behaviour, conduct)• intellectual agility (innovation, imitation, adaptation)
Structural Capital‘non-thinking’
Customer (Relationship) Capitalcustomers, suppliers, shareholders, alliance partners, other stakeholders
Organisational Capital• infrastructure• processes• culture
Innovation Capitalrenewal and development value
Process Capital
Intellectual Property Intangible Assets
Developed by Leif Edvinsson
Adam and Oleksak Concept of Intellectual Capital
Market Value
Intellectual CapitalFinancial Capital
Human Capital
Structural Capital
Relationship Capital Business Model
Management
Employees Processes
Intellectual Property
Customers
Brand
Network
Current Concept of Intellectual CapitalMarket Value
Intellectual CapitalFinancial Capital
Human Capital
Structural Capital
Relationship Capital
Spiritual Capital
Management
Employees Processes
Intellectual Property
Customers
Brand
Network
Business Model
Intellectual Capital Analysis
This provides clear picture of a firm’s intellectual structure which would be useful in identifying unexploited strengths and incontestable openings for global possibilities.
SWOT Analysis
This is used for identifying opportunities and threats in the business environment as well as strengths and weaknesses within the firm.
Dr Elijah Ezendu is Award-Winning Business Expert & Certified Management Consultant with expertise in HR, OD, Competitive Intelligence, Strategy, Restructuring, Business Development, Sales & Marketing, Interim Management, CSR, Leadership, Project & Programme Management, Cost Management, Outsourcing, Franchising, Intellectual Capital, eBusiness, Social Media, Software Architecture, Cloud Computing, eLearning & International Business. He holds proprietary rights of various systems. He is currently CEO, Rubiini (UAE) and Hon. President, Worldwide Independent Inventors Association. He functioned as Chair, International Board of GCC Business Council (UAE); Senior Partner, Shevach Consulting, Nigeria; Chairman (Certification & Training), Lead Assessor & Council Member, Institute of Management Consultants, Nigeria; Lead Resource, Centre for Competitive Intelligence Development; Lead Consultant, JK Michaels; Technical Director, Gestalt; Chief Operating Officer, Rohan Group; Director, Fortuna, Gambia; Director, The Greens; Director of Programmes & Council Member, Institute of Business Development, Nigeria; Member of TDD Committee, International Association of Software Architects, USA; Member of Strategic Planning and Implementation Committee, Chartered Institute of Personnel Management of Nigeria; Adjunct Faculty, Regent Business School, South Africa; Adjunct Faculty, Ladoke Akintola University of Technology, Nigeria; Editor-in-Chief, Cost Management Journal; Council Member, Institute of Internal Auditors of Nigeria. He holds Doctoral Degree in Management, Master of Business Administration and Fellowship of Several Professional Institutes in North America, UK & Nigeria. He is an author & widely featured speaker in workshops, conferences & retreats. He was involved in developing Specialist Master’s Degree Course Content for Ladoke Akintola University of Technology (Nig) and Jones International University (USA). He also works as Adjunct & Visiting Professor of Universities and holds Interim Management Assignments on Boards of Companies.
Thank You