The more things change: Value creation, value capture, and the Internet of Things
Some changes enabled by the Internet of Things will be incremental, while others will be transformative. Yet the need to capture value remains as acute as ever. The established principles of strategic differentiation, process flow, and network economics will go a long way toward revealing a path to long-term success.
Content: Article | Author: Mark Cotteleer | Source: Deloitte Review | Subjects: IT / Technology / E-Business, Strategy
Mark Cotteleer, Maria Ibanez, Geri Gibbons
Research in behavioral economics and behavioral operations offers ample evidence that humans frequently make poor choices in the face of uncertainty. Whereas classic economic theory suggests individuals make decisions under risk by calculating an “expected value” (that is, the average value or “utility” of all the possible outcomes weighted by their probabilities), extensive analysis of actual behavior shows systematic violation of this rule and suggests … [ Read more ]
Content: Quotation | Authors: Geri Gibbons, Maria Ibanez, Mark Cotteleer | Source: Deloitte Review | Subject: Decision Making
The Answer Is 9,142: Understanding the Influence of Disruption Risk on Inventory Decision Making
The question was how many units of inventory a manager should order when faced with a possible disruption in supply. The correct answer is not guesswork, but based on 150 years of theory and practice. We examine individual choices made in this critical situation—and the results are not encouraging.
Content: Article | Authors: Geri Gibbons, Maria Ibanez, Mark Cotteleer | Source: Deloitte Review | Subject: Operations
Location, Learning, and Logistics: A framework for Managing Trade-Offs in Capacity Location Decisions
Business leaders who misjudge the location of production relative to the location of product and process development resources may adversely impact the company’s long-term competitive position. We explore the link between production location decisions, the nature of the capabilities required to create a product, and the ability of a company to develop the next-generation technologies it may seek.
Content: Article | Authors: David Uhryniak, Josh Timberlake, Mark Cotteleer | Source: Deloitte Review | Subject: Operations
The Profit Parfait: Exploring the Deeper Layers of Corporate Profitability
In previous articles, the authors established the importance of retaining a differentiated, nonprice position in the market. Exceptional companies face a trade-off between increasing ROA through return on sales (ROS) or through total asset turnover (TAT), and the best performers systematically choose higher ROS. We now focus on the primary driver of superior profitability, ROS, and on its determinants: revenue and cost.
Content: Article | Authors: Mark Cotteleer, Michael E. Raynor, Mumtaz Ahmed | Source: Deloitte Review | Subjects: Finance, Management