Introduces a "new-economy" company, Madison Avenue, facing challenges of mega-success. In the two years since its founding, the company's revenues have grown from zero to nearly $30 million, head count has swollen from the start-up handful to more than 200, and the client base has gone from one to dozens. In the company's short life, Madison Avenue's managers have already tried four organizational forms to more efficiently and reliably meet the needs of its customers. Despite the intense, ongoing efforts to find an appropriate organizational form, employees struggle to keep pace with ever-increasing demands. Ted Samson, an implementation engineer at Madison Avenue and a reservist in the Marine Corps, expresses a collective frustration in an e-mail to his boss. The case contains a history of Madison Avenue, starting with its serendipitous creation as an outgrowth of a family business's efforts to advertise on the Web and the collateral development of an expertise in Web advertising and the evolution of the company's business model. Gives a detailed explanation of the internal processes by which Madison Avenue creates, implements, and optimizes online advertising campaigns for its clients. The case asks students to analyze how Madison Avenue currently does its work and then to design a "target condition"--based upon analysis of the company's "current condition"--of how Madison Avenue's internal processes might be redesigned in order to produce higher quality ad campaigns, at less cost, with shorter lead-times, and with greater flexibility in responding to customer needs.
Chronicles the initial efforts to teach a health care organization to manage itself according to the principles of the Toyota Production System (TPS). Describes the decision and dilemmas that arose from the implementation experiment. Builds on Bowen and Spear's earlier research in industrial settings. They found that TPS is an integrated approach to designing, doing, and improving the work of individual people and of groups of people working collaboratively to produce and deliver goods, services, and information. The Deaconess-Glover Hospital project tested the efficacy of the TPS in a nonindustrial setting (i.e., health care) and also offered insight into how to convert an organization, managed by its existing management system to one managed by TPS principles. This case provides background on Deaconess-Glover Hospital and on the TPS teacher, John Kenagy. Describes how Kenagy observed the work at the hospital to understand the system. Given how Kenagy gathered data and based on what he directly observed, what should he recommend to managers about their next step?
The seller (Riggs Engineering) manufactures and services recycling equipment for the computer industry. The buyer (Vericomp) uses solvents in manufacturing chips. Though set in a high-tech industry, this exercise illustrates fundamental aspects of negotiation analysis that would apply in any situation--specifically, potential sources of joint gains and the tension between creating and claiming value. While it may be possible to reach a deal on price alone, doing so is difficult. Students can expand the zone of possible agreement if they creatively trade on other issues, including the scope of services Riggs will provide, payment schedules, timing of the contract, and possible guarantees. Even as they jointly expand the pie, of course, they must be mindful of what slice will be theirs. All agreements can be expressed in present value terms, so it is easy to identify which pairs generated the most gain, and which individuals got the best deals for their particular companies. This is a two-party, multi-issue negotiation exercise. Students should read either the (A) or the (B), but not both, and then be paired up to negotiate. Results are reported using the simple form that is the (C) case.
The seller (Riggs Engineering) manufactures and services recycling equipment for the computer industry. The buyer (Vericomp) uses solvents in manufacturing chips. Though set in a high-tech industry, this exercise illustrates fundamental aspects of negotiation analysis that would apply in any situation--specifically, potential sources of joint gains and the tension between creating and claiming value. While it may be possible to reach a deal on price alone, doing so is difficult. Students can expand the zone of possible agreement if they creatively trade on other issues, including the scope of services Riggs will provide, payment schedules, timing of the contract, and possible guarantees. Even as they jointly expand the pie, of course, they must be mindful of what slice will be theirs. All agreements can be expressed in present value terms, so it is easy to identify which pairs generated the most gain, and which individuals got the best deals for their particular companies. This is a two-party, multi-issue negotiation exercise. Students should read either the (A) or the (B), but not both, and then be paired up to negotiate. Results are reported using the simple form that is the (C) case.
Procter & Gamble reorganized its operations and created Global Business Units with Market Development Organizations (MDO) to augment the brand strategy work. This reorganization supported changes in culture that included reasonable risk taking. The marketing director of Procter & Gamble Canada was evaluating the potential success of launching a new product, Febreze, by using volume analysis resources available to her. The results indicated that Febreze would be a relatively small business opportunity, but the model could not take into account the various new MDO marketing tools that were not yet available. To justify the cost of launching the product, revenues would have to be significantly more than the volume model predicted. While trying to adjust to the new culture, the marketing director had to evaluate the risks associated with launching the product not knowing if the new tools would generate the additional volumes needed and the risk of losing the competitive edge if she postponed the launch.
The A case describes the career of Fairfax County (Virginia) Executive Robert O'Neill, who runs one of the highest-per-capita-income counties in the United States. The case discusses the events leading up to his hiring by Fairfax County, his experience as County Executive, and the situation at the end of the case, including the results of his efforts, the political environment, and a job offer. Students gain insight into the complex aspects of county government, including financial, legal, political, public relations, and strategic business management, as well as into O'Neill's leadership strategy. The B case (UV3179) describes his decision and rationale and a few subsequent events in the county.
The A case (UV3177) describes the career of Fairfax County (Virginia) Executive Robert O'Neill, who runs one of the highest-per-capita-income counties in the United States. The case discusses the events leading up to his hiring by Fairfax County, his experience as County Executive, and the situation at the end of the case, including the results of his efforts, the political environment, and a job offer. Students gain insight into the complex aspects of county government, including financial, legal, political, public relations, and strategic business management, as well as into O'Neill's leadership strategy. The B case describes his decision and rationale and a few subsequent events in the county.
Founders Desh Deshpande and Dan Smith reflect on Sycamore's sales strategies and consider how going public might affect the morale of its key employees. In the optical networking sector, technological change and exploding demand has created a market for talent in which many capable employees strike out on their own to found new competitors--taking their important sales relationships with them. Sycamore needed to learn how it could continue to attract--and retain--the brightest in the business.
More and more, the task of the HR department is one of identifying and articulating primary strategic values of the corporate culture. As an example, Texas Instruments shelved its cumbersome approach to updating HR policy and switched to a system that allowed the rapid response needed in a fast-changing environment. In companies with a strongly articulated value-based culture, the challenge is to apply that culture to the formulation of specific HR policies. Doing so requires that HR policies be examined for relevance to the current business environment, connection to strategic goals, adaptability to changing circumstances, applicability across the firm's theater of operations, familiarity to employees, ease of interpretation and application, specification of the bounds of acceptable employee behavior, and extent of commitment to policies by employees. The process of designing HR policies in a value-based culture is illustrated by the experiences of Texas Instruments, Bell Atlantic, and Unisys.
A cornerstone of manufacturing practice has been to separate complex tasks into simple ones for economies of scale, and service industry practice has followed a variation of this principle by splitting up high and low customer contact activities to cut costs. Low-contact activities are removed from front office jobs, standardized, and centralized in some remote back office to achieve scale economies. Here, the authors question this principle; the choice of how to organize back office work carries strategic implications. Their model provides four approaches illustrating different strategies, based on data from a study of retail bank lending operations and using examples from other service industries. The decoupling of front- and back-office operations hinges not only on cost but whether the service firm's strategy is one of cost leadership, dedicated service, premium service, or cheap convenience. Each distinct strategy poses a different set of trade-offs and important managerial issues. Decoupling can be eschewed to decrease costs, or embraced to enhance responsiveness in the front office.
A number of models have attempted to prescribe how companies should internationalize. Here, the best of these models is synthesized in a "Way Station" approach. It is tempting to take the "Low Road" (short-term, low-cost) approach in planning the trip, selecting the mode of transport, dealing with road blocks, and making a commitment. But success is most often achieved by taking the High Road. The Low Road is defined by relying on anecdotal evidence, responding only to immediate markets, exporting labor to low-cost markets, choosing markets based solely on cultural similarities, not exerting ownership control, relying on a few obvious customers, reacting to challenges with untested responses, falling into price wars instead of competing on value, and not investing in the venture as part of a global portfolio. The High Road, by contrast, emphasizes thorough market research, anticipating future customers and their needs, leading with strengths, defining success broadly, maintaining more than 50% control, diversifying the customer base, taking a long-term view, treating the new foreign venture as an integral piece of global strategy, and capitalizing on new technology in the foreign venture by feeding it back into domestic operation. Even smaller firms can take the High Road.
Petstore.com is one of four contenders for leadership in the highly competitive online pet supply business. Petstore.com faces decisions regarding potential merger partners and how to brand its service within the website managed by its ultimate merger partner, Discovery Communications.
This case describes how eight entrepreneurs discover different opportunities for new businesses to exploit a single technological invention. The case focuses on the process of entrepreneurial discovery and its implications for the creation of new firms. Many of the teaching materials on entrepreneurship assume that entrepreneurs have already discovered an opportunity. While these materials provide useful information about the process of creating new enterprises, they miss the crucial first step in the entrepreneurial process: identifying an opportunity. The case illustrates the theoretical concept of the role of information in the discovery of entrepreneurial opportunities. It can be used in a class on entrepreneurship or management of technology.
Consumer sales promotions are used to acquaint new users with a brand, to load existing users and to maintain interest in the brand on the part of the salesforce, the retailers and the consumers. Four promotions are presented in this exercise - two which were considered successful by the manufacturer and two which were not. These promotions provide the background information necessary for students to: consider the characteristics of each promotion and the surrounding circumstances; evaluate and determine which promotions were successful; and develop a rationale of which factors are important for successful promotions.
Fell-Fab Products is a manufacturer of interior coverings for airlines, bus companies and passenger rail services. A secondary business for the company is the manufacture of other sewn and welded textiles such as mail bags, tents, etc. One of Fell-Fab Products' important airline customers asked the company if it was interested in diversifying into service by taking on a contract to manage all aspects of the interior coverings business. The president of Fell-Fab Products must assess the differences between service management and manufacturing, decide whether Fell-Fab is capable of doing a good job at service and determine whether the business makes economic sense for the company. This case and the accompanying Fell-Fab Products (B) case (product 9B00D022) explore some of the implications of manufacturers diversifying into services.
Shortly after Fell-Fab Products went through the decision-making process of whether to move into service management in addition to manufacturing, it learned that European Airlines, one of its major European customers, would no longer purchase products directly from Fell-Fab Products. Instead, European Airlines instructed Fell-Fab Products to sell to Aircraft Interior Refurbishment. The president of Fell-Fab wondered how this information would affect his decision. This supplement to Fell-Fab Products (A) (9B00D021) raises the possibility of a strategic alliance.
Medisys Health Group, a leading occupational health company, was founded in 1981. It began to look at the North American market for expansion, seeking ways to leverage the Internet to become a leading medical information management company. With a couple of Internet projects on the go, it is up to the director of Internet strategy to explain how each piece fits into the overall business strategy. He contemplates shifting the business from the provision of medical services to the provision of information using an application service provider model. This case may be used in conjunction with Ivey case 9A98E011, Creating a Web Site for Medisys Health Group.
The National Hockey League (NHL) was battling within a competitive market to increase the exposure of hockey throughout the United States. Many new franchises had been established and the challenge was to create a fan base to support both the franchises and the league as a whole. As a result, many new initiatives were being examined to educate and excite the American public. The director of new business development for National Hockey League Enterprises, the marketing arm of the NHL, had to evaluate a proposal to establish an IMAX/Ridefilm attraction at NHL SKATE rinks and determine if this approach would increase the exposure of hockey throughout the United States. To prepare his recommendations for the board of directors, he needed to qualitatively evaluate the prospects of the NHL/Ridefilm proposal and perform a quantitative analysis.
In the United States, genetically modified corn and soybeans are now widely grown and consumed. In Europe, however, they have been dubbed "Frankenstein foods," shunned by packaged food manufacturers, and subjected to a host of governmental restrictions. This case provides information on the economics and politics of agricultural biotechnology. It emphasizes the divergent attitudes in the United States and Europe about how the technology ought to be regulated and highlights the resultant strategic dilemmas for companies in the business, including DuPont, Monsanto, and Novartis. Students can analyze the technology and its regulators from both a normative public policy standpoint (i.e., asking what sorts of regulatory institutions would enhance social well-being) and the point of view of positive political economy (i.e., asking how the regulatory system is likely to evolve given the current institutional setup and the interests of the various public and private players). Raises questions of how firms can develop strategy under conditions of extreme regulatory risk.