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Describes the antitrust issues that arose in 1994 and 1995 with respect to Microsoft's marketing practices.

Discusses Wal-Mart's entry strategy in East Asia, specifically Singapore, Japan, Hong Kong, and China.

Analyzes the strategies pursued by Coke and Pepsi in the emerging Asian soft drink market. Analyzes the tactical battle of the cola giants in China specifically.

Analyzes the tactical battle of the cola giants in India.

Spreadsheet supplement for case 596112.

The merchandising manager of a supermarket chain leads an effort to reorganize the process of buying and delivering products from manufacturers to their warehouse for further distribution to stores. The company is an early mover in implementing efficient consumer response.

ToyWorld, a fast growing retailer, was revitalizing its information technology (IT) infrastructure and called in AT&T to help plan for the future. Five strategic alternatives for use of information and communications technology were identified through value chain analysis and use of proprietary AT&T methodology. While two could be implemented by ToyWorld action alone, two would require external cooperation, and one represented an entirely new (but related) line of business.

Microsoft Corp. proposes to acquire Intuit Corp. Examines the strategic fit and the price proposed to complete the transaction.

Provides an introduction to three cash flow valuation methods. The three methods differ in their measure of cash flows and the discount rate applied to those cash flows. The names for the three methods correspond to the type of cash flow that is used in the valuation: Equity Cash Flow (ECF), Capital Cash Flow (CCF), and Free Cash Flow (FCF). The three methods provide consistent valuations when applied correctly.

Spreadsheet supplement for case 295155.

Spreadsheet Supplement for case 295121

In early 1994, Kimberly-Clark agreed to manufacture private-label training pants for Wal-Mart under the "Atta-Boy!" and "Atta-Girl!" labels. To place this decision in perspective, the case describes Procter & Gamble's battle with Kimberly-Clark for market share in the disposable-diaper market. The case also describes Procter & Gamble's adoption of value pricing, as well as Wal-Mart's introduction of premium store brands. Students must use this information to answer three questions: (1) How should Procter & Gamble respond to the introduction of Huggies Supreme with Velcro fasteners? (2) What should Procter & Gamble do with Luvs disposable diapers, which had been repositioned against private labels with a 16% price cut in May 1993? (3) How should Procter & Gamble respond to Wal-Mart's decision to sell private-label diapers manufactured by Kimberly-Clark?

In theory, mastery of a single competency provides a distinct niche in the marketplace. In practice, today's global competition is more dynamic and multidimensional than those models suggest. The mature industry paradox is that leadership demands differentiation, yet differences are quickly copied. Single-factor innovations tap one competency, and capable competitors can usually match it. Multiple competencies strengthen several dimensions and in effect redefine the basis of competition. The "shadow strategy task force" is offered as a method to force managers to relinquish the comfort of the firm's accepted view of itself. This approach begins with the objective of identifying the strategies and competencies that, in the hands of competitors, might be used to attack the firm's competitive position successfully. Especially critical on the task force are individuals with insight into how customers, suppliers, and competitors view the firm's products and services. Developing new competencies requires constant experimentation. The innovation-imitation-equilibrium cycle suggests that industry leaders teach customers what to demand by defining the current state of the art in performance, price, service, and other dimensions; customers learn to judge competitive offerings against these standards, and the learning effect is cumulative.

Discusses accounting for intercorporate equity investments and the preparation of consolidated financial statements.

Describes the purpose and nature of industry self-regulation and outlines the factors self-regulatory groups must consider to avoid infringing U.S. antitrust laws. Several examples of industry self-regulation are discussed.

Portrays the change process Oticon went through in moving from a bureaucratic, role-driven organization to a creativity-driven, flexible, informal one.

A company making data communication devices has adopted a Total Quality philosophy for working with suppliers, employees, and customers. The finance group finds its existing cost system has become obsolete because of a shift from manual to automatic production technologies. As part of its improvement activities, the group develops an activity-based costing system to replace the obsolete standard costing system. The new system is being used to value inventory for financial reporting, provide monthly feedback on operational efficiencies, and inform product managers about the cost and profitability of their products. It is also being used for target costing, influencing decisions made by product design and development engineers so that future generations of products can be produced at lower cost. The case enables discussion about how well a single system functions for these diverse roles, and to compare this company's target costing approach with those used by Japanese companies, such as Nissan, Komatsu, and Olympus.

In the postwar years, planning and control systems were the tools that enabled companies to grow and helped managers deal with sprawling enterprises. Yet many of the problems companies experience today are inherent in the strategy-structure-systems doctrine that produced those tools. The systems that allowed managers to control employees also inhibited creativity and initiative. Today the challenge for top-level managers is to engage the knowledge and skills of each person in the organization in order to create what the authors call an individualized corporation. In the individualized corporation, top-level managers don't direct and correct middle and frontline managers; they create an environment in which individuals monitor themselves. The authors have conducted research on 20 high-performing corporations. They have concluded that systems, no matter how sophisticated, can never replace the richness of close personal communication and contact between top-level and frontline managers.

In 1993, BP Exploration Operating Co. Ltd., the $13 billion division of British Petroleum Co. that explores for and produces oil and gas, outsourced all its information technology operations in an effort to cut costs, gain more flexible and higher quality IT resources, and refocus the IT department on activities that directly improve the overall business. BP Exploration took a different path to outsourcing than most companies have taken. The company sought a solution that would allow it both to buy IT services from multiple suppliers and to have the pieces delivered as if they came from a single supplier. To that end, three contractors were hired and required to work together to deliver a single seamless IT service. This arrangement--multiple IT suppliers that act as one--is the cornerstone of the company's outsourcing strategy. The IT department has final accountability for IT services, but it is not mired in the operations. Only by relinquishing operations could IT employees begin to focus on doing business instead of running the business.

Companies make capital investments to create and exploit profit opportunities. Opportunities are options--rights but not obligations to take some future action. The old net present value presumption that investment decisions are either reversible or now-or-never propositions turns out to be flawed. Irreversibility, uncertainty, and the choice of timing alter the investment decision in critical ways. Investment expenditures are irreversible when they are specific to a company or to an industry. The simple NPV rule should be modified: Instead of being merely positive, the present value of the expected stream of cash from a project must exceed the cost of the project by an amount equal to the value of keeping the investment option alive. Because they create and preserve options, decisions such as those to test a market or conduct R&D enhance a company's flexibility and should be made more readily than a naive NPV would suggest; but decisions that reduce flexibility should be made more hesitantly and be subjected to stiffer hurdle rates than the cost of capital.