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Supplements the (A) case.

In May 1998, China's Ministry of Foreign Trade and Economic Cooperation (MOFTEC) launched its online market gateway, www.chinamarket.com. One month later, the Ministry of Information Industry (MII) announced a strategic venture with IBM to develop the central e-commerce platform for the country. With the central government promoting e-commerce as a means around domestic infrastructural bottlenecks such as transportation and distribution, the two initiatives were racing to become the gateway through which international e-commerce was "funnelled" into China. Given the open standards and the open access, which are a defining aspect of the growth of e-commerce, could China seriously expect to control the flow of e-commerce to such an extent?

In 1993, China's version of the National Information Infrastructure (NII) was launched, an "informatization" policy office was initiated, and actual implementation of the "information superhighway" begun. These actions distinguished China from much of the rest of the world, both developed and developing. The initiative was to be developed in three stages with the first stage to be completed by the year 2000, at which time the basics of the NII would be in place. By that time, the government expected to have established a high-speed communications platform covering the entire country. The platform would primarily support the "Golden series," a national economic information network, which included a variety of specific information service systems. Why and how was China able to develop and coordinate an NII initiative? Where would it encounter problems?

In the 1990s, freight forwarding had become a rapidly changing and dynamic industry. Vertical integration up the supply chain meant that third-party logistics providers could provide a "one-stop-shop" concept to customers and achieve generally higher margins per transaction volume. Still in the grip of the Asian economic crisis, Kuehne & Nagel management consider a future strategy for their Asia-Pacific operations. Covers several concepts relating to competitive strategy, corporate structure, and core competence. The principal objective is to highlight the juxtaposition of business management theoretical concepts with their application.

Competition in the information age often takes the form of a standards war: a battle for market dominance between incompatible technologies. A company's success or failure can easily hinge on its ability to wage such a standards war. Standards wars are especially bitter in markets with strong network effects, where consumers place great value on compatibility and interconnection with each other. These markets tend to exhibit positive feedback and "tip" to a single winner. Based on a study of dozens of standards wars going back over 100 years, this article offers a "battle guide" for waging a standards war. After classifying standards wars and identifying seven key assets that firms can use to successfully establish a new technology, the authors recommend three tactics in standards battles: building alliances, exploiting first-mover advantages, and managing consumer expectations.

This article analyzes how Knowledge Management (KM) is likely to affect competition in the management consulting industry. KM represents a fundamental and qualitative change in this industry's basic production technology. Because management consultants acquire information directly from their customers, for these firms, KM technology exhibits increasing returns to scale. As such, although KM clearly represents an opportunity for some consultants to build a sustainable competitive advantage, it is likely to lead to a shake-out. Based on the industry's early experience with KM systems, this article describes a number of possible future outcomes as well as strategies that consultants can follow.

Provides an overview of current trends in the global automotive industry and a description of Daimler-Benz AG and Chrysler Corp. prior to the merger. Describes this first transatlantic merger, raising the issues of strategic positioning, potential tradeoffs, and competitive moves.

Describes the organization of the post-merger integration, cultural issues, and the attempts to align the merged company through a mission/vision statement. Explains the complexity of this merger by highlighting implementation issues (e.g., corporate governance, brand separation, etc.).

In late 1998, 38-year-old He Boquan, CEO of the Guangdong Nowada Group, a health beverage producer, needs to decide how to fund his company's growth and ambition to become China's number one domestic health beverage producer by 2002. A consultants study revealed that foreign competition in China was likely to accelerate within the next three years, and that, without improved management skills and additional capital, Nowada risked going from being a leader to being marginalized. The consulting firm therefore identified potential investors (including the investment arm of a European family conglomerate, an international direct investment firm, and a food and beverage multinational). In late 1998, several rounds of negotiations gave He and his team three options: accept a majority investment by the multinational, accept a 25% capital injection with a risky repayment put option, or "go it alone."

Examines corporate strategy for a diversified firm in the French business context. Issues include corporate governance, vision, and the management of unrelated diversification. After the company's first loss ever, the Vivendi board elected a new chairman who completed a financial restructuring and articulated a new corporate strategy. His actions were in part determined by the French business environment, which does not easily permit staff reductions, and by the increasing importance of foreign investors in France.

Provides an overview of the current restructuring that is taking place in the retail financial services industry. Provides a brief overview of the structural changes in banking, brokerage, insurance, and mutual funds. Used as background for examining the strategies of several firms competing in this space.

Provides an overview of Charles Schwab's current strategy for retail financial services. Retail Financial Services in 1998 should be given to all students as background material. The class should then be split into groups, with each group receiving one of the following cases: Retail Financial Services in 1998: Charles Schwab, Retail Financial Services in 1998: Fidelity Investments, Retail Financial Services in 1998: First Union, Retail Financial Services in 1998: Merrill Lynch, or Retail Financial Services in 1998: Travelers to prepare in order to understand how each player is attempting to capture value in the converging world of retail financial services.

Provides an overview of Travelers Group's current strategy for retail financial services. Retail Financial Services in 1998 should be given to all students as background material. The class should then be split into groups, with each group receiving one of the following cases: Retail Financial Services in 1998: Charles Schwab, Retail Financial Services in 1998: Fidelity Investments, Retail Financial Services in 1998: First Union, Retail Financial Services in 1998: Merrill Lynch, or Retail Financial Services in 1998: Travelers to prepare in order to understand how each player is attempting to capture value in the converging world of retail financial services.

The merger of Ciba-Geigy and Sandoz produced genomic-based synergies for health care, agribusiness, and nutritional supplements. How to build on the strength of the individual divisions and provide synergies that would continue Novartis' leadership role is the question facing the company.

As Levi-Strauss implemented its custom-fitted jeans offering, the traditional value chain for clothing manufacturing and retailing was transformed. This case allows students to explore the subtleties of this transformation and the management implications.

Supplements the (A) case.

This is an MIT Sloan Management Review article. Why has the strategy star begun to dim? Why is strategy no longer a "big idea" in most companies? According to the author, strategy innovation is key to creating new wealth. Only those companies that are constantly able to reinvent themselves will survive in a discontinuous world. Yet, no one seems to know how to develop innovative strategies that create wealth. The author calls for the development of a theory of strategy innovation and offers several propositions: that strategy is emergent, much like life itself; that strategists have been working on the "strategy," rather than on the preconditions that give rise to strategy innovation; that strategy is poised on the border between perfect order and total chaos; and that great strategy is both luck and foresight. The author goes on to offer five preconditions for the emergence of strategy: First, the entire organization, not just top management, should have a voice in creating strategy. Second, conversations about strategy must cut across industries and organizations so that knowledge can be combined in new ways. Third, people will embrace change when they see opportunities for rewards and growth. Fourth, managers must help companies reconceive themselves, customers, competitors, and opportunities. Finally, companies must do some market experimentation to determine which new strategies work.

In New Rules of the New Economy, Kevin Kelly urges companies to rethink their business strategies--to base their decisions on a new set of rules in which networks are everything. Easy electronic communication is indeed altering business strategies in many industries, and Kelly's book provides colorful examples and analysis of the opportunities ahead. But are networks, in fact, everything? In reviewing Kelly's book, economics consultant Peter Bernstein reminds readers that networks have been influencing businesses for centuries. Consider the railroad, which boosted living standards enormously by connecting isolated economies into a worldwide market. The Internet is just one more step in the growing interconnectedness of business, and hardly the most important. Nevertheless, Bernstein agrees that a "new economy" has arrived. Network-based opportunities are just one of several facets of this new orientation, all made possible by the regime of low inflation and intense competition introduced in the 1980s. Paul Volcker and his colleagues at the Federal Reserve gave managers the monetary stability necessary for taking risks. T. Boone Pickens and Michael Milken successfully challenged the old guard of corporate leaders that had been slow to respond to competitive challenges from Europe and Asia. The companies emerging from the turmoil of this period are intensely focused on innovation, competitiveness, risk management, and profitability. Without the environment created by Volcker, Pickens, and Milken, Kelly's highly interconnected economy could not have become the dazzling reality that it is.

In this article, Michael Porter, the C. Christensen Professor of Business Administration at the Harvard Business School, explains how clusters foster high levels of productivity and innovation and lays out the implications for competitive strategy and economic policy. Economic geography in an era of global competition poses a paradox. In theory, location should no longer be a source of competitive advantage. Open global markets, rapid transportation, and high-speed communications should allow any company to source any thing from any place at any time. But in practice, location remains central to competition. Today's economic map of the world is characterized by what Porter calls clusters: critical masses in one place of linked industries and institutions--from suppliers to universities to government agencies--that enjoy unusual competitive success in a particular field. The most famous examples are found in Silicon Valley and Hollywood, but clusters dot the world's landscape. Porter explains how clusters affect competition in three broad ways: first, by increasing the productivity of companies based in the area; second, by driving the direction and pace of innovation; and third, by stimulating the formation of new businesses within the cluster. Geographic, cultural, and institutional proximity provides companies with special access, closer relationships, better information, powerful incentives, and other advantages that are difficult to tap from a distance. The more complex, knowledge-based, and dynamic the world economy becomes, the more this is true. Competitive advantage lies increasingly in local things--knowledge, relationships, and motivation--that distant rivals cannot replicate.

This nonprofit strategic planning case tells the story of the Phoenix-based National Family Legal Foundation, an anti-pornography advocacy group which, after attaining national influence during the 1980s, finds itself, in 1995, nearly bankrupt and without a clear mission. When Charles Dunlap, a local real estate developer, agrees to join the board of directors, he unknowingly takes the first step toward a central role in deciding the fate of NFLF. With little left to work with but a skeleton staff and a small group of committed board members, Dunlap, thrust into a central role, must decide whether there is any way the organization can be effective, given its now-limited resources, or whether the time has come to close up shop.