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Space Data Corp. plans to partner with the U.S. National Weather Service to place transceivers on weather balloons and thereby create a national mobile communications network. The company is in the late development stages and is planning to launch a regional test that will demonstrate its ability to provide paging and messaging. It intends to sell its service to existing mobile carriers, such as Skytel and Verizon, rather than directly to end users. This case illustrates how Space Data has applied flexible business processes throughout its initial market research and technology development to create a system that can make optimal use of its limited resources and respond rapidly to changing conditions. As the case concludes, the executive team at Space Data faces three opportunities, each with very different costs and benefits for the company. It can proceed with a regional test of paging and messaging as planned, leap forward to develop a more complex but potentially more lucrative voice service (forgoing a regional test), or make a transition to the small but financially stable telemetry market. Includes color exhibits.

Today's strange, new business world needs an augmented model of industry and market analysis that reflects recent developments in industry dynamics, such as globalization, entrepreneurship, technological advances, and the Internet. Here is such an updated model, built on and expanding the basic premises that underlie Michael Porter's Five Competitive Forces Model. Suggestions are offered for how managers can position their businesses for success in the current competitive environment. Competitive rivalry (the force with the greatest influence on ROI and risk) includes both substitute products and the threat of potential entrants, combined because they are so highly interrelated. The presence of durable barriers to imitation is the most powerful deterrent to destructive turbulence. Strategic positioning in competitive markets requires creating a market-focused organization, a new market space, and relationships with key customers and suppliers. Strategy must be conceived as a series of real options.

Examines the industry structure and competitive strategy of Coca-cola and Pepsi over 100 years of rivalry. New challenges of the 21st century included boosting flagging domestic cola sales and finding new revenue streams. Both firms also began to modify their bottling, pricing, and brand strategies. They looked to emerging international markets to fuel growth and broaden their brand portfolios to include noncarbonated beverages like tea, juice, sports drinks, and bottled water. For over a century, Coca-Cola and Pepsi-Cola had vied for the "throat share" of the world's beverage market. The most intense battles of the cola wars were fought over the $60 billion industry in the United States, where the average American consumes 53 gallons of carbonated soft drinks (CSD) per year. In a "carefully waged competitive struggle," from 1975 to 1995 both Coke and Pepsi had achieved average annual growth of around 10% as both U.S. and worldwide CSD consumption consistently rose. This cozy situation was threatened in the late 1990s, however, when U.S. CSD consumption dropped for two consecutive years and worldwide shipments slowed for both Coke and Pepsi. The case considers whether Coke's and Pepsi's era of sustained growth and profitability was coming to a close or whether this apparent slowdown was just another blip in the course of a century of enviable performance. A rewritten version of an earlier case by Michael E. Porter and David B. Yoffie.

Spreadsheet supplement for case 702-442.

Supplements The Baseball Strike.

Any company can learn to compete more effectively with stronger rivals by mastering the concept of balance in the face of attack. Balance is a judo strategy principle that emphasizes the importance of retaining the initiative and shaping the competition in ways that make it easier to win. Rather than get thrown on the defensive, successful judo strategists learn to engage with powerful opponents by mastering three techniques: grip your opponent, avoid tit-for-tat, and push when pulled. These techniques are illustrated with a variety of examples drawn from both new- and old-economy companies.

To thrive in a connected world, businesses need common standards. But industry consortia require collaboration from competitors, making these consortia difficult to set up and keep on track. Learn five practices that will help cross-industry groups succeed.

Many companies are exploring mass customization as a way to demonstrate market leadership and capture price premiums. Examines Adidas' recent "mi adidas" initiative, aimed at delivering customized athletic footwear to retail customers. Discusses the practical implications associated with expanding the initiative from a small pilot to a wider operation with retail presence. Enables the reader to evaluate an interlinked set of issues, from marketing, retailer selection, and information management through production and distribution, project management, and strategic fit. Offers three alternative routes for moving forward as of October 2001 and challenges participants to decide the future direction of "mi adidas."

Provides a narrative description of the price war in the U.S. airline industry that broke out in Spring 1992.

General Motors (US) and Avto VAZ (Russia) are, in the spring of 2001, in the final stages of forming a joint venture (JV) for the manufacture of a new automobile in Russia, the Chevy Niva. The car would be largely the result of Russian engineering and construction with limited GM input and the GM Chevrolet badge. The JV, if completed, would represent a $300 million combined investment by the parties and be a totally new approach used by Western investors in penetrating emerging markets. .

Supplements the (A) case.

Summarizes some of the pitfalls of conventional strategic planning processes and proposes an alternative approach to making strategic choices.

Global Sources Ltd. is Asia's leading publisher of business-to-business (B2B) trade-related magazines. In the latter half of the 1990s, the Internet became a powerful force for change in the business world, leading to an explosion of Internet-related activities by both traditional bricks and mortar companies, as well as countless upstart dot.coms. The chairman and CEO of Global Sources had foreseen the opportunities afforded by the Internet early on and had made it an integral part of the company's strategy. Currently, the level of activity in the B2B portal space has evolved so quickly that a noticeable degree of confusion among suppliers, buyers, and investors about the merits and drawbacks of these portals has arisen. Moreover, the sustainability of these ventures has been brought into question, which is causing a dramatic reversal of fortunes for many companies. The result is that there are strong signs that the industry will experience a significant consolidation. This has left Global Sources chairman with the key challenge of generating greater visibility among users and potential users of the companies services, as well as greater interest from the investment community to remain viable. The company must be able to educate and convey its value proposition to its users, as well as determine whether it should continue to remain an independent player, purchase a competitor, or enter into a strategic alliance.

Amalgamates several cases concerning strategic decision making at Intel Corp. Discusses the company's decisions surrounding its entry and exit from several lines of businesses, most involving varieties of semiconductors that cost billions of dollars to develop and produce and profoundly influence the company and the marketplace.

This is an MIT Sloan Management Review article. In many ways, the Industrial Age has been an era of harvesting natural and social capital to create financial and productive capital. So far, the New Economy looks more like the next wave of the industrial era than a truly postindustrial one. Why should we care? Because, say the authors, the basic development patterns of the industrial era are not sustainable. In the face of this challenge, organizational learning expert Peter Senge and former Volvo and IKEA senior executive Goran Carstedt hail the emergence of a new environmentalism driven by innovation, not regulation--radical new technologies, products, processes, and business models. They describe how more and more companies are recognizing the business opportunities that a focus on sustainability creates. Such a shift in thinking is already evident in many companies and industries, where learning-organization principles are being applied to create sustainable business models. Simultaneously, they become inspirational, energetic places to work, where even relationships with customers and suppliers improve. Nonetheless, ecoefficiency alone will not create a truly postindustrial age: a strategy must consider how the economic system affects the larger ecological and social systems within which it resides. Only a more integrated view will enable companies to innovate for long-term profitability and sustainability. There are three core competencies that learning organizations must master to profit from sustainability: encourage systemic thinking to sense the emerging future; convene strategic conversations with investors, customers, suppliers, and even competitors to build the trust needed to change outmoded mental models about what business success is; and take the lead in reshaping economic, political, and societal forces that stymie change. According to Senge and Carstedt, no time in history has afforded greater possibilities for a collective change in direction.

This is an MIT Sloan Management Review article. To grow steadily and avoid stagnation, a company must learn how to scale up and extend its business, lengthen its expansion phase, and accumulate and apply new knowledge to products and markets faster than competitors. Managers can't leave growth to chance. They need a plan that renders consistent sales growth over the long term--one that captures management's vision for expansion and that addresses the product and market combinations the company intends to pursue, the size it hopes to achieve in a particular time frame, and the know-how and organizational structures needed. Three thriving companies demonstrate three different strategies in action. The Netscape experience shows how a company can scale up--do more of what it already does well. Netscape went from $80 million in sales in 1995 to $500 million just three years later. IKEA used duplication by repeating the business model in new regions. According to the authors, IKEA's success is tied to the way it manages and transfers knowledge. SAP's growth strategy is an example of granulation--growing select business units. SAP started with a basic enterprise-resource-planning system, then moved to multiple products for e-commerce and Internet activities. Using one product as a platform, it began allowing customers to fine-tune virtually any resource-planning system. The authors emphasize the importance of combining strategies for growth with explicit strategies for learning. Companies must decide what kind of growth strategy they want to pursue, given their capabilities and market opportunities. They must then make the strategy work by changing their structure and processes in a way that lets them acquire or create specific knowledge about new technologies, customers, and industries.

This is an MIT Sloan Management Review article. The quest for competitive advantage often inspires executives to imitate the strategies of the most successful companies. Interestingly, however, precisely opposite factors are considered sources of competitive advantage at different points in time. Henry Ford's emphasis on focus has been touted as the key to success right alongside General Motors' product-line breadth. IBM's vertical integration was considered an unassailable source of competitive advantage a generation ago; today, everyone admires the outsourcing flexibility inherent in the nonintegrated business models of Cisco Systems and Dell Computer. If history is any guide, the practices and business models that constitute advantages for today's most successful companies confer those advantages only because of particular factors at work under particular conditions at a particular time. Harvard Business School's Clayton Christensen, a leading thinker on disruptive technologies, alerts managers to the imperative of understanding the context that supports a particular competitive advantage. He explains why, for example, pharmaceutical companies' current focus on ever larger mergers is moving them in exactly the wrong direction at exactly the wrong time. He blames their strategists (and investment bankers) for not thinking deeply about cause and effect with respect to competitive advantage. He also notes that the very existence of competitive advantage sets in motion creative innovations that, as competitors strive to level the playing field, cause the advantage to dissipate. That does not mean the search for competitive advantage is futile. Rather, it suggests that successful strategists need to cultivate a deep understanding of the processes of competition and progress and of the factors that undergird each advantage. Only then will they be able to see when old advantages are poised to disappear and how new advantages can be built in their stead.

In 2001, International Management Group (IMG) is the dominant company in the sports management industry. Its founder and CEO, Mark McCormack, is credited with having created the industry of sports management in the early 1960s. Over the next 40 years, IMG's expansion from athlete representation into other arenas--including representing models and classical music artists, producing and broadcasting television shows, operating training academies, corporate consulting, and financial planning--has been both dramatic and successful. This case describes the company's logic behind each expansion decision, as well as several challenges that the company has had to confront, specifically, maintaining the loyalty of the agents and clients, avoiding conflicts of interest with clients by virtue of the company's broad reach, deciding where to expand next, and meeting the challenge of increased competition from other sports management conglomerates.

Supplements Yahoo! Business on Internet Time.

Examines the proposed merger between HP and Compaq and the impact of this merger upon the companies and the industry as a whole. Explores the challenges that a combined HP and Compaq will face in various industry segments.