Contemporary Strategy Analysis: Text and Cases Edition 9th Edition

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 1 Tough Mudder Inc.: The Business of Mud Runs TEACHING NOTE ■ SYNOPSIS ■ Established in 2010 by Harvard MBA graduate, Will Dean, Tough Mudder was an early leader in organizing endurance obstacle races (“mud runs”). Dean’s challenge

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Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 1. THE CONCEPT OF STRATEGY Introduction For my first class in a core course in strategic management, I have two major goals: • To convey an appreciation of what strategy is—both in a business context and in other competitive arenas (sport, politics, warfare). • To introduce

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© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 10 Chipotle Mexican Grill, Inc.: Disrupting the Fast–food Business TEACHING NOTE ■ SYNOPSIS ■ Steve Ells opened the first Chipotle Mexican Grill in Denver in 1993; by the end of 2015 there were almost 2,000 Chipotle

Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 10. COMPETITIVE ADVANTAGE IN MATURE INDUSTRIES Introduction Chapter 10 addresses strategies for mature industries—including those in decline. It is the shortest chapter in the book and exists primarily to complement the chapter on strategies for emerging and technology-based industries. The chapter does not

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 11 Ford and the World Automobile Industry in 2015 TEACHING NOTE ■ SYNOPSIS ■ Since the financial crisis of 2008-9, when Ford was the only one of the US Big Three auto makers to avoid bankruptcy and government-financed

Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 11. VERTICAL INTEGRATION AND THE SCOPE OF THE FIRM Introduction Chapters 11-15 are concerned with corporate strategy. The number of sessions I devote to corporate strategy depends upon the length of the course and whether or not there is a subsequent elective course

Instructors’ Manual to Accompany Contemporary Strategy Analysis (9h edn. Wiley, 2016) CHAPTER 12. GLOBAL STRATEGIES AND THE MULTINATIONAL CORPORATION Introduction Given that internationalization and the design of global strategy have been such important management issues in recent years, most instructors will probably give prominence to this topic in their courses in strategic management. How many sessions

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 12 Eastman Kodak’s Quest for a Digital Future TEACHING NOTE ■ SYNOPSIS ■ Eastman Kodak’s entry into Chapter 11 bankruptcy may not have been the end of the road for the former giant of photography, but it certainly marked

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Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 13. DIVERSIFICATION STRATEGY Introduction Diversification lies at the heart of corporate strategy. It also gives rise to highly contentious strategy decisions—diversification has been the source of more destruction of shareholder value than almost any other type of strategy. Its study, therefore, is important! Diversification

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© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 13 Tesla Motors: Disrupting the Auto Industry TEACHING NOTE ■ SYNOPSIS ■ Tesla Motors was the first start-up company to enter volume automobile manufacturer in the US since the 1930s. Under the leadership of legendary entrepreneur, Elon Musk,

Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 14. IMPLEMENTING CORPORATE STRATEGY: MANAGING THE MULTIBUSINESS FIRM Introduction In our analysis of all three dimensions of corporate scope—vertical, geographical, and product—the key strategic issues are exploiting economies from sharing resources and capabilities across different business units and avoiding transaction costs. However, this focus

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 14 Video Game Console Industry in 2015 TEACHING NOTE ■ SYNOPSIS ■ The eighth generation of video game consoles was a three-way battle involving Nintendo’s Wii U, Microsoft’s Xbox One, and Sony’s PS4. Although each new generation

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Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 15. EXTERNAL GROWTH STRATEGIES: MERGERS, ACQUISITIONS, AND ALLIANCES Introduction Like its preceding chapter (Chapter 14, “Implementing Corporate Strategy: Managing The Multibusiness Firm”), Chapter 15 is concerned with strategy implementation rather than strategy formulation. Mergers, acquisitions and alliances are mechanisms by which strategy implemented rather

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 15 The New York Times: Seeking Salvation within a Declining Industry TEACHING NOTE ■ SYNOPSIS ■ Newspapers are a declining industry. As sources of information, newspapers are being displaced by online media sources. As readership falls, so does

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 16 Eni SpA: The Corporate Strategy of an International Energy Major TEACHING NOTE ■ SYNOPSIS ■ Since its privatization in 1995, Eni has metamorphosized from a widely diversified, inefficient, state-owned corporation into

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Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 16. CURRENT TRENDS IN STRATEGIC MANAGEMENT Introduction I devote the final session of the course to considering emerging trends in strategic management. Inevitably, this means addressing whatever is happening at the time—but hopefully the content of this chapter 16 written during early summer 2015

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 17 American Apparel: Vertically Integrated in Downtown LA TEACHING NOTE ■ SYNOPSIS ■ American Apparel is an unusual company. While most U.S. fashion clothing is produced offshore in low-wage countries, American Apparel’s T-shirts and other garments

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© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 18 Chipotle Mexican Grill, Inc.: The International Challenge TEACHING NOTE ■ SYNOPSIS ■ The case is an extension of Case 10, “Chipotle Mexican Grill, Inc.: Disrupting the Fast Food Business.” The earlier case should be

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© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 19 Haier Group: Internationalization Strategy TEACHING NOTE ■ SYNOPSIS ■ The rise of Haier from a near-bankrupt, state-owned refrigerator factory in Qingdao, China to become the world’s biggest domestic appliance company (in terms of units sold) is a

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© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 2 Starbucks Corporation, May 2015 TEACHING NOTE ■ SYNOPSIS ■ Howard Schultz’s leadership of Starbucks’ transformation from a single Seattle coffee shop to a global chain of over 20,000 outlets is a tale of remarkable commercial achievement that

Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 2. GOALS, VALUES, AND PERFORMANCE Introduction Given that strategy is about achieving success, how we go about measuring performance is critically important for strategic management, hence, this is a topic that I like to address early in the strategy course. It requires students

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 20 The Virgin Group in 2015 TEACHING NOTE ■ SYNOPSIS ■ By 2015, Richard Branson’s Virgin group of companies extended from airlines

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© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 21 Google Is Now Alphabet—But What’s the Corporate Strategy? TEACHING NOTE ■ SYNOPSIS ■ Google’s decision in August 2015 to rename itself Alphabet was an acknowledgement by its founders, Sergei Brin

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 22 Jeff Immelt and the New General Electric TEACHING NOTE ■ SYNOPSIS ■ Jeff Immelt’s 14 years as Chairman and CEO of GE have been among the most turbulent in the company’s history. Not

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© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 23 Bank of America’s Acquisition of Merrill Lynch TEACHING NOTE ■ SYNOPSIS ■ In December 2008, Bank of America’s board has its final chance to withdraw from its acquisition of Merrill Lynch. The acquisition offered Bank

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© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 24 W.L. Gore & Associates: Rethinking Management TEACHING NOTE ■ SYNOPSIS ■ W. L. Gore, the manufacturer of Gore-Tex, has a unique organization structure and management style built around its “lattice” principle. The result is a

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 3 Kering SA: Probing the Performance Gap with LVMH TEACHING NOTE ■ SYNOPSIS ■ Strategy is about creating the conditions for the success of an organization: for business enterprises this means profitability. Hence, diagnosis of a firm’s

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Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 3. INDUSTRY ANALYSIS: THE FUNDAMENTALS Introduction Understanding competition, its determinants, and its implications for profitability is a fundamental component of any core strategy course. My preference is to introduce the tools of industry and competitive analysis early in the course. My primary goal for

Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn., Wiley, 2016) CHAPTER 4. FURTHER TOPICS IN INDUSTRY AND COMPETITIVE ANALYSIS Introduction Chapter 3 on industry analysis concentrates upon presenting and applying Porter’s Five Forces of Competition framework. As was noted, the Porter framework has its limitations. The purpose of Chapter 4 is to address some of

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© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 4 Pot of Gold? The US Legal Marijuana Industry TEACHING NOTE ■ SYNOPSIS ■ At the beginning of 2015, 16 US states and the District of Columbia had legalized the sale of marijuana for

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Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 5. ANALYZING RESOURCES AND CAPABILITIES Introduction Resources and organizational capabilities (or “competencies”) are important both as a foundation for strategy formulation and the primary source of a firm’s profits. The resource-based approach to strategy has been one of the most important theoretical streams

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 5 The US Airline Industry in 2015 TEACHING NOTE NOTE: There is an error on Figure 2 of the printed case: the two trend lines have been mislabeled. The upper line shows WACC; the lower line shows ROIC.

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 6 Wal-Mart Stores Inc., June 2015 TEACHING NOTE ■ SYNOPSIS ■ By 2015, Walmart was not only the world’s biggest retailer; it was also (in terms of sales revenue) the world’s largest company. During the 50 years

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Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 6. ORGANIZATION STRUCTURE AND MANAGEMENT SYSTEMS: THE FUNDAMENTALS OF STRATEGY IMPLEMENTATION Introduction The chapter covers the fundamental aspects of strategy implementation. It begins with strategy execution—the challenge of translating strategic plans into action and goes on to consider the core principles of organizational design. Issues

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 7 Harley-Davidson, Inc., May 2015 TEACHING NOTE ■ SYNOPSIS ■ Since its rebirth as an independent company in 1981, Harley-Davidson has experienced a remarkable renaissance, taking market share from the once-dominant Japanese motorcycle companies to become the global

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Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 7. THE NATURE AND SOURCES OF COMPETITIVE ADVANTAGE Introduction Chapter 7 integrates and extends the analysis of competitive advantage that was introduced in the Chapter 7 which discussed the external sources of competitive advantage—namely key success factors at the industry level—and Chapter 5 which

© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 8 BP: Organizational Structure and Management Systems TEACHING NOTE ■ SYNOPSIS ■ A series of accidents, the most tragic being an explosion at BP’s Texas City refinery and the blowout of its Macondo oil

Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 8. INDUSTRY EVOLUTION AND STRATEGIC CHANGE Introduction As the introduction to Chapter 8 makes clear, change is a feature of all business situations. Hence, challenges and opportunities arising from a changing business environment are present is every strategy case study. This chapter takes

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© 2016 Robert M. Grant www.contemporarystrategyanalysis.com 1 CASE 9 AirAsia: The World’s Lowest Cost Airline TEACHING NOTE ■ SYNOPSIS ■ The Malaysian airline AirAsia was an entrepreneurial venture started by Tony Fernandes, a Malaysian music executive who was inspired by the example of easyJet’s Stelios Haji-Ioannou.

Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016) CHAPTER 9. TECHNOLOGY-BASED INDUSTRIES AND THE MANAGEMENT OF INNOVATION Introduction For analyzing the sources of competitive advantage, industries subject to rapid technological change where innovation is a key strategy variable are particularly interesting. These industries are predominantly emerging industries whose existence is the result of