This is part of a case series. The case describes the turnaround of the Belgian bank KBC under the leadership of Johan Thijs in the period 2009-2016. The case is made up of three parts - A, B and C. KBC (A) describes the situation in July 2009 when Johan This was promoted to Managing Director (MD) of the Belgian subsidiary, by far the biggest and most important unit within KBC Group. The timing is a bad one for the bank - it had just been rescued through a multibillion euro bailout by the Belgian government and the bank is on the verge of bankruptcy. Morale is at an all-time low, employees feel betrayed and are demotivated and the euro crisis is about to hit the European banking sector just when banks throughout Europe are trying to respond to the financial crisis of 2008. Johan Thijs inherits a total mess in Belgium and the case describes the facts he faces and asks the question: 'What should he do in the Belgian Unit?' At the same time to becoming MD of Belgium, he becomes member of the Group's Executive Committee (ExCo) and the case also raises the question: 'What can Thijs do as a member of the ExCo to prevent the bankruptcy of KBC Group?'

Supplement to case LBS109. This is part of a case series. The case describes the turnaround of the Belgian bank KBC under the leadership of Johan Thijs in the period 2009-2016. The case is made up of three parts - A, B and C. KBC (A) describes the situation in July 2009 when Johan This was promoted to Managing Director (MD) of the Belgian subsidiary, by far the biggest and most important unit within KBC Group. The timing is a bad one for the bank - it had just been rescued through a multibillion euro bailout by the Belgian government and the bank is on the verge of bankruptcy. Morale is at an all-time low, employees feel betrayed and are demotivated and the euro crisis is about to hit the European banking sector just when banks throughout Europe are trying to respond to the financial crisis of 2008. Johan Thijs inherits a total mess in Belgium and the case describes the facts he faces and asks the question: 'What should he do in the Belgian Unit?' At the same time to becoming MD of Belgium, he becomes member of the Group's Executive Committee (ExCo) and the case also raises the question: 'What can Thijs do as a member of the ExCo to prevent the bankruptcy of KBC Group?'

Supplement to case LBS109. This is part of a case series. The case describes the turnaround of the Belgian bank KBC under the leadership of Johan Thijs in the period 2009-2016. The case is made up of three parts - A, B and C. KBC (A) describes the situation in July 2009 when Johan This was promoted to Managing Director (MD) of the Belgian subsidiary, by far the biggest and most important unit within KBC Group. The timing is a bad one for the bank - it had just been rescued through a multibillion euro bailout by the Belgian government and the bank is on the verge of bankruptcy. Morale is at an all-time low, employees feel betrayed and are demotivated and the euro crisis is about to hit the European banking sector just when banks throughout Europe are trying to respond to the financial crisis of 2008. Johan Thijs inherits a total mess in Belgium and the case describes the facts he faces and asks the question: 'What should he do in the Belgian Unit?' At the same time to becoming MD of Belgium, he becomes member of the Group's Executive Committee (ExCo) and the case also raises the question: 'What can Thijs do as a member of the ExCo to prevent the bankruptcy of KBC Group?'

By operating in war zones, urban slums, and deep rural areas, companies could not only achieve growth and profits, but could also improve the economic and social conditions of these impoverished regions. Yet how can a company operate in areas with unstable security, poor infrastructure, and little or no formal legal frameworks in place? To do so successfully, companies need to go beyond transactional alliances or legalistic business partnerships with local partners. Instead, they need to develop community buy-in and long-term personal relationships based on trust with "unorthodox" local inhabitants-the ones offering them security and protection rather than technology and business assets. Such deep social embeddedness is not cost-free. To prevent it from derailing their success, companies need to nurture and grow their local partners beyond their specific needs.

This is an MIT Sloan Management Review article. Established companies in industries as diverse as airlines, media, and banking have seen their markets invaded by new disruptive business models. The newcomers succeed not only by stealing customers from the established firms but also by attracting new customers into the market. As a result, established companies need to decide how to keep their existing customers while taking advantage of the new ones. One options is to use existing business models to cater for both markets. Another is to develop a new business model specifically for the new market. This is not an easy decision because entering a new market can be risky. But if a firm decides to do so, it must decide on what business model to adopt and then make sure that the new business model co-exists peacefully next to its existing business model. Based on research into 65 companies that chose to enter markets created by disruptive business models (including Nestlä, Edward Jones, Waitrose, Reuters, and Tesco), the authors say that established firms should develop new business models that are different from their existing business models and different from the business model of the disruptor. However, designing these business models is not only difficult in its own right but also raises the challenge of how to operate two different and conflicting business models in the same company. The authors argue that the usual prescription of creating a separate unit to house the new business model is not enough. The company needs to achieve a delicate balance: establishing enough separation between the two business models to avoid conflicts, but not so much to take advantage of synergies between the two. To achieve this balance, the company needs to create an ambidextrous organizational environment.

This case is set in 2008 and examines the challenges facing Amit Mehra, Managing Director of Reuters Market Light (RML), a newly formed unit within Thomson Reuters, as he tries to grow the business amid organisational and market upheaval. RML represented a creative venture by Thomson Reuters to leverage its competences and make money at the bottom of the pyramid. Specifically, RML was set up in 2007 to offer customised, localised and personalised weather forecasts, crop prices and local agricultural news via short message service text messages on mobile telephones to rural Indian farmers. To do so, it had to develop an appropriate business model that allowed it to make money in rural India. The case is therefore a perfect vehicle to discuss three interrelated themes: (1) corporate entrepreneurship - how big established companies can grow new ventures next to the established core; (2) playing two games at the same time - how established companies can compete with dual business models; and (3) scaling up a new business - how to grow a new business while protecting it from rival attacks and internal politics.

This is the second of a three-case series. The (B) case describes the introduction of the new machine (called Nescafe Dolce Gusto) in October 2006, and compares its strategic positioning (and business model) relative to Nespresso. It examines the questions: (1) is the Nescafe Dolce Gusto strategic position substantially different from the Nespresso and Nescafe strategic positions? Has Nestle succeeded in entering the mass market with the new machine or is it simply crowding out Nespresso? and (2) was the choice of brand name appropriate?

Supplement to case LBS134. This is the second of a three-case series. The (B) case describes the introduction of the new machine (called Nescafe Dolce Gusto) in October 2006, and compares its strategic positioning (and business model) relative to Nespresso. It examines the questions: (1) is the Nescafe Dolce Gusto strategic position substantially different from the Nespresso and Nescafe strategic positions? Has Nestle succeeded in entering the mass market with the new machine or is it simply crowding out Nespresso? and (2) was the choice of brand name appropriate?

Supplement to case LBS134. This is the second of a three-case series. The (B) case describes the introduction of the new machine (called Nescafe Dolce Gusto) in October 2006, and compares its strategic positioning (and business model) relative to Nespresso. It examines the questions: (1) is the Nescafe Dolce Gusto strategic position substantially different from the Nespresso and Nescafe strategic positions? Has Nestle succeeded in entering the mass market with the new machine or is it simply crowding out Nespresso? and (2) was the choice of brand name appropriate?

This is an MIT Sloan Management Review article. Brazil's poorest households have an annual total income of around $73 billion per annum; China's have an annual income of about $691 billion; and India's have an income of about $378 billion. However, even though there has been a burst of interest in recent years in how economic growth is unfolding in the developing world, most of the research is still focused on how growth occurs in developed markets. Strategic innovation in developing markets is fundamentally different from what occurs in developed economies, the authors argue. It is not about locating "new whos" (assuming the products and services are affordable, there are plenty of under- and nonconsuming customers to tap), more often it involves adapting existing products to customers with fewer resources or different cultural backgrounds and creating basic market ingredients such as distribution channels and customer demand from the ground up. Using examples from mobile telephony in the Philippines; consumer goods, power equipment, and auto industries in India; the personal care market in Brazil; and the appliance industry in China, the authors discuss cases from companies including Smart Communications, Hindustan Unilever, Tata Motors, Eveready, and Haier. They present a framework for strategic innovation based on four factors (affordability, acceptability, availability, and awareness) and show how companies can create value.

This is an MIT Sloan Management Review article. Choosing a distinctive strategic position involves making tough choices about whom to target as customers, what products to offer, and how to undertake related activities efficiently. The most common source of strategic failure is the inability to make clear, explicit choices in these areas. Unfortunately, not only do aggressive competitors imitate attractive positions but, perhaps more importantly, new strategic positions emerge continually. Successful incursions into established markets by strategic innovators such as Canon and the brokerage firm Edward Jones are based on strategic innovation--proactively establishing distinctive strategic positions that are critical to shifting market share or creating new markets. To prepare for the inevitable strategic innovation that will disrupt its market, an organization should: identify turning points before a crisis occurs by regularly monitoring indicators of strategic rather than financial health in the market, prevent cultural and structural inertia by creating a culture that welcomes change, develop processes that allow experimenting with new ideas, develop the required competencies and skills, and manage a transition to the new strategic position. Designing a successful strategy is a never-ending, dynamic process of identifying and colonizing a distinctive strategic position; excelling in this position while concurrently searching for, finding, and cultivating another viable strategic position; simultaneously managing both positions; slowly making a transition to the new position as the old one matures and declines; and starting the cycle again.

One of the most challenging decisions a company can confront is whether to diversify. The rewards and risks are extraordinary. Success stories such as General Electric, Disney, and 3M abound, but so do stories of failure--consider Quaker Oats' entry into the fruit juice business with Snapple. There has been much talk about the importance of strategic focus for companies in recent years, so much so that diversification as a corporate strategy has gone out of vogue. In this article, London Business School Professor Costas Markides argues that companies may be overlooking significant growth opportunities by abandoning diversification moves. In order for diversification to work, though, he proposes that companies consider a number of essential questions before they leap into new business: What business am I in? Do I have all of the critical success factors? Can I break up my core competencies? The answers to these and other questions may make the difference between success and failure in the new business. Much has been written about "focusing on core competencies," while diversification has been largely ignored. And yet, diversification can be a powerful way to grow a business.

This is an MIT Sloan Management Review article. How can a company successfully attack an established market leader? How can it find new ways to compete that everyone else has missed? By breaking the rules of the game in its industry to find new sources of innovation, according to the author. In a study of 30 successful attackers, the author identifies five ways that they think about and develop new game plans: First, redefine the business. A company should ask itself what business it believes it is in, which, in turn, determines its customers, its competitors, and its competitive advantage. Second, redefine the who. Ask: Who is my customer? Companies can locate a customer segment that is not currently served by competitors and design products or services to fill that gap. To be successful, a company must choose a niche that eventually grows to become the mass market, and the company's way of playing the game becomes the new game in town. Third, redefine the what. A company should first decide strategically what products or services it should be selling to its customers. Then it can determine whom to target. To become a strategic innovator, a company has to be the first to identify new or changing customer needs and priorities and find better ways to satisfy them. Fourth, redefine the how. A company can build on its existing core competencies to create a totally new product or way of doing business. It can share competencies across business units, reuse a competence from one unit to create a new business, and expand competencies as it learns new skills. Finally, start the thinking process at different points. In thinking of new ideas and ways to do things, managers need to broaden their perspectives and change their angles of focus. Companies can use any one or a combination of the five approaches to kick-start strategic innovation.

Some U.S. companies have moved manufacturing operations overseas to take advantage of lower wage rates, defending the practice as the only way to stay competitive. For many companies, offshore manufacturing is a poor option for gaining competitiveness. It involves extra transportation, communication, and paperwork; these costs can offset any potential savings. Also, when direct labor is a small percentage of total costs, as it is for much of manufacturing, labor savings are less critical to the bottom line. The only sure way to get more competitive is to strengthen the business as a whole.