Definition of the Domain

First of all it is very important to decide what importance the future operations of an enterprise have in order to decide the relationship between industry and environment. This also amount to drawing the long term composition of how the industry shall adapt itself to the environment. This is the definition of domain. Zone of survival as the definition of domain is the base for deciding the other definitions.

It is said that the failure of Railways Industry in America was because of mistaken definition of domain. The American Railways Industry can be called as pilot representative of large industry. However, the Railway Industry thought that its work is only that of the railway operation rather that the transportation work. As a result, it failed to match the rapidly increasingly demand from the transportation sector. The declining market and capturing of the demand by the alternate means of transportation were basically responsible for this failure and in its background was the failure of defining the domain.

Domain specifies the work area in which the operational activities of an enterprise are carried out or it is expressed as a concept covering all such operations. Operation portfolio is the example of the former, and the latter can be expressed by “C & C” (Computer and Communication) of NEC and Life and Cultural industry of Santory.

On the other hand, the definition of domain for the American industry relatively market oriented and it includes many elements which are close to the successful factors in the market. “IBM means Services” can be called as domain of IBM (the IBM operation is not to sell the machines but to sell the functions of the products). Secondly, it comes out with solution for the problems of the customer. “Develop, Make and Sell” (technological reforms, productivity and market share) are the basics for the operation development of the Texas Instruments (TI). These are some typical examples.

For example, the management targets of IBM in 1980s can be understood from the technology map which is an internal document of the company . This map is used for describing the domain of IBM. The portion covered with mesh represents the area of activity where IBM is involved and it holds an edge technically also. It can be understood that from here it extends its operation to almost all the areas of information industry business. In this connection, it may be noted that the portion covered by full lines represents the operations of AT & T, whereas the areas covered by hatched line represents the operational are of Olivetti.