Managing Time for Competitive Advantage

Every firm, small or large, pursues a formal or informal business strategy to compete and become successful in the marketplace. Some become very successful, and others go out of business. However, to become successful, a company must also have an effective functional strategy. Both strategies are essential for generating competitive advantage and superior performance. Through operations strategy (a functional strategy), firms achieve operational effectiveness that means performing implementation activities in a way to realize low cost, speed, performance, and productivity—better than competitors.

By the mid-1980s, the top Japanese firms had achieved excellence in the practice of time-based competitiveness. By implementing time-based tactics, they were able to reduce their costs, offer broader product lines, and capture a larger portion of the total market. Examples of time-based competitive techniques are time-to-market, platform-based product development, just-in-time (JIT) system, expanding product variety, and flexible manufacturing. And examples of some Japanese companies that successfully implemented time-based competitive tactics are Honda, Sony, NEC, and Toyota; and U.S. companies include FedEx, Sun Microsystems, McDonald’s, and Intel. Here is another example from my work experience: during the early 1990s as chief engineer of R&D and engineering at Recoton Corporation a consumer electronics accessories company, I was given the responsibility to manage its innovation and technology strategy including new product development efforts and consider time-to-market as one of the major goals in accomplishing companies overall strategic goals.

By this time Recoton had already well established itself as a distributor and manufacturer for selling its products in high volume through retail stores in the U.S. and high-volume contract manufacturing (in China & Taiwan) to take advantage of high volume low-cost flexible manufacturing, respectively. In addition to designing low-cost high-performance products, shortening the product development cycle time was the most important part of my responsibility to timely introduce new wireless electronic products into the market. By using platform-based product development strategy and implementation, and coupled with fast development cycle time tactics, the company introduced many low-cost award-winning high profitability products in the market within a period of five years. The results were amazing; the company’s wireless product line’s revenues grew 20 times in five years span from around $2 million in 1990 to around $45 million in 1995 that also improved the company’s total shareholder returns (TSR) performance each year.

Additionally, in 1988, Recoton initiated an aggressive growth strategy through acquisitions. This acquisition process was further accelerated due to Recoton’s rapid growth in revenues and profits each year in the early 1990s generated through the sales of most successful wireless product lines that resulted in Recoton to rapidly acquire many companies by 1995. Other strategic factors for this rapid growth were Recoton’s lower costs relative to competitors, internal radio frequency (RF) and microwave R&D distinctive competencies, and the early 1990s recession that allowed Recoton to acquire companies at comparatively low prices. Because of Recoton’s growing cost leadership position, successful growth strategies (acquisitions and vertical integration), and speedy time-based initiatives, Recoton was able to become a global leader in the consumer electronics accessories industry by 1995.

Some of the tools and techniques used at Recoton to implement time-based competitive tactics were platform-based product development, concurrent engineering, project time management, project integration management, project communications management, cross-functional management, and speedy decision making. It was all about doing, linking, and integrating activities within the time limits to maximize the firm’s performance.

Time is a resource and, if managed effectively based on the competitive needs of the firm, can generate an advantage in the competitive arena. Through schedule compression and optimization techniques, projects can be completed faster with respect to the competition that can significantly improve a firm’s competitive advantage.

In today’s highly dynamic and fiercely competitive landscape, for example, competing only on the basis of generic strategies is not enough to succeed. A firm must also have some means of generating operational effectiveness, particularly using time management constantly to generate sustainable competitive advantage so that it can preserve and enhance its strategic position. Time-based tactics still remain viable and essential to remain competitive in today’s market. However, my personal work experience demonstrates that firms still lack expertise in this area, or they know about the subject but find difficulty in implementing time-based competitive tactics.

References and Further Reading

1. George Stalk JR., 1988, “Time–The Next Source of Competitive Advantage,” The Boston Consulting Group on Strategy(New Jersey: John Wiley & Sons, 2006), pp. 63-82.
2. Michael E. Porter, “What Is Strategy,” Harvard Business Review (November-December 1996), pp. 1-21.
3. History of Recoton Corp. – FundingUniverse
www.fundinguniverse.com/company-histories/recoton-corp-history