New Take on Old Theory May Boost Bottom Line
Spring 2012 · Comment ·
Many business owners consider speed the key to success: how quickly they can enter the marketplace, promote their product, and adapt to customers鈥� needs. Associate Professor Liliana P茅rez-Nordtvedt has a different theory. It鈥檚 not how fast you do something that matters, but when you do聽it.
鈥�Most strategies ask, 鈥楧o we want to differentiate our product, our price, or how customers view us?鈥� 鈥� she says. 鈥淭his is kind of a different approach.鈥�
The idea is called entrainment, and it鈥檚 nothing new. It means that something does best when it synchs with the dominant forces in its environment. But until Dr. P茅rez-Nordtvedt came along, few thought of it as a business strategy. She and UT Arlington colleagues Susanna Khavul and Jeff McGee are among the first researchers attempting to measure entrainment in business strategy.
The $1.3 billion Cowboys Stadium is aiding their efforts. The researchers are looking at how the stadium, which opened in 2009, has impacted local businesses.
鈥�They bring about a lot of change, but they also bring a time component,鈥� P茅rez-Nordtvedt says. 鈥淯ntil this, anything that happened around Arlington typically occurred around the summer. So they bring an expansion of what businesses around here can聽do.鈥�
The research focuses on how businesses entrain themselves to Cowboys Stadium, taking advantage of the huge crowds. Consider an outdoor hot dog vendor nearby. His business model likely won鈥檛 change because of the stadium鈥攈e鈥檚 still selling hot dogs鈥攂ut when he chooses to sell them might. And he might choose to close during a Cowboys game when patrons are inside and traffic to his stand would be聽low.
Closing when Cowboys Stadium is open鈥攕ynching against the dominant cycle鈥攊sn鈥檛 exactly entrainment. But the team is finding that this can also be a common and effective business strategy for some smaller firms.