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Strategic Management 5e (2018)Riderwood Publishing

The following list is based on a national survey of strategy faculty about classic cases frequently used in their strategy and business policy courses. Please click on a title to move directly to a detailed description of the case and how it can be used in the classroom.

Apple Computer 2006Body Shop InternationalCarnival Cruise LinesCat Fight in the Pet Food Industry (A)Cola Wars Continue: Coke & Pepsi in 2010Crown Cork & Seal in 1989DAG GroupGE's Talent Machine: The Making of a CEOGE's Two Decade Transformation: Jack Welch's LeadershipGo Global--or No? Kodak and the Digital Revolution (A)Leadership Online (A): Barnes & Noble vs. Amazon.comLevi's "Personal Pair" Jeans (A)MapQuestMatching DellNewell Co.: Corporate StrategyNucor at a CrossroadsPassion for LearningPhilips versus Matsushita: A New Century, A New RoundReady-to-Eat Breakfast Cereal Industry in 1994Satellite RadioSouthwest Airlines 2002: An Industry Under SiegeStore24The Walt Disney Co.: The Entertainment KingWal-Mart Stores in 2003Whole Foods Market, IncYum! Brands, Inc: A Corporate Do-OverZARA: Fast Fashion

Apple Computer, 2006

Primary learning objective Industry structure & evolution; Business level strategySetting Personal computer industry, 2006, $ 13.9 billion revenuesLength of case (pp) Text 15; exhibits 17Financial statements? YesOther subjects covered Nature of sustainable competitive advantage; competitive

moves; competitive advantage through innovation

Publisher Harvard Business School, HBS 9-706-496Latest revision date 2007Teaching note available? Yes, HBS 5-706-513

Case description by publisher:

Apple has reaped the benefits of its innovative music player, the iPod. However, its PC and server business continue to hold small market share relative to the worldwide computer over the past few years. Will the iPod lure new users to the Mac? Will Apple be able to produce another cutting-edge device quickly?

Page West comments:

This case may be useful in a couple different parts of a Strategic Management course. First, it enables you to explore how the evolution of industry structure impacts the strategic position and approach of a key player. As the PC industry matured and commoditized through the 1990s, the competitive position of Apple eroded. To facilitate this analysis, there is a good section on the evolution of the PC industry that parallels the story of Apple's development.

Second, the case provides rich material to explore the appropriateness of business level strategies (and their necessary resource requirements) at different stages of an industry's evolution – see Chapter 8 of our textbook (Industries and Life Cycles).

Another useful aspect of this case includes the effectiveness, sustainability potential and risks of an innovation-based strategy. This is a facet that Apple dealt with continually as it decided to avoid an "open systems" approach with its Mac computers, and as it developed the successful iPod business. This opens up interesting discussion possibilities for the kinds of resource investments required to be successful in this approach, and when and whether such investments can be predicted to be successful in an evolving industry context.

The following questions may be asked as prep for the class discussion: Historically what were Apple’s major competitive advantages? How have the dynamics of the personal computer industry changed over the past 15 years? How would you characterize the major strategies pursued by Apple since 1990? Which do you think have

been successful and which have not? Has Jobs finally found a solution to the historical problems of Apple? Is the iPod different?

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The Body Shop International

Primary learning objective Leadership; Mission/vision; Growth; Global, Resource-based advantage

Setting Cosmetics industry, 1991, $391 million revenuesLength of case (pp) Text 13; exhibits 6Financial statements? YesOther subjects covered Nature of sustainable competitive advantage; ethics;

competitive advantage through innovation



Describes the start-up and rapid growth of a company whose founder holds strong, non-traditional beliefs about the role of the corporation and its responsibility to society. After profiling Anita Roddick as a person, the case describes the anti-mainstream approach she took to building her highly successful business (no advertising, simple packaging, non-traditional R&D). After elaborating on the strong values she has imposed on the business, concludes by highlighting questions of the business' transferability to the United States and its survivability as Anita steps back.

Page West comments:

This case is broad and has many different levels of approach depending upon what you are looking to explore. Before the students get mired in the discussion about social responsibility and the Body Shop approach to business, we like to ask them first to do some structured analysis of the company’s resource-based advantages. Why has this business been so successful when it eschews so much of a classical business approach? They ignore marketing, refuse to spend any real effort on package design, and Roddick refuses to hire anyone with an MBA degree!

The company has established a position with a group of customers that were not being satisfied by the mainstream cosmetics companies. The case works extremely well with Chapter 6 on Resource-Based Analysis by forcing the students to consider each element of the Body Shop through that lens. The case also ties very well with Chapter 3 as the leadership efforts of Anita Roddick are front and center in the strategic direction of the company. This case, more than most, really pushes the students to consider a set of ethical dilemmas as they relate to the normal business practices in the industry. Once you launch the ethical debate, be prepared for the class discussion to get confrontational. We’ve found that keeping the issues organized, addressing one at a time really improves the discussion and allows it to be used as a model for other case analyses. They will remember “The Body Shop Case” for years to come.

The following questions may be asked as prep for the class discussion: What are the most important sources of the Body Shop’s competitive advantage? How important is Anita Roddick to the continuing success of the business? To what extent has the Body Shop changed the competitive landscape? What changes to the business model would you recommend to the Body Shop as it enters the

United States market?

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Carnival Cruise Lines

Primary learning objective Industry analysis; Value chain; Resource-based analysisSetting Cruise ship industry, 2004, $7.4 billion revenuesLength of case (pp) Text 13; exhibits 19Financial statements? YesOther subjects covered PerformancePublisher Harvard Business School, HBS 9-806-015Latest revision date 2006Teaching note available? Yes, HBS 5-806-087


Highlights the potential value of customer data and the choices and challenges the firm faces when attempting to capture this value. Carnival collects a significant amount of individual-level behavioral and demographic customer data. Senior management must now decide how to leverage such a wealth of data to improve firm performance through customer targeting and acquisition, customer retention, and customer profitability strategies.

Page West comments:

This case is useful near the mid-point in a Strategic Management course, because the best discussions occur among students who believe they understand industry analysis and how competitive advantage is attained, but may not have the full application down pat. There are a substantial number of charts in the case tracking every facet of the business. A nice tie-in to Chapter 2 (Performance) can be made when students try to equate the success of the company with their analysis of the Value Chain (Chapter 5).

The real focus of this case is on the competitive data that the company has collected and yet failed to use in any meaningful way. Although Carnival has spent millions collecting data, they don’t seem to understand how it might be a competitive advantage. Having the students try to apply resource-based analysis (Chapter 6) makes the case richer and more meaningful. A second key point in the case is the success that Carnival has had with its value chain. We like to have students construct a value chain diagram for the company and then discuss in class how and where the company creates value.

The following questions may be asked as prep for the class discussion:

What factors in the environment have helped Carnival Cruise Lines succeed? Where and how does Carnival make money? Is Carnival in the cruise line industry or as the case suggests – in the vacation industry? Where do you believe that Carnival has most opportunity for increasing profits?

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Cat Fight in the Pet Food Industry (A)

Primary learning objective Multi-market competition & economies of scopeSetting Pet food industry, 1986, $5.3 billion revenuesLength of case (pp) Text 7; exhibits 6Financial statements? Yes, basicOther subjects covered product scope; geographic scope; competitor analysis and

prediction

Publisher Harvard Business School, HBS 9-391-189Latest revision date 1993Teaching note available? Yes, HBS 5-391-276Additional comments There are three short supplements to this case, which provide

incremental updates to the (A) case:B – 1 page, describes takeover of Anderson ClaytonC – 2 pages, update through 1988D – 2 pages, update through 1991


Describes the pet food industry in the mid-eighties prior to the breakout of a major competitive battle as manufacturers fight for share. Illustrates how when there are benefits to play in multiple markets, competitors will take action in one market to preserve their position in other markets. An example of multi-market competitive interaction. Covers competitor analysis and prediction, and economies of scope.

Page West comments:

This case is useful midway through a Strategic Management course, because the best discussions occur among students who have grasped the complexity of industry analysis and business level strategies. We use the case when we want tot tackle industry evolution, company growth, and resulting competitive dynamics. That occurs between Chapters 8 (Industries and Life Cycles) and 9 (Competitive Dynamics) of our textbook.

The opening discussion should seek to unpack the sources and kinds of scope economies that accrue to the companies that compete in different markets (dog food, cat food). There is sufficient data in the exhibits for analysis of the scope question, rather than just "eyeballing" it. Building off the scope discussion, it is useful to tease out the elements of competitive dynamics in this industry since these dynamics parallel the kinds of scope that can be important. The importance of certain types of scope and the competitive dynamic that exists on this front set the stage for the next discussion.

Some competitors compete broadly but some compete narrowly, so who is better positioned in the industry? The answer to this question is in part determined by the nature of the industry itself, which further discussion reveals is not stable. The (B) Supplement to the case is only 2/3 page long and outlines the deal that Quaker Oats makes to acquire Anderson Clayton and their Gaines division. It's a nice supplement to tag onto the positioning discussion because it dramatically changes the shape of the industry. Why is their increased bidding for this company? What would any acquirer be expected to do once it owns it? What should be the response of Quaker's competitors? For the instructor the (C) and (D) supplements can provide additional historical background on these questions.

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Cola Wars Continue: Coke and Pepsi in 2010

Primary learning objective Industry analysisSetting US beverage industry, 1886-2006, $ 66 billion revenuesLength of case (pp) Text 12; exhibits 7; endnotes 3Financial statements? YesOther subjects covered Global expansion, distribution channels, suppliers,

competitive dynamics



Examines the industry structure and competitive strategy of Coca-Cola and Pepsi over 100 years of rivalry. The most intense battles of the cola wars were fought over the $74 billion CSD industry in the United States, where the average American consumes 46 gallons of CSD per year. In a "carefully waged competitive struggle," from 1975 to the mid-1990s, both Coke and Pepsi had achieved average annual growth of around 10%, as both U.S. and worldwide CSD consumption consistently rose. However, starting in the late 1990s, U.S. CSD consumption started to decline and new non-sparkling beverages become popular, threatening to alter the companies' brand, bottling, and pricing strategies. The case considers what has to be done for Coke and Pepsi to ensure sustainable growth and profitability. A rewritten version of an earlier case.

Page West comments:

This is a wonderful case for students because they are all very familiar with the two main companies, Coca Cola and Pepsico. It reads like a story, but has excellent exhibits that students can use to assemble detailed evidence for their arguments. We like to break the discussion of the industry into two time frames – the first before the Pepsi challenge in 1974, and the second over the next 25 years. Conducting a five forces industry analysis in each of these periods reveals fundamental changes in industry structure that compel the companies to change strategies. In the earlier period the companies almost avoided each other, and the industry was extremely profitable. In the latter period they competed head-to-head, so that costs and innovation become much more important. Usually placed early in the course, this case lends itself to both straightforward industry analysis questions as well as more probing thought-provoking questions:

Consider the soft drink industry in two time periods - one in the years up to the Pepsi Challenge, and one in the years afterward when competition escalated. In each time period use the five forces framework to analyze the nature of the competition.

What is the effect of the each of the five forces on the competitive rivalry? What driving forces are there in this industry that affect competition? Identify the key success factors in this industry.

Why would Coke and Pepsi both begin acquiring bottlers in the 1980s? Exhibit 4 shows pretax profit of concentrate producers at 30% but bottlers at only 9%. Why are they acquiring less profitable operations?

An interesting discussion that follows has to do with why Coke spun off bottling operations in the 1980s while Pepsi did not.

Building on the discussion in the textbook's Chapter 2 (Performance), break down ROE for each of the companies during the two periods. What do the components of ROE reveal about the capabilities of each company?

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Crown Cork & Seal in 1989

Primary learning objective Industry analysisSetting Packaging, carton & container industries, 1989,

$1.8 billion revenuesLength of case (pp) Text 13; exhibits 10Financial statements? YesOther subjects covered Focused competitive strategy; evaluation of new strategic

directions; leadership change



Describes the structure and recent trends of the metal container industry, Crown's successful strategy for competing in the industry, and John Connelly's leadership over more than 20 years. In 1989, William Avery succeeded Connelly as CEO and is forced to consider new strategic options in the face of industry change.

Page West comments:

This case has long been popular with Strategic Management instructors, and we understand why. Although it explores an industry about which most students have little familiarity, it asks us to consider penetratingly sharp questions about the important dimensions of and definitions involved in industry analysis.

The first question is about defining the industry itself – an issue we review in Chapter 4 (Industry Analysis) of the textbook. Define it too narrowly and you miss important competitors and industry dynamics, define it too broadly and you're working with mush. There is an art and a science to the industry analysis methodology, and this case is very helpful in allowing students to see the balance that is needed between the two.

The case also provides an excellent opportunity to explore in depth the nature of each of the five forces. Each of the forces demands critical thinking as to who would be included in the description, and why. Good data in the exhibits facilitates the understanding of the quantitative dimensions of this analysis. This can then lead to a very productive discussion about key success factors going forward.

This is important for the second important dimension of the case – the issue of new leadership and potential changes in strategy. A review of Connelly's leadership over 20 years enables a comparison of what the company has historically done well with what conclusions from the current industry suggest are important going forward. These provide guidance on major issues the new CEO faces.

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The DAG Group

Primary learning objective Industry analysis (fragmented industry); Market entrySetting Dry cleaning and laundry, 1991, $4.0 billion revenuesLength of case (pp) Text 7, exhibits 6Financial statements? Yes, detailedOther subjects covered Competitive advantage; value creation; entrepreneurship;

service management



Chris Hackett and Val Rayzman have spent six months after graduating from business school exploring the possibility of building a chain of upscale drycleaners. This fragmented industry looked ripe for an innovative new entrant. Chris and Val have researched the industry thoroughly, selected a metropolitan area in which to start, searched for acquisition candidates, and considered the prospect of de novo start-up. They have uncovered only one feasible acquisition candidate. With time and money running out, they feel pressured to decide whether to go through with the acquisition, to start their own store, or to abandon the project. This case is designed to focus on the strategic aspects of entrepreneurial management. May be used to emphasize the importance of understanding industry economics and competitive dynamics. May also be used to examine acquisition as an alternative to start-up.

Page West comments:

We included this in the case selections because it is a clear example of a highly fragmented industry with no dominant competitor and very low barriers to entry. A five forces analysis demonstrates that the two protagonists should expect to see low profits from any dry cleaning venture they acquire or start up. The case is fairly short, but there are detailed financial statements in the exhibits that enable students to look critically at what changes might be made in dry cleaning operations to improve the potential for profits.

Why are returns so low in this industry? Is Superb an attractive acquisition? What are the tradeoffs between acquiring an existing business and starting up a new one? Should they just

go ahead and open their own store?

The question then becomes how they could create a sustainable position of competitive advantage. This requires thinking about ways to create value in a nearly perfectly-competitive industry.

What is sustainable about DAG's intended strategy? Are there opportunities to create a sustainable position by "rolling up" the industry, as occurred in office

supplies, in order to create scale? Why or why not?The instructor can walk students through a discussion of possible sources of sustainable value creation – whether they exist upstream in relations with suppliers, internally in operations, or downstream in relations with customers.

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GE’s Talent Machine: The Making of a CEO

Primary learning objective Leadership; Corporate strategySetting Conglomerate, 1878-2003, $ 131 billion revenuesLength of case (pp) Text 13; exhibits 16Financial statements? YesOther subjects covered Global expansion; Diversification



GE believes its ability to develop management talent is a core competency that represents a source of sustainable competitive advantage. This case traces the development of GE's rich system of human resource policies and practices under five CEOs in the post-war era, showing how the development of talent is embedded into the company's ongoing management responsibilities. It describes the development of a 25-year-old MBA named Jeff Immelt, who 18 years later is named as CEO of GE, arguably the biggest and most complex corporate leadership job in the world and how he frames his priorities for GE and implements them, pulling hard on the sophisticated human resource levers his predecessors left him. Immelt questions whether he should adjust or even overhaul three elements of GE's finely tuned talent machine.

Page West comments:

This is a very nice case for later in the course. It takes an element of the business (leadership development) and shows how GE has turned this processes into a competitive advantage. A great way to start this case is to talk to the students about how conglomerates are notorious for not creating value. The spread of businesses in the portfolio simply prevents a deep understanding by corporate management of all parts of the business. The question then is what value does being a conglomerate bring to the companies within the family?

GE has been a machine producing numerous CEOs for companies throughout the Fortune 500. The case spends significant time tracking the career of Jeff Immelt. The case uses Immelt to show the depth and breadth of their management meritocracy program. We use this case to discuss the differences between managing and leading (Chapter 3). We also use the case to discuss Corporate Strategy (Chapter 10) and how that aligns with value creation.

Finally, this case works extremely well when used in conjunction with the “GE Two Decade Transformation” Case that is listed next in this case map.


Why are conglomerates so difficult to manage? What are the unique elements in the management development program at GE that help develop CEOs? How does the meritocracy at GE promote the mission of a conglomerate?

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GE's Two-Decade Transformation: Jack Welch's Leadership

Primary learning objective Leadership; Implementing transformational changeSetting Diversified corporation, 1981-2001, $100 billion revenues,

293,000 employeesLength of case (pp) Text 14, exhibits 10Financial statements? YesOther subjects covered Corporate strategy; restructuring; managing culture and

mindsets; implementation

Publisher Harvard Business School, HBS 9-399-150Latest revision date 2005Teaching note available? Yes, HBS 5-300-019Additional comments A 10-minute video interview with Jack Welch is available to

supplement this case (HBS 9-300-508).


GE is faced with Jack Welch's impending retirement and whether anyone can sustain the blistering pace of change and growth characteristic of the Welch era. After briefly describing GE's heritage and Welch's transformation of the company's business portfolio of the 1980s, the case chronicles Welch's revitalization initiatives through the late 1980s and 1990s. It focuses on six of Welch's major change programs: The "Software" Initiatives, Globalization, Redefining Leadership, Stretch Objectives, Service Business Development, and Six Sigma Quality.

Page West comments:

As the HBS teaching note indicates, this case can be used to illustrate a variety of themes. We typically use the case to emphasis leadership and implementing transformational change – universal themes that are important in every company. Therefore our use of the case tends to fall toward the end of a Strategic Management course, almost as a "capstone to the capstone."

There are several issues we like to have our students explore carefully. First, what does "strategy" mean to someone at the highest level of a huge corporation? We have our

textbook definition in Chapter 1 (Need for Strategy), and students now understand types of business level strategies and the nature of corporate strategy. But Welch talks about "being # 1 or #2" and about "three circles." Are these strategy, or are they something else?

Second, what is the proper balance between centralization and strategic control, versus decentralization and empowerment? GE moved from one type of company under Reg Jones to another under Welch. How is it that leaders can empower while at the same time ensure strategic consistency and control?

Third, what is the process through which effective transformation can occur? The case is a chronological story of Welch's leadership, and in that chronology we can see how Welch's approach to transforming the company unfolded and then changed over time.

Throughout the case there is a wealth of detail about specific operational aspects and programs initiated by Welch to implement large-scale transformation. So the case provides the opportunity for students to read and think carefully about how gross mandates for change translate down to specific actions and initiatives. This reflects a theme that we emphasize in the textbook, that the essence of strategy requires a focus on actions that people take. It is through actions that organizations accomplish their strategic goals.

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Go Global – or No?

Primary learning objective Growth & global; Strategy implementation; Industry analysis; entrepreneurship

Setting Data analysis market; $60 million revenueLength of case (pp) Text 9Financial statements? NoOther subjects covered Business level strategy; Performance and control

Publisher Harvard Business School, HBS R0106ALatest revision date 2001Teaching note available? No, The commentary is embedded


Only a few weeks ago, Greg McNally, the CEO of software start-up DataClear, had called an off-site in Montana to celebrate his company's success in racking up $5 million in sales from its first product, ClearCloud--a powerful data analysis package. But that was before his talented and successful head of sales, Susan Moskowski, gave him the news about VisiDat, a British start-up that was testing a data analysis package of its own that was only weeks away from launch. "We need to agree on a strategy for dealing with this kind of competition," Susan had told Greg. "If they start out as a global player, and we stay hunkered down in the U.S., they'll kill us." Because of that news, Greg had changed the agenda of the off-site, instead having Susan present the options for taking DataClear global. The meeting had taken place two weeks ago, at which point the consensus had been to establish a European presence and probably one in Japan. The only question seemed to be whether to do it from scratch or to form partnerships with local players. Did DataClear really need to go global? Should it instead expand into different domestic markets? Should it do both at once? Could the company afford to?

Page West comments:

Although one of the shortest cases in our offering, it is also one that gives the instructor a lot of room to work with the concepts of Globalization and a deep understanding of the value in a business. The front five pages constitute the case told in a folksy manner. Greg starts out fly fishing in a warm stream catching something every time he casts his line into the water (an easy analogy to the growth of his company in the United States). The case ends with him knee deep in the icy waters in Norway catching absolutely nothing and with no idea what to do next. The company has grown quickly and the markets within the U.S. appear to be ripe for tremendous expansion. However, a new competitor has popped up in Europe and this has caused a panic in the company. The question is what to do.

The case points out how little the senior management knows about the environment and the competition. They also have no real strategy for the company other than “to grow.” We like to use this case to point out how all the work the students have done can be effectively applied. We usually ask them to provide advice to the senior management as though they were consultants. Explain Industry analysis (Chapter 4), where the company should position itself (Chapter 7), and then discuss the issues of going global (Chapter 8). The students will see that by applying the “science” that has been discussed thus far in the course, they can arrive at a very solid set of recommendations for the company.

Four commentaries are provided to the case, each critiquing the current state of affairs at DataClear. Each author takes a slightly different approach and we like to have the students critique the critiques. We ask if the commentator is using any real analysis tools or just going on their gut. The reactions by the students to the various commentators provide a rich discussion. In several classes, we have broken the students into four groups (each group takes the role of one of the four commentators) and had each group argue the case from the point of view of their commentator.

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Kodak and the Digital Revolution (A)

Primary learning objective Leadership; Change management; Strategy implementationSetting Photo and photo processing industry, 2003, $13.0 billion

revenuesLength of case (pp) Text 9, exhibits 9Financial statements? Yes, detailedOther subjects covered Global; Resource-based analysis



The introduction of digital imaging in the late 1980s had a disruptive effect on Kodak's traditional business model. Examines Kodak's strategic efforts and challenges as the photography industry evolves. After discussing Kodak's history and its past strategic moves in the new landscape, the case questions how CEO Daniel Carp can use digital imaging to revitalize Kodak. A rewritten version of an earlier case.

Page West comments:

There are several versions of the Kodak case. This is the condensed version and is one of the most popular cases in the Harvard Case Library. The other versions are Kodak (A) and Kodak (B) which are detailed cases following the evolution of the business from 1981 on. This version of the case presents a wonderful history of the company and its true roots. These roots form not only the frame by which management saw the world, but also provide a rich source of material about initial competitive advantages. We ask students to put together a list of the company’s resource-based advantages prior to 1981 and then again in 2000. They will see a dramatic change in where the company stands relative to the rest of the industry, and they usually marvel at how a company could allow this to happen.

The core of the case is the technological change to digital that threatens to completely disrupt the industry, and how an established leader company deals with that change. The leadership seemed to recognize the movement in the industry, but was really hampered both in their thinking and actions. The implementation process is a real disconnect in this case. This case lends itself to a deep discussion of Leadership, vision and mission (Chapter 3), as well as Change management and implementation (Chapter 11). Each approach takes most of a class session.


What made Kodak such a strong company throughout most of its existence? Why is digital imaging such a big leap for Kodak? How would you access Fisher’s efforts to transform the company? How could Kodak have modified their efforts early on such that they would be the leader in the industry

today?

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Leadership Online (A): Barnes & Noble vs. Amazon.com

Primary learning objective Value creationSetting Internet retailing, 1997, $2 billion revenues, 20,000

employeesLength of case (pp) Text 14, exhibits 6Financial statements? YesOther subjects covered Resource-based sustainability; competitive dynamics;

entrepreneurship

Publisher Harvard Business School, HBS 9-798-063Latest revision date 2004Teaching note available? Yes, HBS 5-798-119Additional comments There is also a (B) case and accompanying teaching note,

which update the situation through the beginning of 2004.


Describes the attempt of a traditional retailer, Barnes & Noble, to counter the challenges posed by an Internet-based start-up, Amazon.com.

Page West comments:

Although the online book retailing segment has evolved significantly since this case was written, there is great value in going back and carefully examining the competitive dynamics between these two companies in the late 1990s. Besides, this was only a few short years ago!

One of the aspects of this case that we find compelling is that it spotlights an issue we raise in Chapter 5 (Value Chain Analysis) of the textbook on creating value. There are pros and cons to the approach that Amazon.com offers through the online model, and so the question is are they really providing sufficiently greater benefits than the bricks and mortar model of Barnes and Noble? The teaching note outlines the arguments that instructors can expect to cull out of a classroom discussion. But of course benefits provided are only one side of the value creation component. The other side is the cost/price side, and here is where the case provides ample data for students to work out comparative cost structures between Amazon and B&N. There are many, many cases in which value creation remains at the conceptual level; one of the real values of this case is financial data to analyze. Putting the benefits-provided and cost-of-providing elements together enables a more informed analysis of value creation.

Another aspect of this case that we find valuable is the issue of sustainability – which again is one of the organizing themes of our textbook. Here sustainability can be discussed from two views – from Amazon and from B&N. They are each making significant investments in online models, and B&N also seeks to dominate book retailing through its store model. What kinds of investments are they making that offer greater opportunity for a sustainable, superior position? Even though instructors may not have yet covered textbook Chapter 6 (Resource Based Analysis), the discussion here can be very rich and can segue nicely into that material. Or if this has been covered, then the conversation is even better.

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Levi's "Personal Pair™" Jeans (A)

Primary learning objective Value chain analysisSetting U.S. apparel industry, 1995, $ 2 billion industry revenuesLength of case (pp) Text 3; exhibits 3Financial statements? Channel of distribution financialsOther subjects covered Implementation; management accounting; asset management

Publisher Babson College, BAB-020Latest revision date 1998Teaching note available? Yes, BAB-520Additional comments There is also a (B) case which updates the situation through

1996.


As Levi-Strauss implemented its custom-fitted jeans offering, the traditional value chain for clothing manufacturing and retailing was transformed. This case allows students to explore the subtleties of this transformation and the management implications.

Page West comments:

This very short case produces rich discussions in class. Students already know the company's products very well. The case provides the opportunity to drill down value chain analysis – both conceptually and analytically – to a very specific operational level. This is because the exhibits provide great financial information by distribution channel as well as an exploded view of Levi Strauss's supply chain.

Usually students will have considered value chain at the overall business level strategy for the company in question. However, here the question of value creation – involving both benefits produced and the costs of doing so – is tackled at an operational level. It is instructive for students to see how the value chain idea can be unpacked at deeper levels within and throughout an organization.

For this case we think the best approach is to ask teams to work on the preparation questions in advance. This is because the financial analysis will be useful for the team to then consider the broader strategy questions raised. Team members with stronger accounting and finance skills can work up preliminary information for the rest of the team to discuss:

What opportunity in the market place is Levi Strauss attempting to address? What impact will the “Personal Pair” system have on Levi Strauss’s value chain? What value will the system deliver to the customers of Levi Strauss? What is the financial impact of the "Personal Pair" system? Is the “Personal Pair” system a strategy that should be expanded to other Levi Strauss products? How do you think other manufacturers might respond to this strategic move by Levi Strauss?

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MapQuest

Primary learning objective Competitive dynamics; Growth; PerformanceSetting Mapping industry, 2000, $55 million revenuesLength of case (pp) Text 12, exhibits 10Financial statements? Yes, detailedOther subjects covered Industry analysis; Value chain; M&A; Entrepreneurship

Publisher Ivey, 904M44Latest revision date 2004Teaching note available? Yes, Ivey – 804M44


MapQuest is a leading provider of mapping services and destination information as well as a publisher of maps, atlases, and other guides. On the Internet, it provides these products and services both to consumers directly and to other businesses, enabling these businesses to provide location, mapping, and destination information to their own customers. The company completed a successful initial public offering five years ago and was in a strong competitive position. However, the markets allowed competitors to get funding quickly in both private and public deals. In addition, there were perceptions of a general stock market bubble for technology companies. The CEO wanted to consider the available options and present a recommendation to the board. Possible options included: splitting the firm's old and new-line business units, raising capital to fund an acquisition strategy, forging a set of alliances, focusing on organic growth, and pursuing the sale of the firm.

Page West comments:

As one of the internet mapping services to have survived the dot-com bust, we love The MapQuest case because it is so instructive in so many areas. The case has detailed financial information that is well suited to use as a Performance analysis case (Chapter 2), provides ample information for constructing an industry analysis (Chapter 4) that could easily be used as the foundation of a detailed discussion about positioning, and provides enough information for a great discussion about M&A (Chapter 10). However, we feel that the best use of this case is to aim it at two specific areas: Competitive dynamics (Chapter 9), and Organizational growth (Chapter 8).

The case provides detailed information about the company and how it relates to its competitors and the market. It is the competitive dynamics of every move MapQuest might make that really pushes the students. Students seem to very quickly make up their mind about how MapQuest should proceed. We ask them to state their position early in the class session, then we use the entire class to challenge their assumptions and talk about how a move by one organization will dramatically change moves made by another company. The discussion about where to go with this company gets muddied by its complexity and the fact that there is not one “perfect” answer. A great case for a wide-ranging strategy discussion.

The following questions may be asked as prep for the class discussion: Which of the four big strategic options do you believe MapQuest should pursue?

o Grow organicallyo Grow through acquisitiono Split the firm into two – online and printingo Sell the business

How does MapQuest make money? In what area do they make the most money? What is the expertise of the company’s senior management?

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Matching Dell

Primary learning objective Value chain analysis; Business level strategySetting Personal computer industry, 1998, $ 18 billion industry

revenueLength of case (pp) Text 14; exhibits 17Financial statements? Yes, plus detailed competitive comparisonsOther subjects covered Competitive analysis; resource-based analysis

Publisher Harvard Business School, HBS 9-799-158Latest revision date 1999Teaching note available? Yes, HBS 5-700-084 and TN Supplement 5-706-482


After years of success with its vaunted "Direct Model" for computer manufacturing, marketing, and distribution, Dell Computer Corp. faces efforts by competitors to match its strategy. This case describes the evolution of the personal computer industry, Dell's strategy, and efforts by Compaq, IBM, Hewlett-Packard, and Gateway 2000 to capture the benefits of Dell's approach. Students are called on to formulate strategic plans of action for Dell and its various rivals.

Page West comments:

In our own research among faculty who teach Strategic Management this case and a Wal-Mart case were rated as the best for exploring the combination of value chain and business level strategy. We have also included the Wal-Mart case in the case selections packet (see below).

We think the reason Matching Dell is so popular is that – like other cases in our selection – it provides significant financial detail allowing students to make precise calculations about cost advantages the Dell business model has over competitors like Compaq. We think it is not enough to simply identify the kinds of value-creating actions that Dell takes to build its competitive advantage. These are definitely important to bring out in class discussion. But at the end of these descriptive summaries of actions they take, we are fond of asking "how much of an advantage do these actions make?" As we explain early on in Chapter 2 (Performance), we want student to make the connections from strategy to actions to performance effects. This case has all that is needed to drive home those connections.

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Newell Company: Corporate Strategy

Primary learning objective Corporate strategy; Business level strategySetting Home and Hardware, 1997, $3 billion revenuesLength of case (pp) Text 12, exhibits 9Financial statements? YesOther subjects covered Value chain; Growth



In 1998, Newell Co., a manufacturer of low-tech, high-volume consumer goods, acquired Calphalon Corp., a high-end cookware company, and Rubbermaid, a $2 billion manufacturer of consumer and commercial plastic products. The case focuses on Newell's strategy and its elaboration throughout the organization, as well as the importance of selecting appropriate acquisitions to grow the company. Do Calphalon and Rubbermaid fit with the company's long-term strategy of growth through acquisition and superior service to volume customers? A rewritten version of an earlier case. Page West comments:

This is an excellent case examination of Corporate Strategy (Chapter 10) and its relationship to Business-Level Strategy (Chapter 7). Newell Corporation has an exceedingly detailed and complex set of organizational processes and systems to make the whole worth more than the sum of its parts. They have been very focused on providing discount retail businesses with a wide variety of home and hardware products. They built their entire system to cater to this group of customers and have been rewarded with a long period of growth in sales and profits. The case spends some time explaining how all this works and it provides a nice backdrop and comparison to single-focused companies.

The case then shifts to examine two acquisitions made by Newell in 1998, the first of which was Calphalon. Calphalon was an upscale manufacturer of specialized cookware and didn’t appear to be a good fit with the Newell system. The second was Rubbermaid Corporation. While Rubbermaid was a much better fit, the company grossly overpaid for the company (49% premium over an inflated stock price). Weaving these two companies into a well honed system seemed fraught with problems. The company sought different types of synergies with each: Calphalon for distribution and Rubbermaid for cost cutting.

Students tend to jump on the acquisitions as poorly thought out, however we really want to push them to consider how competitive advantage at the business level can be amplified or leveraged at the corporate level, and vice versa. The second area for the students to focus on is that of value creation. We have the students design a Value Chain diagram (Chapter 5) for Newell and then figure out how the company creates value. This eye-opening exercise tends to cause students to re-consider the acquisitions. They see all kinds of possibilities for Newell. The last area for the students to consider is how strategy evolves over time. As in several of the cases in our case map, this one does a very nice job of tracking strategy over time. We encourage students to map this out along two-dimensional graphs. We let them choose the axes and then discuss this with the whole class. The discussion is usually quite illuminating.


How has Newell succeeded in the past? How has Newell’s strategy changed over time? What do you think of the acquisitions of Calphalon and Rubbermaid?

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Nucor at a Crossroads

Primary learning objective Strategy implementation; Resource-based advantageSetting Steel industry, 1986, $750 million company revenueLength of case (pp) Text 14; exhibits 8Financial statements? YesOther subjects covered Strategic commitment through capital investment;

performance and control

Publisher Harvard Business School, HBS 9-793-039Latest revision date 1998Teaching note available? Yes, HBS 5-795-021Additional comments A video interview with Ken Iverson is available to

supplement this case (HBS 9-792-501).


Nucor is a mini-mill deciding whether to spend a significant fraction of its net worth on a commercially unproven technology in order to penetrate a large but hitherto inaccessible segment of the steel market. This case is an integrative one designed to facilitate full-blown analysis of a strategic investment decision.

Page West comments:

We think the best use of this classic case is all about resource-based advantage and strategic implementation. This can be accomplished by looking back at how Nucor has performed, and by looking forward to consider the major decision to invest in thin-slab casting technology. Nucor has performed exceedingly well in spite of an industry structure that looks unattractive after a five forces analysis. Evaluating why the company has fared so well puts the spotlight on internal policies, procedures and processes that reflect the critical resource criteria we discuss in the textbook Chapter 6 (Resource Based Analysis). These dimensions also help explain why other competitors, especially other mini-mills, have been unable to imitate Nucor. The intangible management dimensions – much of which have to do with implementation – are at the core of Nucor's superior strategic position.

Looking forward, CEO Iverson has to make a decision about investing in thin-slab technology. This part of the case is interesting because it requires students to complete an economic analysis of the investment. But then into the "black and white" answer from tumbling the numbers must be factored management judgment about the estimated impact of strong implementation and, again, the possible imitation by competition. Here the company's strong existing foundation in organization and implementation can be leveraged into a sustainable position.

What's nice about this case is that its analysis and discussion will identify very specific details about internal actions that are part of a strong implementation effort. These actions can be described in mechanical terms (i.e. what they do), but also in conceptual terms using resource based analysis dimensions (i.e. why the actions confer advantage).

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Passion for Learning

Primary learning objective Value creation; Value chainSetting Toy industry, 1995, $17.5 billion industry, $54000 company

revenueLength of case (pp) Text 11; exhibits 6Financial statements? Yes, Pro formas and detailed direct mail response dataOther subjects covered Market entry; entrepreneurship; resource-based advantage



Describes the challenges confronting a recent HBS graduate who has started a direct-mail toy company. The entrepreneur must evaluate industry conditions in both toys and direct mail, and determine whether he has developed a viable business concept. Presents detailed financial projections associated with each of three major repositioning options.

Page West comments:

Passion for Learning is a wonderful transition case between industry analysis and internal analysis. It is nice to start this case by asking students at the beginning of class which of the faddish toys they actually enjoyed playing with when they were young. We get hoots when we ask which male students had Cabbage Patch dolls (and many did) and which female students played with Transformers. It sets the right tone for a good class discussion.

We like to first have the students diagram the industry value chain – from toy manufacturers to consumers. It becomes obvious there are many different paths in the industry, but it also becomes obvious that it is tough for PFL as a new company to break into this industry the way it has been approaching its business so far. The company is not making insulating strategic investments, in fact nearly everything it does represents outsourced variable cost and can be easily imitated by anyone else.

The case provides several business development and financial proformas for new possibilities for the company going forward. It is not possible to have a thorough discussion of all of these in a single class period, so our suggestion is to take one of them and explore the ramifications for how value can be created, uniquely and sustainably, how much it might cost, how long it might take.

Better yet, we have challenged students to rethink how a pure catalog toy retailer could possibly succeed. What specific actions must the entrepreneur take that both create value and provide competitive insulation. The instructor can walk students through a discussion of possible sources of sustainable value creation – whether they exist upstream in relations with suppliers, internally in operations, or downstream in relations with customers. This can be a very interesting discussion, and begins to open up the "black box" of value chain and value creation.

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Philips versus Matsushita: A New Century, a New Round

Primary learning objective Growth & global; Competitive dynamics; Strategy implementation

Setting Electronics industry, 2000, $ 35 billion (Philips) & $69 billion (Matsushita)

Length of case (pp) Text 13; exhibits 7Financial statements? Yes, detailedOther subjects covered Corporate strategy

Publisher Harvard Business School; HBS 9-302-049Latest revision date 2008Teaching note available? Yes, HBS – 5-302-063Additional Comments A video is available of Cor van der Klugt (former CEO of

Philips) discussing how to overcome all the embedded issues. HBS Video – 9-302-810


Describes the development of the international strategies and organizations of two major competitors in the global consumer electronics industry. The history of both companies is traced and their changing strategic postures and organizational capabilities are documented. Particular attention is given to the major restructuring each company is forced to undertake as its competitive position is eroded. A rewritten version of an earlier case.

Page West comments:

This is a sweeping, wide-ranging examination of two powerhouse companies over a hundred-plus year time period. The case really expounds on the power of history and administrative heritage. Philips was the industry leader until the early 1980s when it was surpassed by Matsushita. The Philips model was one of autonomy and rapid response to consumer demands. Each country (national organization) was a fully-integrated business that could respond independently. The contrasting organization was Matsushita which was centrally controlled and organized. For the two decades before 2000, Matsushita was able to thrive on its lower cost, highly systematized approach.

Philips began responding to changes in the early 1970s, but found that its heritage, structures and systems simply prevented movement. We ask the students to consider several implementation techniques discussed in Chapter 11 and to apply one of those to Philips. The 7-S framework seems to apply very well. We then ask the students to consider Matsushita. Matsushita roared for two decades, but then near 2000 they found that the demand for more flexibility in national markets was needed. Furthermore, the increase in the power of the yen really tested the model that they had developed. We also have the students create a 7-S map for Matsushita.

Both companies seem to be struggling with the exact same market. However, their administrative histories forces them to deal with completely different issues. They appear to be sliding toward a similar model when they have worked so hard for decades to be different from each other.

The following questions may be asked as prep for the class discussion: What organizational capabilities do each of the companies have that will allow them a competitive

advantage? How have the two companies responded to each other in the past? Be specific with several examples. What would you recommend that each company do now?

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The Ready-to-Eat Breakfast Cereal Industry in 1994 (A)

Primary learning objective Competitive analysis and competitive dynamicsSetting Breakfast cereal industry, 1994, $ 9 billion industry revenueLength of case (pp) Text 11; exhibits 6Financial statements? YesOther subjects covered Business level strategy; strategic value of brand; signaling

strategic intent; industry analysis



Ready-to-eat breakfast cereal has historically been a stable and highly profitable industry, dominated by the Big Three of Kellogg, General Mills, and Kraft General Foods (Post). In 1994, private label cereals are making significant market share gains, and promotional competition among the manufacturers of branded cereals is heating up. What steps should one of the Big Three take to prevent these trends from undermining industry profitability, especially in light of likely competitor reactions?

Page West comments:

It is always interesting to students to "go behind the scenes" of an industry or company whose products they know so well from personal use. This is certainly true here with the RTE cereals case.

This case offers the opportunity to systematically explore competitive dynamics. The decision by General Mills CEO Steve Sanger at the end of the case – to significantly cut levels of trade and consumer promotional spending – screams for this type of analysis. Will the historic market leader Kellogg's follow suit? What will be the impact if they do not? Which competitors have the most to gain and the most to lose from initiating competitive actions such as what Sanger decided to do? Which competitors have the most to gain or most to lose from not following?

The other valuable use of this case is to show how strategic and tactical decisions within a functional area of a company – in this case marketing – relate to business level strategy and overall corporate performance. For example, we often caution our students that pricing decisions are tactical, not strategic, because they can be made instantaneously with zero investments and can be imitated instantly. But in this case we are talking about pricing policy for a major division of a company, and that policy's impact on long term competitive behavior as well as overall industry profitability. A similar discussion can point out the strategic nature of brand-equity-building spending and new product development efforts, both of which the case provides excellent data on.

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Satellite Radio

Primary learning objective Industry analysis; Competitive dynamicsSetting Satellite radio industry, 2003, $ 6 billion market

capitalizationLength of case (pp) Text 8; exhibits 13Financial statements? Yes - limited, plus detailed competitive comparisonsOther subjects covered Performance

Publisher Harvard Business School, HBS 9-802-175Latest revision date 2003Teaching note available? No


In early 2002, XM and Sirius were fighting for control of the emerging U.S. market for satellite radio. Each company targeted consumers in automobiles, providing 100 channels of CD-quality audio for a monthly subscription fee of $10-$13. Wall Street analysts predicted that these companies would be profitable by 2005-2006, but investors were increasingly skeptical of ventures that required huge, irrevocable bets on customer acquisition and infrastructure. This case describes the business models of the satellite radio companies, the technology they employed, and their target markets. Poses questions about their pricing strategies, strategic partnerships with auto manufacturers, and whether they should develop interoperable radios that receive either company's signals.

Page West comments:

This is a great case that students really enjoy because they know that in 2008 Sirius Radio and XM Radio combined to form Sirius XM Radio. The fact that the industry had only two direct competitors who charged for a service that was offered to customers for free by land-based companies makes the industry analysis particularly interesting. The case works well with the discussion of Competitive Dynamics (Chapter 9) and reinforces learning from earlier in the semester with Industry Analysis (Chapter 4).

The case traces the business model for each of the companies and poses the question of the viability of the business. There is little question that their customers enjoy commercial-free, CD quality radio that specializes in a variety of formats. What is unclear in this case is whether a sustainable economic model exists. Conditions are not much better today in the industry despite the fact that the two companies have combined. We use the case to explore competitive dynamics (Chapter 9) in a very tightly controlled industry as well as to have the students do a complete industry analysis (Chapter 3). We’ve found that the case lends itself well to these areas especially if the instructor pushes back on their analysis with three key questions:

1. How should XM and Sirius overcome the switching costs associated with Satellite radio?2. Has the introduction of MP3 players (e.g. iPod) nullified the competitive advantages of Satellite radio?3. How would you make this business economically sustainable?

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Southwest Airlines 2002: An Industry Under Siege

Primary learning objective Resource-based advantage; Value chain analysisSetting Airline industry, 2002, $5.5 billion revenueLength of case (pp) Text 15; exhibits 9Financial statements? YesOther subjects covered Business level strategy; Growth; Strategy implementation

Publisher Harvard Business School, HBS 9-803-133Latest revision date 2003Teaching note available? Yes, HBS 5-803-138Additional comments There are numerous video clips available from online

sources. Probably the best is a 60 minutes article done in the early 1990s that is available via CBS.


The company's management is faced with long-term questions regarding the rate and manner of growth in the wake of the 9/11 attacks and general industry malaise.

Page West comments:

The entire airline industry was turned upside down beginning in 2002. The takeover of security by the newly-created TSA, the institution of new regulations regarding security screening, and the change in service offerings by the legacy carriers all came together to challenge the Southwest strategy. The case does a nice job of taking the student through the history of Southwest Airlines from the perspective of its strategy. The first six pages are devoted to this, while the next five pages are devoted to a discussion and analysis of the leadership at the airline. The company is faced with a set of decisions regarding their approach now that U.S. airline travel has changed. Should they focus on what they have done well in the past? Should they seek to grow at their historic 10%-15% rate? And if they grow, how should that be accomplished? Should they seek to fly longer distances rather than their traditional 60-90 minute flights?

Students have strong opinions about airlines in general and we have found that they really like Southwest Airlines. We use this case in two ways. The first is as a resource-based analysis (Chapter 6) examination where the students are asked to determine what Southwest’s competitive advantages are and how they are sustainable. Despite many attempts over the years, other carriers have had a very difficult time achieving the Southwest magic. As the case points out, much of that is founded in their approach to employees, level of responsibility and authority as well as a leadership that is committed to the system. The second approach is to use the case for a value chain analysis (Chapter 5) where the students develop the Southwest value chain model and then compare that model to one or more of the legacy airlines. The differences are glaring and the students really marvel at the usefulness of value chain as a technique.

The following questions may be asked as prep for the class discussion: How does Southwest consistently make money when other legacy carriers don’t? Should Southwest consider modifying their business model to fly longer flights between busier airports? How can Southwest take advantage of the new way of life in the airline industry?

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Store24

Primary learning objective Strategy implementation; Performance & controlSetting Convenience Store industry, 2000, $180 million revenue; 75

Stores in New EnglandLength of case (pp) Text 5; exhibits 4Financial statements? Modest – analysis of store contributionsOther subjects covered Entrepreneurship



Illustrates how non financial performance measures can be used to manage a business and evaluate the success of a strategy.

Page West comments:

Store24 is a short case that does a wonderful job of examining two significant issues. The first is how a poor strategy can be distinguished from poor implementation of a good strategy. The company uses a modified version of the balanced scorecard (Chapter 11) in order to drive employees toward the strategic results they are seeking. The use of non-financial performance measures and the means by which they are utilized is discussed in the case. The students in our classes like the use of the scorecard but find the implementation to be terrible. The annual audits of a store are announced ahead of time, while the success of the various components seem to be at odds with each other.

That brings up the second significant issue. The company is trying to implement two different strategies at the same time. They have a strategic approach referred to as “Cause You Just Can’t Wait” that focuses on efficiency, getting the customers in and out of the store, having what the customer wants easily available and making the store experience quick. Senior management then implemented a new strategy along side of “Cause You Just Can’t Wait” called “Ban Boredom.” The concept behind this strategy was to make the store experience fun, exciting and so interesting that customers would come back more often, spend more time in the stores to see “new stuff” and enjoy their store experience. The two are at odds with one another and the metrics in the balanced scorecard really point this out. The teaching note that accompanies the case does a nice job with scatter plots and a regression analysis that point out the flaws in the approaches.

The following questions may be asked as prep for the class discussion: What is the aim of the Store24 Balanced Scorecard? Does it achieve the aim? Would you recommend dropping one of the two approaches (Ban Boredom & CYJCW)? If so, which one? How would you improve the implementation of the approach that you kept?

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Wal-Mart Stores in 2003

Primary learning objective Business level strategy; Value chainSetting U. S. discount retailing, 1965-2003, $ 245 billion company

revenueLength of case (pp) Text 17; exhibits 15Financial statements? YesOther subjects covered Competitive analysis; resource-based analysis; implementation

Publisher Harvard Business School, HBS 9-704-430Latest revision date 2004Teaching note available? No. However, a Teaching Note from an earlier Wal-Mart case

provides great insight on its sources of competitive advantage as of 1985 (HBS 5-387-127).

Additional comments There is an abridged version of this case (HBS 9-709-423), with 11 pp of text and 14 pp exhibits.


Examines Wal-Mart's development over three decades and provides financial and descriptive detail of its domestic operations. In 2003, Wal-Mart's Supercenter business has surpassed its domestic business as the largest generator of revenues. Its international operation seems poised to become the next growth driver for the company as it marches toward the trillion dollar sales mark. But problems are starting to surface even as the company is winning recognition as the number one company in the Fortune 500--unions keep pressuring its minimum-wage employees and allegations of gender discrimination are alleged. Teaching purpose: To introduce students to creating a competitive advantage.

Page West comments:

In our research among Strategic Management faculty, Wal-Mart is one of the top cases for exploring business level strategy and the related value chain. Going behind the scenes for this icon of retailing is bound to generate true appreciation for the strategic foundations of an eminently successful company.

The case discussion walks step by step through every key aspect of Wal-Mart's business. Students should be asked to identify pivotal actions and internal policies that provide an effective difference between the company and its key competition. But after generating the list in a class discussion, it is always fruitful to ask "how much competitive advantage do these generate?" The answer "a lot" is of course not acceptable here. The point is to see how each of the actions and policies impact the financial performance of the company – either through enhanced revenue, greater efficiencies, lower costs, etc. Building on the argument we make in Chapter 2 (Performance) of the textbook, we want students to explicitly identify the connections from strategy to actions to performance.

Whether you use the full case or the abridged case, each presents what Wal-Mart does and how it operates. After engineering the above discussion about sources and effects of competitive differences, 2 other questions bear asking:

Can Wal-Mart sustain its competitive advantages? What are the significant issues for Wal-Mart on a going-forward basis?

The first question can be explored in part by looking at the company's migration from discount stores to Sam's, Supercenters, and international efforts. How has each of these new types of retailing leveraged what the company learned to do so well in discount stores, and what are the challenges they have encountered in this process? There is something deeper to the company revealed through this discussion, such as its ability to learn how to learn.

No company is ever issue-free. So despite ringing success for decades, it is always helpful to consider a company's current challenges. Part of the discussion here is ferreting out what is meant by "strategic challenge."

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The Walt Disney Company: The Entertainment King

Primary learning objective Corporate strategy; Resource based advantageSetting Entertainment industry, 1923-2000, $25 billion company

revenuesLength of case (pp) Text 14; exhibits 13Financial statements? YesOther subjects covered Formulation and implementation



The first ten pages of this case are comprised of the company's history, from 1923 to 2001. The Walt years are described, as is the company's decline after his death and its resurgence under Eisner. The last five pages are devoted to Eisner's strategic challenges in 2001: managing synergy, managing the brand, and managing creativity. Students are asked to think about the keys to Disney's mid-1980s turnaround, about the proper boundaries of the firm, and about what Disney's strategy should be beyond 2001.

Page West comments:

One of the critical issues in corporate strategy is trying to figure out whether synergy exists and how to capture it. Over the years we have seen many successful companies get mired in this fundamental issue and not do so well in addressing it clearly. We discuss this in our textbook in Chapter 10 (Corporate Strategy).

This Disney case, in contrast, provides a more straightforward opportunity for students to wrestle with the synergy issue. A discussion of Disney's history into the Eisner years will be able to identify sets of resources that provided a sustainable strategic foundation for the company. Potential acquisitions and business extensions may look attractive so long as the company is able to leverage these valuable resources. Fleshing this out in class discussion then provides insight on one of the pivotal questions in corporate strategy: how the corporate parent can add value to each business unit.

Having explored these dimensions, there are limits to how far or how much resources can be extended or leveraged. Or we may discover that it will simply require far too much investment to leverage effectively. These questions cause students to step back and reflect critically on the diversification phenomenon. Therefore this is not only a good case to use to introduce corporate strategy, but also one which can reveal the shades of grey in diversification evaluation.

The following questions can help students get going in analyzing this case: Why has Disney been successful for so long? What did Michael Eisner do to rejuvenate Disney? Specifically, how did he increase net income in his first

four years? How would you characterize Disney’s diversification strategies? Has Disney diversified too far in recent

years? Has the Disney magic begun to fade? How? Why? What would you recommend to Disney moving

forward?

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Whole Foods Market, Inc.

Primary learning objective Leadership; Implementation; Business-level strategySetting Natural food retail industry, 2006, $ 4.7 billion revenueLength of case (pp) Text 11; exhibits 23Financial statements? Yes, extensive. Includes a detailed evaluation of competitorsOther subjects covered Entrepreneurship; Performance

Publisher Harvard Business School, HBS 9-705-476Latest revision date 2008Teaching note available? Yes, HBS 9-708-505Additional Comments Works well with the Wild Oats Market, Inc case (HBS 5-707-

438)


Can a short-sleeved, sandal-wearing, college dropout create a company manifesting love, joy, and happiness? Chainsaw John Mackey did. This CEO took a five-month sabbatical to hike the Appalachian Trail. More credentials: Sales-per-square foot of $690 and rising. Hiring by means of teams and a vote requiring a two-thirds majority. A single store in Austin, Texas in 1980; 144 stores in 2004. A seven-year streak near the top of Fortune's list of best companies to work for in America. Team-based hiring with a two-thirds majority required. Incentives based on the bottom line. Morale surveys. No salary higher than eight times the average salary. So how did John Mackey come to be christened Chainsaw John Mackey?

Page West comments:

The case carefully examines the history of Whole Foods and the means by which its strategy developed by providing what it referred to as natural foods. Natural Foods is defined as being anything that was labeled as “organic,” “natural,” “sustainably developed,” “fair trade,” or “green friendly.” Faced with a set of huge grocery competitors, John Mackey moved into an area of the industry that was not being addressed. Over time, his competitors have moved into the market and Whole Foods has had to be flexible with its strategic approach. Whole Foods stores are positioned in areas of higher income with a focus on the LOHAS (Lifestyles of Health and Sustainability) customer group. LOHAS customers will willingly pay 20% more for their products and tend to shop more politically.

The Whole Foods case is all the more interesting because of the ethical issues that are not covered in the case. The CEO of Whole Foods used a fake online name to disparage Wild Oats in more than a 1,000 postings on a financial market blog. That said, this case is really about a different type of leadership, a strategy that was very focused and a fit between the strategy and its implementation right down to using teams to make all of the hiring decisions.

We use this case to talk about fit within the company. The case works well with a 7-S approach as well as using the Implementation Mapping system (Chapter 11). Leadership is a focus, as well, and works very well with the material from Chapter 3 tying into an ethical analysis. Sometimes a leader who pushes the envelope with his people goes over the line. A great discussion on these topics can be a highlight of the semester.

The following questions may be asked as prep for the class discussion: What are ‘natural foods’? Aren’t natural foods available everywhere? How would you define the Whole Foods Strategy? What does Whole Foods do to make sure the whole system supports the strategy?

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Yum! Brands, Inc.: A Corporate Do-Over

Primary learning objective Strategy implementation; Performance & controlSetting Fast Food Restaurants, 2005, $ 9 billion company revenueLength of case (pp) Text 14; exhibits 16Financial statements? Yes, ExtensiveOther subjects covered Global; Corporate strategy



Describes the successful turnaround of the restaurant company Yum! Brands after its spin off from PepsiCo and covers how the company's leadership planned and executed on virtually every dimension of the employee experience. The main dilemma centers on what the company should do in terms of multi-branding--housing two brands in one physical location.

Page West comments:

This is a classic strategy implementation case with every aspect of an implementation design explained. We like to use this case in conjunction with Chapter 11 and Chapter 12. The case opens by explaining how PepsiCo spun off the fast food chains it owned. In 1997, PepsiCo spun off KFC, Pizza Hut and Taco Bell to form a company known as Tricon Global Restaurants. In 2002, Tricon acquired Long John Silver and A&W All-American Foods. The company renamed itself Yum! Brands, Inc.

The company grew and was very successful during the early part of its independent life. Unfortunately, service continued to suffer. Furthermore, the company saw itself as unique in that it managed five types of service-oriented, fast-food restaurants. They wanted to create a new business model that would allow them to take advantage of that competitive position. They chose a hybrid structure that places the ordinary routines of the business in a centralized home office and the extraordinary routines in the field operation so that they can be managed close to the customer (see Chapter 6 for our discussion of ordinary versus extra-ordinary). The case then takes the students through the elements of the implementation including: 1) Launch; 2) Shared services; 3) Performance Measurement (Chapter 12); 4) Recognition of staff; 5) Design of the team and structures (Chapter 11); and 6) Multi-branding – a big part of the new approach.

We really enjoy using this case near the end of the semester. Virtually every student has eaten at one or more of these restaurants and generally view them as relatively lower quality on the fast food chain. The opportunity to work with the creation of a new business model is exciting and we have found that students really enjoy the task.

If you have the time, the case works well if used across two different class periods. During the first class period we examine the design that Yum! is putting in place. We ask students to visit some of the combined stores and view the operations. In the second class we develop a more refined implementation model based on their observations and knowledge. The class discussion is usually lively.

The following questions may be asked as prep for the class discussion: How are YUM! brand restaurants different when compared with McDonalds, Burger King and

Hardees/Carl Jr.? Will multi-branding work?

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ZARA: Fast Fashion

Primary learning objective Corporate strategy; Growth & global; PerformanceSetting Fashion Apparel industry, 2002, $3.2 billion Euros revenueLength of case (pp) Text 20; exhibits 11Financial statements? Yes, complete competitor financial analysisOther subjects covered Formulation and implementation – very broadly defined

Publisher Harvard Business School, HBS 9-703-497Latest revision date 2006Teaching note available? Yes, HBS 5-703-496Additional Comments Teaching note is extensive with numerous comparative

exhibits.


Focuses on Inditex, an apparel retailer from Spain, which has set up an extremely quick response system for its ZARA chain. Instead of predicting months before a season starts what women will want to wear, ZARA observes what's selling and what's not and continuously adjusts what it produces and merchandises on that basis. Powered by ZARA's success, Inditex has expanded into 39 countries, making it one of the most global retailers in the world. But in 2002, it faces important questions concerning its future growth.

Page West comments:

This is a comprehensive, thick case for students to tackle. The case outlines the history of the firm, the competition (in some detail), the strategy and its implementation. It is an excellent case for use near the end of the program or as an individual analysis of Globalization and Growth (Chapter 8). The issues of globalization are covered in great detail in the case. ZARA is but one of the brand name clothing retailers of Inditex (Industria de Diseno Textil) of Spain. The company owns five other apparel chains and relies on a unique technique in the fashion industry. The company is a quick response fashion provider who adjusts what is produced and on the shelves based on sales. The company is deciding how far they can grow geographically and still hold onto their system. Furthermore, they have several newer brands that are growing rapidly, but which are not yet at a critical scale.

We like to use this case to really challenge the student’s ability to put all of their strategy knowledge to use. This usually takes two class sessions. We assign the case before class and ask the students to start the class session with their answers to the questions below. After a class discussion of these issues, teams are assigned to put together their own analysis of ZARA’s competitive advantages (Chapter 4, 5, and 6) relative to its competitors and an implementation map (Chapter 12) that will help the company achieve its goals. The second class session examines the various approaches and seeks to collectively arrive at a strategy and an implementation map. The case is so effective in having the students experience the overall process of strategy analysis, formulation and implementation that we have used it as the basis for a final exam or paper.

The following questions may be asked as prep for the class discussion: Which of ZARA’s international competitors is the best match for the company to use as a comparison? What are ZARA’s current competitive advantages? Why? What do you believe ZARA should do next?

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