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BCG  Site Index Need Log in & Registration Innovation FEATURED PUBLICATIONS   Innovation 2006     (BCG Report)   Measuring Innovationd 2006     (BCG Report)   Innovating for Cash (R0309E) HBR article by Jim Andrew and Hal Sirkin   Innovation 2005     (BCG Report)   Raising the Return on Innovation     (BCG Report)   Making Innovation Pay     by Jim Andrew, Hal Sirkin   Innovating for Cash     by Jim Andrew, Hal Sirkin   Spurring Innovation Productivity    by Jim Andrew, Kermit King Since its founding in 1963, The Boston Consulting Group has focused on helping clients achieve competitive advantage. The firm believes that best practices or benchmarks are rarely enough to create lasting value and that positive change requires new insight into economics and markets and the organizational capabilities to chart and deliver on winning strategies. They consider every assignment to be a unique set of opportunities and constraints for which no standard solution will be adequate. BCG has 61 offices in 36 countries and serves companies in all industries and markets. For further information, please visit their Web site at www.bcg.com.

"Perspectives Book 2005" by Felix Barber, Kees Cools, Luc de Brabandere, Andrew Dyer, Philip Evans, Gerry Hansell, Kenneth Keverian, Arun Maira, Yves Morieux, Ron Nicol, Hal Sirkin, Vikas Taneja, Bob Victor, Bob Wolf.  January 15, 2006

The Boston Consulting Group has been publishing Perspectives for nearly 40 years. These short, often controversial, essays were designed to shake up executives’ thinking about the basics of business: strategy, capital allocation, competition, and winning market share. Their scope has expanded in recent years, but they still focus on the biggest challenges managers face. This booklet contains the ten Perspectives BCG published in 2005. English   PDF. Our Server

1.	"Strategy and the New Economics of Information"
	by Philip Evans, Thomas S. Wurster, Harvard Business Review
	September 1, 1997
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BCG published its first Perspective in 1964. Many have come to represent significant milestones in the firm’s intellectual history. Clients continue to ask for a number of them, including The Pricing Paradox, ( Our Server )due to the timeless nature of the insight they provide.

• Balancing Act: Implementing an Integrated Strategy for Value Creation: The 2005 Value Creators Report.  Our Server

• "Capturing Global Advantage: How Leading Industrial Companies Are Transforming Their Industries by Sourcing and Selling in China, India, and Other Low-Cost Countries". by Arindam Bhattacharya, Thomas Bradtke, Jim Hemerling, Jean Lebreton, Xavier Mosquet, Immo Rupf, Hal Sirkin, David Young April 9, 2004.  The global migration of sourcing and manufacturing operations from high-cost to low-cost countries will accelerate. Sources of competitive advantage include not only radically lower costs but also access to lucrative local markets -- and to skills that create operational flexibility. We discuss the kinds of products and services that should and should not migrate to LCCs, as well as the considerable risks involved, the costs and benefits, and the organizational and operational challenges entailed in capturing global advantage. PDF    Our Server

1.	"Winning in Today's Chinese Automotive Market"
	by Forrest Chen, Jim Hemerling, David Jin
	June 17, 2005
	China's red-hot automotive market cooled dramatically in 2004, when passenger car sales increased only 13 percent-sharply down from the 74 percent rise in 2003. This slowing growth combined with falling prices, significant increases in capacity, and a proliferation of new-model launches has turned China into a fiercely competitive auto market-one that is rapidly separating the winners from the losers.
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2.	"How the Internet Can Boost Your Brand"
	by Matthias Becker, Rob Lachenauer, David E. Williams
	March 15, 2001
	Pioneering industrial companies in industrial goods are moving to differentiate their brands on the Web: by rebuilding their brand promise and by enhancing their brand delivery-primarily through creating a great online salesperson and/or providing entertainment. The Internet offers unprecedented opportunities to strengthen brands in the face of threats to render industrial brands irrelevant by dispelling brand mystique, eroding established customer relationships, and eliminating brand-based price premiums. The key is to act fast to convert the Internet's threat into competitive advantage.
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1.	"Precision Pricing for Profit, Growth, and Advantage "
	by James P. Andrew, J. Kevin Bright, Henry M. Vogel
	September 15, 2002
	Industrial companies have more power to create value through pricing - including raising prices, even under present economic and competitive conditions - than many realize. Companies that focus their organizations on what we call precision pricing typically boost EBIT margins by three to five points, and sometimes by as much as ten points. Moreover, they score these gains fast. The key is to conduct continuous, systematic analysis of four levers: value-based product pricing, mix management, unbundled service pricing, and after-market pricing.
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2.	"Customer Focus: Making It Happen"
	by James P. Andrew, Neil Kohlberg, Paige Price
	September 26, 2001
	Companies that go to great lengths to understand their customers' needs, dissatisfactions, and value propositions acquire an extraordinary ability to innovate. They also forge win-win relationships with key customers and often can collect significant price premiums. To instill genuine customer focus throughout their organizations, managers should define their companies' performance through their customers' eyes, lead by example, invest in customer-focus capabilities, and align their organizations with their customers.
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Also see on this page : "Winning in Today's Chinese Automotive Market"

1.	"IT Outsourcing Rediscovered: Getting Your Share This Time Around"
	by Peter Balnaves, Anthony Datel, Ralf Dreischmeier
	April 22, 2005
	In a quest for cost savings and improved efficiency, many companies outsource portions of their IT. Few companies, however, ultimately capture the value they expected. In "IT Outsourcing Rediscovered: Getting Your Share This Time Around," authors Ralf Dreischmeier, Peter Balnaves, and Anthony Datel provide eight levers to help remedy the situation.
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2.	"Demonstrating the Value of IT: Mission Impossible?"
	by Stuart Scantlebury, Wolfgang Thiel
	September 20, 2004
	Despite quantifiable gains in IT's contribution to companies' performance over the past several years, CIO's continue to face pressure to cut the overall level of IT spending. CIOs need a response to the critics and a plan to ensure continued progress going forward. This OfA attempts to provide such.
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3.	"From IT Complexity to Commonality: Making Your Business More Nimble"
	by Anthony Datel, Stefan Kimmel, Stuart Scantlebury, Wolfgang Thiel
	May 12, 2004
	As companies have grown, many have amassed a large number of disparate hardware platforms, operating systems, database management systems, software packages, and custom applications. Rather than gaining economies of scale, these companies have created diseconomies of complexity. Reducing this complexity can translate into markedly lower IT operating and maintenance costs, as well as a closer alignment of the IT organization with the business.
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4.	"Tightening the Reins on IT Spending"
	by Michael Grebe, Juliane Kronen, Wolfgang Thiel
	November 1, 2001
	Information technology spending represents a significant portion of most companies' budgets. However, much of this spending is wasted as a result of critical dysfunctions that plague the IT organization and management in many companies. BCG's three-step approach to the problem can help companies address these dysfunctions and get IT spending back on track.
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5.	"Supply Chain Strategies for the Internet Era"
	by Jim Christodouleas, Karl Dickel, Chris Keevil
	June 1, 2001
	Many companies are trying to use the Internet to coax additional value from their supply chains. Most, however, have seen only limited benefits at best - and in many cases these benefits will offer no lasting competitive advantage. In contrast, several pioneering companies are deploying creative, competitively focused Internet strategies to transform their supply chains into engines of durable competitive advantage. The authors outline five such strategies, together with guidelines for their successful implementation.
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1.	"To Exchange or Not to Exchange"
	by Stuart Grief
	July 15, 2001
	Companies have a hard time deciding whether to keep procurement in-house or move it to an exchange. Often the debate is emotional, because managers feel that exchanges may threaten their companies' competitive advantage - or their own jobs. In "To Exchange...", the author offers a practical strategic framework that companies can use to analyze the pros and cons of using exchanges.
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2.	"Incumbents Take the Initiative - Harnessing the Power of Business-to-Business E-Commerce in Europe"
	by Henry Elkington, Xavier Mosquet, Stefan Rasch
	May 17, 2001
	How are leading European companies putting 'e' into their businesses? In this report, the authors set out the issues major and opportunities these companies face. After beginning to realize the initial benefits of e-commerce initiatives, the report shows companies focusing future e-commerce investments on gaining competitive advantage and improving the bottom line. The report is based on BCG's cumulative worldwide client experience, in-depth interviews with major companies, and market research with corporate buyers, sellers and supply chain managers across Europe.
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3.	"E-Services: Redefining the After-Market Opportunity"
	by Tom Erixon, Dan Johnson
	May 1, 2001
	For many industrial goods companies, the main strategic opportunity in business-to-business e-commerce today is not electronic buying and selling, but providing industrial services. New wireless technologies and ubiquitous Internet access are radically changing the economics of these businesses, creating unprecedented opportunities. Suddenly, manufacturers can get much closer to their customers - and achieve solid profits, among other benefits - through such services and contractual arrangements as enhanced maintenance, diagnosis, and repair; remote capacity monitoring; and performance-based contracts.
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Also see  on this page : "How the Internet Can Boost Your Brand"

                                    "Supply Chain Strategies for the Internet Era"

1.	"Spurring Innovation Productivity"
	by James P. Andrew, Kermit King
	November 30, 2005
	Most companies urgently need to boost their innovation productivity. However, many lack the discipline to systematically filter their innovative ideas, focus only on the most promising among them, and follow through effectively in developing, launching, and sustaining the resulting products. To isolate the best ideas and drive them to market, managers need to set clear, data-driven targets for innovation, install oversight mechanisms to increase success rates, establish firm priorities among projects, and allocate their resources accordingly.
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2.	"The New Economics of Global Advantage: Not Just Lower Costs but Higher Returns on Capital"
	by Thomas Bradtke, Jim Hemerling
	July 12, 2005
	The capital advantage to be gained in RDE-based operations can boost a facility's return on capital by as much as six percentage points-while also generating a host of operational and strategic benefits. These include significantly reduced investment hurdles, fixed costs, breakeven points, and minimum scale; enhanced flexibility; and easier risk management
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3.	"Shared Services in Operations and IT: Additional Complexity or Real Synergies?"
	by Dr. Rainer Minz, Antonio Riera, Hal Sirkin
	May 25, 2005
	In many organizations, operations and IT are, effectively, separate entities. This translates into higher interface costs, platform redundancy, frustration for business users, and missed opportunities to leverage scale and share best practices. Leading companies have found an innovative way of addressing the situation, however. By integrating operations and IT into what we call Centers of Processing Excellence, these companies have driven down costs and improved the overall quality of service and delivery capabilities across their organizations.
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4.	"Globalizing R&D: Knocking Down the Barriers"
	by James P. Andrew, Arindam Bhattacharya, Hal Sirkin
	May 19, 2005
	Global R&D is making headlines but companies' experiences to date are mixed at best. The first article argues that internal barriers, not external factors, are preventing many companies from moving as aggressively as they should. The second article examines why many companies that are already moving are achieving only lukewarm results.
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Also see  on this page : "Winning in Today's Chinese Automotive Market"

1.	"Balancing Act: Implementing an Integrated Strategy for Value Creation: The 2005 Value Creators Report"
	by Eric E. Olsen, Frank Plaschke, Daniel Stelter
	December 5, 2005
	The seventh in BCG's annual Value Creators series, this report analyzes five-year total shareholder return (TSR) at leading global companies across twelve major industries. The report argues that the most successful global companies take a holistic approach to value creation by optimizing their performance across three critical dimensions: fundamental value, valuation multiples, and distributions of free cash flow. Using examples drawn from BCG client work, the report describes a three-step process to help companies design and implement an integrated strategy for value creation.
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2.	"Back to Fundamentals - Value Creators Report 2003"
	by Mark Joiner, Eric Olson, Daniel Stelter, Pascal Xhonneeux
	December 31, 2003
	This year's Value Creators Report highlights the keys to generating and sustaining above-average shareholder returns. The report is based on analysis of thousands of corporations around the globe, as well as case studies of individual companies. At its heart is a detailed analysis of the core principles of value creation. As expectation premiums decline toward their long-term market average of zero, only firms with strong fundamentals are able to achieve outstanding returns.
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3.	"Value Creators Report 2002: A Global Study of How Today's Top Corporations Can Generate Value Tomorrow - Succeed in Uncertain Times"
	by Brad Banducci, Mark Joiner, Eric E. Olsen, Daniel Stelter, Pascal Xhonneeux
	December 1, 2002
	The study is based on an analysis of over 4,000 of the world's top corporations by market capitalisation. It sets out a new corporate value creation agenda to prevent a re-run of misguided practices of the last decade. In addition, it provides a framework for preparing contingency plans for a recession and TSR and TBR (Total Business Return) rankings for different regions, industries and the top 10 TSR/TBR companies per industry. The analysis includes relative fundamental indicators and their respective expectation premiums.
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4.	"New Directions in Value Management"
	by Eric E. Olsen
	November 29, 2002
	Value management was supposed to help organizations act in ways that improve total shareholder return. It hasn't entirely worked out that way. Although value management has helped companies improve the intrinsic value of their businesses, it has largely failed to address gaps between intrinsic value and the actual price of a company's stock. Some companies, however, are developing new techniques and tools to close the gap between a company's intrinsic value and its actual market valuation. This Perspective describes two approaches to incorporating capital-markets dynamics into traditional value management.
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5.	"Value Creators 2001: Dealing with Investors' Expectations"
	by Daniel Stelter
	December 1, 2001
	Echoing BCG's previous two annual Value Creator's reports, our latest study confirms that companies in all industries can generate above-average TSR, the "gold standard" of value creation. In the long-run, this is fuelled by three key fundamental metrics-margins, asset productivity and investment growth. However, expectation premiums, which are an inherent short-term feature of capital markets, can also play an important role, enhancing or undermining long-term value creation, depending on how they are handled.
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BCG published its first Perspective in 1964. Many have come to represent significant milestones in the firm’s intellectual history. Our clients continue to ask for a number of them, including The Pricing Paradox, ( Our Server )due to the timeless nature of the insight they provide.
 

1.	"Beyond Cost Reduction: Reinventing the Automotive OEM-Supplier Interface"
	by Frank Dietz, Nikolaus S. Lang, Andreas Maurer
	March 8, 2004
	Automotive OEMs' relentless drive for lower prices has severely eroded their suppliers' profits, forcing a number of them into consolidation and close to bankruptcy. Clearly, these outcomes hurt OEMs, as they reduce choice, competition, and suppliers' capacity for innovation. Managing the OEM-supplier interface in a way that is beneficial for both parties will become an important success factor. By wielding six key levers, OEMs can create an innovation-fostering environment, leverage suppliers' expertise, and align their organizations for more effective interaction.
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2.	"Rethinking Automotive Purchasing: From Price Pressure to Partnership"
	by Frank Dietz, Nikolaus S. Lang, Andreas Maurer
	November 30, 2003
	Automotive OEMs' relentless drive for lower prices has severely eroded suppliers' profits, forcing many into consolidation or bankruptcy. Clearly, these outcomes hurt OEMs, as they reduce choice, competition, and suppliers' capacity for innovation. Managing the OEM-supplier interface in a mutually beneficial way will become important for the success of both parties. By wielding six key levers, OEMs can create an innovation-fostering environment, leverage suppliers' expertise, and align their organizations for more effective interaction.
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3.	"Who's Afraid of the Big Bad Exchange? A Primer for Suppliers"
	by Thomas J. Corra, Stuart Grief, David E. Williams
	February 15, 2001
	While business-to-business exchanges can be threatening to suppliers, company leaders should not panic. These companies have a number of attractive strategies available to them, if they act fast. For example, suppliers can develop a strong consumer brand, focus on total cost in use, or enhance the supplier-OEM relationship. Supplier companies should seek to participate in exchanges that base competitive comparison on a number of dimensions, such as collaborative abilities, service, quality, delivery, and total cost in use, rather than on price alone.
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4.	"Making E-Procurement Real-Now"
	by James P. Andrew
	January 31, 2001
	Many companies using e-procurement report increased savings on both direct materials and indirect goods, and broader choice among suppliers, products, and services, as well as improved supplier performance. Other companies, however, are struggling with e-procurement, while still others have yet to begin. The author recommends five steps to get companies started and get e-procurement right: run an auction; use e-commerce to aggregate the spend; take a (global) risk; track your suppliers' "e-readiness"; and choose the right champion.
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5.	"Stalking Those Elusive Savings in Procurement"
	by Kathleen Conlon, Pascal Cotte, Klaus Neuhaus
	September 1, 2000
	Many companies report frustration with their attempts to cut procurement costs. Their problems fall into four general areas: contracts may not cover enough purchases, managers may not comply with contracts, contracts may generate unexpected costs, or the company may inadvertently squander savings that result from the contracts. To address these issues, companies should invest in critical resources, focus on high-value areas, measure and reward contract compliance, take a systemwide perspective on costs, and establish pricing disciplines that protect savings.
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Also see on this page: "Precision Pricing for Profit, Growth, and Advantage "

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