This note explains the considerations involved in determining a firm's vertical, horizontal, and geographic scope. It is organized into five sections: An introduction that presents important questions related to strategy formulation that managers face after mapping their firm's value chain; a second section that provides a brief introduction to Transactions Cost Economics, a framework that helps explain firm governance and scope decisions; a third section that links TCE considerations to decisions about a firm's vertical and horizontal scope; a fourth section that explores the issue of where to locate activities; and a fifth section that concludes. This case is included in Module 1 of the course Business Thought & Action.
This note is an adaptation for classroom use of Chapter 2 of "The Services Shift" by R.E. Kennedy (2009). It introduces students to Michael Porter's 1985 value chain approach to strategically analyzing firms, which says that a firm is a system of interconnected activities with both physical and information linkages. It takes students through the basic steps of analyzing a firm's value chain, explaining that to truly understand how a firm can create and capture value, it is important to explore how activities within the firm are organized and coordinated. The note concludes with some general insights to take away from the value chain framework. To apply this framework to specific companies, this note can be taught in conjunction with "Note on Exploring the Value Chain of Branded Fashion Goods", which profiles Gap Inc. and Deckers Outdoor Corp., and gives students a context in which to use the value chain framework. This case is included in Module 1 of the course Business Thought.
This mini-case provides a concise description of Ford's early history, highlighting milestones like the debut of the Model T, the use of labor specialization, the first moving assembly line, the famous "$5 a day" plan for employee motivation, etc. The mini-case focuses on the challenges that Henry Ford faced (timing production activities, industrial shortages, price increases, etc.) and how vertical integration helped him to overcome many of these challenges. This case is included in Module 1 of the course Business Thought & Action.
In 1978, Deng Xiaoping assumed the leadership of an impoverished China, after Mao Zedong's disastrous Cultural Revolution. During the next 17 years, Deng applied pragmatic policies to liberalize the Chinese economy gradually while maintaining the power of the Communist state. In hindsight, this strategy was among the most successful development strategies ever. Reviews Chinese political history and explores in detail eight parts of Deng's development strategy. Concludes by looking at the problems facing Jiang Zemin in 1997 as he takes control of China for the next leg of economic development.
Explores the phenomenon of IT-enabled services (ITES) exports from developing countries. Reviews the business and technical drivers of this phenomenon, describes major segments of the industry, discusses key challenges facing these firms, and profiles seven ITES firms.
Reviews the issues managers face when attempting to value projects abroad. These include dealing with multiple currencies, adjusting for country and industry risk, and considering expropriation and devaluation risk.
Examines the founding and evolution of a for-profit microlending organization in Bolivia. Explores the mechanics of microlending, nonprofit and for-profit approaches to serving the informal sector, and how the industry evolves over a 15-year period.
Explores the controversy over the pricing of AIDS drugs in poor countries. This issue has received wide publicity due to two events: 1) a court case in South Africa that seeks to force drug companies to license their patents and 2) the announcement by the Indian pharmaceutical firm, Cipla, that it would copy U.S. firms' AIDS drugs and sell them at cost to countries in Africa. Made up of excerpts from 10 articles and highlights the intense feelings on both sides of the issue. Encourages students to think about the short- and long-term consequences of various approaches, the role of government and international institutions, and the pressures facing drug company executives.
Examines the founding and early development of an Indian venture capital firm. Focuses on the opportunity in the Indian high-technology sector, how the founders have adapted the U.S. venture capital model to an emerging market context, and the organizational challenges of early success.
An introduction to the concept of exchange rates, simple analytics regarding currency appreciation and devaluation, and real and nominal exchange rates. Concludes with a series of examples that illustrate how shifts in exchange rates and inflation can affect firms' competitiveness.
Focuses on efforts to combat corruption. Approaches include international laws, international agreements, efforts by international development organizations, and private efforts by firms and nongovernmental organizations.
Explores various aspects of corruption in international business, in two sections. The first section provides a broad discussion of the ethical, business, and legal aspects of corruption. The second section provides a series of "caselets" that are designed to promote discussion of how students would act in particular situations, as well as the potential costs and benefits of these actions.
Examines Mavesa's response to economic liberalization. Looks at Mavesa's efforts to expand into neighboring countries. Also looks at efforts to support the firm's stock price. A rewritten version of an earlier case.
Explores the development of the Internet in China. Starts with background information on China, the Internet, and several common Internet business models. Discusses regulatory and business obstacles to the growth of e-commerce in China. Finally, presents forecasts and an overview of several leading firms.
Programs of economic liberalization often lead to dramatic changes in industry structure. This note presents excerpts from several research papers that summarize findings on how industries evolve following abrupt policy reforms. The note is organized into seven sections. The first introduces the concept of competitive shocks and briefly discusses their prevalence. Subsequent sections discuss typical patterns of industry transformation, entry and exit, changes in concentration levels, and changes in foreign presence (defined as imports plus sales of foreign-owned plants).
Examines InterGen's breakthrough Quezon power project, located in the Philippines. Explores how InterGen evaluates and manages project risk through partner selection, the use of operating contracts, and project finance techniques.
Examines an innovative, village-based management program in Zimbabwe. While the program has been quite successful, executive director Steven Kasere is concerned about the future. The program has become quite controversial in the environmental community, and the U.S. Agency for International Development (USAID) support may be in peril.
Briefly describes six historical currency crises. Presents actual data on 11 disguised countries and asks students to consider which is most likely to experience a crisis.