The foundation of corporate success

Author: (British) John Kay
Publisher:
Publish Date: 2005-01-01
Features: By analyzing a series of successful and failed European companies, this book explores the important question of "What Makes a Successful Company." It identifies four key elements that create value for businesses: innovation, reputation (especially in the form of brands), strategic assets (government-granted monopolies or other ways to restrict competitors' market entry), and structure (the relationships between the company and its employees, suppliers, and customers). Why was BMW able to recover from the brink of bankruptcy and become one of Europe's leading companies? Why did the global strategy of drag it to the brink of collapse? Why did Philips' remarkable innovation record fail to translate into market success? What are the reasons behind the sustained success of companies like Marks & Spencer, Tesco, and Reuters? Through an analysis of these European companies' successes and failures, John Kay explores the question of "What Makes a Successful Company." John Kay argues that success should not be measured by organizational size or market share, but by value creation—the portion of output that exceeds raw materials, total wages, and capital investment. Corporate strategy should start with the question "How can we be different?" and focus on the fundamental goal of value creation. John Kay also identifies four key elements that create value for businesses: innovation, reputation (especially in the form of brands), strategic assets (government-granted monopolies or other ways to restrict competitors' market entry), and structure (the relationships between the company and its employees, suppliers, and customers). Success will not come when managers draw grand blueprints for the company's future, but only when they take action based on the organization's unique capabilities and strengths—especially in key areas of organizational structure.