TABLE OF CONTENTS What would the value of a really effective HR strategy be? How much difference do you think it could make in terms of hard, measurable business results? How about 1 per cent of profit or a 10 per cent increase in market capitalization? These could be very large figures, depending on the size of business.
In Figure 3.1 the whole HR strategy/value proposition is represented. It suggests that all organizations total market value is below their true total potential market value without an HR strategy. As soon as an HR strategy is introduced by one company it starts to reap the benefits relative to its competitors and also increases the absolute value of the market.
Appendix 1 presents a league table of automotive manufacturers, in order of total market capitalization, showing Toyota at the top, with a value nearly four times that of Ford. However, Toyota s sales volumes are only about two-thirds of those of Ford. That sounds as if they must have managed to secure a really significant competitive advantage.
Each of these companies has access to the same technology and equipment. Their business strategies try to achieve low costs with as much product differentiation as possible. Most of the companies shown have been around since the very early days of car production, so they could all potentially have risen to the top of the league if they had...
