Many people thought of knitting as a hobby for grandmothers, but the time-honored craft had evolved into a booming business with loyal, passionate, and interactive customers worldwide. The Spanish e-commerce business We Are Knitters (WAK) spent the last decade growing into what investors called the “world leader in online knitted kit sales,” a segment of the global $100 billion knitting industry. WAK’s sales soared by 240 per cent between April 2019 and April 2020 due to the arrival of the COVID-19 pandemic in early 2020. By February 2021, while WAK’s co-founders were still grappling with pandemic-related challenges, ahead of WAK's 10-year anniversary, they also started to look ahead to consider plans for further growth and internationalization while maintaining their business model and competitive advantages.
On November 23, 2018, the US jewellery maker Tiffany & Co. (Tiffany) received the final verdict in a years-long legal battle with the Swiss watchmaker The Swatch Group Ltd. (Swatch), which required Tiffany to pay Swatch millions of Swiss francs in damages (plus additional legal fees). The subject of the conflict was a strategic alliance the two companies had announced in 2007, which had once been called a "historic agreement" and a "pathbreaking strategic move." The alliance’s objective was to design and manufacture luxury watches under the Tiffany brand name and distribute them across Swatch's vast retail network and through Tiffany's own stores. How did this once-promising alliance come to be terminated in 2011, less than four years later? What lessons could be derived from the failure of this alliance?
From its humble beginnings as a start-up in China’s Jinjiang County in 1989, Joeone Company Ltd. (Joeone) had grown to become the country’s best-selling producer of men’s pants. Over the past three decades, the company’s founder and chairperson had faced several substantive turning points, including a quality crisis, a period of mediocre growth, and the need to enhance the sophistication of the company’s management approach. These turning points led to continuous business model innovation through the three stages of creation, sustaining innovation, and efficiency. By June 2019, the company was doing very well: an initial investment of ¥720,000 had built a company with sales of ¥500 million by the end of 2003, and the company had been publicly traded since its initial public offering in 2011. Clothes from Joeone’s three brand platforms were sold via direct sales channels in key cities and through major online shopping channels. However, the founder was still grappling with questions of how to align the company’s strategy to ensure its long-term success. Against the backdrop of pressures to further increase efficiency, expand the business (potentially internationally), and respond to changes in the larger competitive and political environment, how could the company sustain its competitive advantage and further improve its operational efficiency and flexibility? What lessons from the past 30 years could be applied to the company’s next 30 years of growth?
In late 2012, Shanghai Euclid Printing Machine Co. (Shanghai Euclid), a joint venture between a Chinese state-owned enterprise and an American multinational enterprise, was in the process of closing down. Established in December 1993, the joint venture had experienced successive rounds of downsizing over the past 18 years, dropping from an original high of 1,800 employees to a workforce size of 668 in 2012. In its place, a 100-per-cent state-owned enterprise would now be founded, and any employees and business activities that would be retained needed to be moved to this new enterprise, Shanghai Gutenberg Printing Machine Co. (Shanghai Gutenberg). The general manager at Shanghai Euclid had to make some difficult decisions about the strategic orientation of Shanghai Gutenberg. He also needed to come up with a plan regarding the remaining 668 employees, deciding whom he could retain and who would need to be laid off. Considering the importance of social harmony in the Chinese context, he also needed to determine how to conduct the workforce change process in order to cause the least possible disruption to employees and other stakeholders.
In 2012, two years after a major restructuring project had begun at German skin care producer Beiersdorf, the process was still ongoing. The new chief executive officer (CEO) inherited several challenges from his predecessor, including the difficult implementation of the new transnational strategy, opposition from employees and the work council, and ineffective market-entry strategies (especially in China). Strong competitors and a slow rate of economic recovery in Beiersdorf’s main markets provided additional complexity. Questions remained about how the new CEO should address the ongoing challenges facing the company.