CORPORATE STRATEGY 3E LYNCH Pearson Education November 2002 Case Title Source, Geographical Case Decision Issue Number, and Industry Length, Setting, Teaching Company Size, Note Timeframe Chapter 1 Ryanair J&S, p870 Dogfight over HBSP Ireland; airlines; 10 In April 1986, the Ryan brothers Europe: Ryanair # 9-700-115 employees; 1986 announce that their fledging Irish (A), (B), (C) 8p – (A) airline Ryanair will soon commence HBSP service between Dublin and London. # 9-700-116 For the first time, Ryanair will face 4p – (B) formidable competitors such as Aer HBSP Lingus and British Airways on a major # 9-700-117 route. Students are asked to assess 18p – (C) Ryanair's entry and anticipate the response of incumbent carriers. Teaching Purpose: Allows students to hone skills in competitor analysis and in the anticipation of competitive dynamics. Cost and revenue figures permit students to examine the economics of retaliatory pricing in a business with high fixed costs and low marginal costs. The U.S. Airline HBSP United States; Describes the economic logic leading Industry in 1995 # 9-795-113 airlines; 1995 to the deregulation of the American 22p airline industry in 1978, and subsequent competitive developments. The roles of computerized reservation systems, airport hubs, route strategies, and fleet management are raised as unanticipated tactical responses. The decision focus of the case emphasizes the prospect of regulation. Teaching Purpose: Taught early in an advanced course in strategy, this case is designed to illustrate the connections between industry evolution and the opportunities available to firms as they seek to develop competitive advantage. A rewritten version of an earlier case. Acer, Inc.: Taiwan's HBSP Taiwan and Global; Describes the strategic, Rampaging Dragon # 9-399-010 computers; $3.2 organizational, and management 20p billion revenues; changes that led Acer from its 1976 5,800 employees; start-up to become the world's 1976-1995 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. Teaching Purpose: To explore the links between global strategy and structure, to evaluate leadership of transformational change, and to examine development of global competitive advantage. Chapter 2 The General Mills HBSP Minneapolis, MN; Examines the General Mills Board of Board and Strategic # 9-491-117 consumer food and Directors' role in the General Mills Planning 11p restaurants; Fortune joint venture with Nestle S.A. to sell 500; $6.4 billion cereals outside of North America. It 1990 sales; 1989 raises the more general question of the appropriate role for the board of directors in strategy formulation. Ready-to-Eat HBSP United States; Ready-to-eat breakfast cereal has Breakfast Cereal # 9-795-191 breakfast cereal; $9 historically been a stable and highly Industry in 1994 17p – (A) billion revenues; profitable industry, dominated by the (A) HBSP 1994 Big Three of Kellogg, General Mills, #9-796-122 and Kraft General Foods (Post). In 4p – (B) 1994, private label cereals are updates A case 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? Ready-to-Eat HBSP United States; Supplements Ready-to-Eat Breakfast Breakfast Cereal Supplement breakfast cereal; $9 Cereal Industry in 1994 (A). Industry: Philip # 9-797-104 billion revenues; Morris 2p 1994 Ready-to-Eat HBSP United States; Supplements Ready-to-Eat Breakfast Breakfast Cereal Supplement breakfast cereal; $9 Cereal Industry in 1994 (A). Industry: Quaker # 9-797-103 billion revenues; Oats 2p 1994 Chapter 3 Restructuring the HBSP United States; Focuses on the competitive decline of U.S. Steel Industry # 9-203-042 steel; 1970- the integrated steel producers in the 23p 2002 United States from 1970 to 2002. Issues include: Should the U.S. government impose tariffs to try to protect the industry? What should labor unions do, if anything, to protect jobs and wage rates of employees in failing companies? International Steel HBSP Ohio, Indiana, Profiles veteran investor Wilbur L. Group # 9-803-162 Illinois; steel Ross, Jr.'s plan to turn around the 25p production; $100 aging steel assets of LTV, formerly million revenues; America's second largest integrated 2,500 employees; steel producer. Purchasing several 2002 key assets from LTV under Section 363 of the Bankruptcy Code, Ross is able to acquire the assets free of any pension or healthcare liabilities to retirees. Examines the challenges Ross faces as he tries to make the reborn steel company into a global player as one of the world's lowest cost producers. To accomplish this, he must negotiate a new agreement with the steelworkers' union, transform the old LTV culture, and secure long-term contracts with the right customers who could fulfil ISG's capacity requirements. De Passe HBSP Hollywood, CA; After 24 years at Motown Industries, Entertainment & # 9-494-013 entertainment; Hollywood executive Suzanne de Creative Partners 20p 1991-1993 Passe has decided to go out on her own to start two new businesses. The case describes de Passe's career from her beginning as Berry Gordy's assistant at Motown Records to her presidency of Gordy/de Passe Productions. Upon Gordy's departure from the production business, de Passe decides to become an entrepreneur, forming both an independent production company and an artist management company. In the management venture, de Passe has a business partner, and in the production company she hires a president and COO. Focuses on her decision to become an entrepreneur and on the working partnerships she has developed with the executives of the two companies. BMWFilms HBSP North America; Jim McDowell, VP of marketing at # 9-502-046 automobiles; BMW North America, is debating how 26p $32,693 million to follow up the success of his latest revenues; 97,725 marketing campaign, "BMWFilms." employees; 2001 This campaign features five short films for the Internet, directed by some of the hottest young directors in Hollywood. By all indications, the nontraditional campaign has been a huge success. Now the question is, what to do for an encore? Teaching Purpose: To explore the consumer behavior dynamics associated with nontraditional marketing techniques. Also allows for a discussion of the link between deep consumer understanding and the design of a new advertising genre. Chapter 4 Dreyer’s Grand Ice- Stanford United States; In June 1998, the senior Cream (A) University ice cream, dairy, management team at Dreyer's Grand #OB35A consumer Ice Cream faced a number of internal 25p products; $1.16 and external difficulties that were billion revenues; some of the most challenging 4,000 problems the company ever faced. employees; Problems included profitability issues, 1998 record-high butterfat prices, aggressive discounting by competitors, higher margin better- for-you segment collapse, severance of Ben & Jerry's distribution contract, and management health issues. Given a mandatory and necessary financial restructuring of the company, the senior management team faced some tough employee issues and needed to make very significant decisions to overcome their difficult times. Teaching Purpose: To teach students how to manage a difficult organizational politics issue. Amazon.com – J&S, p674 From Start Up to the New Millenium European Ice- Lynch, 3rd Cream edition Lecturers Guide What Strategy Now Lynch, 3rd for Mars? edition Lecturers Guide Chapter 5 Merloni HBSP Italy; domestic Merloni Elettrodomestici is a leading Elettrodomestici # 9-690-003 appliance; mid- Italian manufacturer of domestic SpA: The Transit 19p size; $300 appliances. In 1986, an exposition for Point Experiment million sales; Merloni customers is scheduled at its 1986 Milano regional warehouse. During the two-month period preceding the event, when the warehouse must be free of inventory, the company conducts a "transit point" experiment. Each day, a truckload of products from the company's central warehouse is sent to Milano, where it is immediately transferred to small trucks for local delivery. At the conclusion of the experiment, the company is considering the replacement of its 17 regional warehouses with transit points. Students are asked to evaluate this proposal and recommend a configuration for Merloni's distribution network. Issues to be considered in the analysis of the case include the impact of different network configurations on customer service and on inventory, labor, operating, and transport costs. Merloni HBSP Europe; Merloni Elettrodomestici was founded Elettrodomestici: # 9-303-062 major in 1975. This case traces the The New Century 21p appliances; evolution of the company's strategy, Begins $2 billion organization, and management as it revenues; becomes the #3 player in Europe 1975-2002 (the #1 in Eastern Europe). Issues involve questions of geographic expansion, resource allocation, and organization. Teaching Purpose: Challenges of general management, strategy, students, and people. Merloni HBSP Europe; In 1995, the Merloni management is Elettrodomestici # 9-300-118 major faced with profitless prosperity. A rise SpA: Building for 20p appliances; in raw material prices in the face of Profit $2 billion ferocious competition in their markets revenues; hurts margins. At the same time, the 1975-2002 company is trying to expand geographically in order to become Pan-European and to consolidate the position of three brands. Teaching Purpose: To develop in considerable detail the management problems associated with internationalization in Europe: heterogeneous markets requiring differentiated approaches to product and marketing. This is made all the more difficult by multiple brands. Merloni HBSP Europe; In 2001 a young (35) new CEO has to Elettrodomestici # 9-301-112 major develop a strategy to move his SpA: Building for 16p appliances; company beyond the hyper- the New Century $2 billion competitive conditions of Western revenues; Europe. A major acquisition in Russia 1975-2002 and a new web-based service business provide interesting new directions. This case traces the development of strategy and organization at this European multinational. Teaching Purpose: To examine the challenges of building and managing a multinational over nearly three decades and to consider the entrepreneurial climate of strategic management. Merloni Group HBSP France, The general manager of the recently- # 9-383-152 Italy; major established French subsidiary of an 18p appliances; Italian appliance company is in mid-size; conflict with headquarters about $350 million unexpectedly poor financial sales; 1982 performance. Headquarters management believes it should be able to exert more control over the subsidiary's strategic decision. The subsidiary general manager feels the Italians are already intervening too much. A change in organization structure is being debated. Airbus A3XX: HBSP France; In July 2000, Airbus Industrie's Developing the # 9-201-028 aerospace; supervisory board is on the verge of World’s Largest 20p 2000 approving a $13 billion investment for Commercial Jet (A) the development of a new super jumbo jet known as the A3XX that would seat from 550 to 1,000 passengers. Having secured approximately 20 orders for the new jet, the board must decide whether there is sufficient long-term demand for the A3XX to justify the investment. At the time, Airbus was predicting that the market for very large aircraft (VLA), those seating more than 500 passengers, would exceed 1,500 aircraft over the next 20 years and would generate sales in excess of $350 billion. According to Airbus, it needed to sell 250 aircraft to break even, and could sell as many as 750 aircraft over the next 20 years. This case explores the two sets of forecasts, and asks students whether they would proceed with the launch given the size of the investment and the uncertainty in long-term demand. Teaching Purpose: Illustrates the basic economics of large projects and the complexity in estimating even top- line demand for products with useful lives of up to 50 years. Also illustrates the role of governments in large projects, both as investors and as customers. Finally it explores the competitive dynamics between a monopolistic and a potential entrant in which entry costs exceed $10 billion. Airbus A3XX: HBSP France; Supplements the (A) case. Developing the # 9-388-028 aerospace; World’s Largest 2p 2000 Commercial Jet (B) Chapter 6 The Pharmaceutical HBSP Global; Provides a broad overview of the Industry: # 9-703-489 pharmaceutical; numerous internal and external Challenges in the 32p $400 billion forces that were driving change in the New Century revenues; 1990- global pharmaceutical industry in 2003 2003. These forces--including downward price pressures, political and social pressures, increased development costs, new technologies, new and different competitors, consolidation, and threats to its basic business models--were changing the way drugs were discovered, developed, manufactured, tested, regulated, marketed, sold, and purchased. Teaching Purpose: To provide students an opportunity to conduct an environmental scan/industry analysis of a complex global industry. Allows for the development of scenarios for industry evolution. A rewritten version of an earlier case. Immusol & Novartis HBSP San Diego, CA; Should Immusol strive to become a # 9-303-038 biotechnology; 90 fully integrated pharmaceutical 31p employees; 2001 company? How should small Immusol structure a deal for its novel technology with the giant Novartis? Teaching Purpose: To look at the nature of licensing deals between large resource-rich firms and small technology-rich ones. Genzyme’s Gaucher HBSP United In Egypt, Genzyme's humanitarian Initiative: Global # 9-303-048 States/Egypt; commitment to treat all sufferers of Risk and 23p biotech; $800 the rare Gaucher disease worldwide Responsibility million revenues; first confronts its commercial 1981-2001 imperative to recoup the huge investment required to bring the drug Cerezyme to market. Here Tomye Tierney must decide how to balance the demands of the sales organization that faces saturating developed markets, but major growth opportunities in developing economies. They believe that as long as the Gaucher Initiative--Genzyme's partnership with Project Hope--is providing free Cerezyme, they will be unable to convince the Egyptian government to authorize reimbursement, which can run from $200,000 to $300,000 per patient annually. CEO Henri Termeer believes Genzyme can hold firm to both the humanitarian commitment and its strong patient-focused commercial objectives. But it is Tierney who is on the front line and negotiates the delicate agreement between Genzyme sales, Project Hope, and Egyptian authorities. Teaching Purpose: To focus on international expansion and new market entry in the context of the tension between corporate responsibility and commercial viability. Marketing HBSP United States; Describes the marketing of Prozac Antidepressants: # 9-502-055 pharmaceuticals; and Paxil, two of the best-selling Prozac and Paxil 27p 2000 mental health drugs in history. Set in 2001, several months before the expiration of Prozac's patent, Eli Lilly (Prozac's manufacturer) and GlaxoSmithKline (Paxil's manufacturer) must decide how to respond to the introduction of generic Prozac into the market. Teaching Purpose: To explore the positioning and counter-positioning strategies available to companies who produce similar products. In addition, provides a vehicle for discussing how to sustain value in the face of low-priced competition. Finally, allows for a discussion of the ethical issues surrounding the marketing of prescription pharmaceuticals. India’s Intellectual HBSP India; In 1970, the Indian government Property Rights # 9-702-039 pharmaceuticals; significantly revised its patent law, Regime in the 23p 1970 Patents and Design Act of 1911. The Pharm Industry 1911 act was enacted when India was a colony of Great Britain, and it was controversial because it led to the total dominance of India's pharmaceutical market by multinational corporations. The 1970 act substantially reduced both the scope and the extent of patent protection and some credited the act as giving rise to India's own indigenous pharmaceutical industry. In 1994, the Indian government committed itself to conforming its intellectual property rights regime to the requirements of the WTO. Domestic political opposition was fierce toward any attempts to move away from the 1970 act. Teaching Purpose: To teach concepts on import substitution and intellectual property rights. General Electric HBSP Global; medical Discusses one of General Electric's Medical Systems – # 9-702-428 products; $8 billion flagship divisions--the world's leading 2002 25p revenues; 2002 provider of medical diagnostic imaging equipment. Provides an opportunity to examine a multinational confronting massive technological and demographic changes around the world. Genomics has created a global opportunity by making personalized medicine seem possible--medical intervention that caters to the genetic makeup of the individual and emphasizes prevention more than cure. Yet, the pursuit of this opportunity requires fundamental changes in the business model at a time when the model is being stressed by the idiosyncratic needs of catering to the large Chinese market and adapting to the needs of an aging population around the world. Demonstrates how multinationals can create value both by replicating their business models worldwide and by adroitly splitting the value chain across national boundaries. Chapter 7 The Global Oil Stanford Energy resources, The oil industry, one of the first Industry University Global business, international businesses, exerted a # IB15 International tremendous influence on almost all business, Mining, aspects of business, economics, and Petroleum, geopolitics throughout the 20th Petroleum industry. century. Their products revolutionized daily life. And the struggles to control and assure access to oil supplies and markets were a major element of international conflict throughout the century. Journey to HBSP Russia; energy; Surveys the operations of Royal Sakhalin: Royal # 9-704-040 $236 billion Dutch/Shell in Russia, including a Dutch/Shell in 27p revenues; 90,000 strategic alliance with Gazprom, the Russia employees; 1991- country's natural gas monopoly, the 2003 development of the Salym oil fields in Siberia, and a small retail refilling network in St. Petersburg. Focuses on the Sakhalin II project. Sakhalin II is the reason for the existence of the Sakhalin Energy Investment Co. (SEIC), owned by Royal Dutch/Shell (55%), Mitsui (25%), and Mitsubishi (20%). Worth approximately $10 billion, the second phase of Sakhalin II would be the single largest investment decision in the history of Royal Dutch/Shell, as well as the single largest foreign direct investment in Russia's history. Sakhalin II would also be the largest integrated oil and gas project in the world. The project faces a number of challenges, however. A production sharing agreement (PSA)--a commercial contract between the foreign investor and a host government that replaces the country's tax and license regimes for the life of the project--govern Sakhalin II. Although Sakhalin II's PSA enjoys the status of Russian law, other Russian laws conflict with the terms of the PSA. PSAs have also become controversial within Russia. After several years of waiting in vain for "legal stabilization," Shell and SEIC executives must decide whether the project should go forward. Teaching Purpose: To consider the challenges of foreign direct investment in Russia and managing in the context of weak institutions. Sunk Costs: The HBSP Europe; oil and gas; Explores the conflict between Shell Plan to Dump the # 9-903-010 $150 billion Oil and Greenpeace over Shell's plans Brent Spar (A) 14p revenues; 90,000 to sink the aging Brent Spar oil employees; 1995 platform in the North Atlantic. Details the tactics Greenpeace employed and examines Shell's responses. Teaching Purpose: Explores issues in crisis organization and coalition building. BP and the HBSP Global; oil and gas; Examines the economics of the oil Consolidation of the # 9-702-012 $160 billion and gas industry with a focus on Oil Industry – 37p revenues; 107,000 1998 through 2001. Discusses the 1998-2002 employees; 1998- rationale behind using a growth in 2001 scale as a means to increase profitability and to gain competitive advantage. Also examines the classic strategic implications of vertical integration and questions the necessity of remaining vertically integrated in today's markets. During 1998-2001, the industry structure changed dramatically with the occurrence of a wave of merger activity. Set at the end of 2001, as BP's chief executive, Lord John Browne, ponders the company's future. BP set off the merger activity in 1998 with its combination with Amoco. Other major oil concerns quickly followed suit. Several large and dominant firms, termed "supermajors," separated themselves from the rest of the competitors. Although a large number of independent specialty firms also exist, the supermajor firms no longer believe them to be direct competitors. After the case discussion, students should be able to: 1) understand the basic economics of the oil and gas industry, 2) analyze the rationale behind vertical integration strategies, 3) analyze why the industry restructuring occurred, and 4) understand the economies of scale of the supermajor firms as well as the potential problems their immense size could create. Teaching Purpose: Analyze vertical integration, horizontal integration, economies of scale, potential limits to growth, and competition in a commodity industry. British Petroleum Stanford Great Britain; oil In 1992-93, British Petroleum plc, (A1): Organising University company; 1992- Britain's fourth-largest of the great for Performance at # IB16 1993 international integrated oil BPX 17p companies, faced a major crisis. The company was experiencing its first losses in its eighty-year history, while morale was battered by downsizing and organizational upheaval. Downfall at Xerox J&S, p1056 Xerox: Outsourcing HBSP United States; In order to increase revenues, Global Information # 9-195-158 copiers; Fortune develop new technologies, and Technology 32p 500; 1993 manage information technology more Resources efficiently, Xerox decided to sign a 10-year, $3.2 billion contract with Electronic Data Systems (EDS). This case describes the events that preceded Xerox's decision to outsource information technology. Xerox and Fuji HBSP Japan, United Describes the growth and Xerox # 9-391-156 States; electronics development of Fuji Xerox, Xerox's 29p (copiers); Fortune joint venture in Japan, and the 500; $18 billion evolving relationship between Fuji revenues; 1962- Xerox and Xerox. Focuses on the 1990 technological development of Fuji Xerox, and on the contributions that Fuji Xerox has made to Xerox's competitive position worldwide. Presents a number of options for modifying the relationship between Xerox and Fuji Xerox in the future, when the two firms will face increasingly serious competition from global competitors. Fuji Xerox is a $4 billion company and arguably one of the most successful joint ventures ever between an American and Japanese firm. In some ways the evolution of Fuji Xerox has been a microcosm of the broader United States-Japan relationship. Xerox and Fuji HBSP Japan, United Describes the growth and Xerox: Update # 9-703-009 States; electronics development of Fuji Xerox, Xerox's 2002 29p (copiers); Fortune joint venture in Japan, and the 500; $18 billion evolving relationship between Fuji revenues; 1962- Xerox and Xerox. Focuses on the 1990 technological development of Fuji Xerox, and on the contributions that Fuji Xerox has made to Xerox's competitive position worldwide. Presents a number of options for modifying the relationship between Xerox and Fuji Xerox in the future, when the two firms will face increasingly serious competition from global competitors. Fuji Xerox is a $4 billion company and arguably one of the most successful joint ventures ever between an American and Japanese firm. In some ways the evolution of Fuji Xerox has been a microcosm of the broader United States-Japan relationship. Chapter 8 Corona Beer (A) HBSP Mexico, United In early June 1997, the CEO and vice # 9-502-023 States; beer; 1997 chairman of Grupo Modelo were 21p reviewing the performance of Corona beer in the U.S. market. Despite a much higher sales volume growth rate, Corona still trailed Heineken, the #1 imported beer brand in the U.S. market. Could Corona overtake Heineken and, if so, what marketing strategy changes needed to be made? Includes color exhibits. Corona Beer (B) HBSP Mexico, United Supplements the (A) case. # 9-502-037 States; beer; 1997 2p South African J&S, p897 Breweries The Brewery Group, J&S, p950 Denmark Kirin Brewery Co. IMD061 (IMD) Japan; brewing; In response to being challenged in its Ltd: The Dry Beer 23p $1,300 billion home market by a smaller rival, Kirin War Japanese yen Brewery, Japan's leading brewer, revenue; 1988 rejuvenated its lager beer and launched three new products, including a dry beer to compete with Asahi Breweries' enormously successful Super Dry. Shortly after launch of Kirin Dry, two other major Japanese brewers also introduced dry beers. Kirin executives must now develop a strategy for the 1989 beer season. Kirin Brewery Co. IMD076 (IMD) Japan; beer; $31 Sales of Asahi Brewery's Super Dry Ltd: (B) Revised 12p billion Japanese yen are booming. Kirin Brewery's share of revenues; 1978- market is declining rapidly. Mr. Tani 1989 was recently appointed as new general manager of Kirin's Beer Division, with the mission to respond to Asahi's challenge. Other competitors have now joined the beer war between Kirin and Asahi. Kirin must now fight on several fronts. Mr. Tani has to decide on an appropriate strategy for Kirin. This is a revised version of an earlier case. South African Stanford Tanzania; beer In January 1994, Danie Niemandt, Breweries in University brewing and general manager for South African Tanzania # IB22 distribution; $150 Breweries operations in Tanzania, 24p million revenues; must determine how his company 2,000 employees; should respond to the entry of a new 1994-1998 competitor in its market--East African Breweries. South African Breweries has executed a successful turnaround of the brewery operations in Tanzania. East African Breweries is backed by Guinness plc, one of the world's largest beer brewers, and Guinness has committed itself to investing the resources necessary to build a leading presence in the Tanzanian market. The challenge facing South African Breweries in Tanzania illustrates the challenge the company faces in many of its international markets. The company has built its international strategy around its operational expertise, but must now adjust to the entrance of well-funded global beer competitors in several of its international markets. Teaching Purpose: Intended for use in a course on international business and strategy. Highlights how a company applies the skills and knowledge developed in its domestic market to form an effective international strategy, the challenges of operating in an emerging market, and the competitive shifts facing a company in an emerging market as the market opportunity attracts outside competitors. Chapter 9 Matching Dell HBSP Global; personal After years of success with its # 9-799-158 computers; Fortune vaunted "Direct Model" for computer 31p 500; $19 billion manufacturing, marketing, and revenues; 1998 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. Teaching Purpose: Designed to be taught in any of several places in an MBA course on competitive strategy. Permits an especially detailed examination of imitation; illustrates how fit among activities and incompatibilities between competitive positions can pose particularly high barriers to imitation. Can also be employed to illustrate competitor analysis, the evolution of industry structure, and relative cost analysis. Dell Computer Richard Ivey Malaysia; Dell Computer Corp. is one of the Corp: Investment School of computers; large; largest computer manufacturers in in Malaysia as a Business 2001 the world. The company's Global Strategic # 903M19 international business strategy has Tool supported its global position and performance facing the Asian economic crisis. Its investment in Malaysia reduced its foreign exchange exposure and supported its low-cost advantage. Now Dell must decide whether to expand its commitment in Malaysia and/or other locations, such as China. Toyota Motor HBSP Georgetown, KY; On May 1, 1992, Doug Friesen, Manufacturing # 9-693-019 autos; large; $1-5 manager of assembly for Toyota's U.S.A., Inc 22p billion revenues; Georgetown, Kentucky, plant, faces a 4,000 employees; problem with the seats installed in 1992 the plant's sole product--Camrys. A growing number of cars are sitting off-line with defective seats or are missing them entirely. This situation is one of several causes of recent overtime, yet neither the reason for the problem nor a solution to it is readily apparent. As the plant is an exemplar of Toyota's famed production system (TPS), Friesen is determined that, if possible, the situation will be resolved using TPS principles and tools. Students are asked to suggest what action(s) Friesen should take and to analyze whether Georgetown's current handling of the seat problem fits within the TPS philosophy. Teaching Purpose: 1) Provide comprehensive knowledge on Toyota Production System, 2) Exercise advanced root cause analysis, and 3) Demonstrate the totality of manufacturing, especially the link between production control and quality control.. Jack Smith (A): HBSP Georgetown, KY; On May 1, 1992, Doug Friesen, Career Launch at # 9-604-057 autos; large; $1-5 manager of assembly for Toyota's Toyota (B) and (C) 9p – (A) billion revenues; Georgetown, Kentucky, plant, faces a #9-604-059 4,000 employees; problem with the seats installed in 1992 the plant's sole product--Camrys. A growing number of cars are sitting off-line with defective seats or are missing them entirely. This situation is one of several causes of recent overtime, yet neither the reason for the problem nor a solution to it is readily apparent. As the plant is an exemplar of Toyota's famed production system (TPS), Friesen is determined that, if possible, the situation will be resolved using TPS principles and tools. Students are asked to suggest what action(s) Friesen should take and to analyze whether Georgetown's current handling of the seat problem fits within the TPS philosophy. Teaching Purpose: 1) Provide comprehensive knowledge on Toyota Production System, 2) Exercise advanced root cause analysis, and 3) Demonstrate the totality of manufacturing, especially the link between production control and quality control.. Jack Smith (B): HBSP North America; Jack Smith had a stellar career at Becoming a Toyota # 9-604-059 automobile; $100 Chrysler managing major design Manager (I) 3p billion revenues; teams and manufacturing plants 100,000 employees; before deciding to join industry leader 2002 and benchmark Toyota. It is his first day on the job; what will his orientation entail? Cursory walkthroughs and introductions before assignment to a job commensurate with his experience and accomplishments or something else to acclimate him to Toyota's unique management approach? Teaching Purpose: To think deeply about corporate acculturation, capability development, and the role of managers in complex organizations where improvement and problem solving are critical to success. Jack Smith (C): HBSP North America; Jack Smith had a stellar career at Becoming a Toyota # 9-604-060 automobile; $100 Chrysler managing major design Manager (II) 4p billion revenues; teams and manufacturing plants 100,000 employees; before deciding to join industry leader 2002 and benchmark Toyota. It is his first day on the job; what will his orientation entail? Cursory walkthroughs and introductions before assignment to a job commensurate with his experience and accomplishments or something else to acclimate him to Toyota's unique management approach? Teaching Purpose: To think deeply about corporate acculturation, capability development, and the role of managers in complex organizations where improvement and problem solving are critical to success. Chapter 10 Crafting a Vision at Richard Ivey United States; Chrysler and Daimler-Benz Daimler-Chrysler School of transportation shareholders approved the largest Business equipment; large; corporate merger in history. After # 902C06 1998 months of talks, the chairman of the German-based Daimler-Benz management board and the chairman and CEO of the U.S.-based Chrysler Corp. were preparing for when the two companies would officially combine forces to create the fifth largest automobile company in the world. These two managers were officially charged with the responsibility of amalgamating two enterprises that were vastly different from each other. Chrysler was known for its efficient production and economically priced vehicles. Daimler-Benz sold only luxury vehicles, and its reputation was based on craftsmanship, quality, and safety. Chrysler executives were in the habit of limiting business expenses; Daimler-Benz executives were not. Between the two companies, there were huge discrepancies in cultures, market segments, product lines, salaries, and attitudes. Aware of the excitement of their investors and the concern of their critics, the two leaders are expected to forge and promote the vision on which Daimler-Chrysler will base its future. DaimlerChrysler Babson College Automotive Centers on the historic merger of Merger: The Quest # BAB041 Daimler-Benz AG and Chrysler Corp. to Create "One 27p and the subsequent quest for Company" (A) integration. The subtexts to this central issue include a comparison and contrast of the operating cultures and business processes of the two companies as well as their histories, positions within the auto manufacturing industry, and corporate values and image. Also introduces the dynamics of integrating the leadership of two companies. Using "what if" scenarios, students can explore the roles of the senior managers in the merger, its execution, and the subsequent integration attempts. Gives students an opportunity to envision and develop an integration strategy. Best suited for studies in strategic management, corporate entrepreneurship, global management, leadership, and change management or organizational behavior. DaimlerChrysler Babson College Automotive Supplements the (A) case. Merger: The Quest # BAB042 to Create "One 4p Company" (B) The IMD Europe, United Provides an overview of current DaimlerChrysler # IMD130 States, Global; trends in the global automotive Merger (A): Gaining 20p automotive, industry and a description of Daimler- Global transportation; Benz AG and Chrysler Corp. prior to Competitiveness 400,000 employees; the merger. Describes this first 1995-1998 transatlantic merger, raising the issues of strategic positioning, potential trade-offs, and competitive moves. Teaching Purpose: To discuss and evaluate the challenges companies face in this hyper- competitive market. DaimlerChrysler: IMD USA, Germany; Provides an inside view on how the The Post-Merger # IMD121/2 automotive, former Daimler-Benz and Chrysler Integration Phase 22p transportation; companies organized their integration large; 1998 efforts following their May 1998 merger, the first truly transatlantic merger in history and, at the time, the largest ever. As such, this merger presents an unusually broad array of management issues that were both unprecedented in scope and rather unique, ranging from cross-cultural management and global strategy and implementation to international M&A alliances and change management. Describes a journey that started during the early 1980s, until the events that preceded the Daimler- Chrysler merger, outlining the key strategic, organizational, and execution challenges facing both companies. BMW Automobiles J&S, p886 Chapter 11 Nike Inc: Entering HBSP Global; sports Traces the evolution of Nike from the Millennium # 9-299-084 footwear & apparel; 1987 through 1998. Through a series 15p Fortune 500; $9.5 of eight assignment questions, it billion revenues; examines how the company has 23,000 employees; created and sustained a competitive 1998 advantage, and how that competitive advantage is reflected in growth, profitability, and share price performance. Nike, Inc. in the HBSP Global; footwear; $4 Describes the transition of Nike from 1990s (A): New # 9-595-102 billion revenues; 1990 to 1993 as it sees major growth Directions 8p 1990-1993 opportunities in foreign markets. Nike, Inc. in the HBSP Global; footwear; $4 Describes Nike's performance to 1994 1990s (B): Strategy # 9-595-103 billion revenues; and describes challenges facing the and Management 5p 1993-1994 new president and COO, Thomas Changes--1993-94 Clarke. Nike, Inc. in the HBSP Global; footwear; $4 In 1998, Nike's earnings and sales 1990s (C) # 9-598-119 billion revenues; growth slowed. Management faced 8p 1993-1994 new competition from Adidas. This case asks students to review the various strategies (including diversification into sports equipment) pursued by Nike to resuscitate corporate growth. Teaching Purpose: To discuss how to address a flattening growth curve in a corporation accustomed to high growth. Nike in Transition HBSP Beaverton, OR; Explores Bob Woodell's tenure as (A): The # 9-392-105 athletic footwear; Nike's first COO. Describes Ascendancy of Bob 17p large; $920 million development of Woodell's Woodell revenues; 4,000 management style, his attempts to employees; 1983- develop the organization, and his 1984 responses to unforeseen business problems. Changing market forces, new competitors, a build-up of low- end inventory, and the absence of Phil Knight, the company's founder, in daily operations, make this a difficult time for Nike. Against the backdrop of disappointing financial results and an upcoming shareholders' meeting, students are asked to assess Woodell's performance, whether management is truly in control of the organization and the company's business, and what role Knight should be playing in the organization. Nike in Transition HBSP Beaverton, OR; After returning to the CEO/COO (B): Phil Knight # 9-392-106 athletic footwear; job, Phil Knight makes changes to Returns 22p large; $877 million Nike's strategy, organization, and revenues; 3,000 management between 1983 and employees; 1984- 1987 aimed at making Nike more 1987 responsive to the market place. He takes cost-cutting measures, and experiments with several management and organizational changes. After much strife within the company, Knight ends up with a hybrid matrix, a new group of managers, and a new strategy. Has Knight made the right choices? Has he squashed Nike's entrepreneurial culture? Is Nike poised for recovery? 3M: Profile of an HBSP United States; high Traces the birth and development of Innovating # 9-395-016 technology products; 3M Corp., focusing in particular on Company 20p Fortune 500 the origins of its entrepreneurially- based ability to innovate. In particular, it highlights the role of CEO William L. McKnight in creating a unique set of values, policies, and structures to nuture and develop continuous renewal. With the changing environment of the 1980s, however, a new generation of CEOs begin to adopt the policies and change the cultural norms that helped 3M grow. The trigger issue focuses on what other changes are required. Teaching Purpose: To show how culturally embedded organizational behavior can become a sustainable source of competitive advantage and to show how such strong cultures can and should be adjusted to new internal and external realities. Philips vs. HBSP Global, Europe, Describes the development of the Matsushita: A New # 9-302-049 Japan; consumer international strategies and Century, a New 20p electronics; large; organizations of two major Round $40 billion-$60 competitors in the global consumer billion revenues; electronics industry. The history of 270,000 employees; both companies is traced and their 1970-2001 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. Teaching Purpose: 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. A rewritten version of an earlier case. Chapter 12 Ford Motor Co.'s HBSP Dearborn, MI; In April 2000, Ford Motor Co. Value Enhancement # 201-079 automobiles; announced a shareholder Value Plan (A) 17p Fortune 500; $162 Enhancement Plan (VEP) to billion revenues; significantly recapitalize the firm's 335,000 employees; ownership structure. Ford had 2000 accumulated $23 billion in cash reserves and under the VEP would return as much as $10 billion of this cash to shareholders. In exchange for each share currently held, the plan would give stockholders one new share plus the choice of receiving $20 either in cash or additional new Ford common shares. Shareholders electing to receive cash would be taxed on these distributions at capital gain rates. Among other things, the plan provided a means for the Ford family to obtain liquidity without having to dilute their 40% voting interest (even though they own only 5% of the shares outstanding.) Students must wrestle with the following questions: Why was Ford proposing this transaction instead of a traditional share repurchase or a cash dividend? How did the interests of the Ford family factor into this decision, and what did the transaction imply about the future involvement of the family in the company? Why was Ford distributing such a significant amount of cash at this particular point in time? Did the distribution signal a change in the company's appetite for making acquisitions or future capital expenditures? If shareholders collectively elected to receive less than $10 billion in cash, how would Ford distribute the remaining cash? Teaching Purpose: Provides a rich setting in which to discuss one of the most basic decisions corporations face: how to return cash to shareholders. It is a vehicle for discussing corporate financial policies and capital structure decisions-- particularly as they relate to cash dividends and share repurchases--in a context where corporate control questions and the interests of multiple constituencies must be understood. Ford Motor Co.: HBSP United States; Ford Motor Co. reports improved Quality of Earnings # 9-104-059 automotive; $150 profitability, but an equity analyst Growth Analysis (A) 25p billion revenues; issues a sell recommendation and 2003 Standard & Poor's downgrades long- term debt. Teaching Purpose: To analyze earnings growth quality. Ford Motor Co.: HBSP United States; Supplements the (A) case. Quality of Earnings # 9-104-063 automotive; $150 Growth Analysis (B) 2p billion revenues; 2003 A Hundred-Year HBSP United States and Through their competitive battle, War: Coke vs. # 9-799-117 global; beverages; Coca-Cola and PepsiCo have created Pepsi--1890s-1990s 21p Fortune 500 stable and highly profitable duopoly in the U.S. soft drink industry. As the domestic industry matured and the cola wars moved to international markets, Coke and Pepsi tried to redesign their competitive strategies as well as the vertical structure of their corporations. Teaching Purpose: 1) How the industry structure evolves as a result of competitive interactions of firms, and 2) How the vertical structure of the firm changes in response to the economic conditions. A rewritten version of an earlier case by Michael E. Porter and David B. Yoffie. Strategic HBSP United States; Describes strategic acquisitions by Countermoves: # 9-795-133 carbonated Coca-Cola and Pepsi-Cola in the late Coca-Cola vs. Pepsi 6p beverages; Fortune 1980s. The context allows students to 500; 1986 evaluate the implications of the mergers for the competitiveness of the industry. Internationalizing HBSP United States; Describes strategic acquisitions by the Cola Wars (A): # 9-795-186 carbonated Coca-Cola and Pepsi-Cola in the late The Battle for China 6p beverages; Fortune 1980s. The context allows students to and Asian Markets 500; 1986 evaluate the implications of the mergers for the competitiveness of the industry. Chapter 13 McDonalds Corp. HBSP New England; fast Describes the operating system of (Condensed) # 9-681-044 food; 1980 McDonald's, the world's most 15p successful fast food chain. The case does not have a decision focus; it is designed for use with Burger King Corp. Students are asked to compare the operating systems of these two fast food hamburger chains. Careful analysis will detect the subtle and not so subtle differences between the two operating systems selected by these two firms. Burger King Corp HBSP New England; fast Describes the operating system of a # 9-681-045 food; 1980 Burger King unit. The case does not 15p have a decision focus; it is designed for use with McDonald's Corp. Students are asked to compare the operating systems of these two fast food hamburger chains. Careful analysis will detect the subtle and not so subtle differences between the two operating systems selected by these two firms. American fast food Richard Ivey Korea; fast food; A major U.S.-based fast food in Korea School large; 2000 company with extensive operations # 903M16 around the world was contemplating 14p whether to enter the Korean market. The Korean fast food market was hit badly by the Asian economic crisis in the late 1990s, but the economy was turning around. Thus, fast food demand in Korea was expected to increase. For the industry analysis, this case provides information on various competitors, substitute foods, new entrants, consumers, and suppliers. Also includes social issues as potential forces. Jollibee Foods Corp. HBSP fast food; $250 Noli Tingzon, newly-appointed (A): International # 9-399-007 million revenues; international division VP at Jollibee, Expansion 23p 1987-1997 the Philippines-based hamburger chain, is faced with the challenge of J&S, p808 expanding fast food operations in Asia in the face of stiff competition. The case describes Jollibee's six-year international expansion history and the lessons the company has learned. Against this background, Noli must decide among expansion opportunities in New Guinea, Hong Kong, and California. News Corporation J&S, p808 AOL – Time Warner HBSP United States; AOL Time Warner, which has been Inc. # 9-702-421 Internet and media; billed as the "first fully integrated 29p 88,500 employees; media and communications company 2000-2001 of the Internet Century," raises the fundamental question of how value will be created and captured by the merger of AOL and Time Warner. This case describes just how different AOL was from Time Warner in strategy, culture, and execution, and permits a thorough analysis of how value is proposed to be created through capturing synergies within the new company. The discussion of synergies is divided into three levels: tactical, strategic, and transformational. The key question to address is whether a merger of this sort is the most effective way to create value or whether contracting and other mechanisms is equally good-- perhaps, superior. Teaching Purpose: Evaluating the synergies for the AOL Time Warner merger. A rewritten version of an earlier case. Valuing the AOL HBSP United States; On January 11, 2000 AOL Time Time Warner # 9-802-098 entertainment Warner announced their intention to Merger 38p telecommunications; merge, creating what AOL CEO $33 billion revenues; Stephen Case and Time Warner CEO 50,000 employees; Gerald Levin called the 21st century's 2001 first fully integrated communications, media, and entertainment company. This case, prepared from public sources, enables in-depth analysis of the value of AOL Time Warner from the viewpoint of executives and analysts before their merger 6 months later. Teaching Purpose: To discuss the challenges of identifying the value of a company during periods of market, industry, and business turbulence. Global Media Lynch 3rd Edition Lecturer’s Guide News Corporation Lynch 3rd Edition Lecturer’s Guide Chapter 14 Nokia Beyond Stanford 2003 In 2003, Nokia was the dominant 2003: A Mobile University maker of cell phones around the Gatekeeper? # SM113 world. It had more than twice the 23p global handset market share of its closest competitor, Motorola. While in a position of strength in 2003, the company faced large challenges in the immediate future. For example, the so-called third generation (3G) of mobile technology was experiencing a slow arrival and uncertain consumer reception. In addition, there was uncertainty about which type of 3G technology would dominate. Perhaps a larger strategic issue for Nokia, however, was its plan for its operating system. In the past, other handset makers were willing to adopt Nokia's popular handset operating system. By 2003, however, Microsoft has entered the market with its own mobile operating system. As mobile devices become more robust, e.g., incorporating web-enabled phones with PDAs, the importance of mobile operating systems increases. How can Nokia contend with the entry of the extremely well-funded Microsoft into its core market? Teaching Purpose: To discuss the strategic options open to Nokia as it faces new competitors in a rapidly changing technology environment. Nokia Corp: Stanford Espoo, Finland; Nokia Corp. is a global Innovation and University telecommunications; telecommunications company that in Efficiency in a high # IB23 $19,954 million eight years went from a near- growth global firm 38p revenues; 51,177 bankrupt conglomerate to a global employees; 1992- leader in mobile telephony, delivering 2000 almost 30% annual compound growth in revenues during 1992-2000 while shedding businesses that had accounted for almost 90% of its 1998 shares. By spring 2000, Nokia had the highest margins in the mobile phone industry, a negative debt- equity ratio, the most valuable non- U.S. brand in the world, Europe's highest market capitalization, a presence in 140 countries, and unique corporate structures, processes, and culture that gave it the feel of "a small company soul in a big corporate body." Along with growth in size and diversity, however, came growth in complexity. Nokia had to develop multiple businesses and technologies (while dealing with the great technological uncertainties that were inherent in the convergence of mobile telephony and the Internet). It also had to manage a growing network of alliances and a number of acquisitions, mostly in the United States. This case provides the background to the issues Nokia faces as it considers how to meet these challenges while maintaining its unique company values and way of working that made it possible to execute efficiently while continuing to innovate. Teaching Purpose: To explore the challenges of innovating while maintaining a focus on efficient operations, to explore the challenges of rapid growth in a technologically turbulent environment, and to explore the challenges of globalization from a narrow national base. Birds Eye and the HBSP United Kingdom; Describes the forty-year evolution of U.K. Frozen Good # 9-792-074 – frozen food; the U.K. frozen food industry, and Industry (A) and (A) – 19p large; L 420 traces the emergence, dominance, (B) million and the decline of Birds Eye. Its HBSP revenues; 1946- success is as a vertically integrated # 9-792-078 – 1984 producer, distributor, and marketer of (B) – 3p frozen foods that pioneers the industry in the U.K. Its decline as other firms enter all stages of the value chain is seen as a result of its earlier success that yields it an unsustainable strategic position. Examines vertical integration as a strategy, the analytic rationale to be vertically integrated, and the disadvantages of vertical integration. Proctor & Gamble: HBSP Global; consumer Dave Walker, vice-president of Global Business # 9-404-124 products; $40 billion business service opportunities and Service 15p revenues; 98,000 chairman of the governance team at employees; 2001 Procter & Gamble, must decide what to do with P&G's 5,700 employee Global Business Services (GBS) group. GBS brought together internal services such as finance, accounting, employee services, customer logistics, purchasing, and information technology into a single, global organization supporting all P&G business units. Recently, P&G CEO A.G. Lafley questioned whether continued investment in GBS represented the best use of P&G's resources. Walker and the other members of the governance team must decide whether to spin off GBS, outsource GBS services to an outside company, outsource the GBS divisions separately to best-of-breed companies, or keep the group in- house. In making the decision, Walker and the members of the team must consider the impact on the organization of altering the existing relationships between the members of GBS and the other employees at P&G. Teaching Purpose: To consider the issues inherent in any decision to outsource services and the impact of such a change on the company. Proctor & Gamble HBSP Rome, Italy; food; Procter & Gamble's (P&G) Pringles Italy: The Pringles # 9-601-070 $38 billion revenues potato chips have been a very Launch (A) 33p (global); 110,000 successful brand. This case reviews employees; 1998- the development and launch in the 1999 United States, then in markets around the world. Italy is one of the last countries for Pringles. Should P&G Italy use the successful launch strategy used throughout Europe, or devise its own? Teaching Purpose: Launch strategy/marketing mix in a different country context. Chapter 15 Ericsson and the J&S, p605 creation of mobile telephones KPN Telecoms J&S, p659 Ericsson in China: HBSP China; Focuses on Ericsson in the Chinese Mobile Leadership # 9-700-012 telecommunications mobile phone market--the company's 27p largest single market, and one that is still growing at rates in excess of 50%. Permits comparison of two distinct ways of entering the Chinese market: by forming joint ventures with local competitors or with a WFOE (wholly foreign-owned enterprise) structure. But the bulk of the case is devoted to changes in the Chinese market and in mobile phone technology, and the threats that they pose to the sustainability of existing competitive advantages as well as the new opportunities that they open up. Make Yourself IMD Europe, global; Ericsson, the Swedish Heard: Ericsson’s # IMD040 mobile phones; telecommunications products and Global Brand 20p large; 1998 systems company, is embarking on a Campaign first-ever global advertising campaign for its brand of mobile phones. The idea for consumer brand building, new to an otherwise technology- oriented, industrial company, has come about as a result of developments in the worldwide market for cellular phones: fast growth, entry of new consumer segments, declining product differentiation, and the growing pressure on prices and margins. The expensive campaign, aiming to cement a relationship with consumers, is notable for a total absence of product-related communication. Under the slogan "Make yourself heard," the ads feature a gallery of faces and a range of situations demonstrating the spirit of communication between people around the world. Some of the issues the case raises are: How do you build a strong brand for a product that is increasingly difficult to differentiate? Can pure brand values stand on their own merits without any references to products? What criteria should you use to evaluate advertising execution? A 2001 ECCH award winner. Bharti Tele- HBSP India; Following the liberalization of India's Ventures # 9-704-426 telecommunications; telecommunications service industry 26p $642 million in the early 1990s, Bharti Tele- revenues; 5,000 Ventures grew from a small employees; 2003 entrepreneurial telephone equipment importer and manufacturer to become India's largest private-sector telecommunications service group in terms of numbers of customers. Attracting over $1.2 billion in foreign equity investments, more than any other Indian telecom firm, by 2001 Bharti had achieved the country's leading market position in mobile telecom service. By 2003, however, the nature of the game had changed. A spate of mergers and acquisitions had reduced the field to the most successful and best-financed contenders. At the same time, telecommunications regulatory changes let in new, lower priced competitors, significantly altering the rules of the game. Suddenly, in addition to government-owned BSNL and the stately Tata Group, India's oldest business house, Bharti was up against Reliance, the largest and most profitable of a new generation of business groups. Bharti's management and equity partners at Mittal and his partners at SingTel and Warburg Pincus had to determine what to do next. Teaching Purpose: Explore challenges and opportunities for entrepreneurial companies in a newly deregulated and highly competitive industry where rivals include large domestic business groups, foreign multinationals, and state-owned incumbents. Honda (A) HBSP Japan, United Describes the history of Honda Motor # 9-384-049 States; motorcycles; Company from its beginning through 9p large; 1948-1974 its entry into and subsequent dominance of the U.S. market. The history is explained primarily in terms Honda (B) of strategic factors and quoted from two sources: an earlier case and Boston Consulting Group report on the motorcycle industry. Should be used with Honda (B). CMR Forum: The California Perhaps no other article published in "Honda Effect" Management the management literature has had Revisited Review the impact of Richard Pascale's piece # CMR065 on the "Honda Effect" that was 41p published in the Spring 1984 issue of the California Management Review. This now classic article has stimulated considerable debate over the role and value of corporate strategy in business decision making--which is the subject of this forum. This special collection of essays includes an abridged version of Pascale's original article ("Perspectives on Strategy: The Real Story Behind Honda's Success"), an exchange of correspondence between Henry Mintzberg and Michael Goold, and new essays by Richard Rumlet, Michael Goold, and Richard Pascale, who revisits his own original article as well as this whole debate. Chapter 16 Sony Europa (A), IMD Europe, Japan; In 1994, Sony's European operation (B) and (C) # IMD057 – consumer moved to centralize its organization 31p, IMD058 – electronics; 10 to improve operating efficiencies, 5p and IMD059 billion Deutschmarks implement pan-European marketing, – 2p revenues; 1994 and develop a unified position vis-a- vis Sony headquarters in Japan. In this transition, the powerful local country organizations lost much of their autonomy in key decision areas. Informally referred to as Big Bang, the radical organizational change ran into trouble almost from the beginning. This case provides the background to the organizational change, including important market forces that are reshaping the consumer electronics market in Europe. Teaching Purpose: To illustrate the management challenges involved in moving from a decentralized country management structure to a pan-regional centralized organization as well as to raise issues about the management of radical change. To discuss global marketing, marketing implementation, and change management. A 1999 EFMD award winner. General Motors HBSP Global; automobiles; This four-part case series details the Corporation (A) # 9-299-006 Fortune 500; $164 financial policies and practices at The Overview, (B) and 3p billion revenues; General Motors Corp. (GM) from 1990 (C) # 9-299-007 647,000 employees; to 1996. This case provides a brief 8p 1990-1996 introduction to GM. Teaching #9-299-008 Purpose: Enables students to 9p examine how different financial policies and practices in a firm complement one another and how these policies are coordinated by firms. The General Motors HBSP Global; automobiles; This four-part case series details the Corp. (D): 1993-96 # 9-299-009 Fortune 500; $164 financial policies and practices at The 17p billion revenues; General Motors Corp. (GM) from 1990 647,000 employees; to 1996. This case describes the set 1993-1996 of financial decisions taken by the firm as its business recovered, and focuses on an immediate decision faced by GM's treasurer in 1996. He must decide whether to recommend to the board whether to hold "excess" cash, disburse it to shareholders via a dividend increase, or repurchase shares. In addition, the repurchase alternative offers a number of tactical choices, including whether to engage in a put-writing program or an accelerated share repurchase. Teaching Purpose: Enables students to examine how different financial policies and practices in a firm complement one another and how these policies are coordinated by firms. Permits a discussion of the strategic decision about holding or disbursing cash, plus the tactical decision of whether to use various forms of financial engineering in conjunction with a repurchase program. Asea Brown Boveri HBSP Sweden; electrical The merger of Asea AB and BBC (Condensed) # 9-199-027 equipment; large; Brown Boveri required a restructuring 6p $17.8 billion of operations and a change in revenues; 150,000 organizational cultures. Competitive employees; 1987 success also necessitated the benefits of scale while remaining "local" for political and customer-responsiveness reasons. The case describes these competitive pressures, which resulted in the decision to adopt a matrix organization. Teaching Purpose: To be used with Asea Brown Boveri: The ABACUS System to discuss the efforts to restructure while retaining the benefits of being "local," "small," and decentralized. ABB in the new IMD Global; energy, Takes an inside look at ABB's Millenium: New # IMD128 electrical power; $25 unprecedented 1997 to 2000 Leadership, New 11p billion revenues; transformation under Gvran Lindahl, Strategy, New 1997-2000 the second CEO of this electrical Organization engineering powerhouse, who succeeded Percy Barnevik during late 1996. After a highly successful first decade of existence under Barnevik (1988 to 1996), ABB found itself in the midst of a crisis by the end of 1997, after the combined effects of global deregulation, radical technological innovations, and an unpredictable but sweeping financial crisis across most emerging markets. ABB's response was to shift its strategic focus radically to favor knowledge- and service-based offerings across all of its businesses. The company's implementation of such strategy took place in two bold steps. The first one comprised a major global restructuring of ABB, as a result of which the company divested from mature manufacturing businesses such as power generation and transportation and became a global leader in areas such as industrial process automation and electrical distribution solutions. The second step was to transform ABB into a fast-growing high-technology company, moving from old to new economy Internet-based services and solutions. The case contains two mini-cases in ABB distribution solutions and ABB's global information systems group--two instances that show first-hand the pains of rapidly transforming a vast, manufacturing concern into an Internet- and solutions-based powerhouse as the new millennium unfolds. Chapter 17 Real Madrid Club de HBSP Spain; sports; $233 In June 2004, Florentino Perez, a Futbol # 9-504-063 million eurodollars; well-known Spanish businessman, 24p 850 employees; was elected president of Real Madrid, 2004 one of the world's top soccer clubs. In his campaign, Perez had promised to turn around the club's finances, bring in world-class talent, and extend the club's brand around the world through multiple channels. As re-election looms four years later, his management team reflects on initiatives to date and challenges ahead as described in the case. Also describes the soccer industry and the trends transforming it. Teaching Purpose: To evaluate Real Madrid's brand management strategy and to consider the risks and opportunities involved. Also, to recommend a strategy for the future expansion of the brand worldwide. Mastercard HBSP Global; financial MasterCard must decide whether to International: # 9-500-036 services; $651 renew the sponsorship of the World World 21p million revenues; Cup and other soccer events in light Championship 3,000 employees; of a 100% increase in the Soccer Sponsorship 1998-1999 sponsorship fee and a strategic realignment by MasterCard. Teaching Purpose: 1) Demonstrates typical sponsorship deal. 2) Shows how sponsorship can be evaluated. 3) Examines place of sponsorship in marketing mix. A rewritten version of an earlier case. Canon Inc.: HBSP Multinational; Describes Canon's worldwide strategy Worldwide Copier # 9-384-151 copiers; 1983 in the copier business. Designed to Strategy 21p be used to explore strategy formulation in a worldwide industry, and the principles of international competition. Desktop Printer HBSP United States; The desktop printer industry in 1990 Industry in 1990 # 9-390-173 desktop computer is characterized by significant 24p printers; 1990 uncertainty about new technologies and about the types of features customers may demand in the next decade. The case looks at the positions of Hewlett-Packard, Canon, Kodak, Xerox, and IBM enabling students to consider different approaches competing firms may take to manage strategic risks in a rapidly changing, high technology industry. Strategy Planning HBSP Toronto, Canada; Describes the firm's strategic at Sun Life # 9-301-084 financial services; planning activities and focuses on the 21p $1.3 billion challenge of developing processes revenues; 1,300 that enable the firm to improve the employees; 2000 core business as well as processes that foster the creation of promising new business opportunities. Teaching Purpose: To teach students about how to design different types of strategy formulation to accomplish different objectives. Financial Planning Lynch at Hanson Plc 3rd Edition Lecturer’s Guide Chapter 18 The HP-Cisco HBSP United States, In 2002, Hewlett-Packard and Cisco Alliance (A) # 9-403-120 Global; information Systems strive to develop their long- 21p technology; $101 standing partnership into a strategic billion revenues; alliance with increasing impact. 165,000 employees; Critical components of successful 2002 alliance implementation emerge from the analysis. Specifically, the case illuminates the link between alliance strategy, formal design of alliance structure and processes, and informal management of interpersonal dynamics where trust, perceptions, and emotions can both create and overcome formidable obstacles to effective interfirm relationships. Teaching Purpose: Strategy implementation in alliances, power and influence in interorganizational relations, interplay of formal organizational design, and informal interpersonal dynamics. The HP-Cisco HBSP United States, Supplements the (A) case. Alliance (B) # 9-404-040 Global; information 3p technology; $101 billion revenues; 165,000 employees; 2002 AOL, Cisco, Yahoo!: HBSP Silicon Valley, CA, Since the spring of 2001, AOL, Cisco, Building the # 9-302-088 Washington, D.C.; and Yahoo! had collaborated on ways Internet Commons 23p nonprofit; 15 to improve the effectiveness of using employees; 2002 the Internet to benefit society. Each company considered itself strongly committed to philanthropy, making significant charitable donations, and fostering a variety of active community outreach programs. Yet, executives at the three firms recognized the potentially larger impact that a joint effort could have on the greater public good. Overcoming a multitude of barriers to such intercompany cooperation, the firms decided to create Network for Good, a charity portal that individuals and nonprofit agencies in the e- philanthropy space could use to facilitate donations, volunteering, and citizen advocacy. Teaching Purpose: Demonstrates corporate leadership in the social sector, analyzes challenges in developing a multicompany collaboration for social good. Cisco China HBSP China; networking; Designed to show how Cisco has # 9-302-069 $1 billion revenues; taken its U.S.-based infrastructure 17p 700 employees; and applied it to China. It is stunning 2001 in its impact as one notes how so much of what is being done in the United States in terms of the intranet has been transferred to China. Teaching Purpose: To sensitize the class to global information technology transfer issues. The timing that Cisco has used to transfer its intranet technology to China and customize it is stunning. Cisco Systems: HBSP Silicon Valley, CA; Cisco has invested in building a Building Leading # 9-301-133 high technology; leading IT, Internet-based Internet 26p Fortune 500; $25 infrastructure. This case describes Capabilities billion revenues; Cisco's latest efforts to broaden 35,000 employees; Internet capabilities in the company 2001 from 30% penetration to 60%. The Internet capabilities strategy is intended to sustain Cisco's double- digit revenue growth through the decade. Teaching Purpose: To further understanding about Internet capabilities and management leadership in exploiting IT benefits. Cisco Systems: Are HBSP Sunnyvale, CA; An Internet service provider, INS, in You Ready (A) and # 9-901-002 Internet equipment; which Cisco Systems has a minority (B) 28p Fortune 500; $12 ownership stake, receives an offer of billion revenues; $3.1 billion from Cisco's rival Lucent. HBSP 20,000 employees; Cisco's management has to decide # 9-901-003 1999 whether to act on a request from INS management that Cisco make a counteroffer. The decision requires that Cisco's highly successful strategy be revisited. Teaching Purpose: To illustrate: 1) the importance of the preservation of focus in strategic management, and 2) ways of coping with the rapid development of "destructive technologies." Cisco Systems, Richard Ivey United States; Cisco is the world's largest Inc.: Managing School of electronics; large; manufacturer and distributor of Corporate Growth Business 1997 routers and switches. In order to Using an Intranet # 97E018 achieve this position, it has adopted 13p an aggressive growth strategy, acquiring companies, their employees, and new employees at a rate of 250 to 300 employees per month. The Cisco Employee Connection (CEC), a corporate intranet, is the primary means by which new employees are absorbed and acculturated. The CEC is also the principal means of interaction for the multi-functional work team approach Cisco employs. This case critically assesses this approach to scaling an organization and the extent to which it can be maintained and transferred. Chapter 19 Rabobank Group: HBSP Global; agribusiness, The largest global agribusiness bank Leadership Role in # 9-303-421 food, banking; $8.4 has lost its triple A rating and is Global Agribusiness 24p billion eurodollars; rethinking its global strategy as the 2002 leading global food and agribusiness bank. How does it position itself in the vertical value-added global food system? Teaching Purpose: The role of finance and risk management in global agribusiness. BRL Hardy: HBSP Australia/United Focuses on two new product launch Globalizing an # 9-300-018 Kingdom; wine; decisions facing Christopher Carson, Australian Wine 20p $250 million managing director of BRL Hardy, Company revenues; 1992- Europe. Responsible for the European 1998 operations of a major Australian wine company, Carson has begun to globalize his strategy beyond selling the parent company's wines. After a difficult joint venture with a Chilean wine source, he is proposing to launch an Italian line of wines. His local team has also developed a new Australian brand that would compete directly with a parent company's global brand rollout. Teaching Purpose: Focuses on global strategy choices being made through headquarter-subsidiary negotiations that define the roles of country managers and global product managers. Marks & Spencer: Stanford Global, United The venerable British retailer Marks & The De- University# Kingdom; retailing; Spencer suffered a series of setbacks Globalisation of SM87 8 billion pounds in the late 1990s. The company's Marks & Spencer in 11p revenues; 70,000 performance, which had been solid 2001: An Update employees; 1999- for decades, quickly deteriorated, 2001 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. International Lynch Strategy in the 3rd Edition Paper and Pulp Lecturer’s Industry Guide What Strategy Now Lynch for SCA? 3rd Edition Lecturer’s Guide Chapter 20 eBay Inc HBSP San Jose, CA; e- eBay was the world's largest and # 9-700-007 commerce; $47.3 most popular person-to-person 32p million revenues; trading community on the Internet. 300 employees; In early 1999, the company was 1999 doing very well and seemed to have solved many of its early problems. However, on March 30, 1999, Amazon.com announced that it was entering the online auction arena. This powerful firm could prove to be eBay's strongest competitor to date. Teaching Purpose: What should eBay do in light of the entry of its most recent and serious competitor to date. Yahoo: Business on HBSP United States; In the wake of major competitive Internet Time # 9-700-013 Internet portals; moves, CEO Tim Koogle and his 27p $200 million senior team at Yahoo!, an Internet revenues; 900 portal, must decide whether and how employees; 1999 to adjust their strategy. Following deals between AOL and Netscape, Excite and @Home, Infoseek and Disney, and Snap and NBS, Yahoo! faces the prospect of being the last portal without a significant partner. Students must grapple with the benefits and costs of integration in the rapidly changing world of the Internet. Teaching Purpose: Examines how a company organizes itself to formulate strategy in the midst of rapid environmental change. Reveals how external turbulence puts new pressures on a firm's strategy, its organizational structure, and its managers. Considers how one successful company has structured itself to cope with severe environmental uncertainty. Special emphasis is given to the interactions among Yahoo!'s functions and the effects of those interactions on firm flexibility. Also permits students to examine the structural attractiveness of the portal industry and the strength of Yahoo!'s position in the industry. A Brief History of HBSP global; software; Recounts the history of the evolution the Browser Wars # 9-703-517 1994-2003 of browser market shares from 1994 9p forward. Netscape's Navigator establishes a huge early lead, but is then displaced by an equally dominant offering from Microsoft. Highlights the role of Microsoft's dominance in desktop operating systems and Microsoft's bundling of the browser with the operating system. Teaching Purpose: Supplements a fairly analytical exercise on bundling that was taught in a game theory course. Emphasizes the role of bundling in Internet Explorer's ascendancy. However, it makes no explicit reference to that exercise or discussion, making it suitable for general use. Supports a discussion of how Navigator became so dominant in addition to a discussion of bundling. A brief summary of Microsoft's legal entanglements also stimulates a discussion of antitrust considerations. Double Dealmaking HBSP United States; Recounts two complex negotiations in in the Browser #9-800-050 computers/software; which Netscape and Microsoft Wars (A) and (B) 17p $300 million compete to win a browser contract revenues; 700 with AOL--then later with KPMG. After #9-800-051 employees; 1995- reviewing the web and browser 4p 1997 sectors, this case recounts AOL's dramatic negotiations with Netscape and with Microsoft over which firm's web browser would be used by the online service. A path-breaking deal was announced between AOL and Netscape to use Navigator as the "default" AOL browser, only to be undermined the next day by an AOL- Microsoft deal that designated Microsoft Explorer as the "preferred" AOL browser. The deal also put an AOL icon, the Windows desktop, the "world's most valuable cyber-real estate." Describes the first stages of a see-saw negotiation the following year in which Netscape and Microsoft were again competing, but this time for a major deal with KPMG. Concludes as KPMG has awarded the contract to Netscape with Microsoft still scrambling to get the business. The Browser Wars HBSP United States; Analyzes the competition between – 1994-1998 #9-798-094 software; $500 Netscape and Microsoft in the market 20p million revenues; for Web browsers and related 2,300 employees; products. Despite its first mover 1994-1998 advantage, Netscape sees its market share fall once Microsoft becomes "hard-core" about the Internet. By the spring of 1998, the future of both companies is on the line. Amazon.com J&S, p674 Chapter 21 Bertelsmann AG HBSP Global; media and On July 28, 2002, Bertelsmann # 9-703-405 entertainment; $14 announced the firing of its CEO, 29p billion revenues; Thomas Middelhoff, in a move that 81,000 employees; surprised industry observers, 2002 analysts, and many employees. Bertelsmann, a privately held company headquartered in Germany, was one of the largest global media conglomerates, with businesses spanning book publishing, printing, music, and television. Between 1998 and 2002, Middelhoff had initiated a series of strategic initiatives aimed at fostering greater integration among its diverse business units and strengthening their competitive positions, articulated a series of guidelines that would reevaluate Bertelsmann's portfolio mix, and looked to prepare Bertelsmann for a transition to a planned initial public offering in 2005. This case describes these initiatives in detail and the decision of the supervisory board to effect a change in leadership. The new CEO, Gunter Thielen, had to decide whether to effect a fundamental shift in the company's corporate strategy or a more modest reinterpretation of the course charted by Middelhoff. Teaching Purpose: Provides an opportunity to examine 1) the corporate strategy of a media and entertainment conglomerate, 2) the challenges in managing strategic change within a large organization, and 3) the impact of corporate governance on corporate strategy. Includes color exhibits. Teradyne: HBSP Boston, MA; Three cases deal with the Managing # 9-397-112 semiconductor test introduction of a new product to Disruptive Change 9p equipment; $1 billion Teradyne's line of semiconductor test revenues; 1996- equipment. Teradyne: Managing 1997 Strategic Change provides historic and administrative background for the other two cases. Teradyne: The Aurora Project deals with the problems facing the head of a start- up division responsible for developing and bringing to market a new product based on technology deemed very important to the future but unattractive to present customers and therefore the operating divisions. This case deals with the same set of problems from the perspective of corporate management--in particular why the skunk works approach was necessary and what new problems this approach creates even if the project is successful. Teaching Purpose: To explore general management problems--in this case new product development from a strategic perspective--at corporate and middle levels of general management. Teradyne: HBSP Boston, MA; Three cases deal with the Managing # 9-397-113 semiconductor test introduction of a new product to Disruptive Change 7p equipment; $1 billion Teradyne's line of semiconductor test revenues; 1996- equipment. This case provides 1997 historic and administrative background for the other two cases. Teradyne: The Aurora Project deals with the problems facing the head of a start-up division responsible for developing and bringing to market a new product based on technology deemed very important to the future but unattractive to present customers and therefore the operating divisions. Teradyne: Managing Disruptive Change deals with the same set of problems from the perspective of corporate management--in particular why the skunk works approach was necessary and what new problems this approach creates even if the project is successful. Teaching Purpose: To explore general management problems--in this case new product development from a strategic perspective--at corporate and middle levels of general management. Teradyne: The HBSP As above As above Aurora Project # 9-397-114 KPMG (A) J&S, p1012 Chapter 22 Transforming Stanford United States; In 2003, Norman Walker, head of HR Human Resources University pharmaceuticals; at Novartis, received approval from at Novartis: The # HR22 2003 the management board to implement Human Resources 21p a global human resources information Information System system (HRIS). Although Walker had (HRIS) made substantial progress in transforming the HR function, much of their efforts remained transactional and not strategic. If successful, the implementation of HRIS would change the role and responsibilities of not only the HR organization but how it added value to the company. Since its formation in 1996, Dan Vasella, the CEO, had transformed the organization from one with slow- moving functional silos into a high- performance company. His goal was to make Novartis a "premier talent machine by 2005." The new global HRIS was a key element in this transformation. It was clear to Walker that this was a major organizational change effort, not simply an IT implementation. Describes the changes Walker had already made and poses a set of challenges that will need to be addressed to implement the new HRIS project. Teaching Purpose: To raise issues of HR strategy and implementation, organizational change, and the role of HR in global firms. To frame a narrow IT implementation in terms of the larger strategic issues raised when implementing large-scale system changes. eBusiness@Novartis HBSP Basel, Switzerland; Describes a leading pharmaceutical # 9-601-057 pharmaceuticals; company's approach to developing e- 21p $19 billion revenues; business capabilities throughout the 36,000 employees; organization. Highlights the 2001 company's decision to approach e- business on a more centralized manner. Novartis Pharma: HBSP Switzerland; In June 2000, Novartis reorganized The Business Unit # 9-101-030 pharmaceuticals; its pharmaceutical business to form Model 21p $21 billion revenues; global business units in oncology, 70,000 employees; transplantation, ophthalmology, and 2000 mature products. The remaining products (primary care products) were managed as before within global functions (R&D), marketing, etc.) 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. Teaching Purpose: To explore the reasons for Novartis's reorganizing into the new matrix structure, the tensions and challenges the new structure creates, and the culture and accountability needed to make the new structure work. Hans Fritz at HBSP Thailand; Dr. Hans Fritz is 37 years old when Novartis Thailand # 9-399-123 pharmaceuticals; he arrives in Bangkok on March 1, (A) The First 17p large; $21.5 billion 1998 to assume his position as Month, (B) and (C) revenues; 87,000 general manager of Novartis And (D) # 9-399-124 employees; 1998- Thailand. Novartis is the world's 3p 1999 largest pharmaceutical company. He had lobbied to transition from a staff # 9-301-054 position to this line management assignment. He encounters an # 9-301-055 organization in chaos, a demoralized staff, and a market in crisis. The case describes his first month in this new position. His most important task at this stage is to set priorities when everything needs to be done at once. He has to decide whom to trust on his team, and what to do in the short, medium, and long term. Teaching Purpose: Describes the general manager's dilemma. Students are asked to evaluate the situation he encounters and advise him on how to proceed.
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