Book

The Value Chain Shift

Seven future challenges facing top executives
137 pages
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Value chains today have a huge impact on multinational corporations’ right to exist and the way they compete.

The future challenges associated with value chains are also huge and include new demands from society, emerging-market strategies, resource scarcity, risk proliferation and other issues. Anticipating and addressing these future challenges are crucial if companies are to compete effectively.

IMD and several multinational companies created the IMD Global Value Chain Center (VC2020) in June 2011 to develop research about the future of value chains. This book summarizes some of the key findings from this two-year project.

You can also buy the book on Barnes & Nobles, Book Depository, Orell Füssli and Routledge.
Publisher
International Institute for Management Development
ISBN
9782940485086
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Research Information & Knowledge Hub for additional information on IMD publications

This book is part of a series
  • How speed affects risks, opportunities and new business models in value chain
  • Measuring corporations' cost and contribution to society
  • Optimizing IT-enabled processes and systems in the value chain: The role of governance
  • Scale and speed: Traditional multinationals versus emerging market firms
  • The organizational design shift
  • The value chain shift: Seven future challenges facing top executives
This book is part of a series
  • How speed affects risks, opportunities and new business models in value chain
  • Measuring corporations' cost and contribution to society
  • Optimizing IT-enabled processes and systems in the value chain: The role of governance
  • Scale and speed: Traditional multinationals versus emerging market firms
  • The organizational design shift
  • The value chain shift: Seven future challenges facing top executives
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IMD's faculty and research teams publish articles, case studies, books and reports on a wide range of topics
How speed affects risks, opportunities and new business models in value chain
By Carlos Cordon
in Cordon, Carlos, Ferreiro, Teresa / The value chain shift: seven future challenges facing top executives, pp. 107 - 119
Summary
The impact of speed on risks and opportunities is tremendous. While higher speed increases costs, it can also reduce risks and increase business opportunities. However, the “faster is better” maxim has its limitations. Depending on the industry and the context in which companies are operating, they need to determine their optimal speed. Despite the fact that many companies would like to increase their speed because of the volatile context of recent years, increasing levels of control, bureaucracy and¦compliance regulations are decreasing speed and making companies more vulnerable to risks and less able to take advantage of opportunities. The VC2020 research proposes a new model in this chapter that shows how companies¦can substantially improve both their speed and costs by standardizing products and removing variability. However, they need to find the right balance among speed,¦efficiency and variability. A supply chain or a process might be strong on two of these dimensions, but it cannot be strong on all three. The right speed falls at the point¦where the cost is minimized.
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Research Information & Knowledge Hub for additional information on IMD publications

Measuring corporations' cost and contribution to society
By Polina Bochukova Carlos Cordon and Teresa Ferreiro Vilarino
in Cordon, Carlos, Ferreiro, Teresa / The value chain shift: seven future challenges facing top executives, pp. 27 - 41
Summary
Prior to the 2008 crisis, it was an (almost) universally held belief that business should be conducted for the benefit of shareholders. Governments should interfere as little as¦possible with business to avoid hampering efficiency, wealth creation and economic growth. That world collapsed in 2008. During the months following the Lehman¦Brothers debacle, politicians and governments across the globe were forced to save their countries’ largest businesses, from auto manufacturing to banking. This soon¦became a tragi-comedy. The CEOs of America’s largest automotive companies flew to Washington in their luxurious private jets asking for bailouts worth billions in taxpayer money. Since then, it has become more openly recognized that businesses depend on a variety of different stakeholders and today’s business leaders increasingly¦need to show how they create value for stakeholders along the entire value chain of their products or services.
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Research Information & Knowledge Hub for additional information on IMD publications

Optimizing IT-enabled processes and systems in the value chain: The role of governance
By Michael R. Wade Bettina Büchel Arjan J. van Weele and Christopher Zintel
in Cordon, Carlos, Ferreiro, Teresa / The value chain shift: seven future challenges facing top executives, pp. 73 - 88
Summary
IT-enabled processes and systems are widely acknowledged as key drivers of global value chain management. When investing in these processes and systems, corporations want to benefit from standardizing their worldwide networks, but they are faced with¦the challenge of how to adapt to and support differentiated markets and business models with standardized solutions. The goal of this chapter is to understand the implementation journey to IT-enabled processes and systems in global corporations and to provide insights into the governance challenge of balancing centralization¦versus localization.
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Research Information & Knowledge Hub for additional information on IMD publications

Scale and speed: Traditional multinationals versus emerging market firms
By Howard H. Yu and Teresa Ferreiro Vilarino
in Cordon, Carlos, Ferreiro, Teresa / The value chain shift: seven future challenges facing top executives, pp. 59 - 71
Summary
For multinationals in the West, emerging markets represent both a growth story and, increasingly, the need for a pre-emptive strategy. Why? Because emerging-market¦firms have begun to display a clear pattern, they are focusing on customer market segments that are less attractive to – and therefore not satisfactorily served by –¦traditional multinationals. In addition, a poor country is usually surrounded by other poor countries. Once these firms secure a foothold in those markets, they begin to¦improve their product offerings at such a low cost that traditional multinationals find it difficult to replicate. The Japanese applied this strategy when the country began to¦take off almost 50 years ago. And there are a rising number of emerging-market firms in almost every industry imaginable that are keen to establish a foothold in the global marketplace.
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Research Information & Knowledge Hub for additional information on IMD publications

The organizational design shift
By Teresa Ferreiro Vilarino Emanuela Zappone-Fabre and Carlos Cordon
in Cordon, Carlos, Ferreiro, Teresa / The value chain shift: seven future challenges facing top executives, pp. 89 - 106
Summary
Over the past years, organizations have evolved from being very independent and internally focused to becoming part of an ecosystem that includes the entire value chain. The high level of outsourcing and specialization has resulted in companies having interdependent relationships with the other companies in the value chain. While the focus continues to be mainly internal and on the customer, it is starting to move towards the ecosystem that serves and manages the whole value chain (with the client serving as a prime driver). This change implies that traditional organizational structures with their business units,¦geographic structures or other models, need to be adapted to consider the whole ecosystem. The challenge is how to organize and structure the management of the value chain, from supplier to customer.
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Research Information & Knowledge Hub for additional information on IMD publications