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When portfolio planning was introduced in the late 1960s, its advocates believed it to be the key to most strategic planning problems. Now, interviews with CEOs, staff planners, and division line managers reveal that portfolio planning can improve business strategy, but only when it is used with other techniques for analyzing industries and competitors. It helps individual business units understand their competitive strengths, guides top management in identifying divestiture candidates, and promotes the efficient management of existing resources.

Factors like foreign and domestic market structure determine a company's operating exposure to exchange rates. But sophisticated managers have learned to manage foreign-exchange exposure in new ways. For example, companies can approach production units not as fixed, but as flexible, facilities whose importance to the corporation can be adjusted when exchange rates shift. The company can also shift sources of raw materials, subassemblies, and components. Above all, managers are more likely to adopt appropriate courses of action if their performance measurement takes into account the effect of exchange rate changes on operating performance.

In approaching the prospect of a joint venture in the People's Republic of China, foreign executives often plunge ahead with insufficient attention to the strategy of deal making. They waiver in their purposes and seem vague or noncommittal. When such weaknesses come up against the subtle strength that the Chinese bring to the art of negotiating, they become stumbling blocks to the development of effective and profitable commercial relationships. A better understanding of Chinese culture and practices will lead to a better deal.

For more than ten years, American manufacturers have been trying to improve productivity--and thereby enhance their international competitiveness--through cost-cutting programs. But costs have not declined enough, nor has international competitiveness much improved. Instead, our decline has intensified. Real productivity improvement is not easy. Approaches that pare down direct labor costs and make factory workers more efficient have proven fundamentally flawed. Manufacturers need to direct their thinking away from straight cost cutting toward quality enhancement, strategy, and product technology. McKinsey Award Winner.

A credit analyst for a furniture manufacturer is confronted with two customers who have exceeded their credit limits. The financial performance of each has been weak, and one of the customers has a highly leveraged balance sheet. Industry conditions are weak; the manufacturer apparently has excess capacity; and the credit analyst is caught between the conflicting demands of the sales managers and the credit manager. The case provides an opportunity for ratio analysis.

A senior loan officer is reviewing the recent performance of a company that has failed to repay its loan as scheduled. The failure results from a cyclical downturn in sales, coupled with a lag in cutting back production. Inventory risk is minimal. This case is an updated version of Cutrite Shears.

Describes the company's use of information technology to strengthen its position in the elevator sales and service market. Also demonstrates how information technology can be used to better manage and control a large geographically dispersed service organization.

Spreadsheet Supplement for case 286021

Presents the economic and political dimensions of competition in the commercial aircraft industry, as demonstrated by Airbus of Europe and Boeing of the United States.

Presents the first of two cases describing the struggle to solve creative problems on the Dry Idea antiperspirant brand introduced in 1978 by the Gillette Co. and its advertising agency (Batten, Barton, Durstine & Osborne). Provides company and industry background plus a historical brand review, and focuses on the issue facing product manager Carole Johnson in October of 1983: how to get good creativity fast?

Presents the second of two cases describing the struggle to find "the right advertising" for the Dry Idea antiperspirant brand introduced in 1978 by the Gillette Co. and its advertising agency, Batten, Barton, Durstine & Osborne (BBDO). The case begins with Gillette's November 1983 decision to stage a bake-off placing BBDO in competition with a second agency to "cook up" a breakthrough advertising campaign for Dry Idea. It then proceeds to describe the six-month bake-off implementation period, provide a report of bake-off copy test results, and pose the question facing product manager Carole Johnson late in April of 1984: who won the bake-off?

Provides an overview of video contents and three attachments: 1) chart discussed at meeting shown in video, 2) historical Dry Idea copy strategies, and 3) graphic comparison of Dry Idea share trends and airing history.

Provides an overview of the two-part video: 1) bake-off participant interviews with managers from Gillette and its advertising agency for Dry Idea, and 2) creative presentations by the two bake-off competitors.

The Wilson Lumber Co. is faced with a need for increased bank financing due to its rapid sales growth and low profitability. Students must determine the reasons for the rising bank borrowing, estimate the amount of borrowing needed, and assess the attractiveness of the loan to the bank. A rewritten version of an earlier case by J.K. Butters.

Spreadsheet Supplement for case 286122.

Yoplait's director of new product development is evaluating alternative line extensions including custard-style Yoplait. He must determine what additional research to recommend. Options include a mini-market test, a simulated test market and a fully-fledged test market.

Yoplait's director of new product development is finalizing plans for the national introduction of custard-style Yoplait. Based on the results of a mini-market test and a BASES laboratory test market.

The big issue for multinationals today is not whether to go global but how to tailor the global marketing concept to fit each business. In determining the degree of standardization or adaptation that is appropriate, managers should consider their companies' overall business strategy, which products will benefit from the economies or efficiencies of standardization, which products won't fight cultural barriers, what trade-offs will result from standardizing various elements of the marketing mix, and how standardization will vary from country to country.

Entrepreneurs should compile a financial forecast that includes three elements: an income statement, a balance sheet, and a cash flow statement. Forecasts should look ahead five years and include three scenarios: a most likely, a most pessimistic, and a most optimistic. Key estimates for putting the income statement together are sales, costs of goods sold, general and administrative expenses, and selling expenses. Key estimates needed for the balance sheet are accounts receivable, inventory, and the debt-equity ratio. These estimates enable one to complete the cash flow statement.

In July of 1985 the managers of Alloy Rods (who recently purchased the company through a leveraged buyout arrangement) find that their chief competitor (a company more than 6 times as large as Alloy Rods) has introduced a new product clearly aimed at Alloy's most profitable market segment. Management must frame a response, and a prime focus of the battle will be among distributors. Provides an excellent vehicle for comparing very different channel strategy and channel management philosophies, and also confronts students with the necessity of developing implementable marketing programs within the context of a financially-constrained organization.