208 J PROD INNOV MANAG ABSTRACTS 1986;3:204-217

and consortiums, joint product/service marketing and shared facilities, tie-in promotions, and franchising.

The incentives impelling and directing the shape of symbiotic relationships are summarized in terms of both environmental and organizational factors. The former include advances in and convergences of tech- nologies and new regulatory/deregulatory pressures. The latter are described more conventionally in terms of organizational strengths and weaknesses, resources and risks, and asset redeployments.

This paper concludes with a summary of guidelines for identifying growth opportunities, using symbiosis as an entry vehicle, and identifying and evaluating po- tential partnership candidates.

Changing Patterns of International Competition, Michael Porter, California Management Review (Winter 1986)pp. 9 -40 . (AV)

In this article, Michael Porter, a well-known authority on competitive strategy, expands his analysis to the international scene. He argues that while much has been written on international trade, international mar- keting, and international business, very few studies have examined the topic of international strategy. He thus poses the question as follows: "The fact that a firm is multinational says little if anything about its interna- tional strategy except that it operates in several coun- ties. Broadly stated, the question is: What does interna- tional competition mean for competitive strategy'?"

Porter draws a continuum of industry profiles in which his two extremes are multidomestic industries and global industries. In multidomestic industries, the competition in each country is independent of competi- tion in other countries. In global industries (where global strategy, an overused but little understood term, operates) the firm's competitive position in one country is significantly influenced by its position in other coun- tries. Thus, in a global setting firms truly compete with each other on a worldwide basis. Industries that are global include semiconductors, television sets, cop- iers, and automobiles.

Porter's focus in the article is primarily on the global strategy and covers three topics: (a) the nature and causes of globalization, (b) strategic implications of globalization, and (c) the future of globalization.

Using the principle of value chain, Porter argues that firms can be visualized in terms of a collection of dis- crete activities (labeled as value activities) in the per- formance of which they strive towards competitive ad- vantage. Competitive advantage can be gained through low relative cost, or differentiation of each value ac- tivity, or a combination of both. Examples of value activities include management of process technologies, transfer of production know-how, maintenance and de- livery of services, brand name decisions, management of suppliers and supplies, and transfer of marketing knowledge.

The international strategy of the firm then is to make decisions about the configuration and coordination of the value activities. Configuration decisions involve how to disperse the activities geographically; coordina- tion decisions include the management of diversity of the activities in a global setting.

In the next section, Porter discusses the pros and cons of coordination and configuration at various levels and provides several examples of companies that prac- tice different global strategies along these two dimen- sions. His industry examples include aircraft, auto- mobiles, and office equipment.

Porter ends the section by putting global strategy in perspective; that is, he compares it with the well-known principle of comparative advantage. He argues that the traditional view of comparative advantage is single country-based and specific to a single activity as op- posed to the value chain as a whole. In a sense, Porter's global strategy raises comparative advantage to a much higher level.

Porter concludes the article by discussing the prob- lems in implementing global strategies, the need for global infrastructure, the formation of possible coali- tions, and the development of appropriate organiza- tional structures.

How Automation Could Save the Day, Richard Brandt and Otis Port, Business Week (March 3, 1986) pp. 72-74 . (DTV)

This is a small, albeit important, part of a special report on "The Hollow Corporation." Computerized facto- ries may provide part of the answer to the hollowing of domestic corporations.

ABSTRACTS J PROD INNOV MANAG 209 1986;3:204-217

The basic premise behind computer-integrated man- ufacturing (CIM) is that of totally automating and link- ing all of the functions of the factory and corporate headquarters. By so doing, a manufacturer could:

lead times in getting new products to market. These intangibles provide the most concrete reasons for automation.

Conceive new products on a computer-aided de- sign (CAD) system that would allow designers to optimize their ideas.

Pass the CAD data electronically to a computer- aided engineering (CAE) system to verify that the design will do the job intended and can be made economically.

Extract from the CAE data the information needed to make the product. The information would be sent to a computer-aided manufacturing (CAM) system. The CAM system would send electronic instructions for making the product to computer-controlled machine tools, robotic as- sembly stations, and other automated equipment on the shop floor.

Coordinate with computerized management sys- tems, such as manufacturing-resource planning, which keeps a running tab on the consumption of parts and materials, and manufacturing-process planning, which helps schedule production for optimum efficiency.

With a CIM factory, companies would have the abil- ity to respond instantly to changing market conditions, tailor products for each buyer, cultivate a wider mix of customers, and introduce new products at will. The hang-up in implementation is partly cost, technology, and the shortage of good people, but mostly, it is due to management inertia.

This is especially problematic for small companies which also happen to employ the majority of blue collar workers, create the lion's share of new jobs, and gener- ate the most innovations. These companies have to wait until turnkey CIM systems are available. Even a flexi- ble manufacturing system (FMS) can cost $5 million or more. (An FMS consists of machine tools, robots, and other programmable devices under the integrated con- trol of a computer.)

In order to invest in CIM technology, management will have to rethink capital investment decisions. Near- ly all financial yardsticks ignore the benefits of such intangibles as flexibility, better quality, and shorter

Managers Guide to Forecasting, David M. Georgoff and Robert G. Murdick, Harvard Business Review (January 1968) pp. 110-120. (WJA)

While In Search of Excellence reported that 3M devel- ops its new products before it even starts to think about forecasting demand, most organizations feel an intense need to incorporate forecasting into their new product development process. When it comes to forecasting, many organizations tend to lock in on "the way we've always done it." They become comfortable with a par- ticular method and continually reuse it regardless of whether it's best suited for the needs of the moment.

Georgoff and Murdick have evaluated 20 different forecasting techniques against 15 characteristics. This information is presented in matrix form so that the per- son interested in determining which techniques might be appropriate for the task at hand can simply sort through the 15 questions and come up with a list of suitable techniques. The information in the matrix in- cludes the strengths and weaknesses of each technique.

The 15 criteria are:

TIME: 1. Span 2. Urgency 3. Frequency

RESOURCE REQUIREMENTS: 4. Mathematical sophistication 5. Computer 6. Financial

INPUT: 7. Variability 8. Internal consistency 9. External consistency

10. External stability OUTPUT:

11. Detail 12. Accuracy 13. Capability for reflecting direction changes 14. Capability for detecting direction changes 15. Form