As companies aspire to become market-driven, they exhort employees to get closer to customers, stay ahead of competitors, and make decisions based on their markets. Yet, even the best-intentioned senior managers find it difficult to translate those aspirations into action. Failed or flawed change programs have many symptoms, most of which are traceable to a [...]

More than fifty years ago, economist Joseph Schumpeter described the dynamic pattern in which innovative upstarts unseat established firms through a process he called “creative destruction.”1 While most twentieth century economists have focused on competition under conditions of static equilibrium, Schumpeter insisted that disequilibrium was the driving force of capitalism. The theme of creative destruction [...]

Evidence indicates that satisfied customers defect at a high rate in many industries. Because satisfaction alone does not translate linearly into outcomes such as loyalty in terms of purchases, businesses must strive for 100 percent, or total, customer satisfaction and even delight to achieve the kind of loyalty they desire. The authors propose a complementary needs-based model for service businesses that assumes customer delight and outrage originate with the handling of three basic human needs — security, justice, and self-esteem. By recasting a situation as one that has violated any of a customer’s fundamental needs, the deeper emotional outcome (e.g., outrage) does not seem incongruous. The authors describe each need and offer specific managerial tactics for avoiding outrage and creating delight.

How could a team of decent, hardworking, normally law-abiding managers find themselves facing fines, jail time, the loss of their jobs, and ultimately the loss of the company they managed? In making executive decisions, these managers were not deliberately trying to evade the intent of the law, defraud anyone, harm the environment, or act in [...]

In almost every business-to-business industry, companies are facing increasingly powerful intermediaries in their distribution channel. Industry consolidation is replacing a multitude of small “mom and pop” distributors with a handful of national, professionally managed, publicly traded corporations. Seeking to eliminate channel costs, these distributors make new demands on manufacturers and multiply service requirements. As distributors [...]

Faced with increasing global competition, many firms are finding that cost-based pricing is becoming a relic of the past, whereas price-based or target costing is emerging as a key strategic tool. Consistent with the notion of price-based costing, several authors have argued that target costing is a superior approach to cost reduction and control when [...]