“who is thinking differently” case
MGMT 205
Name: ZHANG, WENXIU
ID number: 300050786
Tutor: Sinha, Paresha
Tutorial time: Wed 1530-1630
Topic: Who is thinking differently?
Summary
The traditional European craftsmanship has existed for centuries. It runs on a wide variety of artisan organisations, such as Swiss watchmakers, Irish and Swedish crystal cutters, Scottish whiskey distillers, Belgian jewellers, and so on. But since the Industrial Revolution, thousands of small or medium sized European craftsmen stores had closed down because their products were not able to compete with cheaper standardized machine-made products from the Multi National Enterprises (MNEs). Fortunately, their skills still got passed through generations. After decades of mass production, with the idea of “thinking differently”, Europe’s craftsmen get more advantages than their giant multinational competitors in the ever-globalising world today. The characteristics of them are outlined in figure 1 below.
Figure 1. the characteristics of “Artisan organisation” and “MNEs”
Analysis
The forces of globalisation, standardisation, and mass production are widely described as threats to European craftsmanship products. As Time claimed, “manufactures of clothing, motor cars, and other consumer products are merging into giant, cross border enterprises to take advantages of economies of scale, and to bear the ever-growing expenses of marketing and technology”. The “best practice” strategy the MNEs used has worked incredibly well in the last 20 years. Best practice formalizes the seemingly intelligent idea that the company find out that does the best in the industry and then seeks to replicate it. The MNEs applied the most efficient manufacturing, marketing and even managing methods into every niche of the organisation. They saved the cost, and came out with the cheapest products that possible. Customers are always happy to purchase the best products with lowest price. Therefore, “best practice” strategy had been accepted and widely used by most of the companies. The MNEs quickly clutched the global market. But after a decade-long of benchmarking, their products and services become increasingly similar. For example, the gap between the best and worse U.S. autos performers, which has 212 defects per 100 vehicles in 1998, has now narrowed to 53 defects (Hill, 2003). Further on, price becomes the only thing left to play in the competition. The DVD players’ prices dropped from US$1000 to US$50 within five years (Hill, 2003). The non-stopped price wars decrease the MNEs margins. Dr. Stephen Cummings (2002: 177) examines two options for the established manufactures: they can either carry on with the price wars, which would be more difficult, or turn into “identity”, which the competitors cannot rapidly copied.
