Author(s): Hamel G, Prahalad CK
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Abstract In the 1980s, competitive success came mostly from achieving cost and quality advantages over rivals in existing markets. In the 1990s, it will come from building and dominating fundamentally new markets. Core competencies are one prerequisite for creating new markets. Corporate imagination and expeditionary marketing are the keys that unlock them. McKinsey Award winners Gary Hamel and C.K. Prahalad argue that corporate imagination quickens when companies escape the tyranny of their served markets. (Motorola, for example, sees itself as a leader in wireless communications, not just as a maker of beepers and mobile phones). Think about needs and functionalities instead of marketing's more conventional customer-product grid. Overturn traditional price/performance assumptions. (Fidelity Investments unlocked a vast new market by packaging sophisticated investment vehicles for middle-income investors.) And lead customers rather than simply follow them. Creating new markets is a risky business, however--a lot like shooting arrows into the mist. Imaginative companies minimize the risk not by being fast followers but through the process the authors call expeditionary marketing: low-cost, fast-paced market incursions designed to bring the target quickly into view. Toshiba introduced laptop computers to the market at such a blistering pace that it could explore every conceivable niche--and afford an occasional failure without compromising its credibility with customers. To stimulate corporate imagination, top management needs to redefine failure and develop new time- and risk-adjusted yardsticks for managerial performance. Managers must be encouraged to stretch their company's opportunity horizon well beyond the boundaries of its current businesses.
This article was published in Harv Bus Rev
and referenced in International Journal of Economics & Management Sciences