San Jose Mercury News
24 February 2023
Firms’ plans to compete fall short.
By Sue McAllister
Most executives of American technology companies expect competition from domestic and global rivals to intensify in the next two years, but not many companies in Silicon Valley or elsewhere are formally planning strategies for how to react.
Only about 27 percent of the nearly 300 technology executives that answered a recent survey said they have formally assessed their competitiveness on a companywide basis, according to a survey this week by management consulting firm A.T. Kearney, the Chief Marketing Officers Council and the Business Performance Management Forum.
A larger portion of companies — 54 percent — said they include informal discussions of competitive strategy in their business meetings.
The survey included responses from many of Silicon Valley’s largest technology companies, although a list of respondents was kept private. The study was conducted in late 2004 and early 2005.
John Ciacchella, a senior partner at A.T. Kearney, said three forces are currently changing the competitive landscape for technology companies.
One is a shift to consumer products and services and away from products and services for other businesses. Another is the emergence of large markets in China, India and elsewhere. The third is “disruptive” new technologies such as phone service over the Internet, broadband to homes and wireless communications.
U.S. companies are aware of the importance of these changes, he said, yet too few are formally analyzing and planning for the effects on their businesses.
“My expectation was that businesses were in the process of getting organized to address these changes,” he said. “They seem to be behind the ball.”
About 47 percent of respondents rated their companies’ competitiveness as good or above average, while 53 percent gave themselves average or worse ratings.
Executives said their top priority for improving their competitive standing was to drive product and service innovation. Next was improving customer “intimacy,” which Ciacchella said means “understanding their needs” and “getting ahead of their needs.” The third-highest priority was strengthening their strategic position by developing new partnerships and building brand awareness.
Further down the list of priorities was managing “operational complexity,” a ranking that surprised both the survey’s authors and Geoffrey Bowker, executive director of the Center for Science, Technology and Society at Santa Clara University.
This is an area that deserves much attention, Bowker said, especially by companies with multinational operations or aspirations.
“We’re good at thinking about the next best widget,” he said, “but not about ‘What’s the organizational design and work that goes into producing that widget?’ ”
American companies have a long way to go in designing products and services for other cultures and socioeconomic groups, Bowker said.
“One of the huge areas we’re dealing with right now is people at the bottom of the pyramid and designing products for them. There are 4 billion-odd people without much access to information technology and advanced goods right now,” he said.
Last week, a report from AeA, a trade group formerly known as the American Electronics Association, said U.S. companies risk losing their competitive edge in part because of insufficient science and math education for grade school and high school students, and decreased federal funding for scientific research.