個案總覽

In May 2020, Usha Martin Limited (Usha Martin), a diversified engineering group based in India, was debating strategies for continued future growth. In April 2019, the company had divested its steelmaking and related operations to reduce its debt load. Though the divestment meant a large decline in the company's sales for the year ended March 2020, the company managed to reverse the trend of losses incurred in several recent quarters and years to earn positive profits. However, attaining future growth remained a challenge for the smaller, focused company, especially given the economic disruption caused by the COVID-19 crisis. It was critical that Usha Martin's management made the correct strategic choices so that the company could achieve good, long-term, profitable growth.

In early 2019, Asahi Glass Co., Ltd. (AGC), a diversified Japanese company, was at a critical juncture in its evolution. Three years earlier, AGC had released its Vision 2025, which set a goal for the company to continue as a leading global provider of materials and solutions that improved the daily lives of people around the world. Its financial performance had improved significantly over the previous five years, but profitability remained modest, with operating profit margins slightly above 8 per cent. The modest profitability of the company belied a strong base of technologies in glass, chemicals, electronics, and ceramics. AGC could potentially use these strengths to develop and market high value-added products in varied sectors such as mobility, construction, new energy, and life sciences. To effectively exploit future opportunities, however, the company needed to devise and implement novel strategies, overcome competitive challenges, and align its internal organization. Specifically, it would need to extend or modify its globalization strategy by developing a differentiated strategy for combinations of products and countries, develop new competencies in areas such as biologics, and choose the appropriate entry modes to balance financial and strategic implications. How should AGC proceed toward achieving its Vision 2025 goals?

In early 2019, Asahi Glass Co., Ltd. (AGC), a diversified Japanese company, was at a critical juncture in its evolution. Three years earlier, AGC had released its Vision 2025, which set a goal for the company to continue as a leading global provider of materials and solutions that improved the daily lives of people around the world. Its financial performance had improved significantly over the previous five years, but profitability remained modest, with operating profit margins slightly above 8 per cent. The modest profitability of the company belied a strong base of technologies in glass, chemicals, electronics, and ceramics. AGC could potentially use these strengths to develop and market high value-added products in varied sectors such as mobility, construction, new energy, and life sciences. To effectively exploit future opportunities, however, the company needed to devise and implement novel strategies, overcome competitive challenges, and align its internal organization. Specifically, it would need to extend or modify its globalization strategy by developing a differentiated strategy for combinations of products and countries, develop new competencies in areas such as biologics, and choose the appropriate entry modes to balance financial and strategic implications. How should AGC proceed toward achieving its Vision 2025 goals?

In March 2017, Airbnb needed to make some important decisions regarding its strategy for the Airbnb Business Travel Vertical (ABTV) in Asia. Despite a short history of less than three years since the formal announcement of its launch, the ABTV had exhibited promising performance. The business travel market offered many attractive characteristics, including its large size. Despite the attractiveness of the business travel segment, two issues related to the choice of countries and the choice of segments were of concern. Another key issue related to identifying the specific corporate clients to approach—whether to leverage existing relationships with multinational customers or to approach Asian corporate clients directly.

In March 2017, Airbnb needed to make some important decisions regarding its strategy for the Airbnb Business Travel Vertical (ABTV) in Asia. Despite a short history of less than three years since the formal announcement of its launch, the ABTV had exhibited promising performance. The business travel market offered many attractive characteristics, including its large size. Despite the attractiveness of the business travel segment, two issues related to the choice of countries and the choice of segments were of concern. Another key issue related to identifying the specific corporate clients to approach-whether to leverage existing relationships with multinational customers or to approach Asian corporate clients directly.

In June 2016, Illinois Tool Works (ITW), a fortune 500 manufacturing company in the United States, was at a critical juncture in its evolution. The company had identified a number of lofty goals in its 2015 annual report to be achieved by the end of 2017. These expectations included reaching over 200 basis points in organic growth above the market, a 23 per cent operating margin, a 20 per cent after-tax return on invested capital, 100 per cent free cash flow as a percentage of net income, and 12 to 14 per cent shareholder returns. Riding on the success of 2015, these targets had seemed achievable based on ITW's performance and operational excellence. However, the U.S. and world economies faced a variety of challenges related to political uncertainty in the United States due to a presidential election and also in Europe because of the United Kingdom's recent decision to exit the European Union. Additional challenges such as continued weaknesses in emerging markets and volatile currencies also affected ITW's outlook. ITW's acquisition strategy had yielded excellent results over the past few years by effectively using diversification and decentralization strategies in its growth, but there was considerable uncertainty about achieving future goals. ITW had to make important choices about resource allocation across product groups based on their past performance and future prospects. The CEO also had to make appropriate decisions for continued superior performance.

In June 2016, Illinois Tool Works (ITW), a Fortune 500 manufacturing company in the United States, was at a critical juncture in its evolution. The company had identified a number of lofty goals in its 2015 annual report to be achieved by the end of 2017. These expectations included reaching over 200 basis points in organic growth above the market, a 23 per cent operating margin, a 20 per cent after-tax return on invested capital, 100 per cent free cash flow as a percentage of net income, and 12 to 14 per cent shareholder returns. Riding on the success of 2015, these targets had seemed achievable based on ITW’s performance and operational excellence. However, the U.S. and world economies faced a variety of challenges related to political uncertainty in the United States due to a presidential election and also in Europe because of the United Kingdom’s recent decision to exit the European Union. Additional challenges such as continued weaknesses in emerging markets and volatile currencies also affected ITW's outlook. ITW’s acquisition strategy had yielded excellent results over the past few years by effectively using diversification and decentralization strategies in its growth, but there was considerable uncertainty about achieving future goals. ITW had to make important choices about resource allocation across product groups based on their past performance and future prospects. The CEO also had to make appropriate decisions for continued superior performance.

Haw Par Corporation's healthcare division produces Tiger Balm, the external analgesic rub that has gained global popularity. Despite delivering strong results, the division remains dependent on Asian markets, which poses challenges with regard to low affordability, weak protection of intellectual property and aggressive competition. To achieve sustained growth, the company's executive director is considering several alternatives: geographic expansion, by entering more markets; product expansion, through deeper penetration of existing markets with new products; and extending the brand into the highly competitive wellness space. He also needs to decide whether the division should pursue organic or inorganic growth.

Haw Par Corporation’s healthcare division produces Tiger Balm, the external analgesic rub that has gained global popularity. Despite delivering strong results, the division remains dependent on Asian markets, which poses challenges with regard to low affordability, weak protection of intellectual property and aggressive competition. To achieve sustained growth, the company’s executive director is considering several alternatives: geographic expansion, by entering more markets; product expansion, through deeper penetration of existing markets with new products; and extending the brand into the highly competitive wellness space. He also needs to decide whether the division should pursue organic or inorganic growth.

Companies often initiate strategic changes to adapt to an evolving environment and/or to improve their competitiveness and performance. In this article, I examine why some strategic changes are fruitful for the companies that initiate them whereas others are not. I propose a framework for understanding the fruitfulness of strategic changes based on their expected impact on competitiveness and likely stakeholder commitment to the changes. I propose that strategic changes are likely to be most fruitful when their potential to enhance competitiveness is high and the stakeholder commitment is likely to be high. At the other end of the spectrum, companies should avoid implementing strategic changes that have low potential to enhance competitiveness and where the stakeholder commitment is low. Being poor strategic choices, these changes may not enhance competitiveness or performance, but, in fact, detract from them. I provide case-based evidence for the framework drawing on strategic changes implemented by Starbucks, McDonald's, and Tupperware and also identify conditions, specifically relating to the decision-making process and corporate governance, under which detrimental strategic changes may be implemented. I also offer a set of recommendations to companies to help them avoid making poor strategic choices.

In May 2011, Alan Joyce, chief executive officer of Qantas Group, needed to think about the future strategy of the airline group. Over the past few years, it had launched a number of strategic initiatives to defend its current position and penetrate new markets and segments. Qantas had discontinued its first-class service on many flights, opting to bolster its business-class service instead. Its forays into the budget travel segment through Jetstar proved to be successful and contributed to the overall financial performance of the group. Qantas had also placed a bet on emerging economies such as China, despite experiencing adverse performance in its international routes. However, the financial performance of the company was far from healthy. Qantas was fighting hard to retain its Australian position in the face of attempts by Virgin Blue and Tiger Airways to compete aggressively and gain market share. Analysts wondered whether Qantas was trying to do too much and, in the process, spreading itself too thinly. Would the Qantas Group be better off simply prioritizing across its various alternatives, or did it have sufficient resources (financial as well as managerial) to pursue all the initiatives? And if a narrow focus was better, then which strategic alternatives should Qantas pursue aggressively?