| Creating value together for Shareholders and | | | | suppliers, new hires, conferences, publications, reverse |
| stakeholders is becoming a mandatory must-do thing | | | | Engineering and customers, Experience Curve and |
| nowadays, by shareholders we just do not mean | | | | Scale Curve only show the potential of cost savings, |
| CEOs or the Board of Directors of an organization, it | | | | this potential has to be realized, The main hurdles for |
| has to do also with the employees and customers. | | | | that are, too many productions sites, post merger |
| These two stake and shareholders value creation | | | | integration problems, Inefficient processes, regional |
| concept must be working together in a holistic way, | | | | disadvantages and Weaknesses in the organization |
| never separately as it was recently, it has to be | | | | and management, successful companies combine cost |
| worked all like one if we want to have a sustainable | | | | and differentiation strategies in order to clear way out |
| competitive advantage in all levels. Creating value at an | | | | the cost price trap. |
| Internet business is not the exception, in spite of the so | | | | Concerning the Industry Attractiveness we highly |
| called virtual reality field as it was renown in the past | | | | recommend Michael Porters way to analyse this, |
| we all know this is becoming more real than real, | | | | according to his theory we must take into account the |
| therefore Internet is beyond a fiction business | | | | Customers, the Substitution element, Suppliers and |
| management. | | | | New Competitors. High and stable profits can be |
| Three dimensions define the potential for value | | | | achieved within an industry if the companies: Can |
| creation of a business, first is the Competitive Strength, | | | | effectively handle new competitors and product |
| the Attractivity of the industry and the Operational | | | | substitutions, are able to neutralize the bargaining |
| Efficiency. As we were mentioning above, the potential | | | | power of customers and suppliers, and are able to |
| for value creation of a business is defined through | | | | achieve a moderate competition. We have to |
| internal and external factors either from the Customer | | | | remember here that the life cycle of an industry is an |
| or employee side that include Industry Attractivity, the | | | | important factor for its attractiveness. A very good |
| Competitive Advantage/Operational Efficiency and the | | | | example on the internet field is back to 1970 techie |
| Competitive Position all these three pointing to one sole | | | | terms such as: Computers, retail Software and |
| direction: Profit potential and Value Creation we must | | | | automobil, 30 years later turned and metamorphosed |
| to understand as well that depending on the cost | | | | into microelectronics, communication, internet and |
| assets we will be able to understand the market | | | | biotechnology terms. |
| volume and market share volume. | | | | When talking about the Operational Efficiency we are |
| One of the most effective way we can boost up our | | | | simply talking about Clear Goals, concrete Measures, |
| Competitive Strength is by understanding the | | | | straight consequences, say, who is the best |
| Experience Curve, and yes we must use it as the | | | | (benchmarking, best practice sharing), how is value |
| Law of Gravity of any strategic planning, With each | | | | created (who does what until when,etc) at the end |
| doubling of the accumulated volume of a product the | | | | only success counts as that is what we want after all. |
| costs of value added fall by 20 to 30 per cent, this | | | | A successful business strategy needs the integration |
| empirical law has been discovered by The Boston | | | | of all four dimensions: Right business definition, |
| Consulting Group in the 60ies and empirically proofed in | | | | Competitive strength (Competition), Industry |
| numerous and most diverse industries, Higher Volume | | | | attractiveness (Customer) and Operational efficiency |
| leads to advantages in experience and costs within all | | | | (Company). by doing so we will be able to achieve the |
| the elements of a value chain. The Experience Curve | | | | optimum and ideal stage of any successful business |
| defines the potential for cost savings within a business, | | | | no matter what type: win to win relationship, be aware |
| the Scale Curve (Industry Experience Curve) defines | | | | of zero-sum or win loose anti values creation so the |
| the relative cost position between competitors of | | | | interests of the three groups must be traded off |
| different size at a given point of time. | | | | against one another. |
| In each industry experience is transferred through via | | | | |