Introduction:
This paper is about considering the importance
of the customers’ participation on a growing firm. Usually, when an industry
starts to make a good profit and establish its name in the corporate world. They
tend to ignore the importance of their customers especially those who have been
patronizing them for a long time. However, according to Edith Penrose work about
the growth of the firm. It would still be part of ones achievement to be able to
consider this factor because it may seem to be the reason of securing long-term
success. She gently discusses these things in the “inside track”. Wherein in
that notion she provided certain situations that would be very helpful among
those who have been in the industry for quite several time and still wants to be
in the track as time goes by. She stated that enable to achieve this long term
success in the business. The customers’ ideas and concepts must be considered in
the first place. So that, a certain relationship between the two might be
establish well. And if its that the case, it would be very possible to have and
achieve the long term success.
Start From Scratch
A successful firm doesn’t only include a list of
highly quality product, a well maintained establishment and highly skilled
workers. There are a lot of things that can affect the growth of a certain
firm. Part of it was the customers. In the first place, I think they are the
reason why a certain industry is about to make a new product or render a new
service. It’s because someone is in need of that. Technically, they need to
target a certain market. And in order to make that they should provide a good
strategy. Before moving into the first phase of the business. Taking risk is
just always a part it. Know the people whom you’re going to provide for. And
that would be your market. Then, know their needs. What are the things that
will make their work or life easier for them? If an idea pops out in your mind
then you have the thing that will provide this people what they need. Just like
what Alfa Laval industry did several years ago. They came up with a certain
product that will provide their people what they need and at the same time will
benefit them in terms of profits. But after earning, and after several years,
how do they manage to stay in there position? How do they keep there business on
the right track? Then, enter Edith Penrose the Inside Track.
Keeping on the Right Track
The Inside Track simply implies the
implementation of the customer relationship service in every business firm.
Especially in the providing the needs in their established customers. In this
case, both should be dependent in each other. Having a good customer
relationship would really be a great help in an industry. In here, both will
create a dialogue and in it they will both be open about anything that will not
only benefit the customer but as well the industry. The relationship might seem
to be symbiotic. But it would be very beneficial at the same time. Knowing such
feedback either good or bad is something that shouldn’t be taken for granted
because in these things you will come up with several solutions and as well as
new ideas. Nowadays, this concept is very much possible and in-demand. You can
track people by the World Wide Web if it is not possible to be with them
personally. This social interaction develops the ability to assimilate and
exchange knowledge that is often tacit in nature, and to rapidly adjust the
quality and characteristics of both existing and new products.(Uzzi,1997;
Yli-Renko et al., 2001). According to Larson ( 1992 ), the frequent and
long-term social interaction builds trust and emotional bonds in customer
relationships. And this is very true because the tendency is that people will
tend to be closer and open to tell whatever their upbringings are regarding the
firms’ product and service. They will also be more inclined to try out new
product and they won’t be afraid anymore of taking the risk because they know
that whatever it is that might happen, the firm would be responsible enough to
console them. That’s why in able to be highly appreciated, one should do their
obligations first in order to achieve the trust of the customers. If the inside
track begun to be implemented and once it is highly anticipated. It would be
very difficult for other new industries to merged up because in this case they
really need to be competitive enough. Trust is one that cannot be easily
achieved. Especially for those who are still starting to establish a name.
Once established, inside tracks can be difficult
to imitate. Newcomers lacking insights into the particular circumstances and
needs of customers will only to a limited extent be able to identify and respond
to new product opportunities. Firms with already established customer
relationships may differ in the depth of their knowledge about customer needs
and also their interest in seeking out and actively pursuing new opportunities (Covin
and Slevin, 1991).
Gustav de Laval ( 1885 ) states that
“Alfa Laval means a 100% commitment to service. To us, it’s a total concept
that covers everything, from supplying the smallest spare part to acting as a
long-term performance partner. We call our approach Nonstop Performance, because
that’s what service is all about.” From the mechanical cream operator to the
comprehensive ranges of pumps, valves and fittings. There is no doubt that the
Alfa Laval has gone a long way. They are the leading provider of specialized
product and engineered solution. But how do they manage to still be competitive
in spite of a lot of competitors that has been merged in? Well, it is because
they keep their selves on the right tract… the inside track. They overcome such
difficulties arising in the business because they were able to come up with the
right strategy. They seek for improvement and development for their company.
Their goal is to provide something that will not benefit their selves alone but
as well as the people. After Gustav de Laval invented the first continuously
operating cream operator in Sweden. The business soon boomed in the United
States of America because it minimizes the tedious task of the farmers on hand
skimming the milk. Several years later, they didn’t stop seeking for new
opportunities that will make jobs easier than usual. This took place by
gathering and exchanging knowledge with the farmers who were by that time
considered as their established customers. Although, they was a time when the
competition among others was really tough. Still, they inclined with their
existing customers. With the proper combination of their
in-depth insights into the circumstances and
particular needs of its customers and assimilation of new and substantially
different skills and resources. Fortunately, they have
succeeded again. Maybe that’s the reason why they stated that their approach is
called a non-stop performance and all they intended to do is to serve.
According to Vaughan (1992 )
, the rapid assimilation of new skills and
resources in particular suggests the existence and use of potentially critical
relationships and support routines. However everything wouldn’t be possible
without hard work and determination. If Gustav de Laval didn’t make any further
effort after the invention of his first cream separator. Then, all of the things
that he did from the start will just turn in to nothing. As of now, they still
manage to be competitive and still surviving.
Conclusion:
It turns out that Edith Penrose’s’ work about
inside track have been very helpful among those firms seeking for stability and
long-term growth. It clarifies the usual misunderstanding among the individuals
and the firms. And what she’s trying to impose in this study is that with the
proper establishment of customer relationships as an important source of
sustainable competitive advantage and firm growth then it follows that the more
general notion that the sources of sustainable competitive advantage can be
found in idiosyncratic, interfirm relationships that are not ‘owned’ or
controlled by the individual firm.
Part of her work is wherein she indicates the
Alfa Laval as an example of what was she’s trying to explain when she was
talking about the inside track. She overviews the said firms history and took it
as a living example of the inside track works. By that she was able to represent
a good example of what she is trying to convey. Being descriptive somehow help
her study more resourceful and sensible. Although, there are still flaws to be
considered on how she persuades her ideas. There are no negative outcome that
has been stated so that their can be another option if things didn’t work out
well in the first place. We should not become stick to the other side only or
the just the positive side. Anyway this is business and we are always faced with
different challenges all the time. And somehow dealing with the customers is
such a tough job. Because it is simply dealing with different types of people
everyday. Engaging with different types of point of views. Honestly, a lot of
things are still needed to be considered. The relationship between the customers
as part of the whole strategic plans in the business requires a lot of trial and
error situation. If they tend to adapt the concept of one customer whose needs
are a lot different from the other, then expect a little uncertainty within the
firm. However, if the firm catches the right concept from their customer and it
became very much welcome to all. Then it will be fortunate for them. It’s just a
matter of balancing the right viewpoints of the people around you. Anyway,
expect anything in business because you will never really know it ‘til you’re in
there.
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