Strategy

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The Patriots, the 49ers, and one way sports is different than business

You want a proven path to innovation? Find good ideas in one context, and try to apply them in a different context. The Wharton School gives us some examples: At Reebok, the cushioning in a best-selling basketball shoe reflects technology borrowed from intravenous fluid bags. Semiconductor firm Qualcomm’s revolutionary color display technology is rooted in
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How does NVIDIA make money?

About a year ago, NVIDIA’s stock was trading a little under $30 per share. Today, it trades for over $100 per share. That’s a 250% jump, compared to a 19% increase for the S&P 500. What’s going on? In short, NVIDIA is using its top notch graphics processors to do a whole lot more than
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Sears is dying for completely understandable reasons

Sears is dying. And it’s happening for completely understandable reasons. It’s managers are managing by the book. They’re doing exactly what you’d expect high-profile executives to do in this situation. Unfortunately, Sears is up against two forces that it almost certainly won’t be able to overcome: investor expectations and its self-identity. Sears’ financial performance is on
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You need a team to design good strategy

As I’ve written before, I’m slowly reading Alfred D. Chandler’s Strategy and Structure, which was published in 1962. Chandler documents the transformation of four of America’s largest companies through the early 1900s: DuPont, General Motors, Standard Oil of New Jersey, and Sears, Roebuck. The book’s thesis is that corporate structure follows strategy. As these large
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The Apple car failure shows one of Apple's strengths

Apple appears to be shiftings gears. On Monday, Bloomberg reported that Apple, at least for now, is pulling back on building its own car. (I’m sorry for the pun. But not really. I can’t help myself.) Apple is on pace to have spent about $24 billion in research and development, from fiscal years 2014 through
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A big breakthrough for early 20th century businesses? Forecasting demand

It might seem obvious that, to build a compelling business strategy, you need foresight. You need to understand where market forces are pushing you. In Wayne Gretzky’s words, you “need to skate where the puck is going to be, not where it has been.” This observation wasn’t always obvious. In fact, the idea of using
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Good strategy requires central planning. But isn't central planning bad?

I am slowly rereading Richard Rumelt’s Good Strategy, Bad Strategy. It’s the best discussion of business strategy I’ve ever read. Rumelt on centralization vs. decentralization I just read the section where he discussed the tension between good strategy and decentralization. He points out that good strategy requires a lot of coordination across an organization. In
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Apple did not selfishly kill the headphone jack

In its special event on Wednesday, Apple disclosed that iPhone 7 will not have the standard 3.5mm headphone jack. As you might imagine, panic ensued. Not really. But I saw plenty of editorials about how Apple was pinching the headphone jack just to boost its wireless headphone sales. Here’s a perfect example from The Verge:
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Another way Amazon is following Sears: private label products

Yesterday, I wrote about how Amazon is copying Sears’ roadmap from the late 1920s. In short, 100 years ago, the emergence of the automobile allowed Sears to reach new customers with the kind of scale necessary to displace its competitors. Replace “automobile” and “Sears” with “Internet” and “Amazon”, and you have the analogy. One important
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Amazon is following Sears' roadmap from the late 1920s

Robert E. Wood was a decorated Army officer who retired in 1919 as brigadier general. He was about 40 years old. He quickly joined Montgomery Ward, and was one of the first retail executives to appreciate the commercial impact of the rise of automobiles. Here’s how Alfred D. Chandler describes Wood’s insight, in his book Strategy
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