How Companies Win
Book

How Companies Win

Profiting from Demand-Driven Business Models No Matter What Business You're In

Rick Kash and David Calhoun
HarperBusiness, 2010
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Editorial Rating

9

Qualities

  • Innovative
  • Applicable

Recommendation

The concept of supply and demand has a venerable history. Scottish social philosopher Adam Smith used the phrase in An Inquiry into the Nature and Causes of the Wealth of Nations. Other great economists and thinkers, from John Maynard Keynes to John Kenneth Galbraith, covered it extensively. Today’s wisdom: Forget about it. Consultant Rick Kash and executive David Calhoun turn this bedrock concept inside out, transforming it into the “Law of Demand and Supply.” They explain why businesses that focus on supply and attempt to force demand to align with it will lose big. The sooner sellers accept the reality of the demand economy and adjust, the better chance they will have to survive rocky economic times and flourish in the years to come. getAbstract finds that this book conveys an important message to business leaders. While these authors may not be Smith, Keynes or Galbraith, they certainly have a keen grasp of big concepts.

Summary

Economic Paradigm Shift

A major transition is now underway. No longer is business just about what you can supply. Today, it must focus on whatever consumers demand. Formerly, great companies – for instance, IBM and Ford – promoted their innovative products or services and then optimized their distribution channels. This business model is passé. Today’s great companies, such as Google and Apple, do not focus on distribution or supply channels. They spend their energy on “consumption models” or demand, involving their customers in every aspect of their businesses, including planning, product design and testing. Now consumers, not manufacturers and certainly not supply-chain insiders, are in the driver’s seat. Successful businesses heed their clientele and offer the products or services they want, instead of remaining imprisoned by habitual or static inventories. Supply concerns the product’s packaging, advertising, distribution, pricing, servicing and branding. Demand involves the product’s practical, emotional and psychological ramifications, and how it meets people’s immediate and long-term needs. Demand takes three forms:

  1. “Current” – ...

About the Authors

Rick Kash, founder and chairman of The Cambridge Group, also wrote The New Law of Demand and Supply. David Calhoun, chairman and CEO of The Nielsen Company, was vice-chairman of General Electric.

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