Assignment Questions Netflix 1. What are the dominant economic characteristics of the online movie rental business? 2. What is Netflix’s vision? 3. What is Netflix’s strategy? What type of competitive advantage is it trying to achieve? 4. How do Netflix’s business model and strategy compare to those being employed by key rivals, particularly Blockbuster? 5. How is the online movie rental business changing? What are the underlying forces of change and how are they impacting the industry? 6. What key factors determine success in the online movie rental industry? How important is technology to Netflix’s success? 7. What does an analysis of Netflix’s performance, both financial and strategic metrics, reveal? What is the story of the numbers in case Exhibits 3, 4, 5, and 6? How does its performance compare with that of key rivals—as shown in case Exhibits 7 and 8? 8. What do you see as Netflix’s competitive strengths and weaknesses? Is there a good market opportunity here for Netflix? What external threats does the company need to be concerned about? 9. Do you believe that Netflix has built a sustainable competitive advantage in the online movie rental business? Why or why not? 10. What does Netflix need to do to strengthen its competitive position and business prospects, given the competitive actions of Wal-Mart and Blockbuster? What specific actions should founder and CEO Reed Hastings take? 11. How are Blockbuster and Wal-Mart likely to react to the strategic moves that you have recommended that Netflix make? 12. Would you buy stock in Netflix at this time? Why or why not?
Starbucks 1. What are the key elements of Starbucks’ strategy as of 2004? 2. What grade would you give Howard Schultz for the job he has done as CEO of Starbucks? Be prepared to support your answer based on how well (or not so well) he has performed the five tasks of strategic management discussed in Chapter 2. 3. What was Howard Schultz’s original strategic vision for Starbucks? Is his present strategic vision for Starbucks different from the one he had in the 1980s? How many times has his strategic vision changed? Is his present strategic vision likely to undergo further evolution? 4. Has Starbuck’s strategy evolved as the strategic vision has evolved? 5. What are the key policies, practices, and procedures that underlie how Howard Schultz and Starbucks’ management have implemented and executed the chosen strategy? 6. What is your assessment of Starbucks’ financial performance during fiscal years 1998-2003 period? Does the company’s performance indicate that Starbuck’s strategy is working well? 7. What issues confront the company as of 2004? What should Starbuck’s management be worried about? 8. What recommendations would you make to Howard Schultz to sustain the company’s growth and support continued strong financial performance in the years ahead?
eBay 1. What is competition like in the online auction industry? What do we learn about the nature and strength of the competitive pressures eBay faces from doing a five-forces analysis of each segment? 2. What do you see as the key success factors for firms in the online auction industry? 3. What forces are operating in the online auction macro-environment that have the power to alter the nature and structure of competition in the online auction industry? 4. What does a strategic group map reveal about the positions of the major players in the online auction industry? Is eBay in a good position on the map? Why or why not? Who are eBay’s closest competitors? 5. What does a SWOT analysis reveal about eBay’s situation? Just how attractive is the company’s situation and position? 6. What is your assessment of eBay’s financial performance and financial condition? Is the company in good financial shape? Why or why not? Please use the summary of financial ratios in Table 4.1 in Chapter 4 to guide your calculations and support your assessment of the company’s financial performance. 7. Does your competitive strength analysis like that presented in Table 4.5 in Chapter 4 for eBay and its rivals reveal that eBay has a competitive advantage or a disadvantage in the online auction industry? What are the sources of the advantage or disadvantage? Does eBay have a sustainable competitive advantage in the online auction industry? 8. Is competition in the online auctions industry best described as global or multi-country? Why? Which type of international strategy is eBay using in its international operations? 9. What types of issues does eBay need to consider when entering the Chinese market? Do you believe the entry mode they chose was the best one? Why or why not? 10. Based on your analysis of the industry and eBay’s situation, what problems and issues does eBay’s top management need to address? Which ones are top priorities? Which are low priorities? 11. What actions would you recommend to Ms. Whitman and Mr. Omidyar to improve the company’s competitive position, especially its international operations, and its long-term financial performance?
Wal-Mart 1. What impresses you about this company? What aspects of WalMart do you find unimpressive? What accounts for Wal-Mart’s success over the past 20 years? Is it a great strategy, superb strategy implementation and execution, or great leadership? 2. How would characterize Wal-Mart’s strategy? Which of the five generic strategies is the company employing? What are the chief components of its strategy? 3. What has Wal-Mart management done to implement and execute the strategy? What policies, practices, support systems, and management approaches underlie Wal-Mart’s strategy execution efforts? 4. What is your assessment of Wal-Mart’s culture? What are its chief elements and characteristics? Why does the culture seem to be so much stronger in Bentonville than out in the stores? 5. What does the financial information in case Exhibit 1 reveal about the company’s success and performance during the 2000-2005 period? You should consider using the financial ratios presented in Table 4.1 of Chapter 4 to guide your calculations and reach conclusions about the caliber of Wal-Mart’s financial performance. 6. Can the company continue to be successful? What issues does management need to address? 7. What recommendations would you make to Wal-Mart management?