Herb Kelleher, executive chairman of Southwest Airlines, writes to Elliott Weiss, operations professor at the Darden School. Kelleher responds thoughtfully and in detail to two Darden cases about the experiences a Darden student had while flying on Southwest Airlines and JetBlue Airways.
In May 1999, the Moon Shot team gathered to review the results of a $54.4 million direct-to-consumer (DTC) ad campaign. Moon Shot was a cross-functional team at Zeneca Inc., a pharmaceutical, agrochemical, and specialty products company. The ad campaign was to promote the use of the drug Nolvadexa (Zeneca's brand name for Tamoxifen Citrate) for use in reducing the risk of breast cancer in women at high risk, an estimated 9 million women in the United States. Details Zeneca's development of Tamoxifen and how the company marketed the drug. Focuses on Zeneca's DTC prescription drug advertising campaign and the issues that campaign raised.
The merger of the Caribbean holdings of Barclays Bank Plc. and the Canadian Imperial Bank of Commerce (CIBC) is going ahead, and the reality of integration of very diverse systems and procedures has to be faced. The case deals with understanding the current situation in terms of existing policies and designing policies that would be acceptable to employees from both banks in the organization - FirstCaribbean International Bank - which would be created by the merger. A critical aspect of the merger is the harmonization of compensation and benefits that must be resolved as a matter of priority.
The newly hired head of Strategic Resources Planning and Management at Royal Bank of Canada Investments (RBCI) must develop a "dashboard" mechanism for strategically assessing and managing RBCI's non-interest expenses, excluding brokerage fees associated with providing value-added service to clients. After a week of analysis, two things became apparent: first, the four major business units within RBCI were operating independently, neither collaborating on projects nor sharing information; second, most of the non-interest expenses were related to information technology projects. Considering that RBCI was spending nearly $700,000 per day on service delivery, the senior management team was extremely eager to see what the head of Strategic Resources Planning and Management would propose. Presents information technology portfolio management challenges facing large organizations, and challenges students to develop performance metrics that will be useful at the most senior levels of the organization.
In 1998, the CEO of Whirlpool Corp. decides to change the company's strategy significantly to escape an increasingly unattractive "stalemate" in the appliance industry. The change he proposes involves a fundamental shift in the company's focus--from manufacturing to branding--and requires the development of altogether new organizational capabilities. Examines the full range of adjustments that the CEO must lead his management team to make throughout all the functions of Whirlpool. Distinguishes itself from other cases on strategic change by examining the challenge of change in a company that is not in crisis (yet).
A five-member team from Berkshire Partners must recommend a final bid and financial structure for a leveraged buyout of William Carter Co., a leading producer of children's apparel. Investorcorp, a global investment group, has put the company up for auction. Goldman Sachs, in addition to running the auction, was offering "staple-on" financing. Under this arrangement, the winning bidder would have the option to finance the deal through a prepackaged capital structure.
Following the bombing of the World Trade Center in 1993, there was consensus that the FBI needed to make organizational changes. The FBI had long distinguished itself as the world's pre-eminent organization for conducting after-the-fact investigations that laid the groundwork for the prosecution of criminal cases. What remained to be seen was whether the FBI could build on its strengths to extend its capabilities to intelligence gathering and analysis. Describes the FBI organization, career incentives in the agency, and two attempts at organizational restructuring: The 1998 strategic plan (and the creation of the Investigative Services Division) and MAXCAP 05. Also examines the traditional law enforcement approach and how this manifested itself in the agency's organizational structures and systems. Lays the groundwork for discussion of the incentives related to the decentralized management structure, the recruiting and training of new analysts, information sharing and coordination, performance measurement and rewards, and budgeting. Ends with the appointment of Robert Mueller as the new director and his charge to reform the organization.
Profiles a firm that was reacquired by two companies with different degrees of success. Highlights integration challenges present in acquisition deals when the primary assets of the target are human capital. Focuses on Furman Selz's acquisition by Xerox in 1987; its return to a private company in 1993; and a second acquisition, by ING, in 1997. In particular, provides the opportunity to evaluate five major corporate transitions: the initial launching as an independent firm, Furman Selz, in 1973; the shift to professional management in 1983-1986; the Xerox acquisition in 1987; the MBO in 1993; and the ING acquisition in 1997. Presents the transactions from multiple points of view: the founders and their associates; the professional managers brought in to advance the firm to the next level; the acquired firm under both Xerox and ING; and Xerox and ING themselves.
Conglomerates lie at the heart of debates in corporate strategy. They include, perhaps, the best known companies in history--Beatrice Corp., General Electric, ITT, Siemens, and ABB--and at various times over the last few decades have been both admired and vilified as a form of corporate organization. Regardless of the time at which these debates have occurred, they invariably focus on a few common questions, which this note addresses: Why do conglomerates exist? Do they add value to their component businesses? If so, how?
Which businesses should a firm expand into? This question of corporate scope is central to corporate strategy. Flawed scope decisions can have severe consequences, and the trauma experienced by many companies as a result of mistaken decisions to expand scope is often large. What leads to such mistakes? Where do managers go wrong? And, what might be a sensible logic by which to approach the question of scope expansion? Examines these questions and the logic of the scope decision in those instances where the target business is ostensibly related in some way to a company's existing ones.
Describes the objectives of the Corporate Strategy course; the conceptual framework used in the course; some central principles of corporate strategy that emerge from this framework; and the modular structure of the course, together with the topics each module covers.
Explores the life, work, and achievements of Milton S. Hershey. Analyzes his entrepreneurial achievements, including the creation of the Hershey bar, the founding of the business, and the development of the mass market for chocolate. Also investigates the broader contributions that Milton Hershey made to a sustainable, mutually beneficial social contract between business and community.
Describes IBM's decade of transformation. Provides background on the company's history and the factors that led to its near death in the early 1990s and to its remarkable turnaround during Lou Gerstner's reign as CEO. A rewritten version of an earlier case.
Examines the organizational strategy of a professional football team that contributed to the team's sustained success. Considers several aspects of the team's "blueprint" with respect to players: recruitment, retention, task structure, training, culture, and compensation. Presents opportunities to explore: the potential complementarities between multiple human resources systems, the role of intrinsic motivation and extrinsic incentives, whether star players are incompatible with well-functioning teams, and the establishment and maintenance of a culture that reinforces goal alignment.
At a March 2004 annual shareholder meeting, 45% of Walt Disney Co.'s shareholders withheld their support from CEO and Chairman Michael Eisner, producing a large no-confidence vote in the company's leader. The company had struggled financially in recent years and the board was widely believed to be beholden to Eisner. Two directors, Roy Disney and Stan Gold, resigned in protest of Eisner's leadership and the board's unwillingness to change. The two began to wage a PR battle calling for Eisner's removal and asking all shareholders to withhold their support from him at the upcoming shareholder meeting. Traces the history of Eisner's reign at the company and the events leading up to the March 3, 2004, shareholders meeting.
Dexit is a new electronic payment system that offers a convenient alternative to cash for small-value retail transactions. The chief executive officer is faced with some critical target market and marketing mix decisions as she prepares for launch. The situation is complicated by the fact that action is needed on two fronts: Dexit must not only recruit end consumers for the service, it also must convince merchants to install the payment terminals. Because paying with cash is free, the company needs to persuade both groups that the added convenience of Dexit justifies a transaction fee. Although the concept appears to have good potential, recent test market failures of two similar offerings suggest that success is far from guaranteed. Reinforces the importance of solid consumer analysis when selecting a target market, demonstrates the concept of value to the customer, and provides a basis for discussing push vs. pull marketing strategies.
To launch its Latin American operations, the Indian IT giant Tata Consultancy Services recruits a seasoned executive who becomes the only non-Indian member of senior management. Reviews the start-up operations, from the site selection to staffing and training, the challenges of operating in a Latin American context, the integration of two very different cultures, and the strategic rationale for an emerging market company to invest in another Third World region at a time in which it is launching an initial public offering. Identifies a series of challenges that must be addressed two years on and poses the question whether Tata Consultancy Services should pause or accelerate its presence in Latin America.