Dynamic Effectiveness

Abstract

Based on different observations, in theory as well as in practice, we have identified strategies and operations following two different tracks, striving in different directions, despite it being well known they should go hand in hand. For companies challenged by a more and more dynamic business environment with heavier market segmentation, additional marketing channels, increasing globalisation on supplier and customer side, and high pressure on profit margins, the result from this is competitive weakness. The purpose of this article is to switch focus from operational effectiveness and strategic positioning as static success concepts on how to improve industrial distribution, to dynamic challenges of how to continuously manage the interaction between marketing strategies and operations (e.g., logistics) under the influence of a dynamic business environment. From theories in market strategies, logistics, flexibility, and marketing channels together with empirical experience from a best practice case study, we are introducing a model for dynamic effectiveness, describing the different characteristics of a company and what to focus on in order to become more dynamic. In order to constantly move to new market positions, and at the same time, restructure logistics and improve operational effectiveness, we have identified the dynamic capabilities of an organisation to be the key to success in industrial distribution. We define dynamic effectiveness as “how fast-and-well a company can go from one strategic positioning and productivity frontier to another.” It tells that a frequent interaction between new strategic moves and actions for higher operational effectiveness is required to be in pace with the dynamic and changing business environment and to stay ahead of competition. As a part of this, best practice logistics performance makes it possible not only to be more agile to new strategic moves, but also to drive strategic development from a high operational level. This is achieved by designing logistics to be a resource base to support and be an enabler for new strategic moves on the market.