Building competitive advantage through a global network of capabilities

IEEE Engineering Management Review

Volumn 24, Issue 2, 1996, Pages 29-42

  Bartmess, Andrew ^a   Cerny, Keith ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

COMPETITION; COST EFFECTIVENESS; DECISION MAKING; INDUSTRIAL MANAGEMENT; SITE SELECTION; STRATEGIC PLANNING;

CAPABILITY FOCUSED APPROACH; GLOBAL COMPETITION;

INDUSTRIAL PLANTS;

EID: 0030157186     PISSN: 03608581     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (27)

1. For a good approach to assessing the competitive impact of changes in cost structure over time, see Arthur A. Thompson Jr., "Strategies for Staying Cost Competitive," Harvard Business Review (January/February 1984).
2. See, for example, Robert S. Kaplan, "Yesterday's Accounting Undermines Production," Harvard Business Review (July/August 1984). See also Robin Cooper and Robert S. Kaplan, "Measure Costs Right: Make the Right Decisions," Harvard Business Review (September/October 1988) and Michael J. Fradette et al., "Cost Accounting Overhaul: Making Your Financial Reports the Linchpin of Strategic Decisions," Corporate Controller (November/December 1988) for a brief discussion of traditional systems and a good overview of activity-based costing.
3. See, for example, Robert S. Kaplan, "Yesterday's Accounting Undermines Production," Harvard Business Review (July/August 1984). See also Robin Cooper and Robert S. Kaplan, "Measure Costs Right: Make the Right Decisions," Harvard Business Review (September/October 1988) and Michael J. Fradette et al., "Cost Accounting Overhaul: Making Your Financial Reports the Linchpin of Strategic Decisions," Corporate Controller (November/December 1988) for a brief discussion of traditional systems and a good overview of activity-based costing.
4. See, for example, Robert S. Kaplan, "Yesterday's Accounting Undermines Production," Harvard Business Review (July/August 1984). See also Robin Cooper and Robert S. Kaplan, "Measure Costs Right: Make the Right Decisions," Harvard Business Review (September/October 1988) and Michael J. Fradette et al., "Cost Accounting Overhaul: Making Your Financial Reports the Linchpin of Strategic Decisions," Corporate Controller (November/December 1988) for a brief discussion of traditional systems and a good overview of activity-based costing.
5. See George Stalk, Philip Evans, and Lawrence E. Shulman, "Competing on Capabilities: The New Rules of Corporate Strategy," Harvard Business Review (March/April 1992) for an excellent description of capabilities.
6. The definition used here for capabilities contains some elements in common with the notion of core competencies as advanced by C.K. Prahalad and Gary Hamel, "The Core Competence of the Corporation," Harvard Business Review (May/June 1990). As the authors note on page 82, "Core competence is communication, involvement, and a deep commitment to working across organizational boundaries. It involves many levels of people and all functions."
7. A similar point is made in a study by Craig S. Galbraith documented in "Transferring Core Manufacturing Technologies in High-Tech Firms," California Management Review, 32/4 (Summer 1990), which found that when core technologies were transferred between facilities, a correlation existed between the distance separating the facilities and the time required for the receiving plant to match the productivity level of the originating plant.
8. Morris A. Cohen and Hau L. Lee's "Resource Deployment Analysis of Global Manufacturing and Distribution Networks," Journal of Manufacturing and Operations Management, 2 (1989) represents an excellent example of this type of model.
9. Constantinos C. Markides and Norman Berg, "Manufacturing Offshore is Bad Business," Harvard Business Review (September/October 1988).
10. Bruce Kogut, "Designing Global Strategies: Profiting from Operational Flexibility," Sloan Management Review (Fall 1985).
11. Michael Porter, "The Competitive Advantage of Nations," Harvard Business Review (March/April 1990)
12. Jim Carlton, "Conner Peripherals Says Profit Doubled; Seagate Earnings Fall," Wall Street Journal, April 18, 1991, p. B8.
13. Evelyn Richards, "Looking for the Asian Edge: Low-Cost Foreign Labor Helps a U.S. Disk-Drive Maker Lead Its Industry," The Washington Post, June 17, 1990, p. H1.
14. "The Non-Conformist," The Economist, August 22, 1992.
15. Between 1987 and 1988 alone, average hourly labor rates expressed in U.S. dollars increased 24% in Taiwan, 16% in Singapore, and 37% in Korea. U.S. rates, by contrast, increased by just over 3%. Sonia Nazario, "Boom and Despair," Wall Street Journal, September 22, 1989, p. R26.
16. Richard Brandt, "Seagate Goes East-And Comes Back A Winner," Business Week, March 16, 1987.
17. Lynn Fleary, Fortune, March 30, 1987, pp.91-96.
18. See Kim B. Clark and Takahiro Fujimoto, Product Development Performance: Strategy, Organization, and Management in the World Auto industry (Boston, MA: Harvard Business School Press, 1991).
19. See, for example, Kenichi Ohmae, Triad Power: The Coming Shape of Global Competition (New York, NY: Free Press, 1985), pp.5-6.
20. This section draws upon the book by James C. Morgan and J. Jeffrey Morgan, Cracking the Japanese Market: Strategies for Success in the New Global Economy (New York, NY: The Free Press, 1991).
21. Markides and Berg, op. cit.
22. Donald R. Lessard and John B. Lightstone, "Volatile Exchange Rates Can Put Operations at Risk," Harvard Business Review (July/August 1986).
23. Asayehgn Desta, 'Assessing Political Risk in Less Developed Countries," The Journal of Business Strategy, 5/4 (1985): 40-53. The article also presents a good overview of the strengths and weaknesses of traditional approaches to political risk analysis.
24. Maurice D. Levi, International Finance (New York, NY: McGraw Hill, 1990), pp. 389-390.
25. Matt Moffett highlights a similar finding for plant locations in Mexico in "Culture Shock," Wall Street Journal, Global Business, September 24, 1992, p. R13.
26. Kenichi Ohmae, op. cit., pp.5-6.
27. This notion is not new, but as Dixon and Duffey point out, "while recognition of design's importance in keeping U.S. industries competitive in global markets has begun to increase, the actual response continues to be almost entirely in manufacturing: automation of existing processes, material and labor cost reductions, quality control, and so on." John R. Dixon and Michael R. Duffey, "The Neglect of Engineering Design," California Management Review, 32/2 (Winter 1990): 19.