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4 ENTERPRISE CHALLENGES - Coggle Diagram
4 ENTERPRISE CHALLENGES
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Innovations
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Near Term Thinking
- Established, successful enterprises usually measure themselves against current market players and dynamics, such as direct competitors, market share, corporate capabilities, achieving incremental growth of sales/profits, etc.
- Few organizations can also look at the future from a different perspective / another lense as well as allocate enough resources, including appropriate internal and external expertise - To determine how to better position the enterprise to become more entrepreneurial and agile, change to be more sophisticated at managing risk, expand business opportunities, further increase relevance and revenue, etc/
- Enterprises tend to get braver and more challenging of the status quo when disruption or adversity affects their business – which, over time, will occur to all enterprises. As a result, the ability to balance near term and long term thinking are very important for long term success of the enterprise.
Narrow Thinking
- Companies like P&G and Unilever have a long track record in innovation – but within safe parameters, such as new ingredients, packaging or product formats.
- They also innovate via breakthrough advertising campaign such as Dove and Cadbury’s Gorilla.
- They’re very good at tweaking – but rarely change the rules of the game. This is because, as businesses grow, they tend to get fragmented and siloed.
- Employees are rewarded and promoted for understanding a very small part of the business in great detail.
- The consequence is that few people in operations, if any, get good at understanding the whole organization, how to examine whole business processes, etc. While it’s good the focus is on the Customer Experience and Engagement Touchpoints, to truly challenge the status quo, the whole proposition – all along the value chain – needs to be rethought. Even seeing the potential possibilities can be very challenging for people in enterprises because it’s difficult to perceive change, the familiarity and comfort with current business, people, products, processes, customers, markets, etc. and the assumption things will continue, etc.
- With ” outsiders ” not having this perspective and very motivated to effect change driven by opportunity and self-interest – is why enterprises don’t typically recognize there is a problem until it’s too late.
Corporate Gorvenance
- Is a system of processes, policies and rules that direct and control a company's behaviour.
- It's a code of conduct in business for the good management of companies.
- The main problem with corporate governance is that it doesn't stand alone.
- it has to work in conjunction with a company's mission and values statement to give directors and stakeholders a clear guide about how they should behave.
- Directors only sit on boards for a brief period and many face re-election every three years. While this has some benefits – there's an argument that directors cannot be considered independent after 10 years of service
- short tenures could rob the board of long-term oversight and critical expertise.
There are several problems that a business might struggle with:
- Conflict of interest
- Governance standards
- Short-termism
- Diversity
- Accountability issue
Reduced Protectionism
- Protectionism refers to government policies that restrict international trade to help domestic industries.
- Protectionist policies are usually implemented with the goal to improve economic activity within a domestic economy but can also be implemented for safety or quality concerns.
- Protectionism leads to retaliation and therefore higher import prices and higher consumer prices.
- Consumers will have to pay higher prices for imports of goods (e.g. electronic goods from China, food from Africa)
- Higher prices lead to lower overall demand causing job losses in other industries
Different types of protectionism
- Tariffs – This is a tax on imports.
- Quotas – This is a physical limit on the number of imports
- Embargoes – This is a total ban on a good, this may be done to stop dangerous substances
- Subsidies – If a govt subsidises domestic production this gives them an unfair advantage over competitors. This is quite common
- Administrative barriers Making it more difficult to trade, e.g. imposing minimum environmental standards. These are sometimes known as non-tariff barriers.
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