{ "docId": "019dd923-5ca1-7489-b637-3f5ecc0e3265", "docSlug": "bb019d2d6bbbb595", "documentTitle": "IBV Consulting Services", "authorId": "IBM", "authorName": "IBM", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "strategy_consulting", "sourceTypeLabel": "Strategy consulting", "presentationDate": null, "orientation": "portrait", "aspectRatio": 0.773, "pageNumber": 19, "pageCount": 24, "prevPage": 18, "nextPage": 20, "slideType": "case_study", "function": "illustrate_case", "density": "dense", "nDataPoints": 0, "notes": "Includes citations 26-33.", "elementsJson": [ "paragraph", "callout_box", "quote_block" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-5ca1-7489-b637-3f5ecc0e3265/19", "deckHref": "/decks/019dd923-5ca1-7489-b637-3f5ecc0e3265", "deckJsonHref": "/decks/019dd923-5ca1-7489-b637-3f5ecc0e3265.json", "deckAnchorHref": "/decks/019dd923-5ca1-7489-b637-3f5ecc0e3265#slide-19", "components": [ { "bbox": { "h": 0.36, "w": 0.82, "x": 0.09, "y": 0.09 }, "kind": "callout", "text": "Procter & Gamble\nAs a leading consumer packaged goods firm, Procter & Gamble (P&G) has learned to rely on internal and external specialists in most every area of its business. Chairman and CEO A.G. Lafley explains the company's philosophy this way: \"Our core capability is to develop and commercialize. Branding is a core capability. Customer business development is a core capability. We concluded in a lot of areas that manufacturing isn't. Therefore, I let the businesses go do more outsourcing. We concluded that running a back room wasn't a core capability. You do what you do best and can do world-class.\"\nInternally, the company maintains a strong product focus and is renowned for its research and development and branding expertise. But not all ideas need to be internal. Indeed, Lafley has expressed that he wants half of new ideas to come from outside of the company. Even within its core business, P&G leverages experts. For example, P&G partnered with design specialist Design Continuum to assist with the product development of the highly successful Swiffer mop business. P&G is also willing to leverage its R&D expertise with competitors, and in 2002 formed a joint-venture with Clorox's Glad brand.\nExternally, P&G has extensively increased its use of partnerships and specialists in non-core parts of its business. In 2001, it began to consolidate its manufacturing in order to increase flexibility, and in 2002, it outsourced its global facilities management to specialists. P&G's IT infrastructure, finished goods distribution, and logistics are all fulfilled by specialists. Similarly, several aspects of human resources were outsourced to a third party in 2003.", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2fe78e8f-84c6-40b9-9401-79645fb6bdf1", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "callout", "text": "By driving the organization toward internal and external specialization, firms can deliver simultaneous, step-change improvements in differentiation, responsiveness and efficiency beyond the scope of traditional business designs.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd951-c23f-7114-a89a-bc896f2fd112", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.35, "w": 0.38, "x": 0.09, "y": 0.43 }, "kind": "paragraph", "text": "By driving the organization toward internal and external specialization, firms can deliver simultaneous, step-change improvements in differentiation, responsiveness and efficiency beyond the scope of traditional business designs. Differentiation through componentization offers a variety of benefits. Differentiated firms command higher revenues through premium product pricing and new markets. Partnering with specialists improves margins and allows companies to exit nonprofitable markets. Maintaining fewer assets in-house enables the reallocation of resources for investment in more strategic components. The focus and expertise required for differentiation, and the ability to control performance offered by a component structure, serve as powerful risk mitigators. The key is to analyze the firm's positioning within the overall industry environment and only invest in components that are truly differentiating, driving innovation in these key strategic components while pursuing the right partnerships to fill out the rest.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c923eca5-1c28-4c2b-a0b2-5bde290bfee5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.35, "w": 0.38, "x": 0.51, "y": 0.39 }, "kind": "paragraph", "text": "Responsiveness is a second advantage of specialized enterprises. Historically, companies have operated a deliberate business model based on forecasted opportunities and perceived threats while forcing customers to accept the predicted value proposition. In effect, these companies are laden with fixed processes and relationships. This inflexibility boosts the lead time required to introduce new business and hampers the ability to partner effectively. In contrast, specialized enterprises sense and respond rapidly to otherwise unpredictable changes in the market environment and the needs of their stakeholders. Responsiveness is achieved through modularization, elimination of nonessential components and leveraging existing specialists. Specialized enterprises are also far more efficient than companies with traditional business models. Traditional models solidify operations and organizations in silos. These enterprises invest in fixed assets, seek to build scale all across the business and pursue in-house development of table-stakes capabilities.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "db63ddea-6a57-406f-962f-cda8d27b0a86", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "Our core capability is to develop and commercialize. Branding is a core capability. Customer business development is a core capability. We concluded in a lot of areas that manufacturing isn't. Therefore, I let the businesses go do more outsourcing. We concluded that running a back room wasn't a core capability. You do what you do best and can do world-class. — A.G. Lafley, Chairman and CEO, Procter & Gamble", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd951-c23f-7114-a89a-c1092c76bc81", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.18, "x": 0.76, "y": 0.04 }, "kind": "title", "text": "The specialized enterprise", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2bece58b-e6aa-4d1d-8632-1eb665542d56", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.38, "x": 0.09, "y": 0.39 }, "kind": "title", "text": "Specialization in action: Differentiation, responsiveness and efficiency", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "66680f2d-99b2-47fb-8aa9-ef63312e0e84", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Audience Persona", "slug": "audience-persona", "agent": "Storyteller", "layer": "slide", "matchId": "e008b143-6666-4ccd-ae0f-ea2ec53006e5", "evidence": "As a leading consumer packaged goods firm, Procter & Gamble (P&G) has learned to rely on internal and external specialists in most every area of its business.", "confidence": 0.7 } ], "frameworks": [], "arcBeats": [ { "to": 20, "from": 18, "beatId": "f7d2aca0-bfe7-4bb8-9bbf-cff94fe59c8c", "arcName": "The Consultant's Gambit", "arcSlug": "consultants-gambit", "beatName": "Impact & Next Steps", "beatSlug": "consultants-gambit-impact-next-steps", "evidence": "The deck provides a conclusion and case studies", "position": 4, "confidence": 0.8, "parentBeatName": "Resolution", "parentBeatSlug": "resolution" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }