Running head: ARTICLES REVIEW 1 ArticlesReviewNameInstitution
‘The Future and How to Survive It’ By Dobbs,Koller, and Ramaswamy (2015)
The article tries to extrapolate probable future performance ofWestern Corporations based on their current and historical marketpositioning. According to the article, multinational corporationsfrom Europe and North America have enjoyed a strong growth inprofitability for the past 30 years, thanks to a conducive businessenvironment that created cost efficiencies and facilitated robustrevenue growth. Between 1980 and 2013, the after-tax profit ofglobal corporations grew by 30% faster compared to Global GDP andincome grew by 50% faster than GDP, with North American corporationsgrowing their post-tax revenue by 65% over the last 30 years. Unfortunately, this booming era is coming to an end courtesy of lessfavorable business environment that is projected to characterizefuture business operations. This will be caused by a high number ofnew entrants in the market creating stiff competition and makingstratospheric gains derived in the last 30 years to vanish in thecoming ten years.
The article attributes the past 30 years corporate growth toprivatization and deregulation, industrialization and urbanization,growth in capital-intensive production and fall in labor costs, andexpanding a global economy that characterized the last 30 years. However, the global GDP is expected to fall due to aging populationin developed world, cost drivers having reached their floor line,rising labor costs, increased competitions, growth in mergers andacquisitions of developing economies’ companies, development of newways to address market challenges, and technological advancement thathas created globalization (Dobbs et al., 2015). All these factorsmade the authors of the article foresee reshaping of the industriesand global market, spearheaded by technology and globalization. Assuch, the article projects a period in which the Westernmultinational corporations will shrink and face most turbulent marketperformance.
Western multinational corporations have dominated the global marketfor the last 30 years as elucidated in the article. However, theperceived growth in the western corporations has been brought aboutby high media coverage that the western corporations enjoy comparedto eastern ones, which forced some companies such as EnronCorporation to have accounting malpractices that exaggerated itsprofit. Nonetheless, the last 30 years have seen growth in customerbase for the western corporations following the development of theglobal economy, which has created more disposable income, especiallyto the developing world (Ciarapica, Bevilacqua, &Mazzuto, 2016). The western corporations have, however, derived much of their growthfrom local markets rather than international one. For example,companies like Apple gets more than 58% of its income from theAmerican market P&G Company gets more than 52.3% of its profitfrom the local market, and Nestle Company got 54% of its profit fromthe domestic market in 2014 (Ciarapica, Bevilacqua, &Mazzuto,2016). High domestic concentration creates an opportunity fordominance by eastern corporations in the next ten years.
The article analysis of the future business is valid. The increasedglobalization, growth in technology that brings about new businessplatforms such as e-commerce, the maturity of the market in thedeveloped economies coupled by growing market in developing theeconomy, and changing market demand is likely to create anunfavorable business environment for most of the conservative westerncorporations. The global economy in the next decade is going to beshaped by the developing economies. This means that the extent towhich, the western corporations will be affected negatively by thechanging business climate will be determined by their market policiesfor developing economies. In brief, the article projections of ahighly competitive and lower profit margin future for the westerncorporations can never be more accurate.
‘Thesales secrets of high-growth companies’ By Mahdavian etal., (2016)
The article examines factors that distinguish a fast-growing companyfrom slow-growing one. Five factors are isolated as the mostmeaningful differences between the two sets of companies. The fivefactors are arrived at following a survey of more than 1000 companiesthat looked at various aspects of their sales strategies. One of thekey differences identified is a commitment to the future. Accordingto the article, market leaders’ move beyond recognizing thecommitment and build forward-looking capability by constantlymonitoring the macro-environment in search for the salesopportunities. After making sales planning market leaders invest inareas that they think there will be growth. The article observesthat 45% of the fast growing entities make an investment of more than6% of their budget on the activities that support objectives thatfocus the company in the future (Mahdavian, et al., 2016).
The second difference identified in the article focuses on keyaspects of digital. Successful companies employ their full arsenalof resources and capabilities to increase their sales forceeffectiveness, to transform the buying experience of the customersthrough digital channels. The article identifies harnessing of thefull sales analytics range, as the third factor. For a company to bea market leader, it has to take analytics of its competitors,customers, and sales to come up with improvement methods. The otherdifference identified is investing in people. A fast growing companyhas to focus on improving sales and management skills of its people. The final difference between the fast and the slow growing companiesis the integration of leadership action and a clear vision. Salesleaders involved in the survey said that two vital factors that leadto growth and success are the articulation of the management on aconsistent and clear strategy and vision followed by a commitment byleadership.
As stated in the article, companies are supposed to have a highcommitment in the future. The contemporary business environment ischaracterized by changes in market factors necessitating aforward-looking strategy, which identifies ways in which theorganization will cope with these changes. Failure to change withthe changes in the business environment has ruled out many businessesout of business. On addition, as illustrated in the articlesuccessful companies are supposed to embrace technology. Technologylowers cost of production, increases market accessibility andpenetration, and facilitate the creation of high-quality products,which are key drivers for corporate success.
Analyzing the success factors of the competitors, the preferences ofcustomers and gaps in the market are critical in differentiatingbetween a slow and fast growth company. Harnessing these analyticsis essential in ensuring that the company is useful. The factorsgiven in the article are clear differentiating elements that havehelped global companies to develop a strong market positioning. However, the article fails to look at the human elements in theorganization where on top of embracing these factors, theorganization has to look at the quality of management and humanresources, which is critical in determining the sustainability of thecompany. In brief, the analysis of the article reveals that anysuccessful company should embrace the five factors to remain relevantin the contemporary business environment.
Mahdavian M., Hatami H., Valdivieso M., & Yee L., (2016). Thesales secrets of high-growth companies. McKinsey Quarterly May2016. Retrieved 18th June 2016 fromhttp://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-sales-secrets-of-high-growth-companies.
Dobbs R., Koller T., &Ramaswamy S., (2015). The Future and How toSurvive It. Harvard Business Review October 2015 Issue. Retrieved18th June 2016 fromhttps://hbr.org/2015/10/the-future-and-how-to-survive-it?cm_sp=Magazine%20Archive-_-Links-_-Previous%20Issues
Ciarapica, F.E., Bevilacqua, M., &Mazzuto, G. (2016). Performance analysis ofnew product development projects: an approach based on value streammapping. InternationalJournal of Productivity and Performance Management, 65(2)