Scoping the situation at the Mega Oil Corporation, a major management-consulting firm, had been the easy part. The firm is seriously behind its best competitors and risks falling further behind unless changes are made to reorganize its worldwide staff functions. Now the more difficult task is identifying and prioritizing the actions to take.
The product planning manager for BMW Group Canada (BMW) wondered how to revive the once-promising BMW Individual program. Despite a strong start when the BMW Individual Collection (IC) was launched in 2002, and significant growth in total BMW sales over the past three years, IC sales had declined substantially. At the corporate level, no specific measures had been taken to ensure a constant focus on the Individual program. At the customer level, BMW retailers were putting forth little effort, likely because they had no additional incentive to push a program that appealed only to a very small portion of their customer base. The product planning manager wondered how he could revive the BMW Individual program in Canada and give it the attention it deserved.
In 2007, the marketing director for Cineplex Entertainment is trying to decide whether or not to proceed with a loyalty program that would provide incentives for customers to see more movies and events, and spend more on concessions. An important by-product would be the collection of detailed customer buying data. She has crafted four possible combinations of rewards and received proposals from three suppliers with experience in managing customer data banks. She must decide the structure and richness of the program, the supplier, the likely response rate to determine financial feasibility, and whether to launch regionally or nationally.
Global financial markets had changed dramatically in the decade following the ING (A) case, product # 9A99M022. This (B) case points to the nature of these changes, creating an opportunity for students to discuss them. Meanwhile, ING had also altered its global strategy, eliminating its attempts to create a global investment bank, and focusing its activities on specific financial sectors, each of which reported directly to head office. This new structure enabled ING head office to maintain closer control over its numerous local institutions. Students can analyze alternative potential strategies for ING in the context of the major financial changes. The (B) case presents summaries of: the 2007-08 global financial crisis; the attempts, like Basel II, to establish global reserve requirements; the economic prospects of the European Union and emerging markets; and ING Direct's success in e-banking.
Shortly after the acquisition of Corus in 2007, Tata Steel Limited entered the international markets with a convertible bond offering (CARS) that had distinct features. The offering of US$875 million was the first of its kind from India. The successful issuance reflected investor confidence in the country and the company. This case covers a full analysis of the CARS with a scope that spans valuation, structuring of the financing instrument to suit the issuer's strategic imperatives and investment analysis.
This interactive spreadsheet accompanies the ProfitLogic case (#802-110) to enable analysis of the cash flow implications of three business models that the company is considering. Students are able to change key assumptions and see the impact on cash flow.
PCH International started out as a sourcing agent of low-priced electronic components from Taiwan and China to the Western world in the mid 1990s, it had evolved to become a provider of comprehensive supply chain solutions to global technology companies by 2007. PCH was designed to address the needs of a complex global technology supply chain landscape. The first section of the case provides an overview of the global technology supply chain in the 2000s; the second section describes the physical, information and capital "flows" in the technology supply chain and the third section discusses how PCH had designed solutions to address the challenges in the three "flows." Customers examples included in the case to illustrate the various supply chain principles.
The number of international tourist visits will more than double in the next dozen years. As demand for access to hot spots outpaces capacity, some companies will profit by creating destinations. And all businesses will need to adopt strategies for claiming - or avoiding - prime turf.
Managers are less receptive to bad news and contrary viewpoints than they think they are, and they often send subtle signals that discourage frank input. The solution: 360-degree surveys of peers and subordinates that generate feedback specific to individual managers.
Change initiatives thrive in companies where the agents of reform are promoted and thereby retained, according to research from a change-leadership consultancy. Investors also notice and reward these businesses.
Coca-Cola developed a distribution model for emerging markets by learning how its Peruvian bottler succeeded in the mom-and-pop channel. The tenets: Turn wholesalers into distributors, use IT to link and control distributors, and employ simple technology. PepsiCo has taken a page from the same playbook; other multinationals can, too.
The managing director and CEO of PIMCO fondly remembers a boss who helped him find solace in failure. Bolstering your high performers when they fall short, he says, is the key to maximizing their potential.
When high-tech businesses lose a valued inventor, they often gain access to her new employer's intellectual capital. To take full advantage of the networking possibilities, technology companies should consider adopting alumni programs like those at consulting and law firms.
The founder of Wikipedia analyzes why wikis are becoming popular tools for sharing knowledge in the workplace. He encourages managers to provide institutional support for these highly practical forums but to be judicious about direct participation.
Advertising on the internet increases sales in brick-and-mortar stores even more than it does online. Individually, search ads and display ads have the power to drive purchases, but they get the best results when used together in a single campaign.
Amp Up, a wildly popular electronic-music game, is the brainchild of KMS's cherished programmers, who now spend their time trying to keep customers dazzled with upgrades. But a couple of start-ups have ripped off the idea using their own code - which is open source. Now they're demanding that KMS float with the rising tide and join the open-source community. How could the company make money without its IP? And why should it try? Four experts comment on this fictional case study in R0804A and R0804Z. Jonathan Schwartz, the CEO of Sun Microsystems, says that if KMS is confident it knows what its customers will want next - and if it's content with a small corner of the market - it should stay proprietary. But it will pay a reputational price. Eric Levin, the executive vice president of Techno Source, suggests that KMS take a middle path: license its software to third-party companies and add features to promote community building. This approach could fund itself through royalties or fees and would allow KMS to approve or veto third-party products. Gary P. Pisano, of Harvard Business School, points out that an open-source strategy could increase Amp Up's rate of improvement, enhance users' satisfaction with the game, and reduce KMS's development costs. But if the company stops competing on the basis of its code, it had better be sure of the strength of its downstream capabilities. Michael J. Bevilacqua, of the law firm WilmerHale, warns that KMS risks greater liability for intellectual-property infringement if it joins the open-source community, where code carries no guarantee that it doesn't infringe on someone's IP rights and providers offer no indemnification.
Most people believe that creative genius is a predetermined personality trait reserved for only a gifted few. Tharp - an award-winning choreographer who has revolutionized dance in our time - firmly rejects that notion. "Everyone can be creative," she says, "but you have to prepare for it with routine." The winner of a MacArthur fellowship, a Tony award, and two Emmys, Tharp has been the artistic force behind her own dance company, Broadway shows, and TV productions, and has created choreography for movies (including Hair and Amadeus) and leading ballet companies around the world. In this conversation with senior editor Diane Coutu, Tharp shares her thoughts about what it takes to achieve creative breakthroughs: hardheaded practicality, discipline, and ruthlessness about the work. She is unsentimental in her advice to aspiring innovators who worry that they don't have the right stuff: Get over yourself. Get angry, throw a tantrum - just do whatever it takes to get moving, and stop wasting time. Creativity is the result of habit, hard work, and constantly pursuing new challenges. Don't get hung up on originality or on failure; if you never fail, you'll stagnate. Mentors may help guide you to your goals, but don't choose people who will hold your hand. Choose mentors who can teach you, and invent them if you have to. In her no-nonsense way, Tharp also talks about her commitment to being uncompromising in her work, even when it exacted a price (such as forgone vacations and personal relationships) or was otherwise painful (when it involved firing extraordinary people). "It's a terrible analogy, but when it comes to your work, you have a war to win," she says. "Men are going to die."
Even among internet companies, Google stands out as an enterprise designed with the explicit goal of succeeding at rapid, profuse innovation. Much of what the company does is rooted in its legendary IT infrastructure, but technology and strategy at Google are inseparable and mutually permeable - making it hard to say whether technology is the DNA of its strategy or the other way around. Whichever it is, Iyer and Davenport, of Babson College, believe Google may well be the internet-era heir to such companies as General Electric and IBM as an exemplar of management practice. Google has spent billions of dollars creating its internet-based operating platform and developing proprietary technology that allows the company to rapidly develop and roll out new services of its own or its partners' devising. As owner and operator of its innovation "ecosystem," Google can control the platform's evolution and claim a disproportionate percentage of the value created within it. Because every transaction is performed through the platform, the company has perfect, continuous awareness of, and access to, the by-product information and is the hub of all germinal revenue streams. In addition to technology explicitly designed and built for innovation, Google has a well-considered organizational and cultural strategy that helps the company attract the most talented people in the land - and keep them working hard. For instance, Google budgets innovation into job descriptions, eliminates friction from development processes, and cultivates a taste for failure and chaos. While some elements of Google's success as an innovator would be very hard and very costly to emulate, others can be profitably adopted by almost any business.
Many of the management tools and techniques used in service businesses were designed to tackle the challenges of product companies. Although they are valuable to service managers, they aren't sufficient for success. In this article, Harvard Business School's Frei explains why and urges companies to add some new ones to the mix. After years of extensive research and analysis, she offers an approach for crafting a profitable service business based on four critical elements: the design of the offering, the funding mechanism, employee management, and customer management. Just like a product that's going to market, a service needs to be compellingly designed, and management must field a workforce capable of producing it at an attractive price. In addition, however, service firms must manage their customers, who do not simply use the service but who can also be integral to its production: Because customers' involvement as producers can wreak havoc on costs, companies must also develop creative ways to fund their distinctive offerings, by providing a self-service alternative, for example, or by offsetting expenses with operational savings. A close look at successful service businesses-Walmart, Commerce Bank, the Cleveland Clinic, and others-reveals that effective integration of the four elements is key. There is no "right" way to combine them; the appropriate design of one depends upon the other three. If managers don't get all four pulling together, they risk pulling the enterprise apart. Incumbents can fend off attacks from highly focused upstarts by becoming multifocused-that is, by pursuing multiple niches through optimized service models rather than trying to cover the entire waterfront with one model. Shared services within a firm (functions such as HR and finance) can help, since they will enable it to generate economies of scale and experience across models.