Case Map for Hitt, Ireland & Hoskisson

Strategic Management: Competitiveness and Globalization, Concepts and Cases (Cengage)

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PART I: STRATEGIC MANAGEMENT INPUTS Chapter 1: Strategic Management and Strategic Competitiveness

Abstract Wal-Mart, 2007: David B. Yoffie, Michael Slind Product #: 707517 Length: 12p Teaching Note: 707570

In 2007, Wal-Mart faced challenges to its historically high growth rate. Lagging same-store sales and setbacks overseas led the company to consider strategic shifts. Wal-Mart was the world's largest retailer, but competition had become particularly acute as the company expanded from rural markets, which it had long dominated, into urban and suburban areas. Covers developments in Wal-Mart's merchandising strategy and its approach to store formats; its sometimes controversial human resources practices; its efforts to improve its image through a public relations campaign; its aggressive, though occasionally problematic, move into international markets; and its leading competitors, especially Target. Exhibits provide data (current as of February 2007) on Wal-Mart's financial performance, its stock-price performance, its international operations, and its store formats, as well as on Target's financial performance. Subjects Covered: Competition; Human resource management; International business; Labor relations; Merchandising; Strategy

Apple Computer, 2006 : David B. Yoffie, Michael Slind Product #: 706496 Length: 32p Teaching Note: 706513

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? Learning Objective: To contrast Apple's success in creating and marketing the iPod with its results in its other hardware categories. To evaluate past performance and consider what the future may hold for a company that relies heavily on periodic bursts of innovation.

Cola Wars Continue: Coke vs. Pepsi in the Twenty-First Century: David B. Yoffie, Yusi Wang Product #: 391179 Length: 24p Teaching Note: 703403

Examines the industry structure and competitive strategy of Coca-cola and Pepsi over 100 years of rivalry. New challenges of the 21st century included boosting flagging domestic cola sales and finding new revenue streams. Both firms also began to modify their bottling, pricing, and brand strategies. They looked to emerging international markets to fuel growth and broaden their brand portfolios to include noncarbonated beverages like tea, juice, sports drinks, and bottled water. For over a century, Coca-Cola and Pepsi-Cola had vied for the "throat share" of the world's beverage market. The most intense battles of the cola wars were fought over the $60 billion industry in the United States, where the average American consumes 53 gallons of carbonated soft drinks (CSD) per year. In a "carefully waged competitive struggle," from 1975 to 1995 both Coke and Pepsi had achieved average annual growth of around 10% as both U.S. and worldwide CSD consumption consistently rose. This cozy situation was threatened in the late 1990s, however, when U.S. CSD consumption dropped for two consecutive years and worldwide shipments slowed for both Coke and Pepsi. The case considers whether Coke's and Pepsi's era of sustained growth and profitability was coming to a close or whether this apparent slowdown was just another blip in the course of a century of enviable performance. A rewritten version of an earlier case by Michael E. Porter and David B. Yoffie. Learning Objective: To analyze an industry and its competitor specifically, Coca-cola and Pepsi during the past 100 years.

Chapter 2: The External Environment: Opportunities, Threats, Industry Competition and Competitor Analysis

Abstract Note on the Structural Analysis of Industries : Michael E. Porter Product #: 376054 Length: 19p

Provides a framework for the analysis of industry structure. Identifies the major structural features that influence the profit potential in industries and some illustrative implications of these for strategy formulation. Can be used as a reference note for business policy courses and/or as the background for a lecture on industry analysis. Subjects Covered: Business policy; Industry analysis; Industry structure; Strategy formulation

Edward Jones: Michael E. Porter, Gregory C. Bond Product #: 700009 Length: 23p

Edward Jones is a leading, highly profitable retail brokerage firm with a unique strategy very different from those of its rivals. The case describes Jones's activities and allows a rich discussion of its positioning choices, supporting activities, and tradeoffs. Jones must cope with a rapidly evolving industry, which, at least on the surface, is a threat to its strategy. Learning Objective: To discuss strategic positioning and strategy in changing industries.

The Chinese Fireworks Industry: Paul W. Beamish, Ruihua Jiang Product #: 99M031 Length: 23p Teaching Note: 899M31

Illustrates an industry that is experiencing intensifying competition and regulation. The Chinese fireworks industry thrived after China adopted the "open door policy" in the late 1970s and grew to make up 90% of the world's fireworks export sales. However, starting from the mid-1990s, safety concerns led governments both in China and abroad to set up stricter regulations. At the same time, there was rapid growth in the number of small family-run fireworks workshops, whose relentless price cutting drove down profit margins. Learning Objective: To analyze the fireworks an industry, estimate the industry's attractiveness, and propose possible ways to improve the industry attractiveness from an individual investor's point of view.

Edward Jones: Michael E. Porter Gregory C. Bond Product #: 700009 Length: 23p

Edward Jones is a leading, highly profitable retail brokerage firm with a unique strategy very different from those of its rivals. The case describes Jones's activities and allows a rich discussion of its positioning choices, supporting activities, and tradeoffs. Jones must cope with a rapidly evolving industry, which, at least on the surface, is a threat to its strategy. Learning Objective: To discuss strategic positioning and strategy in changing industries.

The Offshore Drilling Industry: Kenneth S. Corts Product #: 799111 Length: 22p Teaching Note: 700016

After booming in 1997 and early 1998, the offshore drilling industry slumps in late 1998 and early 1999. Lower oil prices lead oil companies to reduce drilling budgets, and rig utilization falls from essentially 100% to 70% in some markets. Day rates--the prices paid for a rig's services--fall by as much as 75%. The case illustrates how supply and demand work together to determine prices and utilization in the short run, as well as how long-run supply is determined in an industry where capacity additions take several years. Also describes the industry's move toward "turnkey" contracts, in which drilling contractors provide a complete bundle of drilling services, and how advances in deep-water drilling technology are changing industry structure. Learning Objective: Illustrates how supply and demand determine prices and utilization in a fragmented industry.

Chapter 3: The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages

Abstract Southwest Airlines – 1993 (A): James L. Heskett, Roger Hallowell Product #: 694023 Length: 29p

Southwest Airlines, the only major U.S. airline to be profitable in 1992, makes a decision as to which of two new cities to open, or to add a new long-haul route. Provides windows into Southwest's strategy, operations, marketing, and culture. Learning Objective: Illustrates how an airline can simultaneously be low-cost leader, service leader, and profit leader.

GE's Two-Decade Transformation: Jack Welch's Leadership: Christopher A. Bartlett Product #: 399150 Length: 24p Teaching Note: 300019

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. Learning Objective: To expose students to GE's revitalization efforts, including corporate strategy development, transformational change, management and leadership, and corporate renewal.

Levi's "Personal Pair" Jeans (A): William Lawler, John K. Shank, Lawrence Carr Product #: BAB020 Length: 6p Teaching Note: 5703496

DeAs 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. Learning Objective: To introduce students to value-chain analysis within the context of management accounting.

Robert Mondavi and the Wine Industry : Michael A. Roberto Product #: 302102 Length: 32p Teaching Note: 304047

Examines the competitive challenges facing Robert Mondavi as the wine industry begins to consolidate globally. Mondavi faces challenges from foreign competitors entering the U.S. market as well as diversified global alcoholic beverage companies entering the wine business. Learning Objective: Designed to examine a domestic firm's competitive strategy in an industry undergoing global consolidation.

Polycom, Inc.: Visualizing Culture: Clayton M. Christensen Product #: 601073 Length: 16p

Polycom is a rapidly growing maker of video conferencing and teleconferencing equipment. Management is attempting to use "natural work groups" as an organizing mechanism, and to build into the culture implicit rules that will cause desired behaviors to be self-policing. Learning Objective: To explore organizational forms that might robustly handle continued growth

Microsoft in 2005: David B. Yoffie, Dharmesh M. Mehta, Rudina I. Seseri Product #: 705505 Length: 29p Teaching Note: 706467

Focuses on Microsoft's strategy for sustaining competitive advantage in the global software industry. Also, explores Microsoft's history and its current position, as it tries to diversify its product and service revenue streams. Learning Objective: To learn the strategic aspects of technology, bundling, and sustainability.

PART II: STRATEGIC ACTIONS: STRATEGY FORMULATION

Chapter 4: Business-Level Strategy

Abstract

Note on the Structural Analysis of Industries: Michael E. Porter Product #: 376054 Length: 19p

Provides a framework for the analysis of industry structure. Identifies the major structural features that influence the profit potential in industries and some illustrative implications of these for strategy formulation. Can be used as a reference note for business policy courses and/or as the background for a lecture on industry analysis. Subjects Covered: Business policy; Industry analysis; Industry structure; Strategy formulation

Customer Profitability and Lifetime Value: Elie Ofek Product #: 503019 Length: 9p

Introduces the central concepts involved in determining customer lifetime value, with detailed analysis and examples from the realm of direct marketing. Implications for marketing strategy and customer relationship management are briefly discussed. Learning Objective: Provides students with a basic understanding of the analytic tools necessary for calculating customer acquisition costs and customer lifetime value.

Costco Companies, Inc.: David E. Bell, Ann Leamon Product #: 599041 Length: 21p Teaching Note: 599088

Costco Companies, one of the major players in the wholesale club industry, has developed a new class of membership that offers discounted services--auto, health, and home insurance, business credit card processing, real estate services--in exchange for a higher annual fee ($100 vs. $40). The case poses two questions: 1) how should the new membership be marketed, to whom, and how much should be spent on the effort? And 2) what are the potential risks and benefits for Costco, which generated $22 billion in 1997 selling products in bulk, in offering services? Which question is emphasized depends on whether the case is taught in a marketing or a retailing course. Learning Objective: In a marketing course, the case is used to understand to what extent a retail brand name can be extended beyond its roots. What is it about a brand that allows it to be extended? In a retailing course, the case can be used to understand the economics of the Costco model and see whether services are a viable addition to a membership-based product retailer.

Husky Injection Molding Systems: Jan W. Rivkin Product #: 799157 Length: 23p Teaching Note: 5700087

Husky, a Canadian maker of injection molding systems has established an enviable position in the market for plastics processing equipment. The company builds the highest performance systems in the business and charges a hefty premium for them. Husky is enjoying robust growth and record profits in 1996 when competitors attack its core markets. As financial results deteriorate rapidly, founder and CEO Robert Schad must decide how to defend Husky's traditional markets and whether to expand beyond those markets. Learning Objective: 1) To exemplify a highly focused competitor who earns superior returns by commanding a price premium; 2) To illustrate how tailoring of and tight fit among a firm's activities both strengthen its position and influence its assessment of options; 3) To show how one can analyze buyer value numerically in order to calculate the premium that a firm can command; 4) To demonstrate the intimate connection of a firm's strategy to its values, culture, organization, and leadership; and 5) To discuss repositioning in the face of competitive and environmental change.

Wal-Mart Stores, Inc.: Stephen P. Bradley, Pankaj Ghemawat, Sharon Foley Product #: 794024 Length: 22p Teaching Note: 395225

Focuses on the evolution of Wal-Mart's remarkably successful discount operations and describes the company's more recent attempts to diversify into other businesses. The company has entered the warehouse club industry with its Sam's Clubs and the grocery business with its Supercenters, a combination supermarket and discount store. Wal-Mart experienced a drop in the value of its stock price in early 1993, which it still has not made up. Wal-Mart has advantages over its competitors in areas such as distribution, information technology, and merchandising, to name a few. Learning Objective: To explore the issue of sustaining competitive advantage. To discuss how sustainable Wal-Mart's advantages, and potential threats to Wal-Mart's continued success.

GE's Imagination Breakthroughs: The Evo Project: Christopher A. Bartlett, Brian J. Hall, Nicole Bennett Product #: 9907048 Length: 24p Teaching Note: 908413

In September 2003, Jeff Immelt challenged the business leaders at GE to come up with "Imagination Breakthroughs," innovative new projects that would serve as the centerpiece of GE's organic growth initiative. Follows the company as these changes are driven through the business units, focusing on GE Transportation as it launches a series of groundbreaking, green products--from the Evolution Locomotive to the Hybrid Locomotive. The growth process transforms the culture within GE Transportation, leading to a redefinition of the marketing role, the implementation of a "growth leader" profile and new decision-making processes to encourage innovation and risk. Finally, presents a critical decision point, as Transportation executives must decide whether or not to support the high-risk Hybrid Locomotive project. Learning Objective: To focus on growth strategy and the implementation of process changes driven from the corporate level down to individual business units.

Chapter 5: Competitive Rivalry and Competitive Dynamics Abstract

Robert Mondavi: Competitive Strategy: Michael E. Porter, Gregory C. Bond Product #: 799125 Length: 23p Teaching Note: 700084

Describes the competitive situation facing Robert Mondavi, the leading premium California winery. Mondavi has been an industry innovator and has recently taken steps to become more international. Mondavi has to cope with growing domestic competition as well as market share growth by wineries from Chile and Australia. Learning Objective: Designed to explore competitive strategy in an evolving industry with a special focus on international strategy.

Matching Dell: Jan W. Rivkin, Michael E. Porter Product #: 799158 Length: 31p Teaching Note: 700084

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. Learning Objective: Permits an especially detailed examination of imitation; illustrates how fit among activities and incompatibilities between competitive positions can pose particularly high barriers to imitation. To illustrate competitor analysis, the evolution of industry structure, and relative cost analysis.

Eckerd Corp.: Michael E. Porter, John C. Kelleher Product #: 799141 Length: 23p

Describes the history and current situation in the retail pharmacy industry, including competition from new merchants and Internet drugstores. Eckerd, one of the top four drug chains, must decide how to position itself for the future. Learning Objective: To support a discussion on the evolution of competition and competitive dynamics among rivals.

Progressive Corp.: Michael E. Porter, Nicolaj Siggelkow Product #: 797109 Length: 25p

Progressive is a leader in providing nonstandard (high-risk) automobile insurance to drivers across America, with a long record of extraordinary profitability. Progressive is facing a challenge in its segment from Allstate, the industry leader, and must decide how to respond. Learning Objective: Designed to explore competitive positioning, using the concepts of activities, activity systems, and tradeoffs between positions.

British Satellite Broadcasting vs. Sky Television : Pankaj Ghemawat Product #: 794031 Length: 17p Teaching Note: 5799078

Describes the rivalry between two competitors who have attempted to become the dominant force in the emerging British satellite television industry. Can be used to examine issues of competitive positioning, technology adoption, and scenario analysis. Helps students make decisions given competitive challenges and industry uncertainties. Subjects Covered: Competition; Product development; Securities analysis; Strategy formulation

Cola Wars Continue: Coke and Pepsi in 2006: David B. Yoffie, Michael Slind Product #: 706447 Length: 28p Teaching Note: 5706514

Examines the industry structure and competitive strategy of Coca-Cola and Pepsi over 100 years of rivalry. New challenges in 2006 include boosting flagging carbonated soft drink (CSD) sales and finding new revenue streams. Both firms also began to modify their bottling, pricing, and brand strategies. They looked to emerging international markets to fuel growth and broaden their portfolios of alternate beverages like tea, juice, sports drinks, energy drinks, and bottled water. Coca-Cola and Pepsi-Cola had vied for the "throat share" of the world's beverage market. The most intense battles of the cola wars were fought over the $66 billion CSD industry in the United States, where the average American consumes 52 gallons of CSD per year. In a "carefully waged competitive struggle," from 1975 to 1995, both Coke and Pepsi had achieved average annual growth of around 10%, as both U.S. and worldwide CSD consumption consistently rose. This cozy situation was threatened in the late 1990s, however, when U.S. CSD consumption declined slightly before reaching what appeared to be a plateau. Considers whether Coke's and Pepsi's era of sustained growth and profitability was coming to a close or whether this apparent slowdown was just another blip in the course of a century of enviable performance. A rewritten version of an earlier case. Learning Objective: To analyze an industry and its competitors, specifically, Coca-cola and Pepsi during the past 100 years.

Chapter 6: Corporate-Level Strategy

Abstract

The Walt Disney Co.: The Entertainment King: Michael G. Rukstad, David J. Collis, Tyrrell Levine Product #: 701035 Length: 27p Teaching Note: 5705495

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. Subjects Covered: Competitive advantage; Corporate strategy; Diversification; Implementing strategy; Strategy formulation

Intel Corp.--1997-2000: Ramon Casadesus-Masanell, Michael G. Rukstad Product #: 702420 Length: 11p

Describes Intel's diversification strategy initiated in 1998 by CEO Craig Barrett. Initially, Barrett's strategy worked well, as market value reached $510 billion in September 2000. Just three months later, however, investor pessimism over a slowing economy and recent problems at Intel resulted in market valuation plummeting by more than 55%. Learning Objective: To analyze the reasons for the drop in market value.

Newell Rubbermaid: Strategy in Transition: Cynthia A. Montgomery, Rhonda Kaufman, Carole A. Winkler Product #: 704491 Length: 34p

Describes the transformation of a company's corporate-level strategy. Begins by laying out the strategy that brought the Newell Co. stunning success for nearly three decades. The highly integrated, internally consistent strategy was tailored for manufacturing and selling a particular genre of products to a particular kind of customer. In the mid-1990s, Newell encountered some shifts in its competitive environment and subtle erosion in profits. In 1999, the $3.5 billion company paid a 49% premium to acquire the $2.5 billion Rubbermaid Co., in part for its product development process and strong consumer brands. After the acquisition, the profits of the combined enterprise deteriorated at an accelerated rate and the CEO was replaced. In less than a year, a fundamentally new strategy was announced, profits improved, and both Wall Street and major retailers were encouraged. Some setbacks followed, leading to reduced earnings and revised expectations. Exposes students to the pains and struggles of changing a deeply ingrained and long-lived strategy. Also forces them to confront the question of whether the new strategy is the right one and the markers one should seek to prove the case. Learning Objective: To illustrate the analytical and organizational challenges of transforming a long-lived, corporate-level strategy.

Hermes Systems: Michael L. Tushman, Daniel B. Radov Product #: 400056 Length: 17p

Covers the history of Hermes, a large telecommunications and network equipment company, as it grows from a single business firm to a diversified firm from 1980-95. Examines the use of entrepreneurial subsidiaries for product development and fast growth. Other issues include the challenges of managing ambidextrous organizations and the problems a CEO faces in keeping control of fast growing divisions. A rewritten version of an earlier case. Subjects Covered: Business growth; Diversification; Innovation; Leadership; Organizational culture; Organizational structure; Subsidiaries

Viacom, Inc.: Carpe Diem: Joseph L. Bower, Thomas R. Eisenmann Product #: 396250 Length: 30p

Viacom has reached a powerful position in the global entertainment industry through skillful and very bold acquisitions. Now its further expansion is challenged by the moves of Rupert Murdock's News Corp. Different businesses within Viacom have contradictory positions on how to deal with major opportunities and how Viacom top management should manage the decision-making process. Learning Objective: To help students understand the costs and benefits of alternate approaches to strategic management in the tumultuous global entertainment industry.

Chapter 7: Merger and Acquisition Strategies

Abstract

House of Tata: Acquiring a Global Footprint: Tarun Khanna, Krishna G. Palepu, Richard J. Bullock Product #: 708446 Length: 33p Teaching Note: 709455

Chronicles the globalization of the Tata Group, one of India's largest business groups. Since 2000, many Tata Group operating companies have aggressively built international businesses, particularly through overseas acquisitions. After describing the globalization rationales and approaches of the major Tata Group companies, the case asks students to consider whether Tata Motors should pursue the acquisition of the Jaguar and Land Rover brands owned by US-based Ford Motor company. Learning Objective: To consider the use of acquisitions as a tool for emerging market-based companies to globalize their businesses.

Kraft General Foods: The Merger (A): David J. Collis, Toby Stuart Product #: 391139 Length: 22p Teaching Note: 391279

Describes Philip Morris' acquisitions of General Foods in 1985 and Kraft, Inc. in 1989, focusing on the integration of Kraft and General Foods that forms a $30 billion food subsidiary. Details the steps required to merge these two large companies, emphasizing the managerial, organizational, administrative, and strategic issues engendered by the integration of Kraft and General Foods. Subjects Covered: Acquisitions; Competition; Corporate strategy; Mergers; Mergers & acquisitions

Strategic Countermoves: Coca-Cola vs. Pepsi: Anita McGahan, Julia Kou Product #: 795133 Length: 6p Teaching Note: 799076

Describes strategic acquisitions by Coca-Cola and Pepsi-Cola in the late 1980s. The context allows students to evaluate the implications of the mergers for the competitiveness of the industry. Subjects Covered: Acquisitions; Antitrust laws; Decision making; Mergers; Strategic planning

WPP--Integrating Icons to Leverage Knowledge: Joseph L. Bower Product #: 396249 Length: 23p Teaching Note: 398169

Martin Sorrell has used WPP to acquire a large portfolio of marketing service firms including J. Walter Thompson and Ogilvy & Mather. How did he make this minnow-swallows-many-whales trick work, and can he make the whole into something bigger than the parts? Subjects Covered: Acquisitions; Diversification; Holding companies; Leadership

Chapter 8: International Strategy Abstract

Tricon Restaurants International: Globalization Re-examined: Pankaj Ghemawat, Tarun Khanna Product #: 700030 Length: 24p Teaching Note: 711472

Describes a leading fast food operator/franchiser trying to consolidate and standardize its operations worldwide and focus its efforts on a few key markets. Lends itself to a discussion of how global the fast food industry is, whether Tricon's new international strategy is consistent with industry structure and its competitive position, and, if so, which country markets to focus on. Subjects Covered: Competition; Globalization; Industry structure; International business; Market positioning; Target markets

The De-Globalization of Marks & Spencer in 2001, An Update: Robert A. Burgelman, Philip Meza Product #: SM87 Length: 11p

The venerable British retailer Marks & Spencer suffered a series of setbacks in the late 1990s. The company's performance, which had been solid for decades, quickly deteriorated, forcing the rapid turnover of chief executives and many restructurings. Perhaps the largest change the retailer made was the abandonment of its global expansion plans, withdrawing from continental Europe and trying to sell off assets in the United States, including the well-known clothiers Brooks Brothers. This case examines the changes Marks & Spencer made between 1998 and 2001, as the company tries to shore up its ailing core business, U.K. retail, while deciding on an appropriate global strategy. Subjects Covered: Globalization; Reorganization; Restructuring

The Globalization of CEMEX: Pankaj Ghemawat, Jamie L. Matthews Product #: 701017 Length: 22p Teaching Note: 907410

CEMEX is a Mexican company that has become a major international competitor in cement while maintaining a higher level of profitability than other, longer-established majors. CEMEX's superior profitability supplies a basis for discussing the sources of superior performance in a global context. In addition, the wide array of benefits that CEMEX derives from its operations in different countries broadens conventional notions of why firms globalize. Subjects Covered: Competitive advantage; Developing countries; Globalization; Industry analysis; Mergers & acquisitions

Philips versus Matsushita: The Competitive Battle Continues: Christopher A. Bartlett Product #: 910410 Length: 20p Teaching Note: 910411

Describes the development of the global strategies and organizations of two major competitors in the consumer electronics industry. Over four decades, both companies adapt their strategic intent and organizational capability to match and counter the competitive advantage of the other. The case shows how each is faced to restructure as its competitive advantage erodes. Learning Objective: Illustrates how global competitiveness depends on organizational capability, the difficulty of overcoming deeply embedded administrative heritage, and the limitations of both classic "multinational" and "global" models.

Acer, Inc.: Taiwan's Rampaging Dragon: Christopher A. Bartlett, Anthony St. George Product #: 399010 Length: 20p Teaching Note: 399147

Describes the strategic, organizational, and management changes that led Acer from its 1976 startup to become the world's second-largest computer manufacturer. Outlines the birth of the company, the painful "professionalization" of its management, the plunge into losses, and the transformation under founder Stan Shih's radical "fast food" business concept and his "client server" organization model, which are put to the test when a young product manager in Acer America develops a radically new multimedia home PC with global potential. Shih must decide whether to give an inexperienced manager in a loss-generating subsidiary the green light. Learning Objective: To explore the links between global strategy and structure, to evaluate leadership of transformational change, and to examine development of global competitive advantage.

Chapter 9: Cooperative Strategy

Abstract

Swissair’s Alliances (A): David B. Yoffie, Eric J. Vayle Product #: 794152 Length: 20p Teaching Note: 794012

Swissair established two alliance networks in 1989 in order to improve its competitiveness. In order to evaluate the benefits of the alliances, Swissair's history, products, and cost structure are described, as is the international airline industry and the major players. The challenge for Swissair is how to gain further economies of scale in an increasingly competitive global marketplace. A rewritten version of an earlier case. Subjects Covered: Decision making; International business; Joint ventures; Strategic alliances; Strategic planning

Daewoo’s Globalization: Uz-Daewoo Auto Project: John A. Quelch, Chanhi Park Product #: 598065 Length: 35p Teaching Note: 598108

The top management at Daewoo is reviewing its close relationship with the Uzbekistan government, focusing especially on the performance of Uz-Daewoo Auto, a strategic alliance to manufacture and market passenger cars. Learning Objective: Shows the challenges of organizing strategic alliances in transitional economies.

Pandesic: The Challenges of a New Business Venture (A): Joseph L. Bower, Clark Gilbert Product #: 399129 Length: 18p Teaching Note: 399131

Pandesic is a joint venture of SAP and Intel designed to develop turnkey information architectures for market space companies. The case explores the problems of developing the joint venture from the perspective of its general management. Describes the development of its strategy and organization. At the end of the case, performance is poor and Harold Hughes (Intel) steps in from his position as part-time chairman to run Pandesic. Learning Objective: To understand how the strategic and structural context of a joint venture can lead to an inadequate strategy and poor pattern of resource commitments.

Corning, Inc.: A Network of Alliances: Christopher A. Bartlett, Ashish Nanda Product #: 391102 Length: 26p Teaching Note: 394018

Describes James Houghton's actions in assuming the role of CEO at Corning in the midst of a recession. Not only must he turn around operating performance, he must also revitalize a demoralized organization and set a new, clear strategic direction. In doing so, the case focuses on the changing role of alliances and partnerships in Corning operations. Increasingly, they are moving from a peripheral role in providing market access interchange for technology, to a more central role at the core of Corning's business. The strategic and organizational challenges this presents are highlighted through some specific decision issues facing Houghton. Subjects Covered: Business policy; Implementing strategy; Joint ventures; Leadership; Organizational change

Starbucks and Conservation International: James E. Austin, Cate Reavis Product #: 303055 Length: 28p Teaching Note: 304100

Starbucks, the world's leading specialty coffee company, developed a strategic alliance with Conservation International, a major international environmental nonprofit organization. The purpose of the alliance was to promote coffee-growing practices of small farms that would protect endangered habitats. The collaboration emerged from the company's corporate social responsibility policies and its coffee procurement strategy. The initial project was in the southern Mexican state of Chiapas and resulted in the incorporation of shade-grown coffee into the Starbucks product line, providing an attractive alternative market for the farmer cooperatives at a time when coffee producers were in economic crisis due to plummeting world prices. Simultaneously, the company had to deal with growing pressures from nonprofit organizations in the Fair Trade movement, demanding higher prices for farmers. Starbucks was reviewing the future of its alliance with Conservation International and its new coffee procurement guidelines aimed at promoting environmentally, socially, and economically sustainable coffee production. The nature of the industry puts the case in the global context from both the supply and demand sides. Learning Objective: To examine the corporate social responsibility strategy of a company as an integral part of its business strategy and the critical factors in managing a company's interface with nonprofit organizations and vice versa.

PART III: STRATEGIC ACTIONS: STRATEGIC IMPLEMENTATION Chapter 10: Corporate Governance

Abstract

Royal Dutch/Shell in Transition (A): Lynn Sharp Paine Product #: 300039 Length: 31p

After the Brent Spar episode and the 1995 events in Nigeria, Shell undertakes an intensive review of its values and business principles. At the same time, it conducts the largest multi-stakeholder consultation in its history in an effort to better understand society's evolving expectations for companies like Shell. Based on its findings, the company launches an effort to change its culture and embed in the organization a revised set of business principles. The company is considering whether as part of the transformation effort to begin public reporting on its environmental and social as well as its financial performance. The issue is sharpened when Shell receives a challenge from a small group of shareholders in the form of an unusual (for a British company) shareholder resolution. Learning Objective: Allows students to explore society's changing expectations for reporting the non-financial performance of these companies.

Al Dunlap at Sunbeam: Brian J. Hall, Rakesh Khurana, Carleen Madigan Product #: 899218 Length: 21p Teaching Note: 902135

Al Dunlap was one of the best-known corporate turnaround artists of the 1990s. In 1996, he was hired at Sunbeam to effect a restructuring, but was fired almost two years later when the company's financial performance and stock price began to decline. Many of the controversies that had surrounded him at his previous job, Scott Paper, followed him to Sunbeam: his rejection of the multiple stakeholder view of corporate governance, his aggressive managerial style, his shaky relations with the media, and his high level of pay. The case describes Dunlap's compensation package at Sunbeam and addresses the issue of how U.S. companies compensate "superstar" CEO's. Learning Objective: To discuss the debate about multiple stakeholders versus shareholder primacy; to analyze the incentives and compensation packages of highly sought-after CEOs, the amount and form of their pay packages (cash, bonus, options, etc.), and stock price as a measure of performance.

Attention Shoppers: Executive Compensation at Kroger, Safeway, Costco, and Whole Foods: David F. Larcker, Brian Tayan Product #: CG13 Length: 27p

Retail grocery sales represent a significant portion of the U.S. economy. The industry was highly competitive, with companies operating on low gross and net margins. As a result, grocery stores were generally under significant pressure to reduce their operating costs in order to maintain profitability. For the last several decades, the grocery industry grew roughly in line with gross domestic product and was considered a mature industry. In order for companies to succeed, they needed to find effective strategies to steal customers from competitors. Many sought to differentiate themselves through store format, store location, product mix, ancillary services, or quality of customer service. Strategies, however, could easily be imitated by competitors, putting grocery store chains under constant pressure to innovate and remain efficient. In general, growth also required the expansion into new store locations. Companies that failed to grow often went bankrupt or were acquired. This case explores executive compensation at four retail grocery stores: Safeway, Kroger, Costco, and Whole Foods. Consideration is given to each company's strategy and market position and corporate governance structure. Readers of the case are asked to evaluate in a critical manner the appropriateness of each company's compensation strategy and compensation levels, given company performance. Learning Objective: To understand in detail the components of executive compensation programs and to learn to evaluate which policies, structures and pay levels are appropriate, given company performance.

Fogdog: John W. Glynn Jr., Christopher S. Flanagan Product #: E100 Length: 21p Teaching Note: E100T

This case examines the growth and development of Fogdog, an online sporting goods retailer, from its founding through multiple rounds of venture capital financing to an IPO and, ultimately, to its sale to Global Sports--one of its publicly traded competitors. The Fogdog story is set in the late 1990s, when the Internet economy was virtually exploding with new opportunities. Built to capitalize on the new Internet medium, Fogdog faced a number of issues specific to the unique economic climate surrounding the company at the time. However, the company also faced a number of timeless issues that many emerging companies experience, such as board composition and development, communication between a company and its board, and the respective positions and responsibilities of both management and a company's investors when tough company decisions have to be made. Woven throughout the case are additional themes of hiring management, raising capital, and forming strategic alliances. It ends with the "forced" sale of Fogdog by the company's board at a time when the near-term outlook for Internet-related companies was uncertain. This sale took place despite management's stated desire to continue running the company. Learning Objective: Focuses on the relationship between a company and its board of directors through different stages of the corporate life cycle. Students are able to put themselves in the shoes of several Fogdog stakeholders. Students consider many issues, including Who is in control of the company at any given time? Who is represented on the company's board of directors? What is the best way for communication to take place between and among the board and senior management members? And What other outside responsibilities do directors and other senior management team members have?

Chapter 11: Organizational Structure and Controls

Abstract

Kenan Systems: Joseph L. Bower, James B. Weber, Sonja E. Hout Product #: 301101 Length: 15p

Kenan Sahin has built a very successful company using a unique business model and a unique organization and culture. Success has brought important risks, but logical options such as sale, partnering, or going public threaten the culture and hence the business. Learning Objective: Uses a very powerful business problem to motivate a deep examination of a counterintuitive organization and culture.

Polycom, Inc.: Visualizing Culture: Clayton M. Christensen Product #: 601073 Length: 16p

Polycom is a rapidly growing maker of video conferencing and teleconferencing equipment. Management is attempting to use "natural work groups" as an organizing mechanism, and to build into the culture implicit rules that will cause desired behaviors to be self-policing. Learning Objective: To explore organizational forms that might robustly handle continued growth

Novartis Pharma: The Business Unit Model: Srikant M. Datar, Carin-Isabel Knoop, Cate Reavis Product #: 101030 Length: 21p

In June 2000, Novartis reorganized its pharmaceutical business to form global business units in oncology, transplantation, ophthalmology, and mature products. The remaining primary care products continued to be managed within global functions (e.g., R&D and marketing). The new organization created a matrix structure and new roles and responsibilities for heads of business functions, CEOs of new business units, and country managers operating in over 100 countries. Learning Objective: To explore the reasons for Novartis's reorganizing into a new matrix structure, the tensions and challenges the new structure creates, and the culture and accountability needed to make the new structure work.

USA TODAY: Pursuing the Network Strategy (A): Michael L. Tushman, Michael J. Roberts, David Kiron Product #: 402010 Length: 18p Teaching Note: 802229

Describes the evolution of USA TODAY Online, the electronic version of the newspaper, within the organizational structure of the newspaper. Describes the tensions and issues that develop and the pressure from the Online division to be spun off. At the same time, CEO Tom Curley sees a greater strategic need for integration. Poses the question of what degree or type of strategic integration is required, what degree of organizational integration this implies, and how it can be achieved. Learning Objective: To expose students to difficult issues surrounding integration when two organizational units are different and explores the challenges of building an "ambidextrous" organization that is an organization that executes the existing business well and innovates at the same time.

Polycom, Inc.: Visualizing Culture: Clayton M. Christensen Product #: 601073 Length: 16p

Polycom is a rapidly growing maker of video conferencing and teleconferencing equipment. Management is attempting to use "natural work groups" as an organizing mechanism, and to build into the culture implicit rules that will cause desired behaviors to be self-policing. Learning Objective: To explore organizational forms that might robustly handle continued growth.

Chapter 12: Strategic Leadership Abstract

Mary Kay Cosmetics, Inc.: John P. Kotter, John M. Stengrevics Product #: 481126 Length: 13p

Introduces the student to Mary Kay Cosmetics, Inc., its business, its strategy, and its organization. Provides the necessary background for understanding the contributions of Mary Kay Ash, the company's founder and chairman. Subjects Covered: Entrepreneurship; Leadership; Power and influence

Bill Gates and the Management of Microsoft: Philip M. Rosenzweig Product #: 392019 Length: 19p Teaching Note: 394028

In July 1991, Microsoft has achieved record growth and profitability in the PC software industry. The case focuses on Microsoft's founder and CEO, Bill Gates, and his top management team, as they seek to retain the innovation and spirit of a small company in a rapidly growing and changing environment. Specific issues include the management of organizational complexity, cultural change, CEO and COO interaction, compensation, and leadership. Subjects Covered: Business growth; CEO; Compensation; Leadership; Organizational change; Organizational culture; Organizational management

GE's Two-Decade Transformation: Jack Welch's Leadership: Christopher A. Bartlett Product #: 399150 Length: 24p Teaching Note: 300019

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. Learning Objective: To expose students to GE's revitalization efforts, including corporate strategy development, transformational change, management and leadership, and corporate renewal.

Meg Whitman at eBay, Inc. (A): Linda A. Hill, Maria T. Farkas Product #: 401024 Length: 32p

Meg Whitman takes over as CEO of eBay from the founder. She must figure out how to lead the company through a stage of phenomenal growth without compromising eBay's unique external customer culture and internal culture--its key success factors. A rewritten version of an earlier case. Learning Objective: Leadership, managing change, managing growth, and organizational culture.

Chapter 13: Strategic Entrepreneurship Abstract

Enspire Learning: Roger Hallowell, Bjorn Billhardt, Frank Andrasco, Hans ten Cate Product #: 802001 Length: 23p Teaching Note: 5802153

An MBA student founds an e-education business and must decide which customers to target and which products/services to produce. Learning Objective: Examines the online education marketplace and encourages students to develop action plans to succeed in it. Designed to place the student in a situation he or she can empathize with and in which he or she can make recommendations that will create alignment among targeted customers, customer value propositions, and service delivery systems. Also illustrates the importance of a simple and intuitive customer interface for an Internet-based service and the approach successful firms have adopted to deliver such an interface.

Zipcar: Myra M. Hart, Wendy Carter Product #: 802085 Length: 17p

Provides a detailed description of the processes and tasks associated with creating a new venture in an emerging industry (subscription car-sharing for urban dwellers). Chronicles the entrepreneur's concept development, industry analysis, market research, identity definition, and brand building. Also provides background on writing the business plan, creating a budget and building financials, developing a management team, creating business partnerships, and financing the businesses. Learning Objective: Raises several issues including how to manage the "chicken and the egg" process of building and testing the concept, getting resources, and engaging customers when starting a new venture. Provides examples of "bootstrapping" and creative fundraising and concludes with the question of how to grow the business strategically.

OXO International : H. Kent Bowen, Marilyn E. Matis, Sylvie Ryckebusch Product #: 697007 Length: 19p Teaching Note: 601161

OXO, a kitchen tools and gadgets company, was started by a businessman who had 30 years of experience in the house wares industry. With his wife and son as founders, he creates a new niche in the gadgets industry for high-end gourmet stores. The company has headquarters in New York City, but it outsources product design to a NYC industrial design firm, manufacturing to Asia, and warehousing to a site in Connecticut in order to manage start-up costs and growth. Because of the veteran businessman's reputation and industry sense, the company grows quickly and in 1992 is sold for $6.2 million to a large house wares distributor, General House wares. The original owners stay on as consultants to the parent company and decide to turn over management of the company to a Harvard MBA who also has extensive industrial design experience. Innovative product design is the key to OXO's success, and the company has worked exclusively with one design firm based on royalties of sold products. The new managing director initiates new product category programs for the bathroom, the garden, and home baking. He must coordinate the outsourcing of the design and development function. Subjects Covered: Entrepreneurial management; Operations management; Small & medium-sized enterprises; Sourcing

Iggy's Bread of the World: Alexis Gendron, Kathleen McGinn Product #: 801282 Length: 14p Teaching Note: 801283

In January 1994, Igor and Ludmilla Ivanovic opened the doors of their bakery, Iggy's Bread of the World. This case describes their unusual mission statement and the way in which they try to bring a social consciousness mentality to a for-profit business. Six years later, they have grown beyond their physical and administrative capacity. The Ivanovics must decide how to reconfigure the leadership structure of the company without losing their control over the fundamentals. Learning Objective: Explores direct vs. indirect influence, focusing on the difficulties inherent in learning effective indirect influence tactics where one is accustomed to using direct influence. Also explores issues in corporate culture and corporate reorganization.

Howard Schultz and Starbucks Coffee Co.: Nancy F. Koehn Product #: 801361 Length: 43p Teaching Note: 5801374

Investigates the entrepreneur's strategic initiatives to develop a mass market for specialty coffee in the 1980s and 1990s. These initiatives included the development of premium products, rapid expansion of company-owned stores--each with attractive retail environments and responsive customer service--and, especially, the creation of a strong brand. Also devotes considerable attention to how Schultz built the Starbucks organization, examining the consistent emphasis that he and his colleagues placed on the company's relationship with its employees, how Schultz financed Starbucks' early expansion, how vertical integration ensured quality control, and how--strategically and operationally--the company managed its phenomenal domestic and international growth after 1993. Learning Objective: To examine how, in the midst of widespread socioeconomic change, an entrepreneur and his company influenced millions of consumers' tastes, behavior, and daily lives, Also, to understand why Schultz and Starbucks came to lead the intensely competitive specialty coffee industry, and to analyze the relationship between entrepreneurial brand creation and institution building.