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Cisco Systems's company strategy was acquire, acquire, acquire during the 1990s. Along the way the firm tailored an integration process unique to each acquisition that Cisco consumed. From the day the intended purchase was announced, human resources and business development teams traveled to the acquired company's headquarters to familiarize themselves with the new acquisition. The day after the deal closed, the human resources arm of the business development department hit the firm with tailor-made orientation programs. Cisco's approach had worked well between 1994 and 2000 with over 70 acquisitions. By 2001, Cisco's buying spree slowed and acquisitions dropped to only two that year, causing public speculation that the firm had over-shopped. Yet in early 2002 John Chambers, CEO of Cisco Systems, announced he still intended to acquire eight or ten companies that year. What new post-merger integration challenges would the firm face? This case provides an opportunity to examine Cisco's post-merger integration (PMI) strategy that takes place in a fast time period in order to achieve cost savings, high earnings, and an integrated culture. Students will discover how Cisco realizes value from its acquisitions and the role of executives in the acquired companies. They will also be challenged to think about how Cisco's PMI strategy reflects their corporate strategy and culture.

Andina Bottling develops an information system for monitoring the performance and operations of its various foreign and domestic subsidiaries.

This note can be used as informational background reading on fuel cells, an environmentally attractive alternative technology for power generation and transportation. Courses that deal with innovation, technology, entrepreneurship, environment, energy/power/transportation issues, or sustainable business may find this useful. This note accompanies a case on fuel cells (UVA-ENT-0018). The note explores fuel cell technology including its history, current and potential applications, fuel sources, environmental issues, and manufacturing challenges. The commercialization issues covered include: performance requirements, time to market, costs, and other outside driving forces such as fuel distribution infrastructure, power generation reliability, fuel prices, etc. Fuel cells are an electrochemical energy source with the potential to take a significant market share from traditional electrical power generation and automobile propulsion technologies. Over the next decade fuel cells may provide more reliable energy and cleaner air while decreasing dependence on fossil fuels for transportation and stationary applications.

This case recounts the strategy of Terra Lycos, an integrated global media company formed by the October 2000 merger of Spain's Terra Networks and US-based Lycos, to achieve profitability and a leading market position. At the time the case was written (November 2001), Terra Lycos trailed its three heavyweight contenders, AOL-Time Warner, Yahoo! and Microsoft/MSN.

Japan Net Bank (JNB), Japan's first Internet bank without physical branches, began operation in October 2000. It attracted mainly young customers looking for convenient, round-the-clock bank services with much more competitive interest rates and transaction charges than traditional Japanese banks. Its access channels included the mobile Internet service i-mode and fixed-line Internet. JNB relied on flexible, open computer systems and a small, young workforce to minimize operation cost. Its shareholders, including parent company Sumitomo Mitsui Banking Corp. as well as NTT DoCoMo (provider of i-mode), were all big companies from different industry sectors. By April 2001, JNB had 130,000 customers. But it needed to resolve a number of issues before being able to achieve long-term success in the face of strong competition from bricks-and-mortar banks and new Internet-only banks. One of those issues was about how to meet with wide fluctuations in usage without overinvesting; the other was alliance management, i.e., how to cooperate with alliance partners to achieve competitive advantage.

This is an MIT Sloan Management Review article. In following the traditional model of strategy development, a company seeks to craft the best possible plan so that it can be handed off for a predetermined course of execution involving a predictable set of events and a specific final goal. This scripted approach resembles traditional theater: The actors speak the same lines and the action comes to the same satisfying conclusion, night after night. The model works well when business is going through a relatively stable period. The current situation, however, is not stable: Companies are still trying to navigate the technological tsunami created by the Internet. Under the circumstances, it makes much more sense for companies to follow an improvisational model -- that is, to throw out the script, bring in the audience and trust the actors to innovate on the spot. The metaphor of improvisational theater helps executives think about the way in which an entire organization can become an arena for staging experiments that can transform a company's overarching strategy. Harvard Business School professor Rosabeth Moss Kanter lays out the six elements of strategic improvisation and illustrates how companies have made use of each one to get the most out of new technologies. Senior managers who understand these elements can create an atmosphere in which improvisational theater thrives; change then becomes an organic process rather than a painful reaction to circumstances beyond the company's control. Although this approach does not advocate a big plunge into something totally new, it is anything but conservative. Companies that engage in continual improvisation through innovative projects of all sizes and shapes are much better equipped to explore highly threatening disruptive technologies and embrace quite radical changes.

This is an MIT Sloan Management Review article. Managers don't have to be told that to innovate they need to embrace drastically different practices from the ones they use for routine work. So why don't they do it? According to Robert I. Sutton, co-director of Stanford University's Center for Work, Technology and Innovation, when business leaders see what innovation actually requires, they often recoil. The right practices seem strange, even wrongheaded. Understandably, it's hard for any executive to take action that will lose money today in order to test ideas that might never make money -- in hopes one idea will make money tomorrow. Nevertheless, Sutton contends, that is just what cutting-edge companies do, bravely tackling ideas that at first blush seemed weird. From his research on such organizations, Sutton has developed eight techniques to move teams and companies from working by rote to innovating. The first two techniques are designed to provoke emotions that interrupt mindless action (provoke unpleasant emotions in others; make yourself uncomfortable). The second two are for smashing mindsets (treat everything like a temporary condition; ignore the experts). The third two help people identify and reject their dearest beliefs (plan to do something ridiculous; hold a sacred cow workshop). The last two are for exploding the composition of organizations and teams (bring in some slow learners; keep changing the composition of teams). Sutton cautions, however, that the exact methods a company uses to spark novel ideas and actions should differ depending on the situation. He recommends giving people freedom to play around with a wide variety of offbeat notions until bringing in new knowledge and helping people see old things in new ways finally enables the company to break from the past.

Describes a specific approach for measuring the efficiency of the groups of computers inside an organization and suggests ways this tool may be used to reduce the company's computing investment while maintaining service. It is a software-enabled industrial engineering approach to delivery of computing resources. The evolution of this approach and the listing of its strengths and weaknesses is the key purpose for the class discussion.

Supplements the (A) case.

A start-up intellect exchange initially offered a public expertise exchange, connecting experts with clients. Now management wonders whether a new, more focused strategy will succeed.

Companies have traditionally viewed their information systems as proprietary. They buy or lease their own hardware, write or license their own applications, and hire big staffs to keep everything running. This approach has many flaws--it's cumbersome and expensive and hinders collaboration. But there's been no alternative. Until now. Today, we're seeing the emergence of an entirely new approach to corporate information systems: web services. Rather than own and maintain all of their own hardware and software, companies will soon buy their information technologies as services provided over the Internet. The authors guide executives through this new IT strategy, explaining what the web services architecture is, how it differs from traditional IT architecture, and why it will provide significant cost savings to businesses while creating new opportunities for growth. They lay out a step-by-step approach for adopting the new architecture. The experiences of companies such as Merrill Lynch, General Motors, and Dell Computer, which are already transitioning to the new architecture, offer three guidelines. First, build on your existing systems, connecting them to the web services architecture to gain immediate benefits. Second, start at the edges of your company, focusing on those applications that connect your organization to customers or other companies. Third, work with your partners to develop a shared terminology for your shared applications, coming to agreement, for example, on the precise meanings of XML terms. As the new architecture matures, the distinction between users and suppliers of web services will fade. The location of particular capabilities and applications will become less important than executives' ability to discover and orchestrate these capabilities to deliver greater value to customers.

A professor has decided to build an equity portfolio made up of common shares from major companies. He has to decide what fraction of the portfolio should be devoted to each of the four issues by determining the best method of calculating risk. Excel files are available, products 7B01E009A and 7B01E009B.

Team-based exercise designed to illustrate the use of the Internet directly by executives. Requires going on the Internet to search for information required to construct a high-tech investment portfolio.

The economics of the Internet are often tied to determining the value of a communications network. However, there are several different kinds of communications networks, each with their own method of valuation. These networks are named by the laws that describe their valuation: Sarnoff's, Metcalfe's, and Reed's. This note describes each network type and its method of valuation.

Corporate information and the contracts that govern it used to be bound together on paper and filed away. But now data fly loose on the Internet--and that can be a problem.

This is an MIT Sloan Management Review article. The Internet has created new markets, customers, products, and modes of conducting business. But it also has given currency to some dangerous half-truths. Subramanian Rangan and Ron Adner, professors of management and strategy at INSEAD in France, explain why seven popular strategies are not the path to profitable growth. First-mover advantage, for example, gets too much credit for e-business success. Companies believe that they can lock in customers and trigger a winner-take-all dynamic, but there is no guarantee that those benefits will go to first movers. The allure of reach--increasing the number of customer segments--causes many companies to ignore fit, the coherence with which their activities reinforce one another. Another tempting growth strategy is to provide customer solutions, offering products or services that complement a company's core offering. But offering solutions can dilute a company's focus. Targeting the right Internet sector is one way to maintain focus. When companies view the Internet as an undifferentiated landscape, they are less able to distinguish the drivers of customer value and performance--or the metrics to measure them. Some companies see best-of-breed-partner leverage as the secret of profitable growth. But although the Internet makes it easier and cheaper to align activities across company boundaries, it does not do much to align interests--a requirement for the creation of joint value. Another misconception is the belief that an Internet business will automatically be successful abroad. The last, and perhaps most dangerous, misconception is managers' belief that technology can substitute for strategy. Companies that understand their technology better than they understand their customers and competition won't succeed in any economy, old or new.

Identifies the 10 key components of a strategic I-Net. May be used with any case or discussion about building strategic IT infrastructures.

Covers the history of IT management from 1960 to the present. Applies the Stages Theory as a basis to trace the evolution of the three dominant IT designs (mainframes, microcomputers, networks) and how companies used and managed IT in each era.

Cisco has invested in building a leading IT, Internet-based infrastructure. This case describes Cisco's latest efforts to broaden Internet capabilities in the company from 30% to 60% penetration. The strategy is intended to sustain Cisco's double-digit revenue growth through the decade.

Many firms have implemented company-wide systems called Enterprise Resource Planning (ERP) systems, designed to integrate and optimize various business processes, such as order entry and production planning, across the entire business. Such systems are complex, and implementing one can be difficult, time consuming, and expensive. Limited reports in the popular press suggest that these systems have achieved mixed success at best; some imply that failure of implementation threatens the existence of the company. Here we present an objective view of ERP systems, based on interviews with operating managers, IT personnel, and consultants. The dominant reason for adopting ERP was to simplify and standardize IT systems; the second most common reason was to have access to accurate information. Cost of implementation generally ranged from 1.5% to 6% of annual revenues, with the software portion of the costs being just the tip of the iceberg. Implementation time varied from 12 months to 4 years. Return on investment in ERP was mixed--from 5% to 20%. For all the negative press ERP systems have received, our interviews indicated that all firms represented in our sample were pleased with them, despite some problems. Successful implementations were characterized by thorough senior management involvement, a cross-functional implementation team, clear guidelines for performance measurement, and detailed plans for training users. Importantly, a single ERP system does not provide an end-to-end solution, as most companies use other systems for specialized functions. Overall, though, the future of ERP is very promising.