Competitive Business Management

A Global Perspective

Silvio M. Brondoni

• Publisher: Routledge
• Year: 2018
• Print ISBN: 9781138342224
• eBook ISBN: 9780429801235
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

The growth of global corporations has led to the development of new business strategies whose complexity and configuration rest on corporate networks; corporate cross-culture and intangible corporate and product assets. In global markets, corporations compete in a competitive marketspace dimension, in other words, competitive boundaries in which space is not a stable element of the decision-making process, but a competitive factor whose complexity depends on markets increasingly characterized by time-based competition and over-supply. In view of today's fierce competition from US and Southeast Asian corporations, this book highlights global business development policies based on innovation, sustainability and intangible assets.

The book assesses competitive business management from a global perspective, examining business development policies linked to the profitability of global firms. It forces readers to actively think through the most fundamental policies developed by global firms in the current competitive landscape and provides answers to questions such as: What are the new drivers of global capitalism?; How do global businesses deal with new local nationalism?; Which governance systems and behavioural norms qualify global businesses?; What are the main business policies that characterize competitive business management in a global competition perspective?

Competitive Business Management neatly explains the global business management domain and helps readers to gain an understanding of global development business policies.

Part 1
Conceptual Framework

Chapter 1
Competitive Business Management and Global Competition.
An Introduction

Silvio M. Brondoni

ABSTRACT: Global markets redefine market-space competition and affirm a global business economy with distinctive traits including: resource management without physical and administrative boundaries; increasingly sophisticated products that rapidly become obsolete through easy imitation at a reduced cost; competitive interrelationships between transnational networks that go beyond multinational (or multidimensional) organizations – typically European – and linked to smaller market spaces; and finally, transforming national markets into complex socio-economic systems, where communication and distribution are global, nation-states are confronted with supranational organizations, and enterprises exercise multidimensional values of both responsibility and corporate social responsibility.

SUMMARY: 1.1. Globalisation and competition. Emerging issues in global business management. – 1.2. Market-space competition: competitive landscapes in global firms. – 1.2.1. Networking and competitive global business management. – 1.3. Global markets, competitive landscapes and market-driven management. – 1.3.1. Competitive business management, over-supply and bubble demand. – 1.3.2. Market-driven management and global economies of scale. – 1.3.3. From marketing management to market-driven management. Competitive customer value. – 1.4. Competitive global business, market-driven management, product and corporate intangible assets.

1.1. Globalisation and competition. Emerging issues in global business management

Globalisation has led to new competition boundaries between enterprises, changing the traditional temporal and spatial competition relationships (Lambin and Brondoni, 2001).

Global markets transcend the traditional view of the localism and staticity of competition spaces that characterized corporate competition policies until the early 80s (Levitt, 1983; Brondoni and Lambin, 2001). With globalisation, individual local contexts aim to develop and achieve specific and partly contingent competitive advantages (from time to time, and ascribable to aspects of production, marketing, R&D, etc.) coordinated in a wider economic and business management system (market-space management) (Brondoni, 2015b).

In global markets, firms therefore compete according to the market-space competition logic, namely, with competition boundaries where the space is not a known and stable decision-making element, but a competitive factor that is determined by – and changes as a result of – the actions/reactions of the firms, competitors, and authorities of the many areas in which businesses operate. Business policies based on an open competition space (market-space management) endeavour to overcome the usual limitations of direct control and proximity characterizing the physicality of activities (invariance of goods produced, amount realized with direct controls, reduced number of customers and suppliers, static localization of production facilities, etc.) and instead affirm operating contexts characterized by: the dominance of intangible resources; competitive adaptability; management flexibility (Best, 2004; Webster, 2002: Lambin, 2000; Day, 1999; Rayport and Sviokla, 1994; Day, 1990). Globalisation profoundly changes the traditional industrial production principles (i.e., the direct and controllable coordination of workers, technologies and materials, standardizing the temporal sequence of processes), which in extreme synthesis is always characterized by: efficient production processes and the greatest possible number of standardized goods; organisational structures based on a rigid and planned division of tasks; the presence of workers at production sites (Brondoni, 2008).

In global markets, the strategic leverage of organizations moves from product characterization (supply differentiation) to the qualification of overall knowledge held and managed by a corporation. Information systems (internal and among companies) thus become critical to business development; collaboration between companies is achieved through specific information channels and flows; and finally, processes organized according to a sequential logic are transformed into relations developed in project-oriented networks, up to arriving at virtual firms.

Therefore, new flexible forms of organization postulate the division of structures in terms of space, time, and functions performed.

In terms of space, production is not implemented through a single process nor necessarily located permanently in a given location. Production processes are usually divided among different units and do not assume a stable spatial location, since the information flows that generate production enable the physical transfer of outputs (also partial) anywhere in the world, directly from individual units and without any time constraints.

Moreover, with regard to time, market-space management affects the temporal efficiency of production and the supply chain of defined goods. Networks variously articulated and localized replace sequential productions and processes, so that the production/delivery time determines the overall realization and logistic needs of the operational units comprising the network. The globalisation of ICT digital technologies determines pressing rhythms on competition (time-based competition), producing new business policies in terms of: launching innovations; imitation of products and services; competitive pricing.

Finally, with respect to the functions performed, market-space management tends to suggest a fundamental change in relationships and collaborations with customers, partners and co-makers, overcoming the typical limitations of interface cooperation and instead aimed at achieving more narrow and selective interactions between inter-company teams. In this sense, the economic and financial crisis of 2007–2008 (which in practice concluded the first globalisation phase) has further contributed to changing the competitive relationships between companies by developing new market-driven management policies, focusing on the critical success factors of global companies, amongst which their network alliances, the ever-larger size of companies and a multi-dimensional competitive landscape (Brondoni, 2014; Cappellin and Wink, 2009).

Thus, with the globalisation of markets, new trends have affirmed in economic and business management. The intangible elements of the business economy now outweigh the tangible elements, time becomes a critical management function, and mobility (of people, goods, knowledge and ideas) affirms new relation systems in the context of a global business economy (Salvioni, 2010).

1.2. Market-space competition: competitive landscapes in global firms

Global markets redefine the competitive space (market-space competition) and affirm a global business economy whose distinctive characteristics are: resource management without physical and administrative boundaries; increasingly sophisticated products that quickly become obsolete through ease of imitability at a reduced cost; competitive interrelationships developed between transnational networks, far beyond multinational (or multi-domestic) organizations, typically European, and linked to reduced market spaces; and finally, the transformation of national markets into complex socio-economic systems in which communication and distribution are global, nation-states are confronted with supranational organizations, and enterprises exercise both multidimensional responsibility and corporate social responsibility values (Salvioni, 2003).

In global markets, unstable customer groups (demand bubbles), constant benchmarking with competitors, waning competitive boundaries, and the high substitutability of products overall stimulate companies to adopt a strong orientation to competition management policies to deal with: consumption characterized by uneven growth rates; unstable demand; and above all, changing consumption potentialities, because these are not predictable with traditional purchasing trends, since consumption does not develop in a simple and linear form in time or in space.

Indeed, in global markets, companies tend to constitute a complex life system (Golinelli and Gatti, 2001) that is competition-oriented and with a competitive landscape that dominates the traditional space and time dimensions (i.e., with performance and competitive positions related to closed markets and to an elementary enterprise-products-market combination). The competitive market-space conditions often determine overlapping and changing boundaries where space and time contribute to forming and altering the competitive context of reference, making it, amongst other things, very difficult to evaluate via the usual performance and position indicators the conditions of potential market domination. The competitive space generated by market-space management behaviours is in fact difficult to define in the sphere of basic activities, and is more ascribable to the intangible resource systems that pro tempore contribute to characterizing the competitive profile of defined business realities (Brondoni, 2012c).

1.2.1. Networking and competitive global business management

Business development based on the open competition space (market-space management), precisely due to progressive market-space competition growth, generates mega-organizations, formed by global networks operating in expanded market spaces, valorising intangible assets on the basis of very extensive and sophisticated market information (Lambin, 2014). In fact, the sharing of intangible resources pursued by market-space management policies usually relate to different structures of the same network, and very often relate also to a complex system of organizations united in market competition due to alliances and joint ventures.

In any case, the global business economy seeks to extend the areas of activity in the intangible dimension, thus configuring complex inter-firm systemic relations, which from extremely blurred and unstable boundaries jointly determine the competitive purchasing, processing, distribution, and sales positions of goods and companies, since these refer to a complex and generally variable matrix (Brondoni, 2008; Dunning and Lundan, 2008).

Modern global bread production processes, i.e., a very traditional product and seemingly far from the market-space competition logic, is a symptomatic example of competitive interdependence at the level of enterprise and business management systems dominated by intangible resources. Indeed, fresh bread today is no longer an elementary good characterized by artisanal, milled, and local production processes. For consumers, fresh bread is normally associated with fragrant bread that is still warm and purchased locally. In reality, bread is a complex product that is not always easily classifiable. In many nations, fresh bread is industrial bread that is frozen, prebaked, or even fully baked (and therefore with raw materials and processing stages that are part of the production process without any time and space constraints), subject to the free movement of goods, transported from production sites to points of sale, proposed to consumers with a short baking completion time, allowing having freshly baked bread 24 hours a day; therefore, vastly expanding the competitive boundaries in terms of production, sales, and competencies.

Companies today face high-intensity competitive conditions, global markets and highly fragmented research, production, and sales processes in a multiplicity of coordinated phases. Unlike in the past, no business can therefore rely solely on its own resources, knowledge, and competencies.

The global business economy therefore interfaces with a competitive space in which, on the one hand, markets are open and information permeability is high, and on the other, the dimensional growth of companies is fostered with networking models to address the high instability of demand (volatility of consumption choices; purchasing non-loyalty; lack of repurchasing loyalty) and supply (creation of demand bubbles and acceleration of obsolescence in US-focused companies or zero-defects product development in Japanese/South-Korean corporations) (Kim, 1997; Brondoni, 2012).

Globalisation thus changes the business structure and particularly the role of strategic alliances, imposing collaborative network strategies among groups of companies, with competitive relationships that tend to form closed cooperation relations in the pursuit of a global vision coherent with companies of vast dimensions.

Business development thus abandons the predominance of production in the large capitalist factories of the 50s and 60s where they guaranteed equal treatment to efficient and inefficient workers, according to the average yield of the professional categories; a simple and consistent mechanism with a production model based on 30/40 years working in the same company.

Moreover, since the 80s, the global economy has profoundly changed companies, production, products, and workers (in an increasing locational, commercial, and production dynamism) with various forms of collaboration and no guarantees of stability (short-term contracts; training contracts, temporary staffing, ongoing independent collaborations; etc.) (Paliwoda et al., 2013).

The global business economy imposes structured, widespread, and highly interconnected organizations (networks). These complex structures privilege management skills and outsourcing relations with co-makers and external partners (competitive alliances).

The corporate culture in particular affirms cross-cultural management oriented to overcoming the physical competition sphere and the primacy of business local...

Table of contents

• Cover
• Title
• Copyright
• CONTENTS
• Acknowledgements
• Preface. Global business management
• Part 1: Conceptual Framework
• Part 2: Managerial Issues
• Authors