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Patterns of Change The Cluster Conglomerate Cisco Systems depends on 37 manufacturing facilities to create its line of products.Of those 37, Cisco owns only 2. The rest are partners whose operations are tightly coupled with Cisco through network technologies. The Internet has dramatically transformed the way successful companies do business,and "business webs" are all the rage in the strategic management press. But multinational corporations don't have the luxury of working with a clean slate, building the company from day one on the basis of partner relationships as Cisco did. Most corporations must face the transformation from the opposite direction: How does one create fast-moving, nimble partner relationships from a huge, integrated corporation having a plethora of legacy systems? Most corporations have begun the process by reorganizing the company, breaking up old business entities into new, customer-facing groupings to push them closer to the market. The process is incredibly difficult, however, especially when compared to the ease with which a small new company can build a fast and flexible network of partners. But business as usual is not an option—large corporations must be able to compete effectively with new companies using new business models. The results of early efforts indicate that a clustering of spin-offs, subsidiaries, and acquisitions—the cluster conglomerate—may be a viable means for large companies to find their own way in the network economy. Items Worth Noting Not-So-Popular Dynamic Pricing Amazon.com's recent foray into variable pricing went over like a lead balloon. Page 3. Pervasive Advertising Advertising continues to make inroads on domains—including school and work—that have traditionally been relatively free of advertising. Page 7. Choice Overload More choices don't necessarily lead to better decisions—too many options to choose from overtax a person's ability to make cogent comparisons and lead to poor decisions on the World Wide Web. Page 8. |
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