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This Wine Industry Note examines the wine industry as the basis for discussing how competitive advantage is created and how advantage can be lost when innovative strategies challenge the incumbent players. The wine industry in 2003 was in a state of transition. Historically, a plethora of products and fragmented international markets made it nearly impossible for a company to establish a dominant international position. In addition, because wine was an agricultural product and subject to the vagaries of the weather, reliability of supply was unpredictable. However, well-capitalized international winemakers were emphasizing global presence and brand recognition. The tremendous success New World producers had experienced in markets traditionally dominated by European winemakers was leading to increased emphasis on creating recognized brands, stable distribution arrangements, and focused advertising campaigns. Only time would tell if the wine industry remained one where terror and the mystery of the wine prevailed, or global brands displaced the local and regional winemakers.

Research in Motion had successfully launched the innovative BlackBerry service in North America and was looking to accelerate business growth there and globally. The company had been using a direct sales approach and was considering a move to using telecommunications carriers as the primary channel. A team of executives was charged with recommending a strategy and implementation plan.

Chronicles the experience of Lucchetti, a Quinenco subsidiary, as it expanded from its historically strong domestic stronghold into Peru. Lucchetti, a pasta company, had grown to the point where there was no room to expand in the Chilean market. The Peruvian market, however, looked extremely promising. Thus, in 1996, Lucchetti Peru was born. By late 2003, however, the new state-of-the-art pasta plant was being liquidated. The management of the company was considering whether Lucchetti should leave the Peruvian market altogether and absorb a $150 million write-off or, alternatively, to continue and build a new plant to take advantage of what was left of the Lucchetti market share, despite the considerable additional investment required. Had this been a case of a good strategy plagued by Murphy's Law? Was there something they should have known or some point where the team members had made the wrong decision? The lesson to be gleaned from this failed Peruvian venture remained unclear, but they wanted to apply those lessons to future domestic and international expansion ventures.

In early 2000, Asahi's senior management was under considerable pressure to launch its own brand of happoshu, a low-end form of beer that enjoyed certain tax benefits under Japanese law. Unlike its major rivals, all of whom had launched happoshu brands in the previous few years, Asahi steadfastly refused to enter the happoshu category.

Chuck Smith, senior brand manager of A.1. Steak Sauce, learns that Lawry's will soon be launching a steak sauce product. He has to determine whether A.1. should defend its business and, if so, what A.1. should do. In formulating the recommendation, he has to consider competitive dynamics and work through the financial implications.

Considers why Blockbuster has a competitive advantage in video retailing. Details both Blockbuster's use of revenue sharing contracts with movie studios to coordinate the vertical chain and Blockbuster's "Go Home Happy" marketing campaign. Challenges readers to understand how revenue sharing contracts, which are imitable and sometimes used by Blockbuster's competitors, can nevertheless be a key part of Blockbuster's advantage.

Provides an overview of the domestic airline industry. Offers details on industry structure and performance necessary for basic industry analysis (or five forces analysis). Also emphasizes cost and benefit drivers, especially hub-and-spoke vs. point-to-point service and sources of differentiation.

Looks at the strategic positioning decision of ValuJet Airlines when it entered the fortress hub of Delta Airlines. ValuJet's strategy, and Delta's response, is an example of what is sometimes called Judo strategy--where the entrant uses the incumbent's strengths against them. ValuJet positions itself in such a way that it is very costly for Delta to retaliate.

Looks at the merger of two Chicago-based nonprofits that share similar missions and clientele, but have different strategies and capital structures. They also operate in the highly competitive job training/temporary work field, where organizational survival is at stake. Suburban Job Link is a fee-driven, largely commercial nonprofit, and STRIVE/CES is a philanthropic-based nonprofit dependent on grants and government for revenue. Explores alternatives to a merger and proceeds from merger discussions to post-merger outcomes.

In 2000, Millennium Pharmaceuticals was the poster child for successful genomic companies. Millennium's fast growth and exuberant valuations were due to the elegant alliances the company had forged with top pharmaceutical, biotechnology, and agricultural companies. However, as the market shifted and Millennium was forced to fully integrate, the type and structure of its alliances no longer worked.

Grove Street Advisors, a manager of customized private equity investment products, has been very successful in its first five years. To grow, the group must decide whether to target smaller organizations, revive its coinvestment efforts, or enter the highly competitive fund-of-funds market.

Investigates how the rise of the Internet as a vehicle for renting and buying movies has disrupted the video rental industry and how market leader Blockbuster Inc. can and should respond to these developments. Explores how the emergence of e-commerce affects the degree to which consumers buy instead of rent low-priced DVDs and how Blockbuster might adjust its online initiatives in response. Details the rise of Internet-enabled substitution threats, such as home delivery services (e.g., Kozmo.com) and Internet subscription services (e.g., Netflix.com), and investigates the potential options and chosen actions of Blockbuster Inc. as it seeks to maintain its competitive position. In times of technological change, firms continuously face decisions regarding the extent to which they should embrace a technologically advanced substitute at the possible expense of their existing products and services. Guides the reader through Blockbuster's decisions and its resulting responses.

Examines the emergence of technologies for delivering video content to consumer homes via direct digital distribution and investigates the strategic options facing video rental giant Blockbuster Inc. as it tries to respond to the new technological substitutes. Examines the impact of personal video recorders (or digital video recorders) on the market for Blockbuster's main complementary products, the VCR and DVD player, and explores how this technology might ultimately impact Blockbuster. Addresses the current and future impact of video-on-demand, the latest incarnation of the long enduring pay-per-view technology, and analyzes Blockbuster's potential and actual response to the threat. In times of technological change, firms continuously face decisions regarding the extent to which they should embrace a technologically advanced substitute at the possible expense of their existing products and services.

Provides a comprehensive background of the video rental industry and home entertainment giant, Blockbuster Inc. Follows the life of Blockbuster Inc. from its first days under founder Wayne Huizenga to its most recent developments under 2003 CEO John Antioco. By looking at various strategic decisions its leaders have made throughout the past few decades, students come to understand better how Blockbuster Inc. has become the industry's dominant player. Also explores the fascinating economics of the home video industry, paying particular attention to the unique revenue-sharing model that has developed in recent years. Understanding Blockbuster Inc. and the video industry's background also allows students to analyze better the various technological substitution threats (such as DVD, DIVX, sell-through, home delivery services, Internet subscription services, personal video recorders, pay-per-view, and video-on-demand).

Investigates how the rise of digital video formats threatens to make videocassette technology obsolete; how this technological substitution might alter the economics and structure of the video rental and retail industries; and how Blockbuster Inc., the industry leader, should respond to the new technologies. Explores Blockbuster's response to the new DVD and DIVX digital disk formats and the impact of these technologies on Blockbuster's traditional business model. Also highlights the industry changes that DVD has created, including an increase in direct video sales at the expense of video rental. In times of technological change, firms continuously face decisions regarding the extent to which they should embrace a technologically advanced substitute at the possible expense of their existing products and services. Guides the reader through Blockbuster's decisions and its resulting responses.

The aluminum industry has suffered from long periods of depressed prices and profits interspersed with relatively short-lived price and profit peaks. The case investigates why, this has occured, focusing on the decision Alusaf must make on whether to invest in a major new facility in the face of depressed aluminum prices. Courseware provides cost data on all the facilities in the industry to develop a supply curve. It also provides a supply and demand model that allows students to investigate: the drivers of average industry profitability and relative profitability of individual players in it; the impact of changes in demand over the economic cycle on the price of metal; the impact of different elasticities of demand on price and profitability; the impact of oligopolistic pricing on industry profitability; the impact of adding capacity on industry profitability; and the ability of a firm to preempt the aluminum market. A rewritten version of an earlier case.

In April 2002, Guy Semmens, a partner in Argos Soditic, has to decide whether to take the lead in the management buyout (MBO) of Kermel, a niche player in the specialty fiber market. Invites participants to consider an MBO from the perspective of the private equity investor and answer the following questions: What is the fair value of Kermel? How should you structure the deal to provide incentives for management while generating adequate returns? What would be the exit strategy?

The Fox television network, launched in 1987 by Rupert Murdoch's News Corp. was in a precarious position in 1993. Although it had met its business plan targets, its ratings in the recently concluded November "sweeps" were indifferent, several of its newly launched shows had failed, and entry of two other networks was imminent. In December 1993, Fox made an outrageous offer to purchase the television rights for the National Football League (NFL) games and, in the process, broke the stranglehold of the major networks on broadcasting these games. Describes the events surrounding Fox's bid and those of the other three networks. Industry sources estimated that Fox could lose several hundred million dollars on the deal, whereas Fox believed that it had purchased the NFL at a discount.

In early 1998, a few major content deals threatened to shape the competitive battle between the television networks for the next several years. These were the bidding for the National Football League (NFL) games, the announcement by Jerry Seinfeld (star of the show Seinfeld on NBC) that this would be the show's last season, and the decision by Warner Brothers to invite multiple bids for its hit drama ER (which also aired on NBC). Describes how these various deals were concluded.

Seattle's theatre industry had a rich, 38-year history of producing top-quality plays and musicals. In a typical year, the theatres collectively sold over 1 million tickets and pumped over $8 million into the local economy. Historically, the five major theatre companies--Seattle Repertory Theatre, A Contemporary Theatre, The Empty Space Theatre, Intiman Theatre, and Seattle Children's Theatre--each had a clearly defined mission statement and unique artistic focus. However, by the close of the 2001 season, the theatres' strategic and artistic identities had blurred as each company pursed growth. Some attributed theatregoers' and donors' waning interest and declining support to this homogenization in addition to the slumping U.S. economy. Others argued that there was too much capacity in the industry and that to survive, the stronger theatres had to expand their niches and even drive smaller, weaker players out of business. The vibrant Seattle theatre industry appeared to face monumental challenges to remain both critically acclaimed and financially sound.