The World is Flat

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The World is Flat Chapter 11 How Companies
Cope Jenna Hicks, Jackie Hilgendorf, Laurel
Miller, Dakin Munson, Kaytee Norris
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Introduction

• Everyone wants economic growth, but nobody wants
  change Paul Romer (pg. 441)
• companies that have managed to survive and grow
  today are those that are most prepared to
  change. Friedman (pg. 442)
• 9 rules companies live by in a flat world

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Rule 1 When the world is flat, whatever can be
done will be done. The only question is whether
it will be done by you or to you.
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Rule 1

• Today, with the right imagination, Internet
  bandwidth, and a modest amount of capital, anyone
  can assemble a global company by matching workers
  and customers from anywhere to do anything for
  anyone. (pg. 444)
• we are seeing the emergence of collaborative,
  build-your-own business models that are
  unprecedented in history and that whatever can
  be done is being done. (pg. 447)

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Rule 2 Because we are in a world where
whatever can be done will be done, the most
important competition of today is between you and
your imagination.
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Rule 2

• What is unique about the flat world is the degree
  to which individuals, or small groups, can now
  act and compete globally
• Must have radical free-trade because the society
  that is most open to the competition, while also
  being most inviting of its own people and
  immigrants to imagine and do whatever can be
  done, is the society that will thrive the most
• Britain dominated the 19th century, America
  dominated the 20th century, and China will
  dominate the twenty-first century
• America will have to work harder and smarter to
  dominate
• China censors Google, and that is a proxy for
  impeding and restring imagination and what can be
  done

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Rule 3 And the small shall act big one way
small companies flourish in the flat world is by
learning to act really big. Imagination is
necessary, but not sufficient. You have to be
able to implement what you imagine. And the key
to being small and acting big is being quick to
take advantage of all the new tools for
collaboration to reach farther, faster, wider,
and deeper.
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Rule 3

• Aramex first home-grown package delivery
  service in the Arab world and the first and only
  Arab company to be listed on the Nasdaq
• Triple Convergence
• Software and Industrial Engineers in Jordan,
  Ability to use the latest technologies, Internet
  platform
• Insourcing
• Delivery of credit cards, collecting bills
• We are a very flat organization, Ghandour
  explained. This is not traditional because Arab
  institutions in the private sector tend to look
  like the governments very hierarchical and
  patriarchal. That is not how Aramex works.
  There are no more than two or three layers
  between me and anyone in the company. Every
  single knowledge worker in this organization has
  a computer with e-mail and Internet access.
  Right here from your computer I can access my
  intranet and see exactly what is happening in the
  organization without my senior people having to
  report to me. (pg. 454)
• Collaboration
• Supply chaining, outsourcing, insourcing, and all
  the steroids

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Rule 4 And the big shall act small One way
that big companies learn to flourish in the flat
world is by learning how to act really small by
enabling their customers to act really big.
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Rule 4

• Starbucks and ETrade The smartest big
  companies clearly understand that the triple
  convergence allows them to collaborate with their
  customers in a totally new fashion and by doing
  so, to act really small (pg 455).
• Internet and Flat World lead to the birth of the
  self-directed consumer.
• Companies can now act like they are catering to
  customers individual needs without the expense of
  actually dealing with each customer individually.
  
• They make changes according to customer requests
  and suggestions, without having to employ someone
  to research it FREE research, and often making
  money from the customer using the services!

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Rule 5 The best companies are the
collaborators. In the flat world, more and more
business will be done through collaborations
within and between companies, for a very simple
reason The next layers of value creationwhether
in technology, marketing, biomedicine, or
manufacturingare becoming so complex hat no
single firm or department is going to be able to
master them alone.
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Rule 5

• Companies need to specialize and find niches to
  stay competitive in the flattening world.
• The cutting edge of technical innovation in
  every field is increasingly specialization
  Joel Cawley, IBM strategic planning unit head
  (pg 457).
• Rolls-Royce no longer manufactures automobiles
  (sold in 1972).
• R-R became a technology company specializing in
  power systems.
• They expanded from the U.K. to a global market --
  now employing 35,000 people and services 120
  countries.
• They outsource 75 of engine components and
  remaining 25 is the differential elements
  the hot end of the engine the turbines, the
  compressors and fans, and the alloys and
  aerodynamics (pg 459).

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Rule 6 In a flat world, the best companies
stay healthy by getting regular chest X-rays and
then selling the results to their clients.
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Rule 6

• A niche can become vanilla quickly
• Constantly identify Hot Spots (IBM)
• Core competencies
• Skills with potential
• Functions to outsource (to free up funds)
• HP Bags 150 Million India Bank Contract
• Implement and manage a core banking system
• HPs innovations to its own info systems
• Commercialize it to clients

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Rule 7 The best companies outsource to win,
not to shrink. They outsource to innovate faster
and more cheaply in order to grow larger, gain
market share, and hire more and different
specialists not to save money by firing more
people.
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Rule 7

• LRN outsourcing to MindTree
• Offers ethics education and managing corporate
  governance responsibilities of global companies
• Demand increased after Enron
• Double Challenge
• Grow market share
• Design a new integrated platform
• Not cutting costs, but adding people and creating
  new processes

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Rule 8 HOW you do things as a company
matters more today than ever.
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Rule 8

• This concept is taken from Dov Seidman
• You need to differentiate yourself from how you
  do business
• Wal-Mart, Target, and Kmart
• If your interactions with others deliver a more
  meaningful customer experience, if you deal more
  consistently, openly, and honestly with your
  suppliers and investors, and more decently with
  your employees, you engender loyalty that brings
  them all back and trust that enables greater
  collaboration (pg. 468)
• Companies used to be one-way communicators and no
  you can interact through things like pod casting
  and blogging to establish a companies overall
  reputation and credibility

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Rule 9 When the world goes flatand you are
feeling flattenedreach for a shovel and dig
inside yourself. Dont try to build walls.
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Rule 9

• Its all about the idea of commoditization and
  triple convergence sticking to your core
  competencies.
• Greer and Associates vs. Freelancers
• The analog process in photography went digital,
  virtual, mobile, and personal
• Advanced technology has increased the competition
  like the Canon DI
• Control of the supply chain (photographer,
  processor, color separator)
• All functions used to be farmed out to a
  separate company now everything controlled on a
  single computer in a single task