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Copyright © 2002 |
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Table of Contents |
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| Teaching Notes: Crossan/Fry/Killing/White, Strategic Management, Sixth Edition PART ONE: Introduction to Strategic Management1 London Telecom Network London Telecom Network (LTN) is a fast-growing reseller of long distance telephone services. The company has survived where many have failed and is starting to generate significant profits. Now management is beginning to look at a range of initiatives to further build the business. The situation raises some interesting questions for Rob Freeman, the founder and owner of the business. Are the circumstances right for LTN to be pursuing new ideas? If so, which of several proposals deserves priority attention? 2 Asiasports: Hockey Night in Hong Kong Tom Barnes, executive director of Asiasports Ltd., is evaluating several options for growth for the sports management company. Asiasports principal sports properties are the South China Ice Hockey League and the World Ice Hockey 5's tournament, both based in Hong Kong. Among the alternatives available: Barnes could develop hockey in other countries in Southeast Asia; he could acquire new sports properties; or he could expand into in-line hockey promotion in Hong Kong.
PART TWO: Strategy—Environment3 Aikenhead’s Stephen Bebis, the CEO of Aikenhead’s, is opening the first warehouse home improvement centre in Toronto, which will radically alter the competitive landscape. He must assess how he should roll out the business given competitive pressures. 5 Cola Wars Continue: Coke vs. Pepsi in the 1990s The competition between Coke and Pepsi is a classic corporate battle that began in America at the turn of the century and has expanded into worldwide competitive warfare in the 1990s. This case examines the economics of the soft drink and bottling industries, and describes the history and internationalization of the cola wars. 5 Matching Dell After years of success with its vaunted "Direct Model" for computer manufacturing, marketing, and distribution, Dell Computer Corp. faces efforts by competitors to match its strategy. This case describes the evolution of the personal computer industry, Dell's strategy, and efforts by Compaq, IBM, Hewlett-Packard, and Gateway 2000 to capture the benefits of Dell's approach. 6 Wall Street Journal: Print vs. Interactive One of Dow Jones & Company's most respected brands, The Wall Street Journal, is threatened by Internet news providers, including their own Interactive Edition. The company is unsure whether the Interactive Edition will be a substitute or a complement to the Print Edition. The case focuses on changing industry boundaries, new technology, potential cannibalization, and a threat to the company's traditional business model. 11 Grand & Toy: Staples' Competitive Threat Pete Vanexan, President of Grand & Toy, is reviewing his company’s 2001 budget forecast in preparation for a meeting with the other senior managers. He wanted to focus on this opportunity to rethink Grand & Toy’s strategy and assess whether there was something they had missed in the previous strategy review. 12 Napster And MP3: Redefining The Music Industry The music industry has changed dramatically as a result of technological and business innovations that have transformed how music is acquired, and how value is created and distributed. Napster Inc. operates one of several Web sites that allow Internet users free access to MP3 music files. The case requires examination of the forces at play in the transformation of the music industry, the strategic alternatives for players in the industry and the legal context of the strategic alternatives. 13 iCraveTV.Com: A New-Media Upstart iCraveTV intends to retransmit network broadcast television signals to Internet-connected PCs, reaching a worldwide extension market. There are several obstacles to overcome while entering the fiercely competitive broadcasting industry and building competitive advantage. Several issues remain unresolved as they move towards the launch of iCraveTV. 14 WestJet Looks East The management team at WestJet is reviewing its growth plans in light of an anticipated merger of Air Canada and Canadian Airlines. The merger would result in a near monopoly of domestic air travel in Canada and a new set of opportunities and challenges for the handful of smaller airlines in the country. Under the circumstances, WestJet is considering whether it should shift from its focus of building on its success in Western Canada and expand into the East.
PART THREE: Strategy—Resources11 Harlequin Enterprises Limited Harlequin, the world’s largest and most successful publisher of romantic fiction, is ending a decade of solid growth and profitability. What should be the firm’s strategy to sustain this performance? 12 Starbucks Starbucks must decide how it should leverage its core competencies against various opportunities for growth. Some options include introducing its coffee in McDonalds, pursuing further expansion of its retail operations, and leveraging the brand into other product areas. 14 AB Sandvik Saws & Tools: The Ergo Strategy The Saws and Tools division of Sandvik has invested heavily in development for a world-class competency in ergonomic hand tool design and manufacture. The Ergo strategy appears to be working in Europe, but North American results are disappointing. Göran Gezelius, the division president, must decide how to proceed with the Ergo strategy. 14 The Loewen Group Service Corporation International, the world's largest funeral consolidator, has just made a formal takeover bid for the Loewen Group, its key competitor. The offer is approximately 50 per cent above the price at which Loewen Group stock traded 30 days ago. Should Loewen Group fight the takeover, or accept the offer? 15 Meubles Canadel: Looking Towards the Future In less than 20 years, Canadel, based in Louiseville, Quebec, had become Canada’s leading manufacturer of casual dining room furniture. Canadel's top management team, the three Deveault brothers, Guy, Michel, and Jean, were discussing recent results and future prospects for the firm. Some questions that surfaced included growth in existing and new markets, and competition from established industry giants and new upstarts. 17 Harley-Davidson Despite the substantial investments Harley Davidson had made in growth and development—including expanding sales and distribution outside the US, the new assembly plant in Kansas City, the acquisition of Buell Motorcycle Company and Eaglemark Financial Services, gross margins had widened, and net income had increased. Jeffrey Bleustein, president and CEO is considering to what extent changing market forces and competition will affect Harley Davidson in the future.
PART FOUR: Strategy—Organization17 Workbrain Corporation Workbrain Corporation is a young firm that offers Web-based time and attendance management systems solutions to companies with a "blue-collar" workforce. The newly hired vice-president of corporate development is responsible for the strategic growth of the firm both internally and externally. He is faced with the task of organizing and re-orienting the company, and needs to develop a plan for growth. 18 London Free Press: Strategic Change Phil McLeod had been appointed as the editor of The London Free Press (LFP) with a mandate to make changes. Despite its ability to remain profitable, McLeod thought that the paper was not living up to its potential. He wondered if it would be possible to stop the slow decline of the newspaper, or if its shrinkage was an inevitable consequence of broader trends in the information industry and Canadian society. In pursuing a new strategy McLeod must consider whether they need to rethink how they are organized. 19 First Bank Direct Top management at the Bank of Montreal is considering a proposal for a pilot launch of a direct banking venture (Direct banking bypasses the traditional branch network and deals directly with the customers by phone, fax personal computer and ABM). At issue are such matters as the nature, scope and independence of the venture and the pace of introduction.
PART FIVE: Strategy—Management Preferences23 Visioning at Xerox Canada Diane McGarry, Chairman, CEO and President of Xerox Canada has been meeting with her leadership team since eight o'clock in the morning to craft the organization's new vision statement. Three and a half hours into the meeting the team hits a roadblock. With 30 minutes left in the session, McGarry must decide whether and how to proceed. 24 Merck and Co. Inc. Roy Vagelos, head of Merck research labs was considering a request by Merck researchers to pursue a cure for river blindness, a disease plaguing millions in developing countries. Vagelos had to decide whether to invest in research for a drug that, even if successful, might never pay for itself. 25 The Body Shop International The case describes the start-up and rapid growth of a company whose founder holds strong, non-traditional beliefs about the role of the corporation and its responsibility to society. Are the strong values and beliefs imposed by Anita Roddick transferable to the United States and what will happen as Roddick steps back from the business?
PART SIX: Scope of the Firm23 Laidlaw: The Resignation of James R. Bullock After acquiring Greyhound U.S., Laidlaw, Inc. became the principal provider of intercity transit in North America. Nine months later, the board of Laidlaw asked its CEO to resign, citing performance problems and the need to divest certain operations to strengthen its balance sheet. Laidlaw's attempts to enter and to consolidate selected transportation service industries are examined. Something has gone terribly wrong and the search for the reasons pushes back to fundamental issues associated with growth by acquisition and corporate management. 27 Newell Company: The Rubbermaid Opportunity The Newell Company, a multi-billion dollar company dealing in hardware and home furnishings, office products and housewares, is contemplating a merger with Rubbermaid, a renowned manufacturer of plastic products. Newell has a remarkable record of success in growth by acquisition. Rubbermaid would mark a quantum step in this program, but equally, would pose a formidable challenge to Newell's capacity to integrate and strengthen acquisitions. 28 Labatt-Femsa: Amigos for Growth? This case explores a proposal by Labatt management to purchase a 22 per cent interest in a Mexican brewing business and to strike associated agreements for cooperative activities throughout North America. An evaluation of the deal requires an assessment of the venture prospects in the Mexican and U.S. beer markets, the potential for synergies in cooperative activities and ultimately the pricing and financing of an investment in a developing economy. 29 Trojan Technologies Inc: The China Opportunity Trojan Technologies sells water disinfecting equipment, and the senior market associate's job is to find new areas for growth. China is particularly intriguing because it has as much water as Canada, but 40 times the population, and its economic boom will further stress current water resources. Trojan has set growth hurdles of 30 per cent per year, and needs new markets to reach that objective. The task in new market development is to determine if Trojan should enter China, and if so, when, where and how.
PART SEVEN: Implementing Strategy27 Guru.com: Power For The Independent Professional Guru.com intends to transform the global labour market by creating the world's largest online marketplace for independent professionals (IPs)—freelancers, consultants, "knowledge workers" and "hired guns"—known as gurus. One month into the launch of its preview site, and preparing for its first major release scheduled in three months, management needs to define its priorities for implementation. 28 Westmills Carpets Limited (Condensed) This Calgary-based carpet manufacturer has been suffering serious losses. Its president, hired only one year earlier to correct the situation, has resigned. The major shareholder must consider anew the possibilities and means of recovery. 30 Provincial Papers Inc. Provincial Papers is a very troubled manufacturer of coated paper located in Thunder Bay, Ontario. The director and chairman of the board of Provincial Papers is being informally pressed to take on the CEO role. He is assessing the possibility of rescue in the face of depressed market prices, an over-supplied industry, departing personnel and money-losing operations. 30 Wellington Insurance Murray Wallace has just taken over as CEO and President of Wellington Insurance, a “company without hope” according to a recent consultant’s report. Wallace is faced with the challenge of effecting a complete revitalization at Wellington when the prospects for the industry and the company look bleak. 32 Silent Witness Enterprises Ltd. Silent Witness Enterprises Ltd. is one of Canada's fastest growing technology-based firms. The 14-year-old publicly traded company created a new market niche in the security surveillance industry by introducing novel applications of VCR-based technology. The company's founder forecasted growth that would take the company from annual revenues of $34 million in 1999 to $250 million by 2005. In achieving these goals, he must decide how to balance the need to sustain innovation and new product development, while at the same time, develop the capabilities needed to manage the firm's increasingly complex operations.
PART EIGHT: Strategic Analysis and Personal Action32 Sabena Belgian World Airlines (A) When Pierre Godfroid took over as Sabena’s CEO, Sabena was in crisis and facing imminent bankruptcy. On the strength of a restructuring plan developed by Godfroid and his staff, the Belgian government had agreed to bail out the airline in return for assurances that this would be the last time government assistance would be requested. Godfroid’s task was to transform the company into a viable private enterprise. The case provides the opportunity to evaluate the viability of Godfroid’s strategy. More importantly, it sets the stage for a sequence of follow-on cases dealing with the implementation of the strategy. 33 The GE Energy Management Initiative (A) Raj Bhatt, Business Development Manager for GE Canada, met with executives from GE Supply, a U.S.-based distribution arm of GE. The purpose of the meeting was to discuss new business opportunities in Energy Efficiency. Bhatt had identified some opportunities for business development in Canada, while GE Supply had just put together an energy-efficiency joint venture in the U.S. Bhatt was keen to work with GE Supply and retain a high level of operating autonomy. The challenge was to put together an appropriate organizational structure. 35 Procter & Gamble Canada (A): The Febreze Decision Lynn Mepham, marketing director for Procter & Gamble Canada, is evaluating the potential success of launching a new product, Febreze. Procter & Gamble had reorganized operations with the intent to promote reasonable risk-taking. While trying to adjust to the new culture, Mepham had to evaluate the risks associated with launching the product not knowing if the new marketing tools would generate the additional volumes needed, and the risk of losing the competitive edge if she postponed the launch.
PART NINE: Comprehensive35 Nestlé-Rowntree (A) Nestlé is the world’s largest food company. For some time it has been attempting, without success, to develop a link with Rowntree PLC, one of the world’s top chocolate companies. As a matter of policy, Nestlé does not make hostile takeovers, but now its hand seems to be forced by the sudden purchase of 14.9 per cent of Rowntree by Jacobs Suchard, one of Nestlé’s keenest rivals in the European chocolate business. Rowntree is preparing to fight all comers; the stakes are enormous.
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