" Strategic capital is defined as "capital expenditures that are required to expand production capacity above the previous year's level" (dictionary.com). We have to carefully define our strategic capital in order to monitor the direction and progress for next the next ten years. Another term that I learned through this book is the word "ubiquitous," which is defined as "existing or being everywhere, especially at the same time; omnipresent" (Dictionary.com). The ubiquitous fog surrounded our community at dawn and left everyone trapped within their homes.
The concepts within the book is directly connected to the concepts of the changing nature of business as a result of rises within modern economic, social and political factors. The most evident of these two factors is the rise of globalization and information-technology. Globalization has resulted in an expansion of the competitive landscape, which means that companies must now fight a multi-front war within the majority of industries. Therefore, in order to compete they must devise strategies that allows them to respond to consumer bases, and flexibly address the changes within their industry. Information technology is another huge factor in current corporate culture, because it has created a more intelligent consumer class who looks to the internet to understand, connect and personalize products. As a result, companies now must use relationship management rather than direct sales as the strategy for retaining and satisfying their core consumer group. Both of these concepts are present within our textbook, which describes the needs of modern corporations as they change from being "internally facing" to "externally facing." This is a key point that is emphasized through "The Future of Competition" as well.
There are three main take-aways from this book that emphasizes the organization and leadership within current companies. First, consumers are far more intelligent today than they are ever before. The ability of consumers to use the internet to learn, connect, and discuss products implies a whole new era of corporate value-creation. Essentially, consumers can now dictate exactly what they want to the entire corporate community, thus making them...
The dramatic turnaround of roles is crucial to understanding what is happening to modern corporations. The second take-away is what necessitates the changes within the organization structure of modern companies. The primary point that Prahalad emphasizes is how information technology has transformed company organizations. Since information technology means that all vehicles of the company is now virtual rather than static, the implication is that organizations use it to develop a much more flexible infrastructure that can react at any given moment to shifts within consumer demand. Information technology has enabled companies to completely redefine themselves and become a streamlined machine rather than cumbersome agent of red-tape and rigid vertical hierarchy leadership. The final take-away from this book is consumer activism has increased significantly within the past five years. The ability of the internet to connect consumers together into networks has created an environment where everyone's voices can be heard. This has emboldened consumers to provide unsolicited feedback to companies and to each other. As a result, activism for products and value-creation has increased to a feverish pitch that companies can no longer ignore. Hundreds of websites already exist that perpetuates consumer activism, many of them targeting specific brands and companies. The use of such devices has empowered consumers to help mode how companies react and increase consumer governance over value-creation, forcing companies to mold themselves to fit consumers.
One concept that I would like to challenge the author on is the definition of "co-creation" itself. Throughout this book, he makes the concept of co-creation appear directive, as if consumers can actively co-create with companies on products. When in reality, deeper consumer activism and general ability to get their voices heard has enabled them to "influence" companies and their value-creation process. However, the actual process of value creation does not appear to be a completely "50-50" split, precisely because the companies still has the ultimate decision of what to do with their products and services.
