The competition of product becomes easily conspicuous and the successes brought about by this competition is glaring also. Human eyes always tend to concentrate on the competition at this level. However, the enterprises which have successfully built competition pre-dominance over a long period in the industry have done so by winning on the basis of creation of distinction of business system. The companies like Matsushita Denki, Toyota, Philips, Coca Cola, I.B.M., Xerox, Mercedes Benz etc. have succeeded in demonstrating success continuously on the basis of creation of distinction of business system.
These enterprises could retain the top position in the industry not on the basis of product development only. Sometimes they could lead on the bases of product development, whereas, sometimes they were led by the competition rival. They were capable of catching up even from behind whenever they were led by the rival companies on the basis of product development. In other words, these enterprises were not leading on the basis of product, rather it was a business system, which gave them the leading edge. A company which could not maintain the lead on the basis of business system had no other way but to compete through the distinction of product. However, any distinction of product fades away in very short duration in most of the cases and it was not possible to continue and maintain the success on a long term basis.
Let us try to understand the business system in more concrete form. The management scholars use different terms for business system. For example, Michael E. Porter has called it value chain. Whatever may be the name, a business system covers various activities from the production of value by enterprises in different operation fields upto the delivery of product or services to the customers.
In the case of a manufacturing company, purchase and delivery, manufacturing, dispatch and distribution as well as marketing and the after sales service are the concrete activities. These are not the independent activities, rather they from one system. These activities can be compiled through various system like information system, logistic system, technology development system, personnel and labour system and organization as well as control management system.
These enterprises could retain the top position in the industry not on the basis of product development only. Sometimes they could lead on the bases of product development, whereas, sometimes they were led by the competition rival. They were capable of catching up even from behind whenever they were led by the rival companies on the basis of product development. In other words, these enterprises were not leading on the basis of product, rather it was a business system, which gave them the leading edge. A company which could not maintain the lead on the basis of business system had no other way but to compete through the distinction of product. However, any distinction of product fades away in very short duration in most of the cases and it was not possible to continue and maintain the success on a long term basis.
Let us try to understand the business system in more concrete form. The management scholars use different terms for business system. For example, Michael E. Porter has called it value chain. Whatever may be the name, a business system covers various activities from the production of value by enterprises in different operation fields upto the delivery of product or services to the customers.
In the case of a manufacturing company, purchase and delivery, manufacturing, dispatch and distribution as well as marketing and the after sales service are the concrete activities. These are not the independent activities, rather they from one system. These activities can be compiled through various system like information system, logistic system, technology development system, personnel and labour system and organization as well as control management system.