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A strategy lesson from a country to a car company
March 2, 2010, 9:35 pm
Filed under: 1 | Tags: , ,

Running a country isn’t so different from running a business; it may be much more complex but a cohesive strategy is still vital.

Singapore is one country which prides itself on a good strategy, particularly when it comes to social control. Add this to the challenge of getting an international foothold when you have few natural resources to speak of and you get a very interesting case study. (It leads on to business, I promise.)

In case you don’t already know:

One; Singapore has an obsession with expats. Think ‘foreign talent’, lots of scholarships for Ivy Leagues and a very cushy expat life.

Two; They struggle to control the influx of immigrants they don’t want settling in the country – workers from less affluent parts of Asia. Good luck getting residence if you’re not rich and educated.

Three; The government strongly deters vice (or anything which might mean you have to rely on them for welfare later in life, or give them more cleaning up to do). This means high taxes on alcohol and cigarettes, and you can’t buy chewing gum without a foreign passport or prescription.

In order to start completing with luxury destinations like Macau, casino development Resorts World was approved and recently opened. The catch? Singaporeans pay a levy to get in, while foreign passports get in free.

From the website it seems that the casino is aimed at rich Asian businessmen, in particular those who complain that they would like some unwholesomeness once in a while besides the lure of Geylang and ‘karaoke’ bars. Cue images of suits clinking tiny glasses around a table while an intense mahjong game clacks away at the next table.

Anecdotal evidence so far suggests that this has not quite been the case. Apparently it is the foreign construction workers and domestic help that society tries to ignore who are coming out to play. Not quite the epitome of sophistication that was envisioned.

Ironically it is the government’s reluctance to give these workers passports which allows them to take over the luxury casino dream. Conversely, the addition of the casino may encourage them to attempt to stay, which is also against governmental intention.

Here there’s two strategies with a common goal – building up the luxury image of Singapore – which have collided with each other.

It reminds me very much of Toyota.

There was the admission last week that in the pursuit of growth there was too big a drive on new technologies and rapid expansion of production. And it worked – they reached a new market niche with the Prius whilst standard models like the Corolla and Camry powered on.

But the two strategies had an explosive reaction. New technologies meant more training and different equipment needed. Toyota has traditionally home-grown their engineers meticulously, so when production grew even more training was required. General opinion seems to be that the push for growth was just too much, too fast. There were warning signs at consumer level, but these do not seem to have reached central management in Japan.

A couple of lessons here:

First – strategy needs to work with other strategy.

But also – strategies can clash in different ways. Sometimes it’s more obvious at a higher level than others. Higher level strategists also need to be in touch with the reality at the bottom.

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1 Comment so far
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great blog, awesome information here thanks !!!

Comment by Whanganui River




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