Consumers are now generating, rather than merely consuming advertising. The consequences for brands, marketers, and senior executives are significant. Advertising was traditionally generated by, or on behalf of, the firm and broadcast to relatively passive consumers. With the rise of digital media, the Internet, and inexpensive media software, considerable creative and distributive power has been handed to the consumer. Liberated from the exclusive control of the firm, ads now express a myriad of different voices. Some ads are subversive, others laudatory, but the fact remains that the firm is no longer in exclusive control of the message. Using a number of high profile cases, this article explores the motivations that drive consumers to create their own ads and develops a typology of the ads created. It develops a model for the various strategic stances that a firm can adopt in response to this phenomenon so that managers can anticipate and thus deal more effectively with some of the extreme consequences of liberated advertising.
In a platform-mediated network, users rely on a common platform (provided by one or more intermediaries) that encompasses infrastructure and rules required by users to transact with each other. A fundamental design decision for firms that aspire to develop platform-mediated networks is whether to preserve proprietary control or share their platform with rivals. A proprietary platform has a single provider that solely controls its technology (for example, Federal Express, Apple Macintosh, or Google). With a shared platform such as Visa, DVD, or Linux, multiple firms collaborate in developing the platform's technology and then compete in offering users different but compatible versions of the platform. This article examines factors that favor proprietary versus shared models when designing platforms and then explains how management challenges differ for proprietary and shared platform providers when mobilizing
Whether selling products or services, making strategic decisions, delivering solutions, or driving innovation, most work of any substance today is accomplished by teams. However, since the early 1990s, teams have evolved from more stable groups-where members were co-located, dedicated to a common mission, and directed by a single leader-to more matrixed entities with colleagues located around the world, juggling time between several projects, and accountable to multiple leaders. As teams have become more fluid, substantial challenges have been posed to traditional advice on team formation, leadership, roles, and process. This article describes how leaders at all levels within an organization can obtain innovation and performance benefits by shifting focus from forming teams to developing networks at key points of execution.
This article examines how IKEA handles a complex network of business relationships with its suppliers and partners. This industrial network is fundamental to IKEA's strategy in terms of efficiency and development goals. From the analysis of IKEA's experiences in dealing with its industrial network, the article discusses a set of structural components and dynamic interactions of a network strategy. The three structural components are: defining the content of relationships; forming the network structure; and evaluating goal matching with the network. The two dynamic interactions are: interacting via inter-organizational routines for efficiency goals; and interacting via joint projects for development goals. Network strategies cannot be used as shortcuts to compensate for severe weaknesses, but instead can only be pursued by firms that possess adequate competences, external organizational interfaces, and network-oriented cultures.
As the outsourcing market has matured over the past 20 years, clients and suppliers have begun to examine how these complex relationships can not only achieve cost savings, but also enable innovation in today's dynamic business environment. This article presents four case studies of large-scale information technology outsourcing relationships that take equal measure of the clients and suppliers. It develops a model of innovation within outsourcing relationships consisting of nine key enablers for achieving innovation. The article then links the key enablers to three levels of innovation that were identified within the case studies. The model provides insight into how executives within outsourcing relationships can move from a cost management focus to a focus on innovation and (ultimately) business value for the client and supplier.
This article highlights several important dimensions of planning for exit from strategic alliances and also offers several examples of the disastrous consequences of inadequate exit-planning. While many companies fall into the trap of having no exit plan, other companies take too simple a planning approach, wondering if the exit will be unconditionally easy or hard. A more effective approach involves questions such as "When should the exit be easy and when should it be hard? And for which partner?" The article develops a framework that stipulates contingency-specific exit provisions for each partner in the alliance-specifically, situations in which exit should be symmetric and easy for both partners, symmetric and hard for both partners, or asymmetric, hard for one partner and easy for the other. Furthermore, many alliances today reflect complex deals that cover several distinct developmental stages, each of which contains a distinct set of contingencies. Such alliances require a dynamic application of the exit framework, wherein each stage of the alliance development entails a different set of exit provisions, and exit from one stage would signify the beginning of the next.
Lauren McDonald, a recently promoted manager at the public accounting firm Ernst & Young in London, Ontario, has an appointment with one of her senior staff accountants. McDonald had met with the staff accountant two months earlier as part of the staff accountant's mid-year performance review. The meeting had also included an informal discussion as to whether the staff accountant was on track for a promotion to manager, which would be decided later in the year. The staff accountant had asked McDonald for another meeting to discuss the responsibilities of becoming a manager in more detail. McDonald had faced many challenges in her three months as a manager and had not had time to reflect on her own performance. However, she wanted to share her experiences with the staff accountant to better prepare her for the challenges she might face in the coming year.
An entrepreneur is looking for business opportunities since she immigrated to London, Ontario. She has come across a franchising opportunity with Williams Coffee Pub (WCP). The promotional material for WCP indicates that annual sales for a typical restaurant can be up to $1,700,000 with a profit margin of 17.5 per cent. This business opportunity seems very attractive, however, she must do some additional investigation. The purpose of this case is for students to build a spreadsheet-based cash flow model and to use the model to perform basic sensitivity or What if? analysis.
What should a manager with a multinational corporation do when his employee confides that he may have accidentally killed someone? The plant where they work is located in Vietnam; the employee, a native, is hesitant to face the charges given his concerns about the fairness of the local legal system. He is seeking both advice and help. The B case (UV1170) updates the situation and provides additional fodder for discussion.
This case updates the situation outlined in the A case (UVA-E-0323), providing information that helps students to both evaluate the decision made in the A case and determine what to do next.
This case describes the introduction of the Apple iPhone, including subsequent price reductions and market share goals. The case includes publicly available data on iPhone production costs, channel margins, and marketing costs. It concludes with the July 2008 introduction of the second generation 3G iPhone.
A pilot/manager in a large corporate aviation department must formulate a fueling plan for an upcoming four-leg trip. Considerations for the fueling plan include different fuel prices at each airport (fuel is much cheaper if bought at home) and ramp fees levied at destination airports if fuel purchases fail to meet specified minimums. Other considerations include aircraft weight limits for takeoffs and landings (with fuel being a large component of aircraft weight), fuel tank capacity, and a company policy specifying a minimum amount of fuel required at each landing.
This material presents students with an opportunity to have another shot at cementing their understanding of the general format of the three basic financial statements, some of the content of those statements, and a few of the basic principles undergirding those statements. The tasks presented in the material are relatively direct and manageable as homework within an hour's time.
At the W'Up Bottlery in Uttar Pradesh, India, Rajat Mehra, director of supply-chain management, mused over the W'Up plant's supply-chain performance over the peak summer period that had just ended. The W'Up Bottlery, which was a wholly owned subsidiary of Hindustan Coca-Cola Beverages Private Limited (HCCBPL), made Coca-Cola and other soft drinks for several regions within the Uttar Pradesh market. While inventories had gone down and fill rates had improved relative to the previous peak-sales season, Mehra was looking for ways to improve performance dramatically. Mehra had heard about the concept of vendor-managed inventory (VMI) that was gaining popularity in the West. Implementing VMI would involve moving away from the current situation in which independent distributors placed orders for replenishment to the W'Up plant, to one in which distributors would instead report their inventory levels directly to the W'Up supply-chain management group. Managers in this group would then decide how much stock to send out to each distributor. Mehra and his team wondered how this idea might be applied to HCCBPL's highly fragmented supply chain, covering regions where IT infrastructure was sparse or non-existent. See also the B case (UVA-OM-1352
After spending a day in a meeting room in August 2005, pondering how to improve supply-chain performance, Rajat Mehra's team hit upon an idea that might enable dramatic reduction in the cost of stock-outs and excess inventory, through implementation of vendor-managed-inventory (VMI). This idea involved moving away from the current situation in which independent distributors placed orders for replenishment to the W'Up plant, which in turn shipped the items ordered. In the proposed system, distributors would instead report their inventory levels directly to the W'Up supply-chain management group. Managers in this group would then decide how much stock to send out to each distributor. This plan mirrored the concept of vendor-managed inventory (VMI) that was gaining popularity in the West. A novel idea for implementation allowed the company to circumvent the scarcity of IT infrastructure. See also the A case (UV1285).
Why do managers become corrupt? Does corruption ever pay? When do friendly relations cross into bribery? How can CEOs manage and prevent outbreaks of corruption? These and other questions are raised by three short case studies of corruption in Germany: at the global engineering firm Siemens, the automaker VW, and the chemical giant BASF. While German law not only permitted overseas bribery but even made it tax deductible until 1999, it was not welcomed in some nations where Siemens did business such as the United States-or in Germany after 2000-but old practices continued. Cooperative management-labor relations, often seen as key to the post-World War II German industrial powerhouse, went sour at VW, as a top manager secured key concessions by paying for union leaders' lavish foreign travel and visits to prostitutes. After vitamin prices sagged in the late 1980s, BASF and the Swiss chemical firm Hoffmann-La Roche plotted a global cartel that lasted a decade and raised the prices of many vitamins 50 percent or more. In the end, even after record criminal fines and jail time for some executives, some observers argued, such practices were likely to recur.
Ferran Adrià , chef at elBulli, the highest-ranked restaurant in the world for two consecutive years, faces two related decisions. First, Adrià and his team must continue to develop new and different dishes for the ground-breaking cuisine at elBulli to guarantee a continuous stream of innovation, the cornerstone of the restaurant's success. In addition, they are also faced with the challenge of growing the business, exploring whether the core concepts from elBulli - this "taste of innovation" - can be applied to domains ranging from consulting to fast food. The case walks readers through an evening at elBulli, by using the rave reviews of former patrons to capture the full experience, from the long trip required to get to the restaurant, to the tour, to descriptions of the meal itself.
The Londolozi game viewing reserve in South Africa became a defining icon of ecotourism during the 1990s and early 2000s--that is, a tourist business promoting ecological land management and, at the same time, local economic development. The reserve was in a region in the northeastern part of the country, not far from Mozambique, that sorely called out for progress in both these dimensions. The Sabi Sand Game reserve (within which Londolozi was located) was initially created by the government to provide hunters with an area in which to hunt wildlife. The government retained a portion of the reserve as the Kruger National Park, which allowed visitors to view wildlife, but banned hunting, in an effort to boost wildlife populations. The KNP was initially fenced off from the Sabi Sands Game reserve to prevent hunters from moving into the wildlife reserve. The fence, however, also prevented traditional east-west migration of animals across the region. Through the 1980s and 1990s, the farms within the Sabi Sand Game reserve converted their functions from hunting to wildlife viewing, and the fence was taken down. The new challenge for the farms while transforming into wildlife viewing became land management and local economic development.