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The last of four module notes for students taking an advanced course on competitive strategy. Examines patterns that distinguish successful strategic change efforts from unsuccessful ones.

The third of four module notes for students who are taking an advanced course on competitive strategy. Examines how combinations of external threats and internal barriers to change lead to strategic failure.

The second of four module notes for students taking an advanced course on competitive strategy. Presents concepts and techniques to help students understand the origins of effective strategies.

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As CEO of the world's largest oilseed processor, Alberto Weisser of Bunge must not only decide how quickly to expand in fast-growing markets of Eastern Europe and Asia, but also how best to leverage the firm's global footprint and leadership position. The firm is anticipating expanded demand for meat and oils in Asia, increased world trade in agricultural commodities and processed goods, increased volatility, and the possibility of new biotechnology-based products with special quality traits that will require segregated, identity-preserved supply chains from farm to food customer. Bunge is unique because of its focus, its integration from farm to consumer, its commitment to partnering, and its management style that emphasizes decentralization and local entrepreneurship.

In October 2005, Urs Riedener, head of marketing at Swiss retailer Migros, is contemplating the company's competitive position. Primarily a retailer for foods and near-foods products, the cooperative Migros, with close to 600 retail outlets in Switzerland (but only four outside its domestic market), is facing stiffer competition, both from existing competitors (such as Coop) and new arrivals (such as hard discounters Lidi and Aldi). Riedener and Migros management have so far always had faith in Migros' position in the marketplace, built around its governance structure (the customers were also the owners, creating a close link between the retailer and the market) and its emphasis on never selling harmful products. Socially, ecologically, and ethically produced products were key aspects of Migros' product offering. Riedener knows that Migros benefited from a unique position--and he wants to make sure that Migros defends it from both new and old competitors.

The Dutch "Verenigde Bloemenveiling Aalsmeer Cooperative" (VBA) was on of the world's largest flower exchanges. Around 6,300 flower growers, one half of them located in the Netherlands, used the auction to sell cut flowers and plants to more than 1,000 wholesalers. In 2004, the value of the flowers and plants traded at Aalsmeer exceeded 1.6 billion euros, representing 36% of the world's trade in cut flowers. Every morning, VBA held 55,000 Dutch auctions to match buyers and suppliers. While formidable in size, VBA management worried about the future of the exchange because direct sales between growers and buyers had started to bypass the auction. Kenyan growers, for instance, often shipped roses directly to wholesalers. VBA's management considered a number of strategic initiatives and tactical moves in response to the growth in direct sales. Should the exchange allow non-Dutch growers to become members? Would it make sense to have the wholesalers bear a larger fraction of the trading cost? Philip Smits, CEO of VBA, knew that expanding VBA membership and adjusting trading commissions were guaranteed to be hotly contested topics at the upcoming general meeting.

Amgen Inc.'s Epogen was the first biotech blockbuster drug. Epogen helped prevent anemia, a condition that leads to severe fatigue, increased risk of cardiovascular disease, and even death. At the time, the market for Epogen, which included dialysis patients and persons with cancer undergoing chemotherapy, was estimated to be a $1 billion opportunity. After a critical scientific breakthrough, which allowed Amgen to identify the EPO gene, the company applied for a number of patents to protect its achievement. However, much to its surprise, Amgen learned that EPO had already been patented. Genetics Institute, the holder of the patent, demanded a royalty-free cross-license. Amgen's manager needed to decide how best to compete with its rival.

The first of four module notes for students who are taking an advanced course on competitive strategy. Presents concepts and techniques to help students analyze the parts of a firm's strategy and understand how the parts fit together to form a coherent whole.

In November 2004 Saurer Twisting Systems launched a new twisting machine called Focus in China under the Volkmann brand. The (B) case describes the launch strategy for the new product in China and India, the competitive response, and the early results Saurer achieved. By June 2005 it was clear that Saurer Twisting Systems would easily achieve its objectives in India and Pakistan, but China was proving to be more challenging. The CEO of Saurer Twisting Systems was trying to decide what additional steps he might take to accelerate Volkmann's progress in China and to deal with the competitive threat posed by a major Chinese competitor.

Basketball star Earvin "Magic" Johnson and K. Robert Turner, managing partner of Canyon Johnson Urban Fund (CJUF), raised $271.7 million for investments in urban real estate. The fund considered two projects, both located in Hollywood, CA. The first was located on Hollywood and Highland. Proposed by a reputable developer who wanted to restore Hollywood and Highland to its former glory, the development included a 640,000 square-foot retail complex, a hotel, and the Kodak Theatre, the future home of the Academy Awards. The second project was a mixed-use development, located on Sunset and Vine. This property had suffered a bad run of previous development attempts, and the community had been highly critical of past projects, feeling high rental prices would lock local residents and businesses out of the market. Hollywood and Highland or Sunset and Vine? Turner planned to make his decision soon. Details the economics of both projects.

In 2000, Procter & Gamble Co. introduced Crest Whitestrips, a new, revolutionary product that allowed consumers to whiten their teeth at home. With Whitestrips, P&G created an entire new category in oral care, worth $460 million in 2002. Whitestrips sent P&G's main competitor in oral care, Colgate Palmolive Co., scrambling because several patents protected the strips, making it difficult for Colgate to copy the invention. But in September 2002, the tables turned. Colgate introduced Simply White, a favorably priced whitening product that consumers could simply paint on their teeth. One month after its introduction, Simply White had captured one half of the market, and Crest Whitestrips lost more than 50% of its share. However, P&G's tests of Simply White indicated that Colgate's new product was largely ineffective. Had Colgate just committed a major strategic blunder by introducing a product that did not work? And, if so, how could P&G best take advantage of the situation?

Focuses on Polaroid's attempt to respond to the changes to its competitive environment that are entailed by the rise of digital imaging.

In early 2005, the market for cement in Mexico was changing. The market, particularly in northern Mexico, had traditionally consisted primarily of sales of bagged cement, which was common in developing economies. There appeared to be a shift to bulk cement, more typical of developed economies. CEMEX, the third largest cement company in the world, and the dominant company in Mexico, had developed a strong brand identity for its bagged cement. Bulk cement, however, was harder to differentiate. Describes the Mexican cement industry and dramatic changes that CEMEX had made in 2000-2005 to focus on customer needs, particularly the needs of its distributors. These changes involved a wide range of activities, including dramatic improvements in logistics, creating a retail network among its distributors, and developing a suite of software applications to ensure that the right product was delivered to the right place at the right time. What lessons could the company adopt from its branded business and its success with building its distributor network, if the market turned more toward commodity bulk cement?

Star India, a subsidiary of Murdoch's News Corporation, and the leading TV network in India, is considering whether to acquire (or continue its arms-length relationship) with one of its major content providers, Balaji Telefilms. The case provides information on the industry context, regulatory environment, key competitors, and the Indian TV market. The case is a good vehicle to discuss value chain concepts and understand the relative strategic positions of different players within a value chain. The case also provides a good introduction to one of the largest television markets in the world.

Many economists argue that monopolies stifle innovation. But before the breakup, AT&T and its R&D units constituted probably the most potent innovation engine the world has known.

As part of its R&D efforts, Porsche taps the resources and expertise of nearly 600 graduate students--saving innovation costs in the process.

There are two kinds of businesses in the world, says the author. Knowing what they are--and which one your company is--will guide you to the right strategic moves. One kind includes businesses that compete on a complex systems model. These companies have large enterprises as their primary customers. They seek to grow a customer base in the thousands, with no more than a handful of transactions per customer per year (indeed, in some years there may be none), and the average price per transaction ranges from six to seven figures. In this model, 1,000 enterprises each paying $1 million per year would generate $1 billion in annual revenue. The other kind of business competes on a volume operations model. Here, vendors seek to acquire millions of customers, with tens or even hundreds of transactions per customer per year, at an average price of relatively few dollars per transaction. Under this model, it would take 10 million customers each spending $8 per month to generate nearly $1 billion in revenue. An examination of both models shows that they could not be further apart in their approach to every step along the classic value chain. The problem, though, is that companies in one camp often attempt to create new value by venturing into the other. In doing so, they fail to realize how their managerial habits have been shaped by the model they've grown up with. By analogy, they have a "handedness"--the equivalent of a person's right- or left-hand dominance--that makes them as adroit in one mode as they are awkward in the other. Unless you are in an industry whose structure forces you to attempt ambidexterity (in which case, special efforts are required to manage the inevitable dropped balls), you'll be far more successful making moves that favor your stronger hand.

The leaders of such global powerhouses as GE, Wal-Mart, and Toyota seem to have grasped two crucial truths: First, far from becoming submerged by the rising tide of globalization, geographic and other regional distinctions may in fact be increasing in importance. Second, regionally focused strategies, used in conjunction with local and global initiatives, can significantly boost a company's performance. The business and economic data reveal a highly regionalized world. For example, trade within regions, rather than across them, drove the surge of international commerce in the second half of the 20th century. Regionalization is also apparent in foreign direct investment, companies' international sales, and competition among the world's largest multinationals. Harvard Business School professor Pankaj Ghemawat says that the most successful companies employ five types of regional strategies in addition to--or even instead of--global ones: home base, portfolio, hub, platform, and mandate. Some companies adopt the strategies in sequence, but the most nimble switch from one to another and combine approaches as their markets and businesses evolve. At Toyota, for example, exports from the home base continue to be substantial even as the company builds up an international manufacturing presence. And as Toyota achieves economies of scale and scope with a strong network of hubs, the company also pursues economies of specialization through interregional mandates. Embracing regional strategies requires flexibility and creativity. A company must decide what constitutes a region, choose the most appropriate strategies, and mesh those strategies with the organization's existing structures. In a world that is neither truly global nor truly local, finding ways of coordinating within and across regions can deliver a powerful competitive advantage.

In the past five years, a rising number of companies in North America and Europe have experimented with offshoring and outsourcing business processes, hoping to reduce costs and gain strategic advantage. But many businesses have had mixed results. According to several studies, half the organizations that have shifted processes offshore have failed to generate the expected financial benefits. What's more, many of them have faced employee resistance and consumer dissatisfaction. A three-part methodology can help companies reformulate their offshoring strategies. First, companies need to prioritize their processes according to two criteria: the value it creates for customers and the degree to which the company can capture some of that value. Companies will want to keep their core (highest priority) processes in-house and consider outsourcing their commodity (low-priority) processes. Second, businesses should analyze all the risks that accompany offshoring and look systematically at their critical and commodity processes in terms of operational risk (the risk that processes won't operate smoothly after being offshored) and structural risk (the risk that relationships with service providers may not work as expected). Finally, companies should determine possible locations for their offshore efforts, as well as the organizational forms--such as captive centers and joint ventures--that those efforts might take. They can do so by examining each process' operational and structural risks side by side. This article also describes a new organizational structure--the extended organization--in which companies specify the quality of services they want and work alongside providers to get that quality.