Failsafe Strategies: Profit and Grow from Risks that Others Avoid by Sayan Chatterjee

Product Description

Pursue your best business opportunities—without the risk!

Today, many companies have become powerfully averse to taking the risks that are essential to long-term success. Dr. Sayan Chatterjee shows how to identify high-risk, high-return opportunities, and then systematically mitigate those risks up front, as you design your initiative. His techniques can help you safely pursue huge opportunities that others pass up—and sustain profit growth far into the future.

A complete framework for attacking high-risk, high-return opportunities

Powerful new tools for sustaining long-term growth and profitability

Clarifying and mitigating your real risks

Understanding what is visible to your customer and how that affects your risk

JetBlue vs. Southwest: More than one way to skin a cat

Identifying multiple competitive objectives, and multiple ways to achieve them

Tracking and reducing risks in real-time

Discovering mistakes in assumptions or logic while there's time to fix them

Creative ways to leverage existing resources more effectively

Reducing risk by avoiding unnecessary additional investments—and what to do when you can't

Execution: Getting your ducks in a row

Creating an organization that can deliver on your high-value, low-risk strategies

Reducing the hazards of growth and diversification strategies

Planning to grow or extend your core markets

Entering existing markets without the risk

Finding more effective ways to overcome entry barriers

Shaping new markets: products, processes, and platforms

What it takes to successfully create and dominate a new market
Product Details
Amazon Sales Rank: #762205 in Books
Published on: 2004-09-27
Number of items: 1
Binding: Hardcover
312 pages
Editorial Reviews

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"Failsafe StrategiesPursue your best business opportunities¿without the risk!


Today, many companies have become powerfully averse to taking the risks that are essential to long-term success. Dr. Sayan Chatterjee shows how to identify high-risk, high-return opportunities, and then systematically mitigate those risks up front, as you design your initiative. His techniques can help you safely pursue huge opportunities that others pass up¿and sustain profit growth far into the future.


A complete framework for attacking high-risk, high-return opportunities

Powerful new tools for sustaining long-term growth and profitability


Clarifying and mitigating your real risks

Understanding what is visible to your customer and how that affects your risk


JetBlue vs. Southwest: More than one way to skin a cat

Identifying multiple competitive objectives, and multiple ways to achieve them


Tracking and reducing risks in real-time

Discovering mistakes in assumptions or logic while there's time to fix them


Creative ways to leverage existing resources more effectively

Reducing risk by avoiding unnecessary additional investments¿and what to do when you can't


Execution: Getting your ducks in a row

Creating an organization that can deliver on your high-value, low-risk strategies


Reducing the hazards of growth and diversification strategies

Planning to grow or extend your core markets


Entering existing markets without the risk

Finding more effective ways to overcome entry barriers


Shaping new markets: products, processes, and platforms

What it takes to successfully create and dominate a new market


"

From the Back Cover

Failsafe Strategies


Pursue your best business opportunities—without the risk!

Today, many companies have become powerfully averse to taking the risks that are essential to long-term success. Dr. Sayan Chatterjee shows how to identify high-risk, high-return opportunities, and then systematically mitigate those risks up front, as you design your initiative. His techniques can help you safely pursue huge opportunities that others pass up—and sustain profit growth far into the future.

A complete framework for attacking high-risk, high-return opportunities

Powerful new tools for sustaining long-term growth and profitability

Clarifying and mitigating your real risks

Understanding what is visible to your customer and how that affects your risk

JetBlue vs. Southwest: More than one way to skin a cat

Identifying multiple competitive objectives, and multiple ways to achieve them

Tracking and reducing risks in real-time

Discovering mistakes in assumptions or logic while there's time to fix them

Creative ways to leverage existing resources more effectively

Reducing risk by avoiding unnecessary additional investments—and what to do when you can't

Execution: Getting your ducks in a row

Creating an organization that can deliver on your high-value, low-risk strategies

Reducing the hazards of growth and diversification strategies

Planning to grow or extend your core markets

Entering existing markets without the risk

Finding more effective ways to overcome entry barriers

Shaping new markets: products, processes, and platforms

What it takes to successfully create and dominate a new market

"For those charged with business strategy, this book is a must read. By understanding and applying its principles, managers may be well on their way to minimizing risks and gaining a competitive edge."

—Thomas C. Sullivan, Chairman, RPM International, Inc.


"Chatterjee helps you take a fresh look at your company's current business model and gives you a roadmap to implement change to align your everyday operations and long-term strategic planning. This book is a must-read for anyone involved in operations and trying to grow a business."

—Arthur Anton, President/CEO, Swagelok


"Dr. Chatterjee has been highly effective in assisting our company with business strategy. He has given us new perspectives in strategic management that have dramatically improved our thought processes and performance results."

—Rick Juve, CEO Americhem


"For a practitioner, this book offers a unique and invaluable focus on proactive risk assessment during the design of business strategy...a focus that other authors omit."

—Ted Zampetis, CEO, Shiloh Industries, Inc.


"Risk. It's everywhere in today's business world. Chatterjee shows businesses how to cope and prosper in the face of risk. If you don't want to succumb to the downside of risk, this book is a must."

—Professor Richard D'Aveni, Tuck School of Business at Dartmouth College and author of Hypercompetition


"Chatterjee takes a unique perspective to strategy. Instead of waiting for a home-run innovation, companies can boost their profits long-term by clearly understanding what causes everyday strategies to fail. What an idea!"

—Sydney Finkelstein, Professor of Strategy and Leadership, Tuck School at Dartmouth and author of Why Smart Executives Fail


"The world of risk management is often thought of in the context of models, measurement, quantitative analysis, and geeks. Dr. Chatterjee's book takes the subject to a new level by focusing on the critical role of strategic risk. As a professional risk manager, I was intrigued by how he weaves strategy into the fabric of enterprise risk management. Chock full of real-world anecdotes, the reader will find this book both entertaining and informative.

—Kevin M. Blakely, Executive Vice President, Risk Management Group, KeyCorp


"This excellent book provides both tools and processes for expansion of company activities into market areas that may outwardly appear very risky. By developing multiple options, the risks of new moves in the market can be reduced to practical proportions."

—Jack W. Harley, President, JWH Group Inc.


"This book offers very sound, worthwhile advice to management concerning a little-reviewed element—substantiating and evaluating risk. It is well worth the effort and should be well received."

—James A Karman, COO RPM Inc.


"For anyone who is currently constructing a business case for their organization, stop now. Read this book first. It will assist you in terms of articulating your chosen strategic design, the core objectives that you are trying to establish, and the pure capability that will enable you to successfully execute. This is value to the max."

—Professor C.H.J. Gilson, author of Peak Performance: Business Lessons from the World's Top Sports Organizations


"Businesses have long built their strategies on a foundation of profitability first, risk analysis second. Sayan Chatterjee flips the formula and shows how business opportunities are often profitable precisely because of the risk involved. This is a fresh perspective on how to calculate the risks that can derail a strategy—or lead to greater profits. Failsafe Strategies provides business managers with a dynamic, accessible framework not simply for avoiding risk, but for converting it into profitability."

—Ming-Jer Chen, Leslie E. Grayson Professor of Business Administration, The Darden School, University of Virginia, and author of Inside Chinese Business: A Guide for Managers Worldwide


© Copyright Pearson Education. All rights reserved.


About the Author

Author Bio

Sayan Chatterjee, Ph.D. is Professor of Management Policy at the Weatherhead School of Management, Case Western Reserve University. He has been doing academic research on the sources of business risk since the early 1990s and is now translating his breakthrough ideas into actionable information for business leaders and financial experts. In May 2003, he spoke at an invitation-only practitioner conference on risk organized by the London School of Economics. His works are used in the curriculum of the Harvard Business School and have been cited in most leading textbooks on strategy. He also consults with leading middle-market firms and global corporations.


© Copyright Pearson Education. All rights reserved.

Customer Reviews

A profound piece of thinking
I read at least hundred books a year on business and this one as provided some incredibly coherent thinking on the nature of strategy and systems thinking! We use the concepts in the Stanford Advanced Project Management program and managers really begin to understand the nature of what good planning looks like!


Where there is risk, there is often great reward
Business is a specialized extension of life, so the reality is that there is no failsafe. However, that is what makes the game so interesting. For if you could not fail, business, like life, would be very dull and uninteresting. In the modern world, jobs are being created and destroyed at a rate faster than at any time in history. There is also no doubt that the pace of change will continue to accelerate. Furthermore, the physical location of jobs is also changing at a rapid rate. However, the rate of change of job movement will slow and eventually flatten out. As countries such as India and China develop, the wage differential will narrow. Finally, at some point most of the jobs that can be outsourced will have been outsourced.
In this environment, the challenges can be overwhelming. The sensible person explores every possible advantage and there is a great deal of sense in this book. Overall business strategy, rather than operational aspects, is the focus. While new technologies are continuously being developed and are creating new business opportunities, the strategies examined here are applications requiring very little new technology.
There are two key points, the first is how to identify a new market that can be exploited and the second is how to manage your growth. Two aspects of markets are described. The first is as a white space, which is a market niche that is currently unexploited. While these are market opportunities, there is a danger in being the first mover. With no history to examine, it is easy to be a trailblazer for others who will avoid your mistakes and be in a better position to exploit the market. The second is the sweet spot, which is a location that will allow you to maintain your advantage and defend it against others who might want to challenge your position.
Several case histories are presented, including an extensive one about Enron in an appendix. Companies such as Dell computer, Southwest airlines and Jet Blue are examined, including their strategies for entering markets and how they manage to maintain their position and profits, even through difficult times. However, I found the case history of Enron to be the most interesting. Their initial business strategy was a brilliant one, but when Enron branched out into other areas without performing the due diligence of research, they began to experience failures. It was the attempt to maintain the façade of unrelenting success that led to their downfall. Rather than admit to the failures, managers at Enron began to engage in account manipulation that snowballed as failures grew in magnitude and number.
As the world changes rapidly, market niches are created and destroyed and are not always evident. Entering these niches requires forethought, courage and determination to succeed. If even one is missing, failure is likely. The information in this book will help you to identify new niches and ask the right questions concerning whether you should enter one. You must supply the courage and determination.

“You can profit by seeing the profits in risks that others will avoid”
“This book develops a set of concepts that allow you to design business models where the risk can be reduced to practical proportions. The risks in any business come from not knowing the demand, threat from competition, and not having the appropriate capabilities. The basic theme repeated over and over again is that to reduce risk, you need to have clarity regarding where the risks are and create choice, or options, in tackling those risks. We use numerous examples of business strategies to illustrate the concepts. But more to the point, the concepts developed in this book enable you to quickly visualize successful strategies as well as avoid the common pitfalls. However, by no means are we claiming that the strategies we use as examples were developed using our frameworks. We are very aware of academic ‘after the fact’ analysis of famous strategies that in no way portrays the reality of how those strategies were developed. Notable examples are Honda, Wal-Mart, and Southwest. This is where our book differs. Rather than looking backward to try to understand these famous strategies, which is often the case with academic analysis, we use these examples as ‘exercises’ to help you re-create these strategies using our framework and methodology – a process that should help you internalize our concepts faster (from the Introduction).”

In this context, Sayan Chatterjee divides this excellent book into two broad sections-ten chapters and an Appendix. He briefly summarizes each of them as following:

I. THE FIRST SECTION develops concepts that allow a firm to clearly understand the nature of the risks in a given business.

1. In the first chapter, we explore the choice dimensions when designing a strategy – how to identify multiple business models. By identifying multiple business models, you will be able to minimize competitive risks by essentially changing the rules of the game.

2. This brings us to the final concept, which you will explore further in Chapter 2. Even if you manage to reduce competitive risks by identifying a competitive logic that is distinctly different from competitors, you are still vulnerable to capability risks.

3. In Chapter 3, we revisit the choice dimensions that allows you to consider different capability configurations that can deliver the same core objectives without making the mistakes made by Continental CALite. This will help you understand how elements of a successful strategy from one business can be applied to just about any business without undue capability risks.

4. In Chapter 4, we will review the different options to reduce capability risks that we have seen so far with some more examples. These options are using an existing or off-the-shelf capability and investment in capabilities that affect part of the value chain, sometimes in order to outsource the risky capabilities. Thus Lilly, Cisco, FedEx Custom Critical, and Sony PlayStation have outsourced the critical parts of their value chains contrary to conventional wisdom.

5. In Chapter 5, you will consider some techniques for reducing capability risks at the operational level.

6. In Chapter 6, we describe the characteristics of organizations that are the best suited to benefit from the types of frameworks described in this book.

II. THE SECOND SECTION expands the framework developed in the first section to growth and diversification strategies.

7. In Chapter 7, we look at generic strategies for adapting to a market.

8. In Chapter 8, you will consider entry strategies based on low price. You also will consider the market characteristics that reduce the risks of such a strategy. In particular, you examine one of the foremost proponents of the low-price strategies, Dell Computer, and how it has leveraged its low-cost operations into many markets by under pricing incumbents. Firms contemplating a low-price entry strategy can learn some important lessons from Dell.

9. In Chapter 9, you will look at the risk factors in shaping a market from scratch. These strategies take a long time to come to fruition, involve much bigger bets, and are inherently more risky. The strategies are usually also the most profitable and most long-lasting.

10. In Chapter 10, you look at managing these risks in a more dynamic context. You will see how to identify choices not only when designing a strategy, but how to keep the options open and defer commitments. By keeping options open, you will be able to commit resources when you have the best understanding of the risks.

III. THE APPENDIX presents a detailed analysis of the rise and fall of Enron using the risk management lens.

Finally, S. Chatterjee says that “Most management books use examples of past successes and failures to justify their frameworks. Of course, this is necessary, and we have also done that to a large extent. However, we have also gone out on a limb and made predictions about the strategies of the best companies in the world. Some of these predictions are not favorable, but if we believe in our frameworks, the true test will have to come in their predictive ability and not by looking in the rearview mirror. Imagine if someone had predicted Enron’s problems in 1999!”

Strongly recommended.