The Biaxin case deals with competition in the mature market for antibiotics designed for use in the treatment of bacterial respiratory infections. The case tells the story of how Pfizer's Zithromax stole the share dominance of an established brand, Abbott's Biaxin. The case deals with the importance in pharma markets of consumer (patient) and channel (physician and insurance payer) insight as well as pharmacological efficacy data.
A major barrier for growth of large multi-business-unit firms is the inability to resource the critical initiatives to win-both in terms of dollars and people. The underpinning of the challenge involves the conflict between resourcing current cash-generating legacy businesses vs. new initiatives which may not, in the short term, produce positive financial results. Most companies do not have a formal portfolio process to deal with this fundamental issue. The Healthcare Solutions business unit of Danaka is a fictional business based on real business experiences. The principle challenge is the need for this business to free up $300 million of current, budgeted R&D projects to fund new, unfunded initiatives to meet its five-year growth objectives. Tools and processes are introduced via interactive spreadsheets that show how to make the tough portfolio decisions on a project-by-project basis.
California telecommunications company Wireworld is considering an acquisition of Nusantara Communications, a subsidiary of Indonesian conglomerate Bakrie & Brothers. Nusantara had invested $50 million in developing the advanced rural telephone system, which had the potential to provide much-needed telecommunications services to the mostly rural Indonesian population. If if were exported, the worldwide market for this product in the next five years was projected to be in the billions. Should Wireworld acquire this small company halfway around the world? Was it prepared to enter the Indonesian marketplace and beyond?
From the ephemeral to the measurable describes one way Corporate Social Responsibility has evolved. This article describes metrics and criteria that can help companies adopt best practices.
Most managers consider global expansion to be an imperative, and cross-border expansion commands wider support than cross-business expansion. This article not only counteracts such a bias, but provides a framework for valuing cross-border moves, called the ADDING Value Scorecard. There are two broad approaches to evaluating strategies: in terms of principles and in terms of analyzing their implications for value. While principles may help guide routine decisions, they should be seen in the context of important decisions as ways of complementing analysis of value rather than substituting for it. The ADDING Value Scorecard’s first component is Adding volume, and is followed by three levers for improving margins: Decreasing costs, Differentiating, and Improving industry attractiveness. The last two components, Normalizing risks and Generating knowledge (and other resources), are add-ons that reflect large discontinuities that can arise at national borders. As an example, the scorecard is applied to a cross-border move that clearly failed the ADDING Value test — the merger, recently dissolved, of Daimler-Benz and Chrysler.
On the watch of three generations of executives, conservative management and aggressive expansion guided Southwest Airline's legendary growth and success in an unattractive industry. Herb Kelleher, founder and industry revolutionary, introduced a business model that transformed the airline industry. After 20 years of steady growth, Kelleher passed the baton to James Parker and Colleen Barrett, the first man-and-woman team to run an airline. This team maintained Kelleher's direction and focus. However, the company soon experienced cracks in its façade in the wake of 9/11 terrorism, spiraling fuel prices, labor unrest, and credible new entrants like JetBlue. After reorganization, Southwest's former CFO, Gary Kelly, took the helm. His message was that the Southwest brand was under attack, and the company would have to change. Kelly had to overcome many challenges within this turbulent environment if Southwest was to continue the impressive track record of profitable growth that they had enjoyed for 35 years. Could Southwest preserve the Herb-centric culture and, more importantly, was this culture critical to their future success? Would Southwest lose its leadership position to copycats, or, worse, have to copy the copycats to meet customer expectations? What could Southwest do to maintain their cost advantage in light of spiraling fuel prices, costly labor concessions, intense competition, and aggressive industry consolidation? Finally, was it time to reinvent the 40-year-old legendary company?
The Icelandic government outsourced its testing and metrology functions in 1997, and in 2008 two firms competed for most of the vehicle emissions testing and inspection business in Iceland. Frumherji was one of the two. In a physically isolated island nation of just over 300,000 residents, word-of-mouth information about customer service could make or break a firm in the marketplace. Karl Sigurdssson, Senior Manager of Frumherji's Vehicle Department, was seeking ways to enhance customer service, while at the same time retaining the high standards and integrity that were essential to the company's continued contractual role with the Icelandic government. He hired a consultant to gather process data and make observations about customer service, and was considering how to use the information to identify problems and introduce solutions. The case highlights current challenges for Frumherji, including perceived customer service, demand variability, waiting times, recording errors, and employee turnover. It also includes relevant information about Iceland's immigration patterns, the growing market for vehicle inspection and emission testing, and goverment policies. The case presents a step-by-step description of the process for inspecting and testing private vehicles at Frumherji's largest station, Hestháls, located in Reykjavik. Accompanying information includes processing times, reject rates (yield rates as the inverse), wait times, error loops, and problems introduced by the customers themselves. Images of the facility and photos of the work area at each step in the process bring a sense of reality to the descriptions.
Entrepreneurs are, by definition, pioneers in that they innovate new products/services, create new processes, open new markets, or organize new industries. Dramatic changes in the global environment suggest that successful entrepreneurs must master three key strategies: (1) develop a clear vision; (2) manage cash creatively, or learn to "bootstrap"; and (3) be able to persuade others to commit to the venture using social skills. This article discusses pioneering strategies and offers guidance on how to implement these.
Companies commonly adopt "the customer is always right" maxim as a basic premise for delivering quality service. A close examination of customer behavior, however, reveals that customers can be not only wrong but also blatantly unjust. Unfair customers take advantage of being "always right" by demanding unwarranted privileges and compensation, adversely affecting companies and, in some cases, employees and other customers. Companies can actually strengthen their ability to deliver quality service by dealing effectively with unfair customers.
Services dominate the world's established economies (such as those of the US, Germany, and Finland) and are becoming increasingly important in developing economies, including those of China and India. Yet most companies, national governments, and universities do not put much energy into service research, innovation, or education. This ironic juxtaposition of facts has led us, along with others, to promote a focus on service research and service innovation across companies and institutions. We call this the "service imperative." In this article, we present our view of the service imperative as a burning platform that is giving birth to many hopeful directions for the future of the global economy. We believe that companies and nations which embrace the service imperative will prosper and benefit, as will individuals who do the same. We also contend that widespread embracing of the service imperative can lead to improved quality of life for people worldwide.
Globalization leads to increased business opportunities and changing rules of the game. Different institutional settings and different organizational players continuously shape business opportunities through different public policy processes operating in various locales. Herein, we develop a framework, based on the work of Nobel laureate Douglas North, which enables managers to determine essential considerations of public policy arenas where they may operate or consider operating.
In this article, we examine the evolution of corporate governance reforms in the emerging economies of China and India. We first describe the two major driving forces behind governance reforms in these countries: privatization and globalization. After summarizing the evolution of governance reforms in each context, we identify four major obstacles that impede their implementation in both countries, namely: (1) lack of incentives, (2) power of the dominant shareholder, (3) underdeveloped external monitoring systems, and (4) shortage of qualified independent directors. Next, we highlight practical implications of these governance challenges for foreign firms contemplating, or already involved in, major investments in these emerging economies. We emphasize that foreign firms that are sensitive to context-specific challenges are more likely to put in place appropriate contractual or other safeguards, as well as identify more practical and meaningful forms of participation in the governance of their ventures. Finally, we conclude with some implications for future research.
Should a leader be loved or feared? That age-old question still has no simple answer. It depends on who the leader is and whom she's leading. Successful executives adapt their styles when they need to; they also know their limits.
When a new technology appears, the old one experiences a sudden leap in performance. Whether you are an old- or a new-technology company, understanding how that phenomenon works can help you win during this critical transition period.
The key to selling well-designed, well-crafted products at high margins is the aesthetic coherence of the company and its goods. Embodying that ideal isn't easy, but it's possible if you avoid three temptations.
Research over 35 years shows only a weak link between socially responsible corporate behavior and good financial performance. However, there's no evidence of risk in doing good, only in being exposed for misdeeds.
The mantra "Every product must stand on its own bottom line" may no longer be the one to chant. Nowadays, broadening your portfolio can increase both your chances of a big win and the benefit your other products can get from a hit's popularity.
When executives meet together to grapple with moral and ethical questions in literature, they end up applying their insights in practice. This Harvard Business School professor endorses book clubs as part of leadership development.
Deliberate, emergent, and analogical approaches to finding the best strategy all have their advan-tages, depending on where an industry is in its life cycle. Be open to the best option at each juncture and wise enough to make the right call.