The Ready-to-Eat Breakfast Cereal Industry in 1994 Essay

Custom Student Mr. Teacher ENG 1001-04 7 April 2016

The Ready-to-Eat Breakfast Cereal Industry in 1994

This industry and competitor analysis seminar provides students with the conceptual frameworks and analytical tools for understanding the dynamics of industry structure and how competitors actually interact in the marketplace. An understanding of the dynamics of competition and industry evolution is an important input to the development of an effective competitive strategy.

The fundamental assumption of the course is that the profit potential of any firm is a function of (1) the industries it operates in, and (2) the competitors it opposes. Therefore to comprehend the firm/performance relationship, a general manager must understand industry structure and competition. A wide range of influences, including the macroeconomic environment, cost and demand conditions of the industry, technological change and government behavior, affects the profits within an industry.

Competitive moves and responses of incumbents also affect firm profits. Actions taken by firms to improve competitive position engender responses by other firms, and the expected sequence of actions and responses must be understood to develop an effective strategy. Reactions of rivals will depend on their goals or intent, beliefs, relative resource positions and past actions. Thus, the approach to studying the dynamics of industry structure and competitors is to focus on the key characteristics of industry structure and the individual competitive moves and countermoves exchanged by various industry players.

The course examines such questions as: How should one go about analyzing an industry and competitors? What models and frameworks are most applicable? What type of data does one look for and how should these data be organized? Where does one look for these data?

The seminar has a strong research component: students will apply the concepts, analytical tools, and research methods learned in class to an intensive field project of an industry and competitors, along the lines of a professional consulting report. Thus, although the course will draw from such theories as industrial organization economics and game theory, the emphasis will be on application and hands-on investigation to produce a consulting report.

Class Format

This is not a traditional lecture-based course. Conceptual material will be illustrated and applied to the “real world” through rigorous class discussion of business cases, examples, your own business experiences and your field projects. Your classmates and I expect you to attend and be well prepared for each class, having read the required conceptual material and analyzed the assigned case study ahead of time. We also expect you to play an active role in class discussions. If all class members prepare for and actively participate in each class discussion, we will all learn more from each other and enjoy the course more.

General tips on how to analyze assigned cases and prepare for class discussions are provided in Appendix A. In addition, specific “case discussion preparation” questions are included in the Course Outline for each case. Please refer to Appendix A and these case-specific questions when preparing for each class.

Required Readings

Course Packet of Cases and Articles available from XanEdu.

While you are not required to purchase the following books for this course, they are sources that develop many of the core frameworks and tools utilized in industry and competitor analyses. You should, at the very least, be familiar with the core content of these sources. You should consider purchasing these books if you don’t already own them and if you plan on pursuing a career in which industry and competitor analysis skills will be necessary (e.g., strategy consulting, industry/company analysis for investors, entrepreneurship, corporate strategic planning or market/competitive intelligence):

Porter, Michael E., Competitive Strategy: Techniques for Analyzing Industries and Competitors, New York: Free Press, 1980.

Porter, Michael E., Competitive Advantage: Creating and Sustaining Superior Performance, New York: Free Press, 1985.

Day, George S. and Reibstein, David J. (editors), Wharton on Dynamic Competitive Strategy, New York: John Wiley & Sons, 1997.

Ghemawat, Pankaj, Strategy and the Business Landscape, 2nd Edition, Upper Saddle River, NJ: Pearson Prentice Hall, 2006.

Courtney, Hugh, 20/20 Foresight: Crafting Strategy in an Uncertain World, Boston: Harvard Business School Press, 2001.

Performance Evaluation

Contribution to class discussion (see Appendix B for details)10%

Two short individual case analyses (2 @ 20% each) (see Appendices C40% and D for details)

Group industry and competitor analysis (see Appendix E for details)50%

Groups should be 4-5-person, self-selected teams. It is expected that all group members will make contributions to the industry and competitor
analysis, and that all should receive the same grade.

Academic Integrity

Academic integrity is expected in this class. Academic dishonesty will not be tolerated in any form. According to university policy, activities that constitute academic dishonesty include: (1) using materials published in print or over the Internet in your papers without proper reference to the original source; (2) consulting students who have already taken the course about analysis and answers to cases or assignments prior to their due date; (3) working with others on individual assignments; and (4) working with non-group members on group assignments.

I encourage you to work with others when preparing for class discussions and in “brainstorming” ideas for written analyses. However, written case analyses must ultimately represent your own work, in your own words (or your group’s work, in the group’s words). Therefore, it is not wise to share written or electronic notes, outlines, or “key points” with others when preparing written analyses, because papers that are judged to be substantially similar in content must be submitted to the university committee for academic integrity.

University procedures will be used to investigate any potential instances of academic dishonesty. Please visit the following website for more information on the University’s Code of Academic Integrity: http://www.shc.umd.edu.

Absences

Attendance at all class sessions is expected. Absences, late arrivals, and early departures necessarily limit your class contribution – and hence may influence your grade.

Disability Policy

If you have a documented disability or other special needs and wish to discuss appropriate academic accommodations, please contact me as soon as possible. COURSE OUTLINE

Note: Readings and case studies should be completed before the relevant class session.

Sep 5 (0201)
Sep 6 (0101)
COURSE OVERVIEW AND INTRODUCTION TO INDUSTRY ANALYSIS

Readings:
Course syllabus
Review SCP analysis of Australian beer industry available in Course Documents on course Blackboard site

Sep 12 (0201)
Sep 13 (0101)
INDUSTRY ANALYSIS

Reading:
Ghemawat, P. and Collis, D., “Mapping the Business Landscape,” Chapter 2 in P. Ghemawat’s Strategy and the Business Landscape, 2nd Edition, Upper Saddle River, NJ: Pearson Prentice Hall, 2006

Case study:
“The Pharmaceutical Industry: Challenges in the New Century,” Harvard Business School Case 9-703-489, 2003

Case discussion preparation questions:
Use the SCP model to describe why the pharmaceutical industry has been consistently one of the most profitable industries in the U.S. Use the SCP model to describe how recent developments in the industry (legal/regulatory, technology, etc.) might drive changes in U.S. pharmaceutical industry structure, conduct and performance in the next 5-10 years. What types of business opportunities and threats might these changes imply for a traditional major pharmaceutical company (e.g., Pfizer)? For a leading biotech company (e.g., Amgen)? For other players that participate in the industry (e.g., CROs, generics producers, PBMs)?

Sep 19 (0201)
Sep 20 (0101)
CREATING AND CAPTURING VALUE IN THE INDUSTRY VALUE NET

Readings:
Brandenburger, A. M. and Nalebuff, B. J., “Co-opetition,” Chapter 2 in Co-opetition, New York: Doubleday, 1996 Brandenburger, A. M. and Nalebuff, B. J., “Players,” Chapter 4 in Co-opetition, New York: Doubleday, 1996 “Note on Home Video Game Technology and Industry Structure (Abridged),” Harvard Business School Note 9-704-488, 2004 Schilling, M. A., “Technological Leapfrogging: Lessons from the U.S. Video Game Console Industry,” California Management Review, Spring 2003 Surf the Net to find some of the latest website, industry, and press reports on the Xbox 360, PlayStation 3, and Nintendo Wii launch strategies

Case study:
“The Golden Age of Home Video Games: From the Reign of Atari to the Rise of Nintendo,” Harvard Business School Case 9-704-487, 2004

Case discussion preparation questions:
Nintendo successfully recreated the home video game business following the Atari-era boom and bust. How did it do so? How was Nintendo able to capture (and not just create) value? What advice do you have for Sony, Microsoft, and Nintendo as they engage in the next-generation battle in the video game console industry?

Individual assignment #1 (option (a)) due at beginning of class: Given your understanding of the video game console industry history and the drivers of performance in that industry, develop a competitive strategy for the next-generation console for Microsoft (Xbox 360), Sony (PlayStation 3), or
Nintendo (Wii). Your strategy should address key competitive positioning issues such as console features, game development, pricing, partnerships with others in the industry Value Net, online offerings, target market segments, and/or any other factor that you think is crucial to winning the next-generation “battle” in this industry. Since many aspects of the firms’ competitive strategies for the next generation are already known (Xbox 360 launched in November 2005, for example), it is acceptable for you to either: 1) Pretend that none of these decisions have been made yet and that you are developing a strategy from scratch; or 2) Document what you perceive to be the strategic decisions that the company has taken and critique them (clarifying which decisions you think are sound and why, and which decisions you would change, how you would change them, and why). In any case, you should use frameworks, concepts, readings, and/or case studies from the class to clarify and support your arguments as needed. (See Appendix C for more details on this assignment.)

Sep 26 (0201)
Sep 27 (0101)
INDUSTRY TRANSFORMATION

Readings:
Christensen, C. M., and Raynor, M. E., “How Can We Beat Our Most Powerful Competitors,” Chapter 2 in The Innovator’s Solution: Creating and Sustaining Successful Growth, Boston: Harvard Business School Press, 2003 You might also want to consult other sources on Clayton Christensen’s work on disruptive innovation. I know that many of you have studied his work in other courses, so I haven’t included another “required” reading in the course packet. To learn more about Christensen’s model, you might watch these videos: http://www.innosight.com/video.php#launch; http://mitworld.mit.edu/video/108/. You can also search Christensen’s consulting firm’s (Innosight) website (http://www.innosight.com/library.php) and the Harvard Business School Publishing website (http://www.hbsp.harvard.edu) for books, articles and other sources. McGahan, A., “How Industries Change,” Harvard Business Review, October 2004 Porter, M. E., and Rivkin, J., “Industry Transformation,” Harvard Business
School Note 9-701-008, 2000

Case study:
“Charles Schwab & Co. Inc. in 1999,” Stanford Graduate School of Business Case SM-35, 2000

Case discussion preparation questions:
What was the logic behind Schwab’s initial low-cost brokerage business model? Why do you think it was ultimately successful? What steps did Schwab take over time to improve its business model and build a competitive advantage? How should Schwab view the Internet?

What should Schwab do in 1999 in order to best position itself against its wide range of competitors (e.g., e-brokers, full-service firms, electronic banks, etc.)?

Individual assignment #1 (option (b)) due at beginning of class: The case discusses two main “revolutions” in the brokerage industry, deregulation of commission payments in 1975 (“May Day”) and the rise of the Internet in the mid-1990s. Use Christensen’s “Disruptive Technologies/Innovations” model to describe and evaluate Schwab’s response to each of these “shocks” to the industry. In addition, use the model to describe what you think Schwab should do to protect and extend its strategic position in the brokerage industry in 1999 (the time of the case). (See Appendix C for more details on this assignment.)

Oct 3 (0201)
Oct 4 (0101)
INDUSTRY CONVERGENCE

Reading:
“Slouching Toward Broadband: Revisited in 2005,” Stanford Graduate School of Business Case SM-137, 2005

Case studies:
“Cox Communications, Inc.,” Harvard Business School Case 9-804-192, 2004 Go to http://www.decommunications.com, the website for D&E Communications, a small, telecommunications company based in Central Pennsylvania. Research the company and its competitive position. You will definitely want to read D&E’s latest Quarterly Report (10-Q) or Annual Report for 2005 (10-K), focusing on the sections that highlight D&E’s business strategy and competition, and the risks it perceives to competing in today’s telecommunications industry. You may also find other material in the “Investor Relations” or other sections of the website that is useful in understanding D&E’s strategy and its recent operating and financial performance.

Case discussion preparation questions:
What are the forces driving the nature and pace of “convergence” in the telecommunications, data, and entertainment service industries? What are the most “natural” strategies for different categories of players – MSOs, ISPs, RBOCs, smaller telecommunications companies, etc. – to compete in this converging industry space? Which types of strategies and players are likely to win and why?

Individual assignment #1 (option (c)) due at beginning of class: Given your understanding of the ongoing convergence between the telecommunications, data, and cable industries, what competitive strategy should Cox Communications pursue? At a minimum, you should identify which of the “four options” outlined in the case that you believe Cox should pursue and why. However, you might also address broader strategic issues such as merger & acquisition activity, technology investments, partnerships, market entry or exit, content strategies, and/or other decisions that you think are fundamental to Cox’s competitive position in the market. In any case, you should use frameworks, concepts, readings, and/or case studies from the class to clarify and support your arguments as needed. (See Appendix C for more details on this assignment.)

Individual assignment #1 (option (d)) due at beginning of class: Given your understanding of the ongoing convergence between the telecommunications, data, and cable industries, what competitive strategy should D&E Communications pursue? Your answer should address broad strategic issues such as merger & acquisition activity, technology investments, partnerships, market entry or exit, content strategies, and/or other decisions that you think are fundamental to D&E’s competitive position in the market. In any case, you should use frameworks, concepts, readings, and/or case studies from the class to clarify and support your arguments as needed. (See Appendix C for more details on this assignment.)

Oct 10, 17 (0201)
Oct 11, 18 (0101)

GROUP PROJECT PRESENTATIONS: INDUSTRY ANALYSIS

See Appendix E for details on this assignment and these sessions.
Oct 24 (0201)
Oct 25 (0101)

COMPETITOR ANALYSIS: TOOLS AND FRAMEWORKS

Reading:
Cassiman, B., and Ghemawat, P., “Anticipating Competitive Dynamics,” Chapter 4 in P. Ghemawat’s Strategy and the Business Landscape, 2nd Edition, Upper Saddle River, NJ: Pearson Prentice Hall, 2006

Oct 31 (0201)
Nov 1 (0101)
NO CLASS

There will be no class sessions or office hours during this week. Please use this time to work on your individual assignment for the BSB vs. Sky case and to organize your team’s work plan for your final presentation and paper.

Nov 7 (0201)
Nov 8 (0101)
APPLIED GAME THEORY: INSIGHTS AND LIMITATIONS

Case study:
“British Satellite Broadcasting versus Sky Television,” Harvard Business School Case 9-794-031, 1994

Case discussion preparation questions:
Was Sky’s entry into the UK satellite television industry predictable? Why or why not? If you think it was predictable, why did BSB not anticipate it? If BSB had perceived Sky as a potential entrant/competitor, what might it have done differently in the months before Sky entered? Who is best positioned to compete in the market, and why?

Given the ongoing losses each side is experiencing in the market, should either one or both exit the market? Why or why not?

Individual assignment #2 due at beginning of class:
Produce a payoff matrix for the BSB versus Sky case. To keep this modeling exercise relatively straightforward, assume the following: Each player has two options, “continue to compete” or “exit” The cash flow model assumptions (except for those exceptions noted below) given in Exhibits 6 and 7 from the case are valid Assume that each player treats losses incurred through 1990 as “sunk” and thus not relevant to the “compete” or “exit” choices in 1991 Assume that even if one player exits, it doesn’t exit until the end of 1991 (in other words, it will incur losses for one additional year, and the other player won’t monopolize the market until 1992) Assume that if both players stay in the market they will have equal market shares starting in 1993 and continuing thereafter Assume a 10% annual discount rate

Assume that any cash flow earned in the last year of the explicit forecast period (1999) will remain constant in perpetuity thereafter Discuss the implications of this payoff matrix for the strategies that BSB and Sky should follow. In doing so, be sure to address the pros and cons of using the payoff matrix – as constructed – in guiding your choices. Suppose Sky were considering acquiring BSB. A key factor in determining whether such an acquisition would be advantageous to both sides, of course, is the price that Sky would pay for BSB. Use the payoff matrix to determine the range of prices (if any) that Sky could pay for BSB in which both Sky and BSB would be better off doing the deal rather than continuing to compete as duopolists. Use this analysis to identify the negotiating stances that you think each side would take as part of a potential acquisition process, and predict whether or not you think both sides will be able to reach agreement on the acquisition. (See Appendix D for more details on this assignment.)

Nov 14 (0201)
Nov 15 (0101)
SYMMETRIC COMPETITION

Readings:
Dixit, A. K., and Nalebuff, B. J., “Resolving the Prisoner’s Dilemma,” Chapter 4 in Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life, 1991 Rao, A. R., Bergen, M.E., and Davis, S., “How to Fight a Price War,” Harvard Business Review, March-April 2000

Case study:
“The Ready-to-Eat Breakfast Cereal Industry in 1994 (A),” Harvard Business School Case 9-795-191, 1997

Case discussion preparation questions:
Why has ready-to-eat cereal been such a profitable business historically? What changes have led to the current industry “crisis?” Why have private labels been able to enter this industry successfully? Do you agree with General Mills’ April 1994 decision to reduce trade promotions and prices? Why or why not? How should the other members of the “Big Three” respond?

Nov 21 (0201)
Nov 22 (0101)

ASYMMETRIC COMPETITION

Readings:
Yoffie, D. B., and Cusumano, M. A., “Judo Strategy: The Competitive Dynamics of Internet Time,” Harvard Business Review, Jan-Feb 1999 Yoffie, D. B. and Kwak, M., “Mastering Balance: How to Meet and Beat a Stronger Opponent,” California Management Review, Winter 2002

Case study:
“Judo in Action,” Harvard Business School Case 9-703-454, 2003

Case discussion preparation questions:
In each of these four cases, does the entrant or challenger (i.e., Softsoap, Red Bull, the supermarkets, or Freeserve) have a competitive advantage? Would they if the incumbents imitated their product offerings immediately? In the Softsoap and Red Bull cases, what kept the incumbents from fighting back aggressively, at least initially? In the case of the UK petrol price war, how do you think the supermarkets expected the major gasoline retailers to react to their entry? Was this expectation reasonable? In the Freeserve vs. AOL case, which customers do you think are most readily switching to Freeserve? How can AOL retain these customers?

Nov 28 (0201)
Nov 29 (0101)

MULTIMARKET COMPETITION

Reading:
D’Aveni, R., “Competitive Pressure Systems: Mapping and Managing Multimarket Contact,” Sloan Management Review, 2002, 44: 39-49 MacMillan, I. C., van Putten, A. B., and McGrath, R. G., “Global Gamesmanship,” Harvard Business Review, May 2003

Case study:
“Cat Fight in the Pet Food Industry (A),” Harvard Business School Case 9-391-189, 1993

Case discussion preparation questions:
What, if any, are the benefits to scale and scope in the pet food industry? Who is best positioned in the pet food industry in 1986? Why? Who do you predict will bid for Anderson-Clayton? Why?

Dec 5, 12 (0201)
Dec 6, 13 (0101)
GROUP PROJECT PRESENTATIONS: COMPANY STRATEGY RECOMMENDATION

See Appendix E for details on this assignment and these sessions.

We will also have a brief course review and complete course evaluations after the final group project presentation.

Appendix A: Analyzing Cases and Preparing for Class Discussions

Each case typically focuses on a defining moment in a firm’s history. The case contains all of the information about the firm, industry, and competitors that you will need to perform an analysis of the situation and develop specific recommendations. While it is tempting to try and figure out “what happened,” and the Internet makes this continually easier, this is typically a waste of time and a distraction from the development of your own strategic thinking. Cases are necessarily a simplification of the real situation, and at times actual courses of action are taken for reasons not apparent from the case or are impacted by subsequent events. Also, at times people make poor decisions. It is expected that you will work purely from the data in the case and not be influenced by what transpired after the close of the case.

Your learning from the cases will derive both from your preparation for and from your participation in the class discussion. It is important that outside information not be introduced prematurely in a class discussion, as it could undermine the learning experience for some students. If you are particularly familiar with a firm or industry and would like to comment on the case from that perspective, please let me know prior to class. I find that a student’s experience can provide valuable insight in further understanding a case, but that this information must be introduced at an appropriate point in the discussion to maximize the learning of all individuals in the class.

In preparing for class, it is recommended that you read each case at least three times. The first reading should be a quick skimming of the text of the case. It should give you a feeling for what the case is about and the types of data contained in the case. Your second reading should focus on better understanding the business and the situation, and should involve careful analysis of the case exhibits. As you work through the second reading, you should begin to develop some fairly clear perspectives on your analysis and recommendations for the case. By your third reading you should have a good idea about the fundamentals of the case. Now you will be searching for additional specific confirmatory or contradictory information. You will need to get at the root causes of problems and gather data from the case that will allow you to make specific, actionable recommendations. Before the third reading, be sure to review the recommended assignment questions (Course Outline) that have been prepared to help guide your analysis.

Each week you will be assigned conceptual readings that provide frameworks, tools and ideas that will help you understand, analyze and communicate the case issues. However, these readings certainly will not provide “perfect insight” into the case issues. Thus when reading and analyzing the assigned cases, you should be prepared to draw on ideas and frameworks from any source, and should not confine yourself to just one idea. You are encouraged to draw upon other sources of information with which you are familiar: books, material from other courses, articles, research reports, your employer’s processes and models, and your personal experience. In addition, you are encouraged to discuss the cases with your classmates, especially those in your work groups. Your classmates’ experiences and perspectives will undoubtedly be useful to you as you analyze the case and prepare for our class discussion. Keep in mind, however, that your written case analyses must represent your own work in your own words (or your group’s work in the group’s words).

In a typical class case discussion, one or more students will be asked to start the class by answering a specific question or series of questions posed by the instructor. Anyone who has thoroughly prepared the case should be able to handle this leadoff question. The discussion will then be opened up to the rest of the class. Each person is expected to be prepared to share his or her views on the case. Since individuals whose hands are not raised may be called upon at any time, you should let the instructor know prior to the start of class if you are not prepared to participate in that session’s case discussion.

While analyses and recommendations are important elements of case discussions, so, too, are probing questions. If someone says something that you do not understand, raise your hand and question that person directly. The purpose of a case discussion is not to come up with the “correct” answer (there rarely is such a thing), but to learn from each other the best way to analyze situations. When someone in the class makes a recommendation that you do not agree with, try to understand why they have come to that conclusion, rather than merely attacking the “correctness” of their conclusions. The objective of using the case method will have been attained if individuals have a well-formulated position regarding what they would do AND understand why other individuals might undertake a different course of action.

Appendix B: Performance Evaluation – Contribution to Class Discussion

Managers must often “sell” their ideas to others in order to get their acceptance and support. In this course, the classroom provides a laboratory in which you can test your ability to convince your peers of the appropriateness of your approach to complex management problems. Furthermore, it tests your ability to carefully listen to others’ perspectives and understand why they may reach a different conclusion. Before you can effectively sell your ideas to others, you must understand what is motivating them, what issues they feel are important, and what assumptions they are making that may be different from your own.

When evaluating your contribution to the class discussion, then, I will consider how effectively you put forth your own arguments, as well as how well you listen to, understand, and build upon (or refute) the arguments of others. In all cases, I will look for high quality (which is not always the same as high quantity) arguments, analyses and questions that improve the class’ collective understanding of the case issues. While I encourage you to speak up at any time, keep in mind that comments that are redundant, tangential or seemingly irrelevant to the case discussion at hand will have a negative impact on your class contribution grade.

I will use the following criteria when determining class contribution grades:Has the student attended and made significant contributions to each class discussion? Is the student a good listener?
Are the points made relevant to the current discussion? Are they linked to the comments of others? Do the comments show evidence of analysis of the case? Do the comments add to our understanding of the situation?
Do the ideas push us to consider an aspect of the case that is not necessarily obvious at the outset? Do they go beyond the surface and get into core issues? Is there evidence of a willingness to test new ideas, or are all comments “safe?” Are comments backed up by solid analysis and a willingness to stand up for a point of view when challenged? But equally important, when comments are shallow and do not stand up to close scrutiny, is there a willingness to admit error? Does the student interact with, challenge, question, and extend comments of other participants, or are all comments directed towards the instructor?

Please note that one can also make contributions to the class through postings on the Discussion Forum in our class Blackboard site. I encourage you to post any questions, ideas, articles, and other sources that you believe will help you and your classmates better understand core concepts, frameworks, tools and examples from the class. Appendix C: Performance Evaluation – Individual Analysis

Due:Depends on option chosen; see Course Outline for due dates Length:Text should be typed, double-spaced, and consist of no more than 5 pages, excluding exhibits. You are encouraged to supplement the text with exhibits that provide additional information and support for your arguments and analyses. Guidelines:Do not put your name anywhere on the report. Instead, please put your student ID number on the top right corner of the first page. Note: This is not your social security number! I will not be able to identify your paper if you use your social security number. Your student ID number is the nine digit number that starts with “10” that the university uses to identify students. If you don’t know this number, you can access it through Testudo. Also, you can ask me for your number since I have these on my class roster. % of grade:20%

Assignment options (each student is to choose one of the four options for his/her paper):

a. Given your understanding of the video game console industry history and the drivers of performance in that industry, develop a competitive strategy for the next-generation console for Microsoft (Xbox 360), Sony (PlayStation 3), or Nintendo (Wii). Your strategy should address key competitive positioning issues such as console features, game development, pricing, partnerships with others in the industry Value Net, online offerings, target market segments, and/or any other factor that you think is crucial to winning the next-generation “battle” in this industry. Since many aspects of the firms’ competitive strategies for the next generation are already known (Xbox 360 launched in November 2005, for example), it is acceptable for you to either: 1) Pretend that none of these decisions have been made yet and that you are developing a strategy from scratch; or 2) Document what you perceive to be the strategic decisions that the company has taken and critique them (clarifying which decisions you think are sound and why, and which decisions you would change, how you would change them, and why). In any case, you should use frameworks, concepts, readings, and/or case studies from the class to clarify and support your arguments as needed.

b. The case discusses two main “revolutions” in the brokerage industry, deregulation of commission payments in 1975 (“May Day”) and the rise of the Internet in the mid-1990s. Use Christensen’s “Disruptive Technologies/Innovations” model to describe and evaluate Schwab’s response to each of these “shocks” to the industry. In addition, use the model to describe what you think Schwab should do to protect and extend its strategic position in the brokerage industry in 1999 (the time of the case).

c. Given your understanding of the ongoing convergence between the telecommunications, data, and cable industries, what competitive strategy should Cox Communications pursue? At a minimum, you should identify which of the “four options” outlined in the case that you believe Cox should pursue and why. However, you might also address broader strategic issues such as merger & acquisition activity, technology investments, partnerships, market entry or exit, content strategies, and/or other decisions that you think are fundamental to Cox’s competitive position in the market. In any case, you should use frameworks, concepts, readings, and/or case studies from the class to clarify and support your arguments as needed.

d. Given your understanding of the ongoing convergence between the telecommunications, data, and cable industries, what competitive strategy should D&E Communications pursue? Your answer should address broad strategic issues such as merger & acquisition activity, technology investments, partnerships, market entry or exit, content strategies, and/or other decisions that you think are fundamental to D&E’s competitive position in the market. In any case, you should use frameworks, concepts, readings, and/or case studies from the class to clarify and support your arguments as needed.

Appendix D: Performance Evaluation – Individual Analysis of BSB v. Sky case

Due:At the beginning of class on November 7 (0201) or November 8 (0101) Case:“British Satellite Broadcasting versus Sky Television,” Harvard Business School Case 9-794-031 Length:Text should be typed, double-spaced, and consist of no more than 3 pages, excluding exhibits. You are encouraged to supplement the text with exhibits that provide additional information and support for your arguments and analyses. In particular, you must include at least one exhibit with a payoff matrix for the BSB versus Sky “game” (see below for details). Guidelines:Do not put your name anywhere on the report. Instead, please put your student ID number on the top right corner of the first page. Note: This is not your social security number! I will not be able to identify your paper if you use your social security number. Your student ID number is the nine digit number that starts with “10” that the university uses to identify students. If you don’t know this number, you can access it through Testudo. Also, you can ask me for your number since I have these on my class roster. % of grade:20%

Assignment:
Produce a payoff matrix for the BSB versus Sky case. To keep this modeling exercise relatively straightforward, assume the following: Each player has two options, “continue to compete” or “exit” The cash flow model assumptions (except for those exceptions noted below) given in Exhibits 6 and 7 from the case are valid Assume that each player treats losses incurred through 1990 as “sunk” and thus not relevant to the “compete” or “exit” choices in 1991 Assume that even if one player exits, it doesn’t exit until the end of 1991 (in other words, it will incur losses for one additional year, and the other player won’t monopolize the market until 1992) Assume that if both players stay in the market they will have equal market shares starting in 1993 and continuing thereafter Assume a 10% annual discount rate

Assume that any cash flow earned in the last year of the explicit forecast period (1999) will remain constant in perpetuity thereafter Discuss the implications of this payoff matrix for the strategies that BSB and Sky should follow. In doing so, be sure to address the pros and cons of using the payoff matrix – as constructed – in guiding your choices. Suppose Sky were considering acquiring BSB. A key factor in determining whether such an acquisition would be advantageous to both sides, of course, is the price that Sky would pay for BSB. Use the payoff matrix to determine the range of prices (if any) that Sky could pay for BSB in which both Sky and BSB would be better off doing the deal rather than continuing to compete as duopolists. Use this analysis to identify the negotiating stances that you think each side would take as part of a potential acquisition process, and predict whether or not you think both sides will be able to reach agreement on the acquisition. Appendix E: Performance Evaluation – Group Industry and Competitor Analysis

50% of the course grade will be determined by a multi-part group project that involves writing a consulting report and giving two oral presentations on your results. Each group must choose a firm and prepare strategic recommendations for this firm based on detailed analyses of the firm’s industry and competitors. The final written report should not exceed 15 pages of double-spaced text, and may be supplemented with exhibits that clarify and extend arguments in the text. The written report will be due on the last day of class, December 12 (0201) or December 13 (0101). Each group must also make two oral presentations to the class. Each presentation must not exceed 20 minutes in length, and each presentation will be followed by 10 minutes of Q&A with classmates and the instructor.

The first set of presentations, scheduled for October 10th and 17th (0201) or October 11th and 18th (0101) (team presentation dates and times will be assigned randomly) should focus on industry analysis. Each group should be seeking to answer for its client firm: What industry (ies) does the firm currently compete in? What is the current attractiveness of this industry (ies), and how is it likely to evolve in the next three to five years in terms of profitability and the level of competition? What implications does this industry analysis have for the industries/markets that the client should be considering entering, exiting, and/or otherwise changing its level of participation in?

The second set of presentations, scheduled for December 5th and 12th (0201) and December 6th and 13th (0101) (team presentation dates and times will be assigned randomly), should focus on your recommended strategy for your client and how it is related to your analysis of industry and competitor dynamics. Each group should be seeking to answer for its client firm: What are the best strategies for the client firm to follow given likely industry and competitor dynamics?

The final written report, then, should be a synthesis of the team’s recommendations for the client firm backed up by the key industry and competitor analyses highlighted in its oral presentations. More information on the presentations and final reports will be provided in class.

Other pertinent information for these group projects:

You are responsible for forming your own 4-5-person teams and for identifying the client firm and industry that you would like to analyze. You must form and announce your group project teams and client firm by our class on September 19th (0201) or September 20th (0101). You cannot choose one of the group member’s employers or former employers as your client firm. However, you can choose one of these employer’s competitors as your client firm. You cannot choose one of the industries or companies featured in this class’ case studies. You must submit a bibliography with all of the sources for your report and presentations. It is expected that teams will do a significant amount of “library” (e.g., Internet) and “field” (e.g., interviews) research for this project. Grades for this assignment will be determined as follows: Midterm industry analysis presentation (12.5%); Final client recommendation presentation (12.5%); Final written report (25%).

Free The Ready-to-Eat Breakfast Cereal Industry in 1994 Essay Sample

A

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  • University/College: University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Date: 7 April 2016

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