Examines the career of Aristotle Onassis and his creation of one of the world's largest shipping companies between 1945 and 1973. Explores the role of ethnic and family networks in Greek shipping and how Onassis was able to penetrate this system despite being an outsider. Looks at Onassis' role as a strategic innovator in flags of convenience and supertankers. Examines the dynamics of competitive advantage in shipping, as well as the strengths and weaknesses of family-owned firms. Ends with the death of Onassis' only son in 1973 and the resulting vacuum in succession.
The theories of market segmentation and brand building in Chapter 3, What Products Will Customers Want to Buy? in The Innovator's Solution by Clayton Christensen and Michael Raynor suggest that when companies segment markets and build brands in ways that match how the customer sees the market--customers hire products to get jobs done--their success rate in innovation increases. Gallardo's is a privately held firm whose products--salsas, sauces, and seasonings for Latin American dishes--were sold primarily in the southwestern United States. When the company had saturated that geographical market, its CEO decided to invade Mexico. Describes how Gallardo's marketers learned what jobs Mexican housewives hired these products to do. Shows how the company used these market insights to segment the market along different lines than its competitors. Gallardo's products and advertisements ended up spurring significant growth in the market, but most of the growth was captured by its primary competitor. What went wrong? Were Gallardo's branding and segmentation strategies consistent with the jobs-to-be-done model? Does the company have the chance to relaunch its products more successfully?
Introduces interest rate derivatives, covering floors, caps, and swaptions. Introduces floors, caps, and swaps by analogy to equity puts, calls, and stocks. As with calls and puts on equity, a put-call parity relationship is shown to exist between caps, floors, and swaps. Draws on students' knowledge of the put-call parity in an equity context.
Presents a simple interest hedging exercise. A hedge fund is considering an investment in a structured fixed--income product: an inverse floating-rate bond, or inverse floater, designed by a U.S. investment bank. The hedge fund's normal policy is to hedge interest rate risk, maintaining a duration and convexity-neutral portfolio. Because of the complicated nature of the structured product, the protagonist must figure out how to hedge this product.
Describes the reorganization of drug discovery at GlaxoSmithKline (GSK) following the formation of GSK from the merger of Glaxo Wellcome and SmithKline Beecham. This reorganization placed nearly 2,000 research scientists into six centers of excellence in drug discovery (CEDD). Each CEDD focused on a small set of therapeutic areas and possessed decision rights over the progression of pharmaceutical compounds through the early stages of development. Describes the proposed structure for the CEDDs and their relationship to remaining centralized departments within GSK's R&D organization. Addresses issues about the benefits of focus vs. diversification in R&D, the role of decentralized vs. coordinated decision making, and the importance of alignment between the structural and infrastructural (e.g., performance incentives) aspects of an operating model. Using the empirical context of mergers in the pharmaceutical industry, the case allows students to build broader insights about the interaction between organizational form and operating performance.
Provides the basic underlying model for credit risk analysis, as well as covers basic credit risk derivatives, such as asset swaps, credit default swaps, total return of rate swaps, and credit spread options.
Introduces forward contracts and derives graphically through basic arbitrage principles the spot-forward parity. Introduces swap contracts as simply a portfolio of forward contracts. Also covers briefly the mathematics behind swaps as an extension of spot-forward parity calculations.
Ticonderoga is a small hedge fund that trades in mortgage-backed securities--securities created from pooled mortgage loans. They often appear as straightforward so-called "pass-throughs," but can also be pooled again to create collateral for a mortgage security known as a collateralized mortgage obligation (CMO). CMOs allow cash flows from the underlying pass-throughs to be directed, allowing the creation of different classes of securities--tranches--with different maturities, coupons, and risk profiles. In April 2005, the general managers of Ticonderoga are looking at the market data, trying to construct a trade given their view on the prepayment speed of mortgages vs. the implied prepayment speed they derive from CMOs in the market.
Eliza Hermann is vice-president of Human Resources Strategy at BP plc, based in London, England. Her career in the energy business began in 1986 when she joined Amoco Corp., where she earned a series of promotions in the international oil business, which exposed her to markets ranging from Argentina to Azerbaijan. She was a member of the team involved in the successful integration of Amoco when BP acquired the company in 1998. During the past several years at BP, she has served as manager, Strategy and Business Transformation-Global Aromatics, leading a team responsible for strategic planning and business development in the company's petrochemical segment and, more recently, as VP of human resources for BP's global gas, power, and renewables segment. Throughout her career, Hermann has traveled extensively, with particular focus on Asia, Western Europe, North America, South America, Russia, and the republics of the former Soviet Union. Hermann holds an MBA degree from the Kelley School of Business, Indiana University, and a BA degree in social and behavioral sciences from John Hopkins University. She serves on the board of directors of Brightpoint, Inc., where she is chairperson of the Compensation and Human Resources Committee, as well as a member of the Corporate Governance and Nominating Committee.
It has become fashionable to discuss business models, but there is much confusion about what business models are and how they can be used. In fact, business models can serve a positive and powerful role in corporate management. Although authors have offered definitions of "business model," none appears to be generally accepted. This lack of consensus may, in part, be attributed to interest in the concept from a wide range of disciplines, all of which have found a connection to the term. To help managers better understand business models, this paper reviews the extant literature and identifies and classifies the components of business models cited therein. Components were classified into four primary categories: strategic choices, the value network, creating value, and capturing value. Offers a definition of "business model" that integrates and synthesizes earlier work. Based on the proposed definition, the case contrasts business models with strategy. Also, discusses four problems associated with business models.
Discusses launching an entrepreneurial venture by acquiring a once popular brand name and reviving it. Ten executives were interviewed who acquired dormant brands and successfully relaunched them into the market. Their comments suggest that, with proper planning, an entrepreneur may be able to increase chances of success substantially by reviving brands, rather than spending the enormous amount of capital required to build a new brand image. Conclusions suggest that nostalgia targeting is not enough; the revived brand must be repositioned to satisfy today's customer values. Evidence also suggests that licensing a revived brand name to unrelated industries may prove very profitable for the entrepreneur.
It has been 20 years since R. Edward Freeman (1984) first proposed his stakeholder approach to strategic management, which stated that corporations must consider the needs and demands not only of their shareholders but also those of a wide range of other external constituencies, or "stakeholders." Examples of stakeholders include customers, employees, suppliers, and communities. Freeman's theory has generated an extensive body of research, including not only the efforts of the management researchers who have tested, revised, and refined the theory, but also the views of corporate executives who have used the stakeholder approach in their strategic planning. This article, based on a review of that literature, identifies five important lessons from the stakeholder model for today's business leaders. These lessons are particularly timely, given the inappropriate behavior that has occurred in the business world during recent years.
Scholars and practitioners have long suggested that smaller teams perform better teamwork, yet it is surprising to find that many organizations are using teams of 10 and more members. Explains how large team size affects teamwork and suggests four ways to keep teams small: (1) Create a multiteam project; (2) create a core team and an extended team; (3) outsource tasks and define team-external contributions; and (4) keep members on the team only for specific project phases.
At what point does legitimate competitive intelligence gathering cross the line into industrial espionage, and what is it about certain intelligence-gathering practices that opens them up to criticism? Examines three recent cases of industrial espionage, involving major multinationals such as Procter & Gamble, Unilever, Canal Plus, and Ericsson. The argument is made that, from an ethical point of view, industrial espionage can be assessed according to three main considerations: the tactics used in the acquisition of information, the privacy of the information concerned, and the consequences for the public interest as a result of the deployment of the information by the intelligence gatherer.