Case 2-1
Summary
Catalya Hats is a large hat company with a global presence that spends time handcrafting hats using a
specialized material, toquilla straw fiber, which must be woven by hand. Catalya earned notoriety from
being a popular clothing apparel for both its uniqueness and celebrity appeal.
Catalya Hats was put in a unique position when their production capacity maxed out. This caused the
owners to sell Catalya to a private investor (Ralph Dweck), who agreed to retain the employees for 2
years and remain with the vision and mission of Catalya. This included moving toward a corporate
approach to for Catalya.
Analysis
This case introduces the concept of mission and vision and discusses how that applies to company
expansion and creating/managing positive organizational culture. Instructors should consider discussing
the family-based organizational culture compared to a corporate model and mind-set and how this impacts
the vision and mission of the organization.
Questions
1. What is Catalya Hats’s vision/mission and how might it explain why the Catalya family sold their firm
to a private investor, Ralph Dweck? (2nd Ed., pp. 48–49)
A vision is what we expect to become as an organization in the future at a particular point in time, while a
mission lays out our expectations of what we are going to do in order to become the organization that we
2. What external environmental factors underlie the discussion of whether production of Catalya hats
should or should not be outsourced? (2nd Ed., pp. 43–46)
External environmental factors include customers, competitors, suppliers, the labor force, shareholders,
3. What is the strategy of Catalya Hats and how does it affect its HR policies? (2nd Ed., pp. 50–51)
There are three types of generic business strategies: low cost, differentiation, and focus/niche. Catalya
4. The discussion around outsourcing of production to foreign partners is an example of which five forces
of competitive analysis? (2nd Ed., pp. 52–53)
The five forces of competitive analysis include rivalry among competitors, threat of substitute products
5. What was the firm’s basic structure and how did it reinforce their strategy? (2nd Ed., pp. 56–59)
Structure refers to the way in which an organization groups its resources to accomplish its mission. The
6. How did the firm’s culture support their strategy? (2nd Ed., pp. 59–63)
Organizational culture consists of Values, beliefs, and assumptions about appropriate behavior that
members of an organization share. Catalya’s organizational culture supported their differentiation strategy
Case 2-2
Summary
Netflix, known for being one of the most famous and highly successful movie rental services, began as a
subscription service and evolved into one of the most well-known online streaming service models in
existence. Starting off in 1997, Netflix only had 30 employees and 925 movies for rental and has grown
exponentially over the next 20 years.
• Selecting new employees/recruiting—with a focus on employees who prioritize company
interests
• Talent management/matching employees with jobs—placing employees in the right positions
based on their skill sets
• Send the right messages—motivating employees based on how the company earns revenue
• Performance evaluation—360-degree evaluations which focused on employee perceptions of
policies and procedures
Analysis
This case study reflects the importance of appropriate strategy in business, with a focus on strategic
planning, which made Netflix a successful organization. Netflix understood both the external and internal
environment. First, Netflix understood the external environment in the fact that they successfully
integrated a streaming service in their business model once the opportunity for a streaming service
became viable.
Questions:
1. Netflix was a pioneer in the market that put the “old-fashioned” DVD rentals to history and knocked
Blockbuster out of business. Using the Five Forces model describe how Netflix changed the
entertainment rental industry.
Rivalry Among Competitors: Netflix did not have any competitors when it started their business. No one
2. What is Netflix’s competitive strategy? What do they believe is the driving force that makes this
strategy so successful? Do you agree?
Answer: Netflix had to understand themselves and what they needed to compete with to have an
excellent competitive strategy. Therefore, Netflix took into account that there was no service for movie
rentals that didn’t charge a late fee. Netflix’s competitive strategy first had to do with their monthly DVD
3. In terms of sustaining the company’s competitive advantage, what is the most important step that
Netflix takes as noted by Hasting and McCord?
Hasting and McCord say that their competitive advantage can be a result of their human resource strategy.
They are able to give great services because of their employees. They have employees who are very
4. “Where we want to be, how to get there, and where are we now” are key points for a successful
company’s strategy. How do the company’s HR policies support the firm’s strategy?
This means that everyone in the company has to be aware of what the company goals are. They have to
make sure that they understand where they are when they are entering the company, what they need to do
5. How does Netflix monitor their employees’ performance? Would you prefer to be evaluated this way
or through a balanced scorecard approach? Explain your position.
Netflix uses a more informal way to monitor their employees’ performance. This means that “informal
360-degree sessions” permit workers to feel comfortable in their environment. They are allowed “to give
6. How would you create a link between customers and the way employees perform to assure that
incentives are distributed evenly and equally in Netflix?
There should goals and objectives given to each employee. They should explain if the goal is met than the
employee will receive some sort of compensation. Strategic planning is about planning for the future, and