06:00
Faizan
Many companies always have lots of excess capacity to supply customers. The cost of losing a customer is usually greater than the cost of having idle resources for these companies.
But profits and morale would be a lot higher if the organization was producing at its current maximum. How can that tighter resource usage be encouraged? Having your core business model insight relate to pursuing and stimulating an important new trend is a powerful competitive advantage to achieve higher resource use.
As nice as it is to always have an expanding supply of low-hanging fruit available to harvest, it is even better to having a rapidly growing demand for that fruit. In that way, you will have more opportunities to serve customers and be well rewarded for what you do. The most adept business model innovators are those who not only seek out the most powerful trends, but specialize on facilitating the faster evolution of those trends.
Let's consider Bob Swanson, CEO of Linear Technology, as an example. The company's business model has always been based on playing the specialist role. Having more application's knowledge than competitors is critical in designing analog semiconductors, which is the company's business.
Mr. Swanson realized that this expertise could be further increased by looking for ways to provide high performance chips that would replace the commodity chips being used. To support the higher cost of high performance chips, Linear Technology would have to add important benefits that the commodity chips did not provide.
In thinking about that problem, he had an important insight. The company should aim to add benefits that would accelerate the growth of the markets it served. In this way, the company's customers would receive more economic benefit from the innovation, as would the company and its other stakeholders.
The company quickly perceived that better power management would make cellular telephones and other portable electronic devices (like laptop computers and personal digital assistants) more valuable to end users by increasing how long the equipment could be operated between battery charges. With the potential for a great deal of Internet traffic to switch over to wireless battery-driven devices in the future, Mr. Swanson thought that he had found a key tangle that his company could help unravel.
With Linear Technology chips in place, battery life was greatly improved. Designers of portable electronic product could either pack more usefulness into the same sized package, or offer smaller packages with the same usefulness. As a result, portable devices quickly became more functional in many dimensions.
But profits and morale would be a lot higher if the organization was producing at its current maximum. How can that tighter resource usage be encouraged? Having your core business model insight relate to pursuing and stimulating an important new trend is a powerful competitive advantage to achieve higher resource use.
As nice as it is to always have an expanding supply of low-hanging fruit available to harvest, it is even better to having a rapidly growing demand for that fruit. In that way, you will have more opportunities to serve customers and be well rewarded for what you do. The most adept business model innovators are those who not only seek out the most powerful trends, but specialize on facilitating the faster evolution of those trends.
Let's consider Bob Swanson, CEO of Linear Technology, as an example. The company's business model has always been based on playing the specialist role. Having more application's knowledge than competitors is critical in designing analog semiconductors, which is the company's business.
Mr. Swanson realized that this expertise could be further increased by looking for ways to provide high performance chips that would replace the commodity chips being used. To support the higher cost of high performance chips, Linear Technology would have to add important benefits that the commodity chips did not provide.
In thinking about that problem, he had an important insight. The company should aim to add benefits that would accelerate the growth of the markets it served. In this way, the company's customers would receive more economic benefit from the innovation, as would the company and its other stakeholders.
The company quickly perceived that better power management would make cellular telephones and other portable electronic devices (like laptop computers and personal digital assistants) more valuable to end users by increasing how long the equipment could be operated between battery charges. With the potential for a great deal of Internet traffic to switch over to wireless battery-driven devices in the future, Mr. Swanson thought that he had found a key tangle that his company could help unravel.
With Linear Technology chips in place, battery life was greatly improved. Designers of portable electronic product could either pack more usefulness into the same sized package, or offer smaller packages with the same usefulness. As a result, portable devices quickly became more functional in many dimensions.
Posted in: business
