Fundamentals Of Strategy 2nd Edition Gerry Johnson, Kevan Scholes, Richard Whittington - Solutions

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Commenting on the Pixar acquisition (Strategy Capsule 14.1), Disney’s CEO stated: “You can accomplish a lot more as one company than you can as part of a joint venture.” Do you agree?Illustrate your answer by referring to some of the joint ventures (or alliances) referred to in this chapter.
A large number of studies examining the success of M&A have examined their impact on shareholder returns. Most of these studies measure changes in the market value of the merging companies from before the merger announcement to several months after. What do these studies tell us about the effects
Most of the mergers and acquisitions shown in Figure 14.1 are horizontal (i.e., they are between companies within the same sector). Some of these horizontal mergers and acquisitions are between companies in the same country; some cross national borders. Are there any reasons why horizontal mergers
Would holding companies (such as Tata Group, Samsung Group, the Virgin Group, and Berkshire Hathaway) be more successful if they were converted into multidivisional corporations(such as General Electric, Philips, and Unilever)?
Amazon.com, Inc. is under pressure to improve its profitability (between 2015 and 2017 it earned a net margin of 1.4%). Amazon is a highly diversified company engaged in online retailing in 14 different countries, audio and video streaming, the production and sale of mobile electronic devices, web
The discussion of “performance management and financial control” identified two companies where the corporate HQ imposes a strong performance management system on its business units, PepsiCo and BP. To which company do you think a performance management system using financial targets is better
Apply the BCG matrix to the different programs that your institution offers. (You will need to make some informed guesses about market growth rates and relative market share.) Does this analysis offer useful implications for strategy and resource allocation?
Unilever—one of the world’s leading consumer goods companies—is reviewing its business portfolio in order to address the problems of unsatisfactory growth and profitability. The head of group planning has asked for your advice on the use of portfolio matrices as an initial screen of
Amazon has diversified from online retailing into cloud computing services (Amazon Web Services), tablet computers (Amazon Fire), and the production of movies and TV shows (Amazon Studios). What synergies might justify these diversifications?
General Electric, Berkshire Hathaway, and Richard Branson’s Virgin Group each comprise a wide range of different businesses that appear to have few close technical or customer linkages? Are these examples of unrelated diversification? For each of the three companies, can you identify linkages
Giorgio Armani SpA is an Italian private company owned mainly by the Armani family. Most of its clothing and accessories are produced and marketed by the company (some are manufactured by outside contractors). For other products, notably fragrances, cosmetics, and eyewear, Armani licenses its brand
Tata Group is one of the India’s largest companies, employing 424,000 people in many different industries, including steel, motor vehicles, watches and jewelry, telecommunications, financial services, management consulting, food products, tea, chemicals and fertilizers, satellite TV, hotels,
An ice-cream manufacturer is proposing to acquire a soup manufacturer on the basis that, first, its sales and profits will be more seasonally balanced and, second, from year to year, sales and profits will be less affected by variations in weather. Will this risk spreading create value for
Since 2013, McDonald’s sales have been falling. Has it got the balance right between global standardization and national differentiation (Strategy Capsule 11.2)? How much flexibility should it offer its overseas franchisees with regard to new menu items, store layout, operating practices, and
British expatriates living in the United States frequently ask friends and relatives visiting from the United Kingdom to bring with them bars of Cadbury chocolate on the basis that the Cadbury chocolate available in the United States (manufactured under license by Hershey’s) is inferior to “the
When Porsche decided to enter the SUV market with its luxury Cayenne model, it surprised the auto industry by locating its new assembly plant in Leipzig in eastern Germany. Many observers believed that Porsche should have located the plant either in central or eastern Europe where labor costs were
According to Michael Porter’s Competitive Advantage of Nations, some of the industries where British companies have an international advantage are:advertising, auctioneering of antiques and artwork, distilled alcoholic beverages, hand tools, and chemical preparations for gardening and
With reference to Table 11.1, what characteristics of national resources explain the different patterns of comparative advantage for the United States and Japan?
With reference to Figure 11.1, choose a sheltered industry—one that has been subject to little penetration either by imports or foreign direct investment. Explain why the industry has escaped internationalization. Are there opportunities for profitable internationalization for firms within the
For its Zara brand, Inditex manufactures the majority of the garments it sells and undertakes all of its own distribution from manufacturing plants to its directly managed retail outlets.The Gap outsources its production and focuses upon design, marketing, and retail distribution. Applying the
Strategy Capsule 10.2 compares alternative strategies for exploiting children’s characters. Hello Kitty is owned by the Japanese company Sanrio Co. Ltd. and is exploited throughout the world through licensing contracts with toy makers, jewelry companies, fashion companies, restaurants, theme
A large proportion of major corporations outsource their IT functions to specialist suppliers of IT services, such as IBM, HP, Accenture, and Capgemini. What benefits do corporations derive from outsourcing their IT requirements? What transaction costs might arise from these arrangements?
Figure 10.2 shows that during 1980–2000 large US companies accounted for a smaller percentage of total employment—a development that is attributed to “a more turbulent business environment and new information and communications technologies” (p. 256). Explain why these factors might cause
Can the expanding scale and scope of large companies between the late 19th century and the 1970s be explained by factors which reduced the administrative costs of firms relative to the transaction costs of markets?
In the market for ride sharing services, Uber is the market leader, followed by Lyft, Curb, and Sidecar. In each overseas country where Uber operates, it faces local competitors: UK rivals include BlaBlaCar, Carpooling.com, and Hailo. What are the sources of network externalities in this market? Do
From the evidence presented in Table 9.2, what conclusions can you draw regarding the factors that determine whether leaders or followers win out in the markets for new products?
Page 228 refers to James Dyson’s difficulties in licensing his innovative vacuum cleaner (see http://www.cdf.org/issue_journal/dyson_fills_a_vacuum.html for further information). What lessons would you draw from Dyson’s experience concerning the use of licensing by small firms to exploit
Table 9.1 shows that:a. patents have been more effective in protecting product innovations in drugs and medical equipment than in food or electronic components;b. patents are more effective in protecting product innovations than process innovations.Can you suggest reasons why?
Trevor Baylis, a British inventor, submitted a patent application in November 1992 for a windup radio for use in Africa in areas where there was no electricity supply and people were too poor to afford batteries. He was excited by the prospects for radio broadcasts as a means of disseminating
The dean of your business school wishes to upgrade the school’s educational capabilities in order to better equip its graduates for success in their careers and in their lives. Advise your dean on what tools and systems of knowledge management might be deployed in order to support these goals.
The market leaders in video games for mobile devices during 2012–17 were start-up companies such as DeNA, GungHo Online, Supercell, King, and Rovio. Why have start-ups outperformed established video game giants such as Electronic Arts, Rock Star Games, and Activision Blizzard in this market?
Identify two sports teams: one that is rich in resources (such as talented players) but whose capabilities (as indicated by performance) have been poor; one that is resource-poor but has displayed strong team capabilities. What clues can you offer as to the determinants of capabilities among sports
Choose an industry that faces significant change over the next 10 years. Identify the main drivers of change and construct two scenarios of how these changes might play out. In relation to one of the leading firms in the industry, what are the implications of the two scenarios, and what strategy
The resource partitioning model argues that, as industries become dominated by a few major companies with similar strategies and products, so opportunities open for new entrants to build specialist niches. Identify an opportunity for establishing a specialist new business in an industry currently
Select a product that has become a dominant design for its industry (e.g., the IBM PC in personal computers, McDonald’s in fast food, Harvard Business School in MBA education, and Southwest in budget airlines). What factors caused one firm’s product architecture to become dominant? Why did
Consider the changes that have occurred in a comparatively new industry (e.g., wireless telecommunications, smartphones, video game consoles, online brokerage services, and fitness clubs). To what extent has the evolution of the industry followed the pattern predicted by the industry life-cycle
Advise a chain of movie theaters on a differentiation strategy to restore its flagging profitability. Use the value chain framework outlined in Strategy Capsule 7.8 to identify potential linkages between the company’s value chain and that of its customers in order to identify differentiation
Bottled water sells at least 200 times the price of tap water, with substantial price differentials between different brands. What are the key differentiation variables that determine the price premium that can be obtained for bottled water?
To what extent are the seven cost drivers shown in Figure 7.7 relevant in analyzing the costs per student at your business school or educational institution? What recommendations would you make to your dean for improving the cost efficiency of your school?
Target (the US discount retailer), H&M (the Swedish fashion clothing chain), and Primark (the UK discount clothing chain) have pioneered cheap chic—combining discount store prices with fashion appeal. What are the principal challenges of designing and implementing a cheap chic strategy? Design a
Which drivers of cost advantage (Figure 7.7) do low-cost carriers such as Southwest Airlines and Ryanair exploit in order to undercut legacy carriers such as United Airlines and British Airways?
Illy, the Italian-based supplier of quality coffee and coffee-making equipment, is launching an international chain of gourmet coffee shops. What advice would you offer Illy for how it can best build competitive advantage in the face of Starbucks’ market leadership?
Since 2009, Apple has been the world’s most profitable supplier of wireless handsets by a large margin. Can Apple sustain its competitive advantage in this market?
Figure 7.1 implies that stable industries, where firms have similar resources and capabilities, offer less opportunity for competitive advantage than industries where change is rapid and firms are heterogeneous. On the basis of these considerations, among the following industries, in which do you
Appreciate the feasibility of pursuing both cost and differentiation advantage.
Use differentiation analysis to identify the sources of differentiation and formulate strategies that create differentiation advantage.
Use cost analysis to identify the sources of cost advantage in an industry, assess a firm’s relative cost position, and recommend strategies to enhance cost competitiveness.
Identify how a firm can sustain competitive advantage—including the use of different types of isolating mechanism.
Identify how a firm can create competitive advantage—including the roles that anticipation, agility, business model innovation, and blue ocean strategies can play.
Draw an organizational chart for a business school that you are familiar with. Does the school operate with a matrix structure (for instance, are there functional/discipline-based departments together with units managing individual programs)? Which dimension of the matrix is more powerful, and how
The examples of Apple and General Motors (see “Functional Structure” section above) point to the evolution of organizational structures over the industry life cycle. During the growth phase, many companies adopt multidivisional structures; during maturity and decline, many companies revert to
In 2008, Citigroup announced that its Consumer business would be split into Consumer Banking, which would continue to operate through individual national banks, and Global Cards, which would form a single global business (similar to Citi’s Global Wealth Management division). On the basis of the
Within your own organization (whether a university, company, or not-for-profit organization), which departments or activities are organized mechanistically and which organically? To what extent does the mode of organization fit the different environmental contexts and technologies of the different
Select a persistently successful team in a professional sport with which you are familiar. To what extent can the superior capabilities of this team be attributed to the role of processes, motivation, and structure (as discussed in the section “Developing Organizational Capability”)?
Jack Dorsey, the CEO of Twitter, Inc., has asked for your help in designing a strategic planning system for the company. Would you recommend a formal strategic planning system with an annual cycle such as that outlined in “The Strategic Planning System: Linking Strategy to Action”and Figure
Apply resource and capability analysis to your own business school. Begin by identifying the resources and capabilities relevant to success in the market for business education, appraise the resources and capabilities of your school, and then make strategy recommendations regarding such matters as
Given the profile of Icelandair’s resources and capabilities outlined in Strategic Capsule 5.8, how might Icelandair best exploit its resources and capabilities to (a) expand passenger numbers traveling to and from Iceland and (b) profitably grow its share of the North Atlantic market?
The chapter argues that Apple’s key capabilities are product design and product development that combine hardware technology, software engineering, aesthetics, ergonomics, and cognitive awareness to create products with a superior user interface and unrivalled market appeal. How easy would it be
Many companies announce in their corporate communications: “Our people are our greatest resource.” In terms of the criteria listed in Figure 5.7, can employees be considered of the utmost strategic importance? For Walmart, McDonald’s, and McKinsey & Company, how important are employees to
I have argued that the part of discrepancy between firms’ stock market value and their book value reflects the fact that intangible resources are typically undervalued or not valued at all in their balance sheets. For the companies listed in Table 5.1, which types of resource are likely to be
The world’s leading typewriter manufacturers in the 1970s included Olivetti, Underwood, IBM, Olympia, Remington, Smith Corona, and Brother Industries. While IBM and Brother adapted to the microelectronics revolution, most of the others failed. What strategies might these companies have pursued as
Since it was founded in 1994, Amazon has expanded its business from online book sales, to online general retailing, to audio and video streaming, to e-readers and tablet computers, to cloud computing. Is Amazon’s strategy based primarily upon serving a market need or primarily on exploiting its
Can existing assets be redeployed more profitably?
What opportunities exist for economizing on their use? Can we use fewer resources to support the same level of business or use the existing resources to support a larger volume of business?
Consider either the North American or European markets for air travel. Can these markets be segmented? If so, by what variables and into which categories? Can an airline be financially viable by specializing in certain segments or must airlines seek to compete across all (or most) segments?
How would you segment the restaurant market in your hometown? How would you advise someone thinking of starting a new restaurant which segments might be most attractive in terms of profit potential?
HP, Canon, Epson, and other manufacturers of inkjet printers make most of their profits from their ink cartridges. Why are cartridges more profitable than printers? Would the situation be different:a. if cartridges were manufactured by different firms from those which make printers?b. if cartridges
During 2010, the Apple iPhone replaced RIM’s Blackberry as global market leader in smartphones. By 2017, the world market for smartphones was dominated by Apple and Google’s Android; RIM and Microsoft each held market shares of less than 0.1%. Why did Google succeed in this market while
Among the industries listed in Table 3.1 in Chapter 3, which would you consider to be the most “hypercompetitive” (i.e., ones in which competitive advantage and market leadership are frequently overturned)?
What do you think are key success factors in:a. the pizza delivery industry?b. the credit card industry (where the world’s biggest issuers are: Bank of America, JPMorgan Chase, Citibank, American Express, Capital One, HSBC, and ICBC)?
Walmart (like Carrefour, Ahold, and Tesco) competes in several countries of the world, yet most shoppers choose between retailers within a radius of a few miles. For the purposes of analyzing profitability and competitive strategy, should Walmart consider the discount retailing industry to be
By 2018, the online travel agency industry had consolidated around two leaders: Expedia(which had acquired Travelocity, Lastminute.com, Hotels.com, Trivago, and Orbitz) and Priceline (which owned booking.com, Kayak, Rentalcars.com, and OpenTable). These two market leaders competed with numerous
The major forces shaping the business environment of the fixed-line telecom industry are technology and government policy. The industry has been influenced by fiber optics (greatly increasing transmission capacity), new modes of telecommunication (wireless and internet telephony), the convergence
With reference to Strategy Capsule 3.1, use the five forces framework to explain why profitability has been so high in the US market for smokeless tobacco.
From Table 3.1, select a high-profit industry and a low-profit industry. From what you know of the structure of your selected industries, use the five forces framework to explain why profitability has been high in one industry and low in the other.
What does the firm need to do to survive competition?
Table 2.1 compares companies according to different profitability measures.a. Which two of the six performance measures do you think are the most useful indicators of how well a company is being managed?b. Is return on sales or return on equity a better basis on which to compare the performance of
Since long-run profitability requires that a firm is sensitive to the interests of its customers, employees, suppliers, and society-at-large, whether a firm is run in the interests of its shareholders or its stakeholders makes no real difference. Do you agree? Are there situations where shareholder
What new products have been released, major investment projects initiated, and top management hired? These strategic decisions are typically announced in press releases and reported in trade journals.
What technologies is the company developing? Identifying the patents that a company has filed (using the online databases of the US and EU patent offices)indicates the technological trajectory a firm is pursuing.
Where is the company investing its money? Notes to financial statements provide detailed breakdowns of capital expenditure by region and by business segment.
Your business school is considering appointing as dean someone whose entire career has been spent in business management. What challenges might the new dean face in applying her strategic management skills to a business school?
Using the framework of Figure 1.6, describe the strategy of the university or school you attend.
I have noted that a firm’s strategy can be described in terms of the answers to two questions:“Where are we competing?” and “How are we competing?” Applying these two questions, provide a concise description of Lady Gaga’s career strategy (see Strategy Capsule 1.2).
The discussion of the evolution of business strategy (see the section “From Corporate Planning to Strategic Management”) established that the characteristics of a firm’s strategic plans and its strategic planning process are strongly influenced by the volatility and unpredictability of its
What is your career strategy for the next five years? To what extent does your strategy fit with your long-term goals, the characteristics of the external environment, and your own strengths and weaknesses?
In relation to the four characteristics of successful strategies in Figure 1.1, assess the US government’s Middle East strategy since the invasion of Iraq in 2003.
Consider two female leaders, in any sphere whether business, politics, education, sport or the arts. How similar are they in style and in what ways is gender important to their style? Could you imagine men leading similarly?
1. Are there other options or factors Heineken should consider?2. How could you improve the ranking analysis?3. Consider the most favoured option in terms of acceptability and feasibility criteria.
1. In terms of Figure 7.10, what are Uber’s value creation, value configuration and value capturing?2. If you were the head of a traditional taxi company, how could you change your business model to compete with Uber?
2 What were the main issues about managing change as NHS Direct? (List these under the categories of: roles, styles and levers for change).
1 Looking at Exhibit 3 what structures and management processes are needed to manage the relationship between NHS Direct and the NHS as a whole?
➔Assess the value of different levers for strategic change.
➔Assess the impact of the roles and management styles of change agents.
➔Recognise how organisational processes (such as planning systems and performance targets) need to be designed to fit the circumstances in which strategies are delivered(such as an organisation’s size, the type of the product/service and the nature of the markets).
➔Analyse the main structural types of organisation in terms of their strengths and weaknesses.
4 Complete your evaluation of the options that now appear most suitable by applying the criteria of acceptability and feasibility (see sections 9.3.2 and 9.3.3 respectively).
3 For each of the top four development directions in your ranking compare the relative merits of organic development, acquisition or strategic alliance.
2 Identify the strategic directions ‘available’ to the company in the future and assess the relative suitability of each of these options by ranking them (using Illustration 9.1 as an example).
1 Using Exhibit 7.2 in Chapter 7 identify the strategic directions that Tesco had followed from its origins as a UK-based grocery retailer.

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Fundamentals Of Strategy 2nd Edition Gerry Johnson, Kevan Scholes, Richard Whittington - Solutions

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