Jacob Zimmermann has seen his revenues and profits declining for the last three years after MegaRols entered his local market and has reduced sales of his Rolex watch offerings in his Midwestern retail store. Bonne Chance has been selected by Swatch to offer their line, which may be an opportunity to revive sales during the upcoming Holiday season and into 2011. The bank loan officer has covered the recent overdraft, but she won't extend more credit. Already behind on some older invoices, cash is very tight, Zimmermann has thirty days to come up with the first payment for stocking the Swatch inventory. He has a number of options to boost sales and liquidate inventory to cover his upcoming purchases of non-Rolex inventory items. Each has an impact on his cash flow and has to be carefully assessed against the reaction from his long time customers Rolex and MegaRols.

George Caldwell, cofounder of Advaark, a cutting-edge ad agency, was listening hard to his biggest client, John McWilliams, CEO of GlobalBev. McWilliams ran a multibillion-dollar holding company for an assortment of food and beverage brands but was giving credit to Advaark for his latest product line. "We were completely blindsided by this whole 'energy drink' craze," McWilliams was saying, clearly delighted that Advaark had steered his company into the business. Then he enthused, "I'd love to get your thinking about our snack lines." "Oh, no," George thought. He hadn't realized that his partner, Ian Rafferty, had made this foray into strategic consulting. Traditionally, their agency focused only on the creative execution of ad campaigns. In fact, they'd disagreed before about whether it was wise to follow customers' needs into areas where they had no skills advantage. George thought Advaark should stick to its core competence. Ian saw a source of easy revenue and an enhanced offering to clients who, he claimed, wanted one-stop shopping. The potential was appealing, but for George, it hardly outweighed the downsides. They'd risk alienating the strategy companies that now referred clients to Advaark. They'd need to recruit or develop new kinds of talent and create a methodology and training. George was just deciding to nix the expansion when a chance meeting with a former client made him pause. She'd heard about GlobalBev's success and wanted the same kind of help. Eager to win back a lapsed account, George was tempted. Should Advaark meet more of its customers' needs by expanding its services or stay focused on what it does best? In R0202A and R0202Z, commentators Gordon McCallum, John O. Whitney, Roland T. Rust, and Chris Zook weigh in on this fictional case.

George Caldwell, cofounder of Advaark, a cutting-edge ad agency, was listening hard to his biggest client, John McWilliams, CEO of GlobalBev. McWilliams ran a multibillion-dollar holding company for an assortment of food and beverage brands but was giving credit to Advaark for his latest product line. "We were completely blindsided by this whole 'energy drink' craze," McWilliams was saying, clearly delighted that Advaark had steered his company into the business. Then he enthused, "I'd love to get your thinking about our snack lines." "Oh, no," George thought. He hadn't realized that his partner, Ian Rafferty, had made this foray into strategic consulting. Traditionally, their agency focused only on the creative execution of ad campaigns. In fact, they'd disagreed before about whether it was wise to follow customers' needs into areas where they had no skills advantage. George thought Advaark should stick to its core competence. Ian saw a source of easy revenue and an enhanced offering to clients who, he claimed, wanted one-stop shopping. The potential was appealing, but for George, it hardly outweighed the downsides. They'd risk alienating the strategy companies that now referred clients to Advaark. They'd need to recruit or develop new kinds of talent and create a methodology and training. George was just deciding to nix the expansion when a chance meeting with a former client made him pause. She'd heard about GlobalBev's success and wanted the same kind of help. Eager to win back a lapsed account, George was tempted. Should Advaark meet more of its customers' needs by expanding its services or stay focused on what it does best? In R0202A and R0202Z, commentators Gordon McCallum, John O. Whitney, Roland T. Rust, and Chris Zook weigh in on this fictional case.

To develop and sustain competitive advantage, companies must begin thinking about strategy in a more integrated way. First, strategies must be comprehensive: they need to have clear direction and a coherent product-market focus, and they must be supported by incisive operating capabilities and resources and robust organization cultures. Second, strategies must align these dimensions and their subcomponents and ensure that each is well adapted to the competitive environment. Third, all of the elements of strategy need to be orchestrated around a powerful core theme. This article shows how managers can develop each of these aspects of strategic integration.

One company can copy another's strategy, reverse engineer its technology, or benchmark its systems. But it cannot duplicate the way strategy, systems, technology, and processes are configured into a synergetic whole. Competitive advantage results from a powerful unifying focus that pulls together the company's core mission and the systems and structures that support the core. Marshall Industries provides an excellent case study of how a company achieved a compelling configuration that goes beyond strategy. Three prototypes of effective configurations are suggested: the pioneer, the salesman, and the craftsman (specific firms illustrate these prototypes). Ideally, a configuration demonstrates consistent emphases: across mission, means, and market; in support systems that direct attitudes and attention; in the prioritization of resources; and in the directing of effort, motivation, and influence. But configuration can be excessive; symptoms of this include too much attention to a single narrow goal and failure to reexamine assumptions and methods. A good configuration permits periodic reassessment and provides the means for renewal and revision. A suggested "configuration audit" is offered as a guide to managers.

Over the past decade, business units have increasingly taken the role of strategy formulation away from corporate headquarters. The change makes sense: business units are closer to customers, competitors, and costs. Nevertheless, business units can fail, just as headquarters once did, by losing their focus on the organization's priorities and capabilities. The author offers a method for refocusing companies that he calls the strategic-renewal process. The principles behind the process are straightforward, but its execution demands extensive data, rigorous analysis, and the judgment of key decision makers. However, when applied with diligence, it can produce a strategy that yields both growth and profit.

Turnaround management is not just for troubled companies. Today's managers must earn the right to compete every day. The basics that will help them do that are the same ones that turnaround managers use to bring failing companies back to life. The rapidly changing environment can dump an otherwise untroubled company into new bankruptcy. Relying on summary reports from distant department heads to learn about the company's cash position can therefore be dangerous. It is better to scrutinize each line item in a cash projection and to use spreadsheet programs to design a number of possible scenarios.