Sole Survivors: How Exceptional Companies Survive and Thrive at the Edge

Article excerpt

Kerin, Anto T. Sole survivors: How exceptional companies survive and thrive at the edge. Dublin, Oak Tree Press, 1999. 398 pp. Tables, figures, index. ISBN 1-86076-131-3.

This book is a compilation of nine case studies on footwear manufacturing companies located in Finland, Ireland, Sweden and the United Kingdom, exporting variously 10-80 per cent of their business, mostly to neighbouring EU countries and some to North America and Japan. They were mostly family-owned businesses operating in the traditional footwear market, and employing 50 to 500 workers. Despite the increasing global competition that occurred throughout the 1990s, they managed to survive and thrive "at the edge", largely through enterprise restructuring and downsizing and by making continuous improvements; a few of them implemented rather more innovative new business concepts.

They are examples of enterprises meeting the challenges thrown up by globalization with determination, effectiveness and efficiency in order to overcome increased competition by ensuring a sufficient return on capital employed through effective restructuring and competitive strategies, so as to attract the investment necessary to generate economic growth and jobs. The case studies detail the new product concepts introduced, together with changes in product management strategies both for restructuring and continuous improvement, and for new business models to achieve a significant departure from traditional business through radical innovation. The studies also explain how business restructuring, continuous improvement, and new business models were promoted by effective HR strategies to overcome the fierce market competition triggered by deregulation and cheap imports from poor countries.

During the 1980s and 1990s, deregulation and the liberalization of trade brought down a large number of footwear manufacturers in the countries of northwestern Europe, where family-owned shoe-making companies had a long history and had accumulated core competency. Having to compete against cheap imports, they found it extremely hard to survive in high-wage economies, and were forced either to restructure and downsize or simply to close down or go bankrupt. Only firms which made continuous improvements or introduced radical innovations managed to survive in some form.

The case studies describe how the companies examined withdrew from less profitable business areas, and made improvements and innovations in areas with greater commercial potential by focusing on promising market niches and on developing necessary core competencies. Depending on the companies' individual core competencies, major investments were made in markets that focused on high quality, high fashion or specialized products, such as shoes for extreme temperatures, safety shoes, children's shoes, and ladies' fashion shoes.

Some expanded into the retail business, promoting sales of their own brands manufactured in their factories, while researching changes in consumer needs through their own outlets. Some others developed exports by making effective use of international trade fairs. One company adopted a new business strategy based on better use of its well-established brand image (the traditional shoe) to expand into the leather-- based fashion business, including handbag production and sales. Others made foreign direct investments by outsourcing in low-- wage economies. A few also bought in products. Thus, spin-off, outsourcing, networking, strategic alliances, mergers, acquisitions, and joint ventures were used as required in order to restructure and to reinforce own core competencies to achieve increased competitiveness.

The companies also made a number of changes to improve their organizational structures, production engineering technologies, work systems, market and consumer research, marketing, sales promotion and merchandizing strategies. Management strategies were enhanced by a sense of vision, communication, involvement, participation, cooperation, teamwork, and partnership between labour and management. …