Over its 17 years in existence, Tesla had redefined people's view of electric cars, and in 2020, the company saw its stock rise by more than 700% to became the most valuable carmaker in the world. In December 2020, Tesla celebrated its fifth consecutive quarter of profit and joined the S&P 500. However, in 2021 competition in the electric vehicle space was rapidly heating up. In January, General Motors announced that it would phase out gas-powered vehicles to sell only vehicles with zero emissions by 2035. A week later, Ford announced that it would invest $22 billion on electric vehicles (including hybrids) and $7 billion on autonomous vehicles by 2025. Meanwhile, BMW was developing electrified versions of all its models, and the Volkswagen Group had announced a new strategic plan with the specific aim of catching up with Tesla. Tesla's run had defied the skeptics, but with competition revving up, would Tesla be able to dominate the market in the years to come?
This note gives managers a concrete perspective on what 'a strategy' really is, what makes a decision 'strategic,' and what 'strategic thinking' means. It also gives them practical frameworks to assess whether some set of decisions is really a strategy and how to assess a strategy's effectiveness. It finally also gives managers a starting point for developing strategy in the form of the '4+3 Elements.' The note builds on the theory of 'strategy as core guidance.' (This is an in-depth rewrite of "Strategy and Strategic Decisions" HBS 712-500.)
Established in 2007, by early 2014 SoundCloud already boasted the second largest number of active music listeners among all streaming services and was recognized as the go-to platform for new artists. Yet, its founders Alexander Ljung and Eric Wahlforss were questioning whether the firm should continue to focus on serving as a lab for emerging musical artists. They were wondering if the firm should instead enter the booming mainstream music-streaming market.
After years of growth, the Swiss watch industry faced an existential crisis. Exports to the US, their primary market, had dropped by more than two thirds over the past five years. Swiss watches were being disrupted by high-quality and affordable American products. The Swiss had to figure out how to respond. No matter the outcome, the year 1876 would prove to be pivotal.
Julie Rice and Elizabeth Cutler founded SoulCycle, an indoor cycling studio chain, in 2006 as more than a health club; they wanted it to become a lifestyle brand that would "empower riders in an immersive fitness experience." By early 2015, SoulCycle had grown to 38 studios in seven metropolitan areas. In March 2015, Equinox, a luxury fitness company that had financed SoulCycle's expansion in 2011, approached the co-founders with an offer to buy them out for $90 million each. It was an attractive offer but it would also likely circumscribe their responsibilities. Rice and Cutler had to decide whether to accept the Equinox offer as a prelude to smaller roles at the firm (even potential exit), or continue investing time, energy, and financial resources in growing the business.
This case, set in 1990, describes the history of Walmart and asks what competitive strategies Kmart might adopt in response to Walmart's success. It discusses the strategy and organization of both companies in terms of HR practices, store location, distribution, information technology, procurement, pricing, and company culture. This (A) case is the first in a multi-part series that goes on to describe the results of Kmart's competition with Walmart, as well as Walmart's later grappling with ecommerce and Amazon.
This note gives students a systematic and comprehensive framework for analyzing and managing competitive advantage. It pays explicit attention to both creating and sustaining advantage and considers both alignment and assets (or resources) as sources of advantage.
This note gives students a systematic and comprehensive framework for analyzing and influencing market attractiveness. It pays explicit attention to value creation, complements, and the dynamics of market attractiveness. It also includes careful sub-frameworks for analyzing each driver, such as bargaining power or competitive intensity.
Co-founders Julie Rice and Elizabeth Cutler have grown SoulCycle from a business idea in 2006 to a major presence among urban boutique fitness studios in 2015. In March 2015, fitness company Equinox approaches them with an offer to buy them out. Evaluating the offer requires an assessment of market or industry attractiveness and of SoulCycle's (potential) competitive advantage.
In 2005 Craig Purse, the CEO of Videojet, a company recently acquired by the conglomerate Danaher, is dealing with the unexpected failure of a new high tech printer just launched in the market. The new product exemplified the first real instance in which the Videojet team had used the managerial processes of the Danaher Business System (DBS). Was the failure of the new printer a sign that the DBS was fundamentally inadequate for product development projects? Or was the failure instead a symptom that the Videojet team had not properly adopted the DBS? What should Purse do to correct the course of the company?
In 2005 Craig Purse, the CEO of Videojet, a company recently acquired by the conglomerate Danaher, is dealing with the unexpected failure of a new high tech printer just launched in the market. The new product exemplified the first real instance in which the Videojet team had used the managerial processes of the Danaher Business System (DBS). Was the failure of the new printer a sign that the DBS was fundamentally inadequate for product development projects? Or was the failure instead a symptom that the Videojet team had not properly adopted the DBS? What should Purse do to correct the course of the company?
This note introduces students to some economic concepts and ideas that are important ingredients for strategy, such as scale, learning, and the effects of market structure on competition. The note approaches these ideas really from a strategy perspective with a focus on their practical implications.
In 2013, Airgas was the market leader in packaged industrial gas distribution. Recent acquisitions had made it into a larger player in upstream gas production as well, where it competed with Praxair and Air Products. Should Airgas continue building a position in gas production or divest these activities?
This note introduces the Performance and Value Analysis (PVA) framework, an integrated framework to analyze strategic performance (i.e., performance corrected for temporary and random effects). This framework (quantitatively) decomposes a firm's performance into 3 consistent parts - common performance, value creation advantage, and bargaining advantage - and then provides frameworks to analyze each.
Despite facing giants like Coke, Pepsi, and Budweiser-with obvious potential sources of competitive advantage-Red Bull had established itself as the U.S. market leader in energy drinks. By 2008, however, Red Bull's dominance was challenged as Monster drinks surpassed it in volume. The case considers judo strategy both from the perspective of a small player (when up-start Red Bull faces Coke, Pepsi, and Bud) and as a large player (when market leader Red Bull faces up-start Monster).
This note introduces a framework for analyzing the sustainability of competitive advantage. (While it applies more broadly, it was developed as a component of the PVA framework.)