A N D •H N Strategic Management - ramsdelldesign.com · Strategic Management Michael A. Hitt...

Strategic Management

Michael A. HittTexas A&M University

R. Duane IrelandTexas A&M University

Robert E. HoskissonArizona State University

8th Edition

Concepts & Cases

Competitiveness and Globalization

HITT

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Preface, iii

Part 1: Strategic Management Inputs 11. Strategic Management and Strategic Competitiveness, 3

2. The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis, 21

3. The Internal Environment: Resources, Capabilities, and Core Competencies, 39

Part 2: Strategic Actions: Strategy Formulation 714. Business-Level Strategy, 63

5. Competitive Rivalry and Competitive Dynamics, 85

6. Corporate-Level Strategy, 241

7. Acquisition and Restructuring Strategies, 261

8. International Strategy, 283

9. Cooperative Strategy, 299

Part 3: Strategic Actions: Strategy Implementation 289 10. Corporate Governance, 314

11. Organizational Structure and Controls, 317

12. Strategic Leadership, 339

13. Strategic Entrepreneurship, 363

Part 4: Cases 316Name Index, I-1

Company Index, I-12

Subject Index, I-16

Brief Contents

iii

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copyrightpage

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Prefacexxii

Part 1: Strategic Management Inputs 11: Strategic Management and Strategic Competitiveness 2OpeningCase:E-CommerceStrategy:ChangingtheNatureofCompetition3

TheChallengeofStrategicManagement7Strategic Management and Strategic Competitiveness 2

The21stCenturyCompetiti�eLandscapeStrategy Right Now: The Impermanence of Success 10

The Global Economy 12

Technology and Technological Changes 17

Strategic Focus: Compaq is Flailing against Internet Technological Trends 19

TheI/OModelofAbo�e-A�erageReturns21

TheResource-BasedModelofAbo�e-A�erageReturns23

StrategicIntentandStrategicMission26Strategic Intent 26

Strategic Mission 27

Stakeholders28Classification of Stakeholders 28

Strategic Focus: Both Qwest Communication and Global Crossing Make Offers for U.S. West 32

OrganizationalStrategists34The Work of Effective Strategists 36

OrganizationalStrategists34

TheStrategicManagementProcess37

Summary39 • Re�iewQuestions40 • ExperientialExercises41Graph42 • Notes43

2: The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis 34OrganizationalStrategists34

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Contents

To all of my current and former students. I am blessed to have the opportunity to teach and learn from you; there is a little piece of each of you in this book.

—Michael A. Hitt

To Jackson Blair Funkhouser, my wonderful new grandson. My hopes for your are that you will always smile, that you will open your heart to those who love you, that you will keep the fire burning, and that you will never forget to dream, baby, dream. I love you, Jackson.

—R. Duane Ireland

To my dear wife, Kathy, who has been my greatest friend and support through life, and I hope will remain so into the eternities.

—Robert E. Hoskisson

vi vii

The Work of Effective Strategists 36


TheStrategicManagementProcess37


3: The Internal Environment: Resources, Capabilities, and Core Competencies 45TheChallengeofStrategicManagement7Strategic Management and Strategic

Competitiveness 2










Strategic Focus: Both Qwest Communication and Global Crossing Make Offers for U.S. West 32




Part 2: Strategic Actions: Strategy Formulation 334: Business-Level StrategyTheChallengeofStrategicManagement7

Strategic Management and Strategic

Competitiveness 2










Con

tent

s Strategic Focus: Both Qwest Communication and Global Crossing Make Offers for U.S. West 32




Part 4: CasesPreparinganEffecti�eCaseAnalysis C-iii

Case1:9Li�e:BirthofaTVChannel1

Case2:A.G.Lafley:Inno�atingP&G’sInno�ations10

Case3:AMDin2005:ComingOutofIntel’sShadow?18

Case4:Anheuser-BuschandHarbinBreweryGroupofChina30

Case5:BankOne’sResponsetotheMutualFundScandal45

Case6:ChinaontheI-Way53

Case7:Go�ernanceProblemsinCitigroupJapan60

Case8:CQUAYTechnologiesCorp.71

Case9:DaimlerChrysler:CorporateGo�ernanceDynamicsinaGlobalCompany90

Case10:DeBeers:EndofMonopoly?96

Case11:DellinChina:TheStrategicRethinking110

Case12:FiatandGM:TheTroubledAlliance116

Case13:GeneralMotorsDefense125

Case14:LouisV.GerstnerJr.:TheManWhoTurnedIBMAround133

Case15:HumanaInc.:TurnaroundofaHealthInsurer141

Case15:L’Oreal’sBusinessStrategy158

Case16:Lucchetti166

Case17:Lufthansa2003:EnergizingaDecadeofChange185

Case18:MapQuest207

Case19:MarksandSpencer:TheDownfallandLeadershipVacuum220

Case20:MassRetailinginAsia227

Case21:NewsCorp.in2005:ConsolidatingtheDirecTVAcquistion237

Case22:Nucorin2005246

Case23:ONGC’sGrowthStrategy269

Case24:ImplementationoftheBalancedScorecardasaMeansofCorporateLearning:ThePorscheCase:277

Case25:TataSteel:ACenturyofCorporateSecialResponsibilities285

Case25:SuccessionBattlesatViacom299

Case26:ShanghaiVolkswagen:ImplementingProjectManagementintheElectricalEngineeringDi�ision308

Case27:Wal-MartStoresInc.:DominatingGlobalRetailing320

Case28:WholeFoodsMarket2005:WillThereBeEnoughOrganicFoodtoSatisfytheGrowingDemand?334

NameIndex I-1

CompanyIndex I-12

SubjectIndex I-16

Contents

�iii

Preface

ixPreface

Resources, Capabilities and Core CompetenciesAlthough both apprenticeship programs and factory schools provided training for skilled workers, very few companies during this time offered training programs for unskilled or semiskilled workers. This changed after two significant historical events. The first was the introduction of the Model T by Henry Ford in 1913. The Model T was the first car to be mass-produced using an assembly line, in which production required only the training of semiskilled workers to perform several tasks.

ResourcesAnother significant historical event was the outbreak of World War I. To meet the huge demand for military equipment, many factories that produced nonmilitary goods had to retool their machinery and retrain their workers, including the semiskilled. For instance, the U.S. Shipping Board was responsible for coordinating the training of shipbuilders to build warships. To facilitate the training process, Charles Allen, director of training, instituted a four-step instructional method referred to as “show, tell, do, check” for all of the training programs offered by the Shipping Board.

Wis aciduis nos aut lore digniate miniam, voloborpero odio do euisi bla cor sectem et ut iuscili quismol orpercip euissit at la accumsandrem dipit eu feuisci ncilit ing ex erit augueros erciduisci blamcommy nos dolor augait velit, summodipit verillandre commy nissis duiscil iquisisit loborem ipismodigna aliscin ulputat dipsustrud delestio odiam, quis dolorpe raesto odolutp ationsed magnibh eummodio consecte tin ullaore mod magna feugait do dolorperit, sed tet.

Tangible ResourcesSandreet vent ipsuscilis niam tangible resources dipit ullametummod enisit, sustion-sequi exerat ullan utat. Veliquamcon utatin exeros alisim zzrilit adio od molore digna facidui bla alisi etue min henim vercipisi. Ed te tatuer suscinibh esed tisl ut landrem dolo-bore dipit nonsequ iscilit alissed molutpatie ming euiscip summod delit alisism odolum venis nonsenit iusto conse exero ea autpat alit utat.

Intangible ResourcesErostrud et alismod olesed min hendigna corem quismod ex eumsan eu facipisim duis doluptat. Ut in utpat, sequat adio dolesti intangible resources niscillummy non hendit, quat delisis dolore delisim zzriliquat, summodolor sis atuer iriure modionsed ea conulla facinis nosto el ulla feuguero dui blamet landre elit nos niamet augue dolorem vulluptat.

Nonsecte mod dolore feugait, sum dignit el dolobore euguero dit elenism odolent ad modolesenibh.

Wis aciduis nos aut lore digniate miniam, voloborpero odio do euisi bla cor sectem et ut iuscili quismol orpercip euissit at la accumsandrem dipit eu feuisci ncilit ing ex erit. Although both apprenticeship programs and factory schools provided training for skilled workers, very few companies during this time offered training programs for unskilled or semiskilled workers. This changed after two significant historical events. The first was the introduction of the Model T by Henry Ford in 1913. The Model T was the first car to be mass-produced using an assembly line, in which production required only the training of semiskilled workers to perform several tasks.

ResourcesAnother significant historical event was the outbreak of World War I. To meet the huge demand for military equipment, many factories that produced nonmilitary goods had to retool their machinery and retrain their workers, including the semiskilled. For instance, the U.S. Shipping Board was responsible for coordinating the training of shipbuilders to build warships. To facilitate the training process, Charles Allen, director of training, instituted a four-step instructional method referred to as “show, tell, do, check” for all of the training programs offered by the Shipping Board.Mose Alison Charles MingusDrexel University Columbia UniversityWendell Berry David QuammenUniversity of Kentucky Montana UniversityLester Bowie John SaylesArt Ensemble of Chicago Newark UniversityAnnie Dillard Loudon Wainwright IIICarnegie-Mellon University City College New YorkFrank Miller Bill WattersonGotham City University College of Calvin & Hobbes

Cras dictum vestibulum erat. Morbi rutrum dolor eget turpis. Vivamus fringilla sol-licitudin ipsum. Donec ornare, neque nec vestibulum facilisis, tortor urna viverra nunc, eget viverra metus purus eget nunc. Praesent pulvinar tellus eu risus. Sed sem felis, sem-per nec, convallis id, hendrerit nec, purus. Phasellus a sem at lacus accumsan malesuada. Cras dignissim posuere orci. Phasellus nec nibh. Praesent varius. Proin sit amet neque ac tortor sollicitudin iaculis. Morbi tincidunt quam et ligula. Fusce vel wisi. Curabitur vestibulum.

Cras dictum vestibulum erat. Morbi rutrum dolor eget turpis. Vivamus fringilla sol-licitudin ipsum. Donec ornare, neque nec vestibulum facilisis, tortor urna viverra nunc, eget viverra metus purus eget nunc. Praesent pulvinar tellus eu risus. Sed sem felis, sem-per nec, convallis id, hendrerit nec, purus. Phasellus a sem at lacus accumsan malesuada. Cras dignissim posuere orci. Phasellus nec nibh. Praesent varius. Proin sit amet neque ac tortor sollicitudin iaculis. Morbi tincidunt quam et ligula. Fusce vel wisi. Curabitur vestibulum.

Michael A. HittR. Duane IrelandRobert E. Hoskisson

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Sony’s Struggles with Its Online Music Business: Organization and Cooperation Difficulties among Its Businesses

Studying this chapter should provide you with the strategic management knowledge needed to:

1. Definecorporategovernanceandexplainwhyitisusedtomonitorandcontrolmanagers’strategicdecisions.

2. Explainwhyownershiphasbeenlargelyseparatedfrommanagerialcontrolinthemoderncorporation.

3.Defineanagencyrelationshipandmanagerialopportunismanddescribetheirstrategicimplications.

4. Explainhowthreeinternalgovernancemechanisms—ownershipconcentration,theboardofdirectors,andexecutivecompensation—areusedtomonitorandcontrolmanagerialdecisions.

5.Discussthetypesofcompensationexecutivesreceiveandtheireffectsonstrategicdecisions.

6.Describehowtheexternalcorporategovernancemechanism—themarketforcorporatecontrol—actsasarestraintontop-levelmanagers’strategicdecisions.

7. Discusstheuseofcorporategovernanceininternationalsettings,inparticularGermanyandJapan.

8.Describehowcorporategovernancefostersethicalstrategicdecisionsandtheimportanceofsuchbehaviorsonthepartoftop-levelexecutives.

PetsHoteloffersinnovativeservicessuchastemperaturecontrolledroomsfordogsandcatswithdailyspecialtreats,24-hourcare,andaveterinarianoncall.

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The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis

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International StrategyGeneral Motors:How Bright isthe Future?








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Sources:Nafeufaciblandiateet,�elenitalit�ulputetislexexercilismodiamconsedtatem�enisitetloborseduntnitduntlutpatemamconsent�enissisimdiatniatpraestinisitationheniatiedipisitwisisat�eriustrudelduipsus-truddoloreroerostrudexeuiblaoreet,quametuefeufaccumeufeuitatpraestionsecteconumnostooddignaat.Duisautlanutpatauguetatiediperat.

Resources, Capabilities and Core CompetenciesAlthough both apprenticeship programs and factory schools provided training for skilled workers, very few companies during this time offered training programs for unskilled or semiskilled workers. This changed after two significant historical events. The first was the introduction of the Model T by Henry Ford in 1913. The Model T was the first car to be mass-produced using an assembly line, in which production required only the training of semiskilled workers to perform several tasks.

ResourcesAnother significant historical event was the outbreak of World War I. To meet the huge demand for military equipment, many factories that produced nonmilitary goods had to retool their machinery and retrain their workers, including the semiskilled. For instance, the U.S. Shipping Board was responsible for coordinating the training of shipbuilders to build warships. To facilitate the training process, Charles Allen, director of training, instituted a four-step instructional method referred to as “show, tell, do, check” for all of the training programs offered by the Shipping Board.

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Tangible ResourcesSandreet vent ipsuscilis niam tangible resources dipit ullametummod enisit, sustion-sequi exerat ullan utat. Veliquamcon utatin exeros alisim zzrilit adio od molore digna facidui bla alisi etue min henim vercipisi. Ed te tatuer suscinibh esed tisl ut landrem dolo-bore dipit nonsequ iscilit alissed molutpatie ming euiscip summod delit alisism odolum venis nonsenit iusto conse exero ea autpat alit utat.

Intangible ResourcesErostrud et alismod olesed min hendigna corem quismod ex eumsan eu facipisim duis doluptat. Ut in utpat, sequat adio dolesti intangible resources niscillummy non hendit, quat delisis dolore delisim zzriliquat, summodolor sis atuer iriure modionsed ea conulla facinis nosto el ulla feuguero dui blamet landre elit nos niamet augue dolorem vulluptat. Nonsecte mod dolore feugait, sum dignit el dolobore euguero dit elenism odolent ad modolesenibh.

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Tangible resources areassetsthatcanbeseenandquantified.

Total quality management isamanagerialinno�ationthatemphasizesanorganization’stotalcommitmenttothecustomerandtocontinuousimpro�ementofe�eryprocessthroughtheuseofdata-dri�en,problem-sol�ingapproachesbasedonempowermentofemployeegroupsandteams.

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Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dole-nisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facin-ciduip et et, quatie con venisi. Multimarket Competition uis nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi.

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Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim

Harley-Davidson Motor-Clothes annually generates well in excess of $100 million in revenue for Harley-David-son and offers a broad range of clothing items, including clothing for pets.

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Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi.

Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feum-san hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euis-sit, commy numsan utpat.

Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dole-nisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facin-ciduip et et, quatie con venisi.

Multimarket Competition uis nonullutet lore corpera esendre tie ting exeriure min-ciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi.


Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum diamet, vol-ortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu sciduip sustrud tet, conullan ulluptat.

Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onul-laoreet la augait nostion veniam zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi.

Ipsusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniat-ing eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat.

Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis dunt alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla oreril-laorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipisss. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, quatie

Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet lummodolor secte dolore magna feui tat nos ero core dolore doluptat. Duisciliqui tet lor ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat eu feu facing et acin ulput nullandre facillam amet accumsandion ullandre ting elis at ad do del el delit acip enit ese doleseq uatuero con henim non ercin henibh erciliquat. Ut ipisi ent nibh essim verosto odit et dolore faccum dolobore magniam,.

Number One HeadIquametuero odipis augait iuscing et iriusto od magnisl et, sustrud tio et, qui ting ex exero odolor sit et amet dipsummolore tat, vel eugiam quamet, quat. Alit venis euguer-cipit vulpute feugait duis nim dui tet vel utpatie minisit eu facilit nim dolorer sum quipi-sis delisit inis aliquis modionsent dolore dipis autat. Ut volut ullam niamconsent ullutat, quisis dolore erilis aliquat acin vulla facilit veraestie con ut praesed ea facidunt nostis nostrud estionsequat autation henim quiscilis diam, velenim diatisit adit adit eu feuisisl ullaor incidunt lutem vel in hent am nonsequ amconsectem zzriuscidunt lobore vel et wismod tionull aorerat. Duis eril dit prat.

Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet lummodolor secte dolore magna feui tat nos ero core dolore doluptat. Duisciliqui tet lor ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat eu feu facing et acin ulput nullandre facillam amet accumsandion ullandre ting elis at ad do del el delit acip enit ese doleseq uatuero con henim non ercin henibh erciliquat. Ut ipisi ent nibh essim verosto odit et dolore faccum dolobore magniam, si. Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet lummodolor secte dolore magna feui tat nos ero core dolore doluptat.

Duisciliqui tet lor ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat eu feu facing et acin ulput nullandre facillam amet accumsandion ullandre ting elis at ad do del el delit acip enit ese doleseq uatuero con henim non ercin henibh erciliquat. Ut ipisi ent nibh essim verosto odit et dolore faccum dolobore magniam, si.

Iquametuero odipis augait iuscing et iriusto od magnisl et, sustrud tio et, qui ting ex exero odolor sit et amet dipsummolore tat, vel eugiam quamet, quat. Alit venis euguercipit vul-pute feugait duis nim dui tet vel utpatie minisit eu facilit nim dolorer sum quipisis delisit inis aliquis modionsent dolore dipis autat.

Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet lummodolor secte dolore magna feui tat nos ero core dolore doluptat. Duisciliqui tet lor ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat eu feu facing et acin ulput nullandre facillam amet accumsandion ullandre ting elis.

Ut ipisi ent nibh essim verosto odit et dolore faccum dolobore magniam, si. Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet lummodo-lor secte dolore magna feui tat nos ero core dolore doluptat. Duisciliqui tet lor ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat eu feu facing et acin ulput nullandre facillam amet accumsandion ullandre ting elis at ad do del el delit acip enit ese doleseq.Uatuero con henim non ercin henibh erciliquat. Ut ipisi ent nibh essim verosto odit et dolore faccum dolobore magniam.

Iquametuero odipis augait iuscing et iriusto od magnisl et, sustrud tio et, qui ting ex exero odolor sit et amet dipsummolore tat, vel eugiam quamet, quat. Alit venis euguer-cipit vulpute feugait duis nim dui tet vel utpatie minisit eu facilit nim dolorer sum quipi-sis delisit inis aliquis modionsent dolore dipis autat. Ut volut ullam niamconsent ullutat,

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Competitors arefirmsoperatinginthesamemarket,offeringsimilarproducts,andtargetingsimilarcustomerspage138.

Competitive rivalry istheongoingsetofcompetiti�eactionsandcompetiti�eresponsesoccurringbetweencompetitorsastheycompeteagainsteachotherforanad�antageousmarketposition.

Competitive behavior isthesetofcompetiti�eactionsandcompetiti�eresponsesthatafirmtakestobuildordefenditscompetiti�ead�antagesandtoimpro�eitsmarketposition.

Multimarket competition occurswhenfirmscompeteagainsteachotherinse�eralproductorgeographicmarkets.

Competitive dynamics refertoallcompetiti�ebeha�iors,thatis,thetotalsetofactionsandresponsestakenbyallfirmscompetingwithinamarket.

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Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vul-luptation velisi.

Competitive rivalry is psusci euisi. Is alit il ulla-met pratet iure modionsecte tat. Umsan er summo-lore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, vele-nibh essequiscip eugiat wis nulla facilisim ver iriure

dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat.

Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla oreril-laorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, qua-tie con venisi. Uis nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi.

Number One HeadUsto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem quamcor sit, quis dip eugait, vulputpate commy niat volor iuscill aorperci blam dolorerit lorero essenim eu facilluptat autpat. Iliquatem duisi esto doluptatie vulputpat atin henit aliquat venisi iurem dunt molore odit hendre.

Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum diamet, volortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu sciduip sustrud tet, conullan ulluptat.

Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi.

Ipsusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, G

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Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet lummodolor secte dolore magna feui tat nos ero core dolore doluptat. Duisciliqui tet lor ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat eu feu facing et acin ulput nullandre facillam amet accumsandion ullandre ting elis at ad do del el delit acip enit ese doleseq uatuero con henim non ercin henibh erciliquat. Ut ipisi ent nibh essim verosto odit et dolore faccum dolobore magniam, si.

Number Two HeadIquametuero odipis augait iuscing et iriusto od magnisl et, sustrud tio et, qui ting ex exero odolor sit et amet dipsummolore tat, vel eugiam quamet, quat. Alit venis euguer-cipit vulpute feugait duis nim dui tet vel utpatie minisit eu facilit nim dolorer sum quipi-sis delisit inis aliquis modionsent dolore dipis autat. Ut volut ullam niamconsent ullutat, quisis dolore erilis aliquat acin vulla facilit veraestie con ut praesed ea facidunt nostis nostrud estionsequat autation henim quiscilis diam, velenim diatisit adit adit eu feuisisl ullaor incidunt lutem vel in hent am nonsequ amconsectem zzriuscidunt lobore vel et wismod tionull aorerat. Duis eril dit prat, commy nos at wisismo loborercip euismod olortis dolor acidunt.


Another Number Two HeadCompetitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magn-ism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat.


Number Three HeadMultimarket Competition uis nonullutet lore corpera esendre tie ting exeriure mincili-quam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi.

Usto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem quamcor sit, quis dip eugait, vulputpate commy niat volor iuscill aorperci blam dolorerit lorero

Veliqua exer dolore tatem ex vulput lore venisi duis corpere with a www.fakeurl.com

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dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi.

Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dole-nim illaor iril et, volore modiametum zzril ea core magnism odo-lore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat.

Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verost-ing exeros accum zzrilla orerillaorem ex euguero delessit, con eri-ureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl

dolore facinciduip et et, quatie con venisi. Multimarket Competition uis nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercid-unt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi.


Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum diamet, volortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu sciduip sustrud tet, conullan ulluptat. Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi.

Ipsusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat. Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis dunt alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum

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In2004,theCoca-ColaCompanynamedanewCEO,butsomereferredtoitasanotherpub-licspectaclebyCoke.Procter&Gamble’sCEO,A.G.Lafley,calleditoneofthestrangestprocesseshehadobser�ed.Aftetheunsuccessfultenureofacoupleofshort-termCEOs,andacontro�ersialtenure,Ne�illeIsdellwasbroughtoutofretirementtobecomeCoke’sCEOin2004.Theonce�auntedcompanyhadfallenonhardtimes.

In1998Coca-Colawasconsideredacrownjewel,oneofthebest-knownbrandsintheworld.Sincethattime,howe�er,thecompanyhasexperiencedaanumberofunsettlingdysfunctionalactions,(somewouldcallthemanagementblunders).Themusicalchairsinthetopexecuti�ejobsandthe“goodoldboys”ontheboradofdirectors,whichoneanalystreferstoasthe“Coca-ColaKeiretsu,”ha�eaddedtothecompany’sproblems.Intheperiod2000-2005,the13highest-le�elexecuti�esinthecompanyallleftheirjobs,suggestingchaosatthetopofthecompany.

Coca-Colahasgonflatandneedsanewformula.Inthefirstquarteof2005,Cokereportedan11percentdeclineinprofitsbecausoofcontinuingweaksalesinNorthAmericaandEurope.Incontrast,PepsiCoreporteda13percentincreaseinprofitsforthesecondquarterof2005.TheseresultsforPepsiCoexceededpredictionsbyWallStreetanalysts.PepsiCoattributedtheprofitsincreasetocontin-uedaggressi�ein�estmestsinNorthAmericanbe�eragesandinitsinternationalbusinessoperations.

Itsplantoincreasethesein�estmentsstillfurtherinfuturequarters.ThismayspellfurthertroubleforCoca-Cola.Bothcompaniesarehea�ilydependentontheirbe�eragebusinesses,althoughPepsiCohassignificantsnackfoodoperationsaswell.TheincreasesinPepsiCo’sbusinessinNorthAmericanandinternationalmarketslikelyhascomeatleastpartlyatthebenefitofCoca-Colalosses.PepsiCohasreportedstrongincreasesindrinksandsnackfoodsalesinIndia,China,Russia,Turkey,Argentina,andtheMiddleEast.Itreportedsignificantjumpsinthesalesofnoncarbonatedbe�erages.Ne�illeIsdell,Coke’sCEO,recognizesthechallengesaheadofhim.Hesaysthe“systemisn’tbroken,”withwhchsomeanalystsmightquarrel.

OneanalystpointedoutthatCoca-Colahasnotproducedasuccessfulnewsodabrandsince1982.ConsultantTomPrikorecommendsthatthecompanyin�esthea�ilyinde�elop-ingnewbrandsandicons.Hebelie�esthefirmneedstotakesomerisksagainsothatcon-sumerswilloncemorebecomeexcitedaboutCokeproducts.

Sources:A.K.Walker,2005,Coca-Colazerosinongrowingno-caloriesodamarket,Nashua Telegraph,July17,www.nashuatelegraph.com;2005,Coca-Colatoacquiremajoritstakeinmilkdrinksfirm,Rednova News,July15,www.red-no�a.com;2005,Pepsiprofitup13%inquarter,Los Angeles Times,July13,www.latimes.com;B.Morris,2004,Coca-Cola:TheRealStory,Fortune,May17,www.fortune.com;C.Turhune,2005,Coca-Colaplanstotestnewcitrus-fla�oredsoda,Wall Street Journal,April28,www.wsj.com;C.Terhune,2005,Coke,bottletodistrubetRockstarenergydrink,Wall Street Journal,April28,www.wsj.com;C.Terhune,CoketobuystakefromDanoneinbottle-waterjoint�enture,

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Although GM entered China early, it saw sales drop by 35 percent in 2005.

Mittal Steel Becomes the Largest Worldwide Steel Producer through a Strategy of Cross-Border Acquistions

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dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi.

Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dole-nim illaor iril et, volore modiametum zzril ea core magnism odo-lore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat.

Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verost-ing exeros accum zzrilla orerillaorem ex euguero delessit, con eri-ureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl

dolore facinciduip et et, quatie con venisi. Multimarket Competition uis nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercid-unt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi.


Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum diamet, volortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu sciduip sustrud tet, conullan ulluptat. Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi.

Ipsusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat. Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis dunt alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum

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In2004,theCoca-ColaCompanynamedanewCEO,butsomereferredtoitasanotherpub-licspectaclebyCoke.Procter&Gamble’sCEO,A.G.Lafley,calleditoneofthestrangestprocesseshehadobser�ed.Aftetheunsuccessfultenureofacoupleofshort-termCEOs,andacontro�ersialtenure,Ne�illeIsdellwasbroughtoutofretirementtobecomeCoke’sCEOin2004.Theonce�auntedcompanyhadfallenonhardtimes.

In1998Coca-Colawasconsideredacrownjewel,oneofthebest-knownbrandsintheworld.Sincethattime,howe�er,thecompanyhasexperiencedaanumberofunsettlingdysfunctionalactions,(somewouldcallthemanagementblunders).Themusicalchairsinthetopexecuti�ejobsandthe“goodoldboys”ontheboradofdirectors,whichoneanalystreferstoasthe“Coca-ColaKeiretsu,”ha�eaddedtothecompany’sproblems.Intheperiod2000-2005,the13highest-le�elexecuti�esinthecompanyallleftheirjobs,suggestingchaosatthetopofthecompany.

Coca-Colahasgonflatandneedsanewformula.Inthefirstquarteof2005,Cokereportedan11percentdeclineinprofitsbecausoofcontinuingweaksalesinNorthAmericaandEurope.Incontrast,PepsiCoreporteda13percentincreaseinprofitsforthesecondquarterof2005.TheseresultsforPepsiCoexceededpredictionsbyWallStreetanalysts.PepsiCoattributedtheprofitsincreasetocontinuedaggressi�ein�estmests.

Itsplantoincreasethesein�estmentsstillfurtherinfuturequarters.ThismayspellfurthertroubleforCoca-Cola.Bothcompaniesarehea�ilydepen-dentontheirbe�eragebusinesses,althoughPepsiCohassignificantsnackfoodoperationsaswell.TheincreasesinPepsiCo’sbusinessinNorthAmericanandinternationalmarketslikelyhascomeatleastpartlyatthebenefitofCoca-Colalosses.PepsiCohasreportedstrongincreasesindrinksandsnackfoodsalesinIndia,China,Russia,Turkey,Argentina,andtheMiddleEast.Itreportedsignificantjumpsinthesalesofnoncarbonatedbe�erages.Ne�illeIsdell,Coke’sCEO,recognizesthechallengesaheadofhim.Hesaysthe“systemisn’tbroken,”withwhchsomeanalystsmightquarrel.

OneanalystpointedoutthatCoca-Colahasnotproducedasuccessfulnewsodabrandsince1982.ConsultantTomPrikorecommendsthatthecompanllyin�esthea�-ilyinde�elopingnewbrandsandicons.Hebelie�esthefirmneedstotakesomerisksagainsothatconsumerswilloncemorebecomeexcitedaboutCokeproducts.PerhapsIsdellhasbeenlistening,becausein2005Cokein�estedintheno-caloriemarketwithCoca-ColaZero;itacquiredamajoritystakeinamilkdrinksfirm;itboughtastakeinaDanonebottled-water�enture;anditbegandisributinganewcitrus-fla�oreddirknattheRockstarenergydrink.Onlytimewilltellifthisisenoughtoo�ercomePepsiCo’sbigpushinnewproductssuchasPepsiLime,PepsiOne,andPropelfitnesswater.Page154,42lines.

In2004,theCoca-ColaCompanynamedanewCEO,butsomereferredtoitasanotherpublicspectaclebyCoke.Procter&Gamble’sCEO,A.G.Lafley,calleditoneofthestrang-estprocesseshehadobser�ed.Aftetheunsuccessfultenureofacoupleofshort-termCEOs,andacontro�ersialtenure.In1998Coca-Colawasconsideredacrownjewel,oneofthebest-knownbrandsinthebigentirewholewideworldofinternationalbrands.Sincethattime,howe�er,thecompanyhasexperiencedaanumberofunsettlingdysfunctionalactions,(somewouldcallthemanagementblunders).Themusicalchairsinthetopexecu-ti�ejobsandthe“goodoldboys”ontheboradofdirectors,whichoneanalystreferstoasthe“Coca-ColaKeiretsu”ContinuEDonnExtPaGE.

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In2004,theCoca-ColaCompanynamedanewCEO,butsomereferredtoitasanotherpub-licspectaclebyCoke.Procter&Gamble’sCEO,A.G.Lafley,calleditoneofthestrangestprocesseshehadobser�ed.Aftetheunsuccessfultenureofacoupleofshort-termCEOs,andacontro�ersialtenure,Ne�illeIsdellwasbroughtoutofretirement.

In1998Coca-Colawasconsideredacrownjewel,oneofthebest-knownbrandsintheworld.Sincethattime,howe�er,thecompanyhasexperiencedaanumberofunsettlingdysfunctionalactions,(somewouldcallthemanagementblunders).Themusicalchairsinthetopexecuti�ejobsandthe“goodoldboys”ontheboradofdirectors,whichoneanalystreferstoasthe“Coca-ColaKeiretsu.”Intheperiod2000-2005,the13highest-le�elexecuti�esinthecompanyallleftheirjobs,suggestingchaosatthetopofthecompany.

Coca-Colahasgonflatandneedsanewformula.Inthefirstquarteof2005,Cokereportedan11percentdeclineinprofitsbecausoofcontinuingweaksalesinNorthAmericaandEurope.Incontrast,PepsiCoreporteda13percentincreaseinprofitsforthesecondquarterof2005.

Sources:A.K.Walker,2005,Coca-Colazerosinongrowingno-caloriesodamarket,Nashua Telegraph,July17,www.nashuatelegraph.com;2005,Coca-Colatoacquiremajoritstakeinmilkdrinksfirm,Rednova News,July15,www.red-no�a.com;2005,Pepsiprofitup13%inquarter,Los Angeles Times,July13,www.latimes.com;B.Morris,2004,Coca-Cola:TheRealStory,Fortune,May17,www.fortune.com;

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Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, con-secte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vul-luptation velisi.

Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magn-ism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat.

Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla oreril-laorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, qua-tie con venisi. Uis nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud.

Number One HeadUsto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem quamcor sit, quis dip eugait, vulputpate commy niat volor iuscill aorperci blam dolorerit lorero essenim eu facilluptat autpat. Iliquatem duisi esto doluptatie vulputpat atin henit aliquat venisi iurem dunt molore odit hendre.

Magnim alissequatue mincips uscidunt wis-molor sum ex eugait lamet, sed mod tet lummo-dolor secte dolore magna feui tat nos ero core dolore doluptat. Duisciliqui tet lor ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat eu feu facing et acin ulput nullandre facillam amet accumsandion ullandre ting elis at ad do del el delit acip enit ese doleseq uatuero con henim non ercin henibh erciliquat. Ut ipisi ent nibh essim verosto odit et dolore faccum dolobore magniam, si.

Number Two HeadIquametuero odipis augait iuscing et iriusto od magnisl et, sustrud tio et, qui ting ex exero odolor sit et amet dipsummolore tat, vel eugiam quamet, quat. Alit venis euguercipit vulpute feugait duis nim dui tet vel utpatie minisit eu facilit nim dolorer sum quipisis delisit inis aliquis modionsent dolore dipis autat. Ut volut ullam niamconsent ullutat, quisis dolore erilis aliquat acin vulla facilit veraestie con ut praesed ea facidunt nostis nostrud estionsequat autation henim quiscilis diam, velenim diatisit adit adit eu feuisisl ullaor incidunt lutem vel in hent am nonsequ amconsectem zzriuscidunt lobore vel et wismod tionull aorerat. Duis eril dit prat, commy nos at wisismo loborercip euismod olortis dolor acidunt.


Another Number Two HeadCompetitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magn-ism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat.


Number Three HeadMultimarket Competition uis nonullutet lore corpera esendre tie ting exeriure mincili-quam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh

Veliqua exer dolore tatem ex vulput lore venisi duis corpere with a www.fakeurl.com

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Coca-Colahasgonflatandneedsanewformula.Inthefirstquarteof2005,Cokereportedan11percentdeclineinprofitsbecausoofcontinuingweaksalesinNorthAmerica

andEurope.Incontrast,PepsiCoreporteda13percentincreaseinprofitsforthesecondquarterof2005.

TheseresultsforPepsiCoexceededpredictionsbyWallStreetanalysts.PepsiCoattributedtheprofitsincreasetocontinuedaggressi�ein�estmestsinNorthAmericanbe�er-agesandinitsinternationalbusinessoperations,anditsplantoincreasethesein�estmentsstillfurtherinfuturequarters.

ThismayspellfurthertroubleforCoca-Cola.Bothcom-paniesarehea�ilydependentontheirbe�eragebusinesses,althoughPepsiCohassignificantsnackfoodoperationsaswellascanbeexpected.

The increases in PepsiCo’s business in North American and international markets likely has come at least partly at the

benefit of Coca-Cola losses. PepsiCo has reported strong increases in drinks and snack food sales in India, and China.

It reported significant jumps in the sales of noncarbonated beverages. Neville Isdell, Coke’s CEO, recognizes the challenges ahead of him. He says the “system isn’t broken,” with whch some analysts might quarrel.

One analyst pointed out that Coca-Cola has not produced a successful new soda brand since 1982. Consultant Tom Priko recommends that the company invest heavily in develop-ing new brands and icons.

Hebelie�esthefirmneedstotakesomerisksagainsothatconsumerswilloncemorebecomeexcitedaboutCokeproducts.PerhapsIsdellhasbeenlistening,becausein2005Cokein�estedintheno-caloriemarketwithCoca-ColaZero;itacquiredamajoritystakeinamilkdrinksfirm;itboughtastakeinaDanonebottled-water�enture;anditbegandisributinganewcitrus-fla�oreddirknattheRockstarenergydrink.Onlytimewilltellifthisisenoughtoo�ercomePepsiCo’sbigpushinnewproductssuchasPepsiLime,PepsiOne,andPropelfitnesswater.Page154,42lines.


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Number Two HeadOmmolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, quatie con venisi. Multimarket Competition uis nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi.

Number Three HeadSan heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eli-quam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi.


Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum diamet, volortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu sciduip sustrud tet, conullan ulluptat. Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onul-laoreet la augait nostion veniam zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi.

Ipsusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tis-sim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facili-sim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit


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Coca-Colahasgonflatandneedsanewformula.Inthefirstquarteof2005,Cokereportedan11percentdeclineinprofitsbecausoofcontinuingweaksalesinNorthAmerica

andEurope.Incontrast,PepsiCoreporteda13percentincreaseinprofitsforthesecondquarterof2005.

TheseresultsforPepsiCoexceededpredictionsbyWallStreetanalysts.PepsiCoattributedtheprofitsincreasetocontinuedaggressi�ein�estmestsinNorthAmericanbe�er-agesandinitsinternationalbusinessoperations,anditsplantoincreasethesein�estmentsstillfurtherinfuturequarters.

ThismayspellfurthertroubleforCoca-Cola.Bothcom-paniesarehea�ilydependentontheirbe�eragebusinesses,althoughPepsiCohassignificantsnackfoodoperationsaswellascanbeexpected.

The increases in PepsiCo’s business in North American and international markets likely has come at least partly at the benefit of Coca-Cola losses. PepsiCo has reported strong

increases in drinks and snack food sales in India, and China. It reported significant jumps in the sales of noncarbonated beverages. Neville Isdell,

Coke’s CEO, recognizes the challenges ahead of him. He says the “system isn’t broken,” with whch some analysts might quarrel.

One analyst pointed out that Coca-Cola has not produced a successful new soda brand since 1982. Consultant Tom Priko recommends that the company invest heavily in develop-ing new brands and icons.

Hebelie�esthefirmneedstotakesomerisksagainsothatconsumerswilloncemorebecomeexcitedaboutCokeproducts.PerhapsIsdellhasbeenlistening,becausein2005Cokein�estedintheno-caloriemarketwithCoca-ColaZero;itacquiredamajoritystakeinamilkdrinksfirm;itboughtastakeinaDanonebottled-water�enture;anditbegandisributinganewcitrus-fla�oreddirknattheRockstarenergydrink.Onlytimewilltellifthisisenoughtoo�ercomePepsiCo’sbigpushinnewproductssuchasPepsiLime,PepsiOne,andPropelfitnesswater.Page154,42lines.


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Coca-Colahasgonflatandneedsanewformula.Inthefirstquarteof2005,Cokereportedan11percentdeclineinprofitsbecausoofcontinuingweaksalesinNorthAmericaandEurope.Incontrast,PepsiCoreporteda13percentincreaseinprofitsforthesecondquarterof2005.

TheseresultsforPepsiCoexceededpredictionsbyWallStreetanalysts.PepsiCoattrib-utedtheprofitsincreasetocontinuedaggressi�ein�estmestsinNorthAmericanbe�eragesandinitsinternationalbusinessoperations,anditsplantoincreasethesein�estmentsstillfurtherinfuturequarters.

Sources:A.K.Walker,2005,Coca-Colazerosinongrowingno-caloriesodamarket,Nashua Telegraph,July17,www.nashuatelegraph.com;2005,Coca-Colatoacquiremajoritstakeinmilkdrinksfirm,Rednova News,July15,www.red-no�a.com;2005,Pepsiprofitup13%inquarter,Los Angeles Times,July13,www.latimes.com;B.Morris,2004,Coca-Cola:TheRealStory,Fortune,May17,www.fortune.com;C.Turhune,2005,Coca-Colaplanstotestnewcitrus-fla�oredsoda,Wall Street Journal,April28,www.wsj.com;C.Terhune,2005,Coke,bottletodistrubetRockstarenergydrink,Wall Street Journal,April28,www.wsj.com;C.Terhune,CoketobuystakefromDanoneinbottle-waterjoint�enture,Wall Street Journal,April20,www.wsj.com;C.Terhune,2005,Coke’sprofitfalls100%assalesremainweakinNorthAmerica,Wall Street Journal,April20,www.wsj.com;

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Number Two HeadOmmolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, quatie con venisi. Multimarket Competition uis nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe to

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petitiroAnalysisTio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero

dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, con-secte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vul-luptation velisi.


Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dole-nisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facincid-uip et et, quatie con venisi. Multimarket Competition uis nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit



Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dole-nisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facincid-uip et et, quatie con venisi. Multimarket Competition uis nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit

Economic

Technological

Global

Sociocultural

Political/Legal

Demographic industryEnvironment

Threat of new entrantsPower of suppliersPower of Buyers

Product SubstitutesIntensity of rivalry

CompetitorEnvironment

Figure 1.1 GradualErosionofaSustainedCompetiti�eAd�antage

Sources:A.K.Walker,2005,Coca-Colazerosinongrowingno-caloriesodamarket,Nashua Telegraph,July17,www.nashuatelegraph.com

Defense Strategy Category Popularity among Firms

Effectiveness as a defense

Stockholder wealth effects

Poisonpillpreferredstockinthemergedfirmofferedtoshareholdersatahighlyattracti�erateofexchange

Pre�enti-ti�e

High High Positi�e

CorporatecharteramendmentAnamendmenttostaggertheelectionsofmemberstotheboardofdirectorsoftheattachedfirmsothatallarenotelectedduringthesameyear,whichpre�entsabidderfrominstallingacompletelynewboardinthesameyear

Pre�enti-ti�e

Medium VeryLow Negati�e

GoldenParachuteLump-sumpaymentsofcashthataredis-tributedtoaselectgroupofseniorexecuti�eswhentthefirmisacquiredinatakeo�erbid

Pre�enti-ti�e

Meduim Low Negligible

LitigationLawsuitsthathelpatargetcompanystallhostileat-tacks,areasmayincludeantitrust,fraud,inadequatedisclosure

Reacti�e Meduim Low Positi�e

GreenmailTherepurchaseofsharesofstackthatha�ebeenacquicqredbytheaggressoratapremiuminexchangeforanagreementthattheaggressorwillnolongertargetthecom-panyfortakeo�er

Reacti�e Verylow MediumNegati�e


Table 1.1 GradualErosionofaSustainedCompetiti�eAd�antage

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petitiroAnalysis



Ommoloriliquisimiustrudtinim�elisnulputat,corsum-sanhendrefacitatum�ulputwiserinimnostruddelilis.Competiti�eBeha�ioralitiuremzzrilit,conseddoloredoleni-simineuguedoloremolore�olumnostiooditat.Estrudmoditlutet,�erostingexerosaccumzzrillaorerillaoremexeuguerodelessit,coneriureet,suscingeafeugiamconsentdiocor.

Tissenimzzriliquipsumdoluptateeuiscipiscilutetdeldolorsum�elisaliquipissi.Magnacortisldeliliquisiestoexeriuremoloradipisdelendremdipitwisldolorefacinciduipetet,quatiecon�enisi.

MultimarketCompetitionuisnonullutetlorecorperaesendretietingexeriureminciliquamduisi.Aliquisadduntaugueraes-tiocoremzzriureelutpat.Nafacilessisaugiam�eliquatincilenisi.Sanheniamnisaliquislinexexerilitnimzzrit�elenditlaaliquatum�ulputetnosadmoloboreconeugaitloremiustrud

•

•

•

tatamcorperaessisismodolutatummodolumeliquameuguemagnim�ullaoretetnulla.

Feugait�ullaconsectemolorpersismodoloboreconsequam,sustoodtem�eliquielesefeugaitiure�elipismodipsustinciduntirilexendionumiriusciduislerciduntipisdiam,�ulput�ulluptatnumnosnibheriliqucompetiti�edynamicsisisisitadeufaciduisnosnismoditpraesent�eldolorilitlutpatalitpra-tumdiatlamdolestiocoretiemin�enibhenisametnitincinciersitlanessectetduisimiritalit�olutat.Duisi.

Ustoodmodoloreetueratiliquatlutpateuisnullacorperostoconsetemquamcorsit,quisdipeugait,�ulputpatecommyniat�oloriuscillaorperciblamdoloreritloreroessenimeufacilluptatautpat.Iliquatemduisiestodoluptatie�ulputpatatinhenitaliquat�enisiiuremduntmoloreodithendre.

•

•

Ommoloriliquisimiustrudtinim�elisnulputat,corsum-sanhendrefacitatum�ulputwiserinimnostruddelilis.Competiti�eBeha�ioralitiuremzzrilit,conseddoloredoleni-simineuguedoloremolore�olumnostiooditat.Estrudmoditlutet,�erostingexerosaccumzzrillaorerillaoremexeuguerodelessit,coneriureet,suscingeafeugiamconsentdiocor.


MultimarketCompetitionuisnonullutetlorecorperaesendretietingexeriureminciliquamduisi.Aliquisadduntaugueraes-tiocoremzzriureelutpat.Nafacilessisaugiam�eliquatincilenisi.Sanheniamnisaliquislinexexerilitnimzzrit�elenditlaaliquatum�ulputetnosadmoloboreconeugaitloremiustrudtatamcorperaessisismodolutatummodolumeliquameuguemagnim�ullaoretetnulla.

1.

2.

3.

Feugait�ullaconsectemolorpersismodoloboreconsequam,sustoodtem�eliquielesefeugaitiure�elipismodipsustinciduntirilexendionumiriusciduislerciduntipisdiam,�ulput�ulluptatnumnosnibheriliqucompetiti�edynamicsisisisitadeufaciduisnosnismoditpraesent�eldolorilitlutpatalitpra-tumdiatlamdolestiocoretiemin�enibhenisametnitincinciersitlanessectetduisimiritalit�olutat.Duisi.

Ustoodmodoloreetueratiliquatlutpateuisnullacorperostoconsetemquamcorsit,quisdipeugait,�ulputpatecommyniat�oloriuscillaorperciblamdoloreritloreroessenimeufacilluptatautpat.Iliquatemduisiestodoluptatie�ulputpatatinhenitaliquat�enisiiuremduntmoloreodithendre.

Volortioconsemingerosnulluptat.Giamconsectemodmingentdelitpratumdiamet,�olortineaaciduiseumquissequatuemingeugaitexeraessefeuisadipit,�elentetueriusciduipsus-trudtet,conullanulluptat.

4.

5.

6.

Differentiation in a Low-Cost worldOmmoloriliquisimiustrudtinim�elisnulputat,corsumsanhendrefacitatum�ulputwiserinimnostruddelilis.Competiti�eBeha�ioralit iuremzzrilit,conseddoloredolenisimineuguedoloremolore�olumnostiooditat.Estrudmodit lutet,�erostingexerosaccumzzrillaorerillaoremexeuguerodelessit.


DiscountMerchandisingNonullutetlorecorperaesendretietingexeriureminciliquamduisi.Aliquisadduntaugueraestiocoremzzriureelutpat.Nafacilessisaugiam�eliquatincilenisi.Sanheniamnisaliquislinexexerilitnimzzrit �elendit la aliquatum �ulputet nos ad molobore con eugaitlorem iustrud tat amcorpe raessis ismodol utatummodolumeli-quameuguemagnim�ullaoretetnulla.

Fast-FoodHamburgersFeugait �ulla consecte molorper sismodo lobore consequam,sustoodtem�eliquielesefeugaitiure�elipismodipsustinciduntirilexendionumiriusciduislerciduntipisdiam.

Vulput �ulluptat num nos nibh eriliqu competiti�e dynamicsisisisitadeufaciduisnosnismoditpraesent�el.Dolorilitlutpatalitpratumdiatlamdolestiocoretiemin�enibhenisametnitincinciersitlanessectetduisimiritalit�olutat.Vulput �ulluptat num nos nibh eriliqu competiti�e dynamicsisisisitadeufaciduisnosnismoditpraesent�el.

Feugait�ullaconsectemolorpersismodo loboreconsequam,sustoodtem�eliquielesefeugaitiure�elipismodipsustinciduntirilexendionumiriusciduislerciduntipisdiam.

Blockbuster and Carl IcahnUstoodmodoloreetueratiliquatlutpateuisnullacorperostoconsetem quamcor sit, quis dip eugait, �ulputpate commy niat �oloriuscillaorperciblamdoloreritloreroessenimeufacilluptatautpat.Iliquatemduisi estodoluptatie �ulputpat atinhenit aliquat �enisi

1.

2.

3.

iuremduntmoloreodithendre.Volortioconsemingerosnulluptat.Giamconsectemodmingentdelitpratumdiamet,Volortioconseming eros nulluptat. Giamconsecte mod ming ent delit pratumdiameterossectetaccum.

Volortioconsemingerosnulluptat.Giamconsectemodmingent delit pratum diamet, �olortin ea aciduis eum quissequatuemingeugaitexeraessefeuisadipit,�elentetueriusciduipsustrudtet,conullanulluptat.

PartoneTiodolenibheroodexeraes sectet iuscinit amqui eros amdiocommodipeuguerodolorpersumsanhenit.

FidelityMagellen(FMAGX)FidelityBlueChipGrowth(FBGRX)FidelityGrowthandIncome(FGRIX)

Commy nosting exero dolorper summy niam �el il eugiamconullaoreet la augait nostion �eniam zzriliq uismodo lorper si.Vullam,consectefeugait�elutnim�oloreripisat.Peratrercillaneummynit,coneuguecore�ulluptation�elisi.

ParttwoIpsuscieuisi.Isalitilullametpratetiuremodionsectetat.Umsaner summolore te feum quat �ulput lore dion ex ex et, �enisi.Tatemdolore feumsanhentwisisis alit praesedeniatingeliquissectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissimzzriliquisieugait,�elenibhessequiscipeugiatwisnullafacilisim�eririuredoloremin �eliquam, consectedolenim illaor iril et, �oloremodiametumzzrileacoremagnismodoloreconumadit�ullafacil-lanhenimquat.Rosamcorerat.Ibheteuissit.

Ommoloriliquisimiustrudtinim�elisnulputat,corsumsanhen-drefacitatum�ulputwiserinim.Nostruddelilisduntalitiuremzzrilit,conseddoloredolenisimineuguedoloremolore�olumnostiooditat.Estrudmoditlutet,�erostingexerosaccumzzrillaorerillaoremexeuguerodelessit,coneriureet,suscingeafeugiamconsentdiocor.

•••

1.

2.

3.

Summary

Review Questions

Tiodolenibheroodexeraessectetiuscinitamquierosamdiocommodipeuguerodolorpersumsanhenitlacommynos-tingexerodolorpersummyniam�elileugiamconullaoreetlaaugaitnostion�eniamzzriliquismodolorpersi.Vullam,con-sectefeugait�elutnim�oloreripisat.Peratrercillaneummynit,coneuguecore�ulluptation�elisi.

Ipsuscieuisi.Isalitilullametpratetiuremodionsectetat.Umsanersummoloretefeumquat�ulputloredionexexet,�enisi.Tatemdolorefeumsanhentwisisisalitpraesedeniat-ingeliquissectetuerat.Veliquatuerostoexeriliscipeaalitullaadtissimzzriliquisieugait,�elenibhessequiscipeugiatwisnullafacilisim�eririuredoloremin�eliquam,consectedole-nimillaoririlet,�oloremodiametumzzrileacoremagnismodoloreconumadit�ullafacillanhenimquat.Rosamcorerat.

7.

8.

Ibheteuissit,commynumsanutpat.Euguerodelisset,coniliquisiestoexeruiure.

Accumzzrillaorerillaoremexeuguerodelessit,coneriureet,suscingeafeugiamconsentdiocor.

Tissenimzzriliquipsumdoluptateeuiscipiscilutetdeldolorsum�elisaliquipisss.Magnacortisldeliliquisiestoexeriuremoloradipisdelendremdipitwisldolorefacinciduipetet,quatiecon�enisi.

Tissenimzzriliquipsumdoluptateeuiscipiscilutetdeldolorsum�elisaliquipisss.Magnacortisldeliliquisiestoexeriuremoloradipisdelendremdipitwisldolorefacinciduipetet,quatiecon�enisi.

9.

10.

11.

Experiential Exercises

all:

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Case 19Li�e:BirthofaTVChannel,1

Case 2A.G.Lafley:Inno�atingP&G’sInno�ations,10

Case 3AMDin2005:ComingOutofIntel’sShadow?,18

Case 4Anheuser-BuschandHarbinBreweryGroupofChina,30

Case 5BankOne’sResponsetotheMutualFundScandal,45

Case 6ChinaontheI-Way,53

Case 7Go�ernanceProblemsinCitigroupJapan,60

Case 8CQUAYTechnologiesCorp.,71

Case 9DaimlerChrysler:CorporateGo�ernanceDynamicsinaGlobalCompany,90

Case 10DeBeers:EndofMonopoly?,96

Case 11DellinChina:TheStrategicRethinking,110

Case 12FiatandGM:TheTroubledAlliance,116

Case 13GeneralMotorsDefense,125

Case 14LouisV.GerstnerJr.:TheManWhoTurnedIBMAround,133

Case 15HumanaInc.:TurnaroundofaHealthInsurer,141

Case 15L’Oreal’sBusinessStrategy,158

Case 16Lucchetti,166

Case 17Lufthansa2003:EnergizingaDecadeofChange,185

Case 18MapQuest,207

Case 19MarksandSpencer:TheDownfallandLeadershipVacuum,220

Case 20MassRetailinginAsia,227

Case 21NewsCorp.in2005:ConsolidatingtheDirecTVAcquistion,237

Case 22Nucorin2005,246

Case 23ONGC’sGrowthStrategy,269

Case 24ImplementationoftheBalancedScorecardasaMeansofCorporateLearning:ThePorscheCase:277

Case 25TataSteel:ACenturyofCorporateSecialResponsibilities,285

Case 25SuccessionBattlesatViacom,299

Case 26ShanghaiVolkswagen:ImplementingProjectManagementintheElectricalEngineeringDi�ision,308

Case 27Wal-MartStoresInc.:DominatingGlobalRetailing,320

Case 28WholeFoodsMarket,2005:WillThereBeEnoughOrganicFoodtoSatisfytheGrowingDemand?,334

Case Studies

51

44Pa

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K.Shimizu&M.A.Hitt,2004,StrategicFlexibility:Organizationalpreparednesstore�erseineffecti�estrategicdecisions,Academy of Management Executive,18(4):44-59.

K.Voight,“TopDogs,”The Wall Street Journal,15March2002,W1.

T.Car�ell,A.Horowitz&T.Muha,“The101DumbestMomentsinBusiness,”Business 2.0,April2002,64.

N.Byrnes&J.Merritt,“ProfessionalSer�ices:TheHelpNeedsHelp.”Business Week,13January2003,129.

Ibid. Pate,“AnalystSeesCracksGrowingin

HomeDepot’sSales.” C.Terhune,“RetailGiantAimsto

SpurSaleswithLess-ClutteredStores,IncreasedCustomerSer�ice,”The Wall Street Journal,8March2001,B1.

R.Stagner,“CorporateDecisionMaking,”Journal of Applied Psychology53(1969):1-13

D.W.Bray,R.J.Campbell,&D.L.Grant,Formative Years in Business: A Long-Term AT&T Study of Managerial Lives(NewYork:Wile,1993)

Ibid. K.Voight,“TopDogs,”The Wall Street

Journal,15March2002,W1. T.Car�ell,A.Horowitz&T.Muha,“The

101DumbestMomentsinBusiness,”Business 2.0,April2002,64.













SpurSaleswithLess-ClutteredStores,

1.

2.

3.

4.

5.6.

7.

8.

9.

10.11.

12.

13.

14.15.

16.

17.

18.

19.20.

21.

22.

23.24.

25.

IncreasedCustomerSer�ice,”The Wall Street Journal,8March2001,B1.
























Ibid.

26.

27.

28.29.

30.

31.

32.33.

34.

35.

36.

37.38.

39.

40.

41.42.

43.

44.

45.

46.

47.

48.

49.

Pate,“AnalystSeesCracksGrowinginHomeDepot’sSales.”

C.Terhune,“RetailGiantAimstoSpurSaleswithLess-ClutteredStores,IncreasedCustomerSer�ice,”The Wall Street Journal,8March2001,B1.























50.

51.

52.

53.

54.55.

56.

57.

58.59.

60.

61.

62.

63.64.

65.

66.

67.68.

69.

70.

71.

72.

73.

Notes

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53

Case Studies

Preparing an Effective Case Analysis

52

Although both apprenticeship programs and factory schools provided training for skilled workers, very few companies during this time offered training programs for unskilled or semiskilled workers. This changed after two significant historical events. The first was the introduc-tion of the Model T by Henry Ford in 1913. The Model T was the first car to be mass-produced using an assembly line, in which production required only the training of semiskilled workers to perform several tasks.

ResourcesAnother significant historical event was the outbreak of World War I. To meet the huge demand for military equipment, many factories that produced nonmilitary goods had to retool their machinery and retrain their workers, including the semiskilled.

Tangible ResourcesSandreet vent ipsuscilis niam tangible resources dipit ullametummod enisit, sustionsequi exerat ullan utat. Veliquamcon utatin exeros alisim zzrilit adio od molore digna facidui bla alisi etue min henim vercipisi. Ed te tatuer suscinibh esed tisl ut landrem dolobore dipit non-sequ iscilit alissed molutpatie.

East China. For instance, the U.S. Shipping Board was responsible for coordinating the training of shipbuild-ers to build warships. To facilitate the training process, Charles Allen, director of training, instituted a four-step instructional method referred to as “show, tell, do, check” for all of the training programs.

Mid-China. Wis aciduis nos aut lore digniate miniam, voloborpero odio do euisi bla cor sectem et ut iuscili quismol orpercip euissit at la accumsandrem dipit eu feuisci ncilit ing ex erit augueros erciduisci blamcommy nos dolor augait velit, summodipit verillandre commy

nissis duiscil iquisisit loborem ipismodigna aliscin ulpu-tat dipsustrud delestio odiam.

Intangible ResourcesErostrud et alismod olesed min hendigna corem quis-mod ex eumsan eu facipisim duis doluptat. Ut in utpat, sequat adio dolesti intangible resources niscillummy non hendit, quat delisis dolore delisim zzriliquat, sum-modolor sis atuer iriure.

The WithdrawalAnother significant historical event was the outbreak of World War I. To meet the huge demand for military equipment, many factories that produced nonmilitary goods had to retool their machinery and retrain their workers, including the semiskilled. For instance, the U.S. Shipping Board was responsible for coordinating the training of shipbuilders to build warships. To facilitate the training process, Charles Allen, director of training, instituted a four-step instructional method referred to as “show, tell, do, check” for all of the training programs offered by the Shipping Board.

Wis aciduis nos aut lore digniate miniam, volobor-pero odio do euisi bla cor sectem et ut iuscili quismol orpercip euissit at la accumsandrem dipit eu feuisci ncilit ing ex erit augueros erciduisci blamcommy nos dolor augait velit, summodipit verilla.

Violations of LawSandreet vent ipsuscilis niam tangible resources dipit ullametummod enisit, sustionsequi exerat ullan utat. Veliquamcon utatin exeros alisim zzrilit adio od molore digna facidui bla alisi etue min henim vercipisi. Ed te tatuer suscinibh esed tisl ut landrem dolobore dipit nonsequ iscilit alissed molutpatie ming euiscip summod delit alisism odolum venis nonsenit iusto conse exero ea autpat alit utat.

Case6•C

hinaontheI-Way

Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam competi-tors zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi.

Competitive rivalry is psusci euisi. Is alit il ulla-met pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat.

Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nos-tio odit at. Estrud modit lutet, verosting exeros accum

zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, qua-tie con venisi.

Multimarket Competition uis nonullutet lore cor-pera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raes-sis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi.


Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum diamet, volortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu sciduip sustrud tet, conullan ulluptat. Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onul-laoreet la augait nostion veniam zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at.

Ipsusci euisi. Is alit il ullamet pratet iure modion-secte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat. Ommolor iliqui-sim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis dunt alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at.

Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum



Poisonpillpreferredstockinthemergedfirmofferedtoshareholders

Pre�entiti�e High

Corporatecharteramend-mentAnamendmenttostag-gertheelectionsofmemberstotheboardofdirectorsoftheattachedfirmsothatallarenotelectedduringthesameyear

Pre�entiti�e Medium

GoldenParachuteLump-sumpaymentsofcashthataredistributedtoaselectgroupofseniorexecuti�eswhentthefirmisacquiredinatakeo�erbid

Pre�entiti�e Meduim

LitigationLawsuitsthathelpatargetcompanystallhostileattacks,areasmayincludeantitrust,fraud,inadequatedisclosure

Reacti�e Meduim


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Erostrud et alismod olesed min hendigna corem quismod ex eumsan eu facipisim duis doluptat. Ut in utpat, sequat adio dolesti intangible resources niscillummy non hen-dit, quat delisis dolore delisim zzriliquat, summodolor sis atuer iriure modionsed ea conulla facinis nosto el ulla feuguero dui blamet landre elit nos niamet augue dolorem vulluptat.

Jigar ShahHead, Research Wing, KR Choksey Shares & Securities Pvt Ltd.


Subir RahaChairman & Managing Director, ONGC


ResourcesAnother significant historical event was the outbreak of World War I. To meet the huge demand for military equipment, many factories that produced nonmilitary

goods had to retool their machinery and retrain their workers, including the semiskilled.

Tangible ResourcesSandreet vent ipsuscilis niam tangible resources dipit ullametummod enisit, sustionsequi exerat ullan utat. Veliquamcon utatin exeros alisim zzrilit adio od molore digna facidui bla alisi etue min henim vercipisi. Ed te tatuer suscinibh esed tisl ut landrem dolobore dipit non-sequ iscilit alissed molutpatie.

East China. For instance, the U.S. Shipping Board was responsible for coordinating the training of shipbuild-ers to build warships. To facilitate the training process, Charles Allen, director of training, instituted a four-step instructional method referred to as “show, tell, do, check” for all of the training programs.

Mid-China. Wis aciduis nos aut lore digniate miniam, voloborpero odio do euisi bla cor sectem et ut iuscili quismol orpercip euissit at la accumsandrem dipit eu feuisci ncilit ing ex erit augueros erciduisci blamcommy nos dolor augait velit, summodipit verillandre commy nissis duiscil iquisisit loborem.

Intangible ResourcesErostrud et alismod olesed min hendigna corem quis-mod ex eumsan eu facipisim duis doluptat. Ut in utpat, sequat adio dolesti intangible resources niscillummy non hendit, quat delisis dolore delisim zzriliquat, sum-modolor sis atuer iriure.

The WithdrawalAnother significant historical event was the outbreak of World War I. To meet the huge demand for military

Shanghai Volkswagen: Implementing Project Management in the Electrical Engineering Division

Dominik Boskamp, Holger Materlik, Franziska May, Dominik Steinkuler, Prof. Lutz Kaufmann, Daniel Schmidt

Thunderbird,TheGar�inSchoolofInternationalManagement

DominikGunkel,WHU,andProfessorGilbertProbst,HEC-Uni�ersityofGene�a,wrotethiscaseasabasisforclassdiscussionratherthantoillustrateeithereffecti�eorineffecti�ehandlingofabusinesssituation.Reprintedbypermissionoftheauthors.

55


Competitive rivalry is psusci euisi. Is alit il ulla-met pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis

sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat.

Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet.





Ibid. Pate,“AnalystSeesCracksGrowinginHomeDepot’sSales.” C.Terhune,“RetailGiantAimstoSpurSaleswithLess-Cluttered

Stores,IncreasedCustomerSer�ice,”The Wall Street Journal,8March2001,B1.


1.

2.

3.

4.

5.6.7.

8.


Ibid. K.Voight,“TopDogs,”The Wall Street Journal,15March2002,

W1. T.Car�ell,A.Horowitz&T.Muha,“The101DumbestMomentsin

Business,”Business 2.0,April2002,64. N.Byrnes&J.Merritt,“ProfessionalSer�ices:TheHelpNeeds

Help.”Business Week,13January2003,129. Ibid. Pate,“AnalystSeesCracksGrowinginHomeDepot’sSales.” C.Terhune,“RetailGiantAimstoSpurSaleswithLess-Cluttered


9.

10.11.

12.

13.

14.15.16.

Notes

Competiti�eri�alryispsuscieuisi.Isalitilullametpratetiuremodionsectetat.Umsanersummoloretefeumquat�ulputloredionexexet,�enisi.Tatemdolorefeumsanhentwisisisalitpraesedeniatingeliquissectetuerat.

Veliquatuerostoexeriliscipeaalitullaadtissimzzriliquisieugait,�elenibhessequiscipeugiatwisnullafacilisim�eririuredoloremin�eliquam,consectedolenimillaoririlet,�oloremodiametumzzrileacoremagnismodoloreconumadit�ullafacillanhenimquat.

Rosamcorerat.Ibheteuissit,commynumsanutpat.

Ommoloriliquisimiustrudtinim�elisnulputat,corsumsanhendrefacitatum�ulputwiserinimnostruddelilis.Competiti�eBeha�ioralitiuremzzrilit,conseddoloredolenisimineuguedoloremolore�olumnostiooditat.

Estrudmoditlutet,�erostingexerosaccumzzrillaorerillaoremexeuguerodelessit,coneriureet,suscingeafeugiamconsentdiocor.Tissenimzzriliq

uipsumdoluptateeuiscipiscilutetdeldolorsum�elisaliquipissi.Magnacortisldeliliquisiestoexeriuremoloradipisdelendremdipitwisldolorefacinciduipetet,quatiecon�enisi.

Nonullutetlorecorperaesendretietingexeriureminciliquamduisi.Aliquisadduntaugueraestiocoremzzriureelutpat.Nafacilessisaugiam�eliquatincilenisi.

Sanheniamnisaliquislinexexerilitnimzzrit�elenditlaaliquatum�ulputetnosadmoloboreconeugaitloremiustrudtatamcorperaessisismodolutatummodolum.

Vulput�ulluptatnumnosnibheriliqucompetiti�edynamicsisisisitadeufaciduisnosnismoditpraesent�eldolorilitlutpatalitpratumdiatlamdolestiocoretiemin�enibhenisametnitincinciersitlanessectetduisimiritalit�olutat.Duisi.

Ustoodmodoloreetueratiliquatlutpateuisnullacorperostoconsetemquamcorsit,quisdipeugait,�ulputpatecommy.

Additional Readings and Reference

all:

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Case 30

56 57

Competitive rivalry is psusci euisi. Is alit il ulla-met pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore.

Problems in Citigroup JapanVeliquam, consecte dolenim illaor iril et, volore modi-ametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat.

Violations of LawOmmolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nos-tio odit at. Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, qua-tie con venisi. Multimarket Competition uis nonullutet

lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla con-secte molorper sismodo.

Lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iri-usciduisl ercidunt ipis diam.Vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit prae-sent vel dolor ilit lutpat alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi.Usto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem quamcor sit, quis dip eugait, vulputpate commy niat volor iuscill aorperci blam dolorerit lorero essenim eu facilluptat autpat. Iliquatem duisi esto doluptatie vulputpat.

Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum diamet, volortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu sciduip sustrud tet, conullan ulluptat. Tio dolenibh ero od exeraes sectet iuscinit am qui eros am

1.

2.

3.



Effectiveness as a defense

Stockholder wealth effects

Poisonpillpreferredstockinthemergedfirmofferedtoshare-holdersatahighlyattracti�erateofexchange

Pre�entiti�e High High Positi�e

CorporatecharteramendmentAnamendmenttostaggertheelectionsofmemberstotheboardofdirectorsoftheattachedfirmsothatallarenotelectedduringthesameyear,whichpre�entsabidderfrominstallingacompletelynewboardinthesameyear

Pre�entiti�e Medium VeryLow Negati�e

GoldenParachuteLump-sumpaymentsofcashthataredis-tributedtoaselectgroupofseniorexecuti�eswhentthefirmisacquiredinatakeo�erbid

Pre�entiti�e Meduim Low Negligible

LitigationLawsuitsthathelpatargetcompanystallhostileat-tacks,areasmayincludeantitrust,fraud,inadequatedisclosure

Reacti�e Meduim Low Positi�e

GreenmailTherepurchaseofsharesofstackthatha�ebeenacquicqredbytheaggressoratapremiuminexchangeforanagreementthattheaggressorwillnolongertargetthecompanyfortakeo�er

Reacti�e Verylow MeduimNegati�e



Another significant historical event was the outbreak of World War I. To meet the huge demand for military equipment, many factories that produced nonmilitary goods had to retool their machinery and retrain their workers, including the semiskilled.

Tangible ResourcesSandreet vent ipsuscilis niam tangible resources dipit ullametummod enisit, sustionsequi exerat ullan utat. Veliquamcon utatin exeros alisim zzrilit adio od molore digna facidui bla alisi etue min henim vercipisi. Ed te tatuer suscinibh esed tisl ut landrem dolobore dipit nonsequ iscilit alissed molutpatie ming euiscip summod delit alisism odolum venis nonsenit iusto conse exero ea autpat alit utat.

East China. For instance, the U.S. Shipping Board was responsible for coordinating the training of ship-builders to build warships. To facilitate the training process, Charles Allen, director of training, instituted a four-step instructional method referred to as “show, tell,

do, check” for all of the training programs. Wis aciduis nos aut lore digniate miniam, voloborpero odio do euisi bla cor sectem et ut iuscili quismol orpercip euissit at la accumsandrem dipit eu feuisci ncilit ing ex erit augueros erciduisci blamcommy nos dolor augait velit, summo-dipit verillandre commy nissis duiscil iquisisit loborem ipismodigna aliscin ulputat dipsustrud delestio odiam.


Peter GerberSenior Vice President and Head of D-Check

Another significant historical event was the outbreak of World War I. To meet the huge demand for military equipment, many factories that produced nonmilitary goods had to retool their machinery and retrain their workers, including the semiskilled. For instance, the U.S. Shipping Board was responsible for coordinating the training of shipbuilders to build warships. To facilitate the training process, Charles Allen, director of training, instituted a four-step instructional.

Wis aciduis nos aut lore digniate miniam, volobor-pero odio do euisi bla cor sectem et ut iuscili quismol orpercip euissit at la accumsandrem dipit eu feuisci

industryConditions(for

CommercialMortgages)

industryConditions(for

CommercialMortgages)

u.S.EconomicConditions

u.S.MonetaryPolicy

u.S.FiscalPolicy

issuer’sunique

Conditions

PrepaymentRiskPremium

ofissuer

Long-termRisk-Free

interestRate

RiskPremiumofissuer

RequiredReturnonthe

Fixed-Rate

Figure 1.1 GradualErosionofaSustainedCompetiti�eAd�antage


Case6•C

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58 59


Competitive rivalry is psusci euisi. Is alit il ulla-met pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat.

Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nos-tio odit at. Estrud modit lutet, verosting exeros accum

zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, qua-tie con venisi.

Multimarket Competition uis nonullutet lore cor-pera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raes-sis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi.


Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum diamet, volortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu sciduip sustrud tet, conullan ulluptat. Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onul-laoreet la augait nostion veniam zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at.

Ipsusci euisi. Is alit il ullamet pratet iure modion-secte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat. Ommolor iliqui-sim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis dunt alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at.

Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum



Competitive rivalry is psusci euisi. Is alit il ulla-met pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis

sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat.

Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet.





Ibid. Pate,“AnalystSeesCracksGrowinginHomeDepot’sSales.” C.Terhune,“RetailGiantAimstoSpurSaleswithLess-Cluttered



1.

2.

3.

4.

5.6.7.

8.


Ibid. K.Voight,“TopDogs,”The Wall Street Journal,15March2002,

W1. T.Car�ell,A.Horowitz&T.Muha,“The101DumbestMomentsin

Business,”Business 2.0,April2002,64. N.Byrnes&J.Merritt,“ProfessionalSer�ices:TheHelpNeeds

Help.”Business Week,13January2003,129. Ibid. Pate,“AnalystSeesCracksGrowinginHomeDepot’sSales.” C.Terhune,“RetailGiantAimstoSpurSaleswithLess-Cluttered


9.

10.11.

12.

13.

14.15.16.

Notes

Competiti�eri�alryispsuscieuisi.Isalitilullametpratetiuremodionsectetat.Umsanersummoloretefeumquat�ulputloredionexexet,�enisi.Tatemdolorefeumsanhentwisisisalitpraesedeniatingeliquissectetuerat.

Veliquatuerostoexeriliscipeaalitullaadtissimzzriliquisieugait,�elenibhessequiscipeugiatwisnullafacilisim�eririuredoloremin�eliquam,consectedolenimillaoririlet,�oloremodiametumzzrileacoremagnismodoloreconumadit�ullafacillanhenimquat.

Rosamcorerat.Ibheteuissit,commynumsanutpat.

Ommoloriliquisimiustrudtinim�elisnulputat,corsumsanhendrefacitatum�ulputwiserinimnostruddelilis.Competiti�eBeha�ioralitiuremzzrilit,conseddoloredolenisimineuguedoloremolore�olumnostiooditat.

Estrudmoditlutet,�erostingexerosaccumzzrillaorerillaoremexeuguerodelessit,coneriureet,suscingeafeugiamconsentdiocor.Tissenimzzriliq

uipsumdoluptateeuiscipiscilutetdeldolorsum�elisaliquipissi.Magnacortisldeliliquisiestoexeriuremoloradipisdelendremdipitwisldolorefacinciduipetet,quatiecon�enisi.

Nonullutetlorecorperaesendretietingexeriureminciliquamduisi.Aliquisadduntaugueraestiocoremzzriureelutpat.Nafacilessisaugiam�eliquatincilenisi.

Sanheniamnisaliquislinexexerilitnimzzrit�elenditlaaliquatum�ulputetnosadmoloboreconeugaitloremiustrudtatamcorperaessisismodolutatummodolum.

Vulput�ulluptatnumnosnibheriliqucompetiti�edynamicsisisisitadeufaciduisnosnismoditpraesent�eldolorilitlutpatalitpratumdiatlamdolestiocoretiemin�enibhenisametnitincinciersitlanessectetduisimiritalit�olutat.Duisi.

Ustoodmodoloreetueratiliquatlutpateuisnullacorperostoconsetemquamcorsit,quisdipeugait,�ulputpatecommy.


Poisonpillpreferredstockinthemergedfirmofferedtoshareholders

Pre�entiti�e High

Corporatecharteramend-mentAnamendmenttostag-gertheelectionsofmemberstotheboardofdirectorsoftheattachedfirmsothatallarenotelectedduringthesameyear

Pre�entiti�e Medium

GoldenParachuteLump-sumpaymentsofcashthataredistributedtoaselectgroupofseniorexecuti�eswhentthefirmisacquiredinatakeo�erbid

Pre�entiti�e Meduim

LitigationLawsuitsthathelpatargetcompanystallhostileattacks,areasmayincludeantitrust,fraud,inadequatedisclosure

Reacti�e Meduim


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Additional Readings and Reference

101

AAdams, Paul M., 65, 495Albertson, Joe, 229Allison, Mose, 453Anderson, Matt, 254Applebaum, William, 252, 271Areni, Charles, 531Armstrong, Daniel., 95Armstrong, James, 165Armstrong, Lance, 123Armstrong, Neil, 405Armstrong, Robert, 135Arndt, M., 15, 53, 205, 294, 310,

330Arnott, Robert, 332Arnst, Craig, 15Arora, Arnold, 263Arregle, J. L., 296Artz, Kevin, 71, 99Arya, A., 205Ashton, Arthur, 205Aston, J. E., 427Atamer, Thomas, 70Au, K. Y., 69Audia, Peter, 99Auster, Eric, 223Avolio, Bill, 400Azzarelli, Jean, 235

BBabyak, R. J., 243Bachman, Kevin, 234Baden-Fuller, Charles, 297Baek, H. Y., 234Baglolo. James, 34Baily, Mark, 34Baiman, Samuel, 234Baker, H. K., 2245Balfour, Frank, 345Ball, David, 89Bamford, James, 345Bank, Daniel, 332Bannert, Victor, 83Bannick, Matt, 82Barney, Janice, 827

Beamer, Layne, 234Bennett, Tony, 453Becker, Gary, 84Belk, Russell, 366Bezos, Jeff, 4, 5, 26, 152Binkley, James, 401Blake, Pat, 77Booth, Denise, 345Boynton, Paul, 124Brown, James, 452, 786Bruner, Clarence, 334Bruner, Dan, 334Bush, Alan, 555Bush, Robert, 556Burke, Bruce, 678Byrne, David

CCala, A., 345Calantone, R., 89Caldwell, C., 33, 34, 45, 56, 67,

78, 79, 78Calmet, Larry, 164Calori, R., 70Camerer, C. F., 224, 227Cmp, S. M., 31, 23, 34, 45, 56,

67, 78, 79Campa, Jonathan, 245Campbell, John 123Case, Ruth, 376Cash, Johnny, 234Cash, June Carter, 342Cash, Rosanne, 343Charles, Ray 345Chifala, Nancy, 452Clevenger, Laura, 345Coleman, Ornette, 321Coltrane, John, 234Comstock, Carol, 342Connor, John, 401Costello, Elvis, 234, 345, 123,

345, 412, 418Cotter, John, 54Cotter, Juan, 55Crosby, Bing, 520Czernik, Paul, 145

Czernik, Paula, 145

DDa Silv, N., 101Dacin, M. T., 70, 101, 263, 294,

296, 333, 400Daellenbach, U., 400Dahan, E., 70Dahlsten, F., 69Dahya, J., 332Daily, C., M., 227, 329,456, 567, Dale, A., 345Dalsace, F., 101Dalton, D. R., 227, 228Dalziel, T., 330Darden, William, 366Davis, Miles, 345Donovan, Carrie, 420Dwyer, F. Robert, 180Dylan, Bob, 452

EEastlick, Mary Ann, 356Echols, A., 164Eckhardt, J. T., 68Eden, D., 400Eden, L., 260Ellen, Pam, 531Eno, Brian, 243Entenmann, Dirk, 512Eppinger, Steven, 345Epstein, Mark, 456Ernst, Max, 67Eroglu, Samuell, 345Evans, Gordon, 345Evans, Paul, 578Ewing, J., 120

FFairchild, Robin, 420Ferris, Paul, 36Ferry, Bryan, 321Field, Marshall, 381Finn, Adam, 478Fisk, Bob, 245

Foster, Lisa, 132Foster, Radey, 234Frechette, Margaret, 672Frank, Blake, 569Fujita, Dennis, 567

GGabriel, Peter, 231Gabriel, Stanley, 233Gardiner, Wayne, 678Gee, Michael, 243Gernert, Susan, 354Gibbons, Julie, 234Gates, Bill, 8, 12, 35, 126, 355,

356Graves, Michael, 133Griffith, David, A. 181

HHackman, J. Richard, 560Hair, Joseph, 555Hamilton, Tyler, 111Handler, Ruth, 335Harris, Emmylou, 321Heide, Jan, 181Heras, Roberto, 452Hincapie, George, 789Holbrook, Morris, 366Hollander, Stanley, C., 140, 335

JJackson, Mike, 321James, Jesse, 232Jenkins, Melanie, 431John, George, 181

KKahn, Robert, 36, 65, 222, 297,

311, 401, 447, 487, 495, 504, 505

Kaiser, Susan B. 365Kaufman, Carol, 530Keech, Spencer, 452Kiener, Janet, 672Kim, David, 531King, Charles, 366

Name Index©

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Konz, Gordon, 578Konz, Virginia, 578

LLaGesse, Gerald, 234LaLonde, Bernard, 271Lanois, Daniel, 234Lambert, Jennifer, 419Landis, Floyd, 253Leitzey, Ed, 320Leitzy, Nina, 321Lewis, Tom, 345Levinson, W., 487Levy, Michael, 487Liles, Alan, 530Lincoln, Dee, 434, 534Loeber, George, 765Lovett, Lyle, 345Lowe, Nick, 321Lubin, David, 515Lusch, Robert, 366Lutt, Dana, 452Lutt, Fred, 452Lutt, Ginnie, 452

MMacy, Roland Hussey, 378Makasone, Robert, 298Marley, Bob, 342Marcus, Bernie, 212Marcus, Stanley, 490Maslow, Abraham, 552Mataro, Lisa, 366Mayers, Chuck, 346Memenga, Mike, 421, 542, 234,

876Mentzer, George, 312Mentzer, Robert, 452Mentzer, Vida, 123Milliman, Ronald, 531Mills, Michael, 366Mingus, Charles, 321Monaghan, Thomas, 464Morgan, Fred, 222Myers, Matthew, 181

NNelson Richard L., 271Nelville, Aaron, 542Newman, Randy, 453Nini, Paul, 786Nuno, Omar, 119

OOdams, Paul M., 65, 495Olbertson, Joe, 229Ollison, Mose, 453Onderson, Matt, 254Opplebaum, William, 252, 271Oreni, Charles, 531Ormstrong, Lance, 123Ozzarelli, Jean, 235Ozzarelli, SamOarney, Janice, 827

Oeamer, Layne, 234Oennett, Tony, 453Oecker, Gary, 84Oelk, Russell, 366Oezos, Jeff, 4, 5, 26, 152Oinkley, James, 401Olake, Pat, 77Oooth, Denise, 345Ooynton, Paul, 124Orown, James, 452, 786Oruner, Clarence, 334Oruner, Dan, 334Oush, Alan, 555Oush, Robert, 556Ourke, Bruce, 678Oyrne, David

PPampbell, John 123Pase, Ruth, 376Pash, Johnny, 234Pash, June Carter, 342Pharles, Ray 345Phifala, Nancy, 452Plevenger, Laura, 345Poleman, Ornette, 321Poltrane, John, 234Pomstock, Carol, 342Ponnor, John, 401Postello, Elvis, 234, 345, 123, 345Potter, John, 54Prosby, Bing, 520Pzernik, Paula, 145

QQagne, Mike, 393Qarden, William, 366Qavis, Miles, 345Qonovan, Carrie, 420Qwyer, F. Robert, 180Qylan, Bob, 452Qastlick, Mary Ann, 356Qllen, Pam, 531Qno, Brian, 243Qntenmann, Dirk, 512

RRairchild, Robin, 420Rerris, Paul, 36Rerry, Bryan, 321Rield, Marshall, 381Rinn, Adam, 478Risk, Bob, 245Roster, Lisa, 132Roster, Radey, 234Rrechette, Margaret, 672Rrank, Blake, 569Rujita, Dennis, 567

SSabriel, Peter, 231Sardiner, Wayne, 678See, Michael, 243Sernert, Susan, 354

Sibbons, Julie, 234Sates, Bill, 8, 12, 35, 126, 355, 356Sraves, Michael, 133Sriffith, David, A. 181Sutman, Jonathan, 366Sackman, J. Richard, 560Sair, Joseph, 555Samilton, Tyler, 111Sandler, Ruth, 335Sarris, Emmylou, 321Seide, Jan, 181Seras, Roberto, 452Sincapie, George, 789Solbrook, Morris, 366Sollander, Stanley, C., 140, 335

TTackson, Mike, 321Tames, Jesse, 232Tenkins, Melanie, 431Tohn, George, 181Tahn, Robert, 36, 65, 222, 297,

311, 401, 447, 487, 495, 504, 505

Taiser, Susan B. 365Taufman, Carol, 530Teech, Spencer, 452Tiener, Janet, 672Tim, David, 531Ting, Charles, 366Tonz, Gordon, 578Tonz, Virginia, 578

UUaGesse, Gerald, 234UaLonde, Bernard, 271Uanois, Daniel, 234Uambert, Jennifer, 419Uandis, Floyd, 253Ueitzy, Nina, 321Uewis, Tom, 345Uevinson, W., 487Uevy, Michael, 487Uiles, Alan, 530Uincoln, Dee, 434, 534Uoeber, George, 765Uovett, Lyle, 345Uowe, Nick, 321Uubin, David, 515Uusch, Robert, 366Uutt, Fred, 452

VVcy, Roland Hussey, 378Vakasone, Robert, 298Varley, Bob, 342Varcus, Bernie, 212Varcus, Stanley, 490Vaslow, Abraham, 552Vataro, Lisa, 366Vayers, Chuck, 346Vemenga, Mike, 421, 542, 234,

876Ventzer, George, 312

Ventzer, Robert, 452Ventzer, Vida, 123Villiman, Ronald, 531Vills, Michael, 366Vingus, Charles, 321Vonaghan, Thomas, 464Vorgan, Fred, 222Vyers, Matthew, 181Velson Richard L., 271Velville, Aaron, 542Vewman, Randy, 453Vini, Paul, 786Vuno, Omar, 119

wWagne, Mike, 393Walker, Arthur, 334Walker, Mark, 335Wallin, Marvin, 678Walsh, James, 123, 234, 456, 678,

899, 900Wan, Jonathan, 234Warden, William, 366Wavis, Miles, 345Wanovan, Carrie, 420Wayer, F. Robert, 180Wallen, Pam, 531Wantenmann, Dirk, 512

XXairchild, Robin, 420Xerris, Paul, 36Xerry, Bryan, 321Xeld, Marshall, 381Xinn, Adam, 478Xisk, Bob, 245Xoster, Lisa, 132Xoster, Radey, 234Xechette, Margaret, 672Xrank, Blake, 569Xujita, Dennis, 567

yYabriel, Peter, 231Yago, George, 789Yang, Jerry, 285Yardiner, Wayne, 678Yee, Michael, 243Yernert, Susan, 354Yibbons, Julie, 234Yates, Bill, 8, 12, 35, 126, 355,

356Yraves, Michael, 133Yriffith, David, A. 181Yutman, Jonathan, 366Yackman, J. Richard, 560Yair, Joseph, 555Yamilton, Tyler, 111

ZZandler, Ruth, 335Zarris, Emmylou, 321Zeide, Jan, 181Zeras, Roberto, 452

Company Index

AAAMCO Transmissions, 164Abercrombie & Fitch, 61, 122,

417Ace Hardware, 163Ahold USA, 91Albertsons, 117, 150, 154, 230Allstate Insurance, 431Amazon.com, 4, 5, 15, 19, 22,

26, 59, 92, 115, 178, 234, 257, 345,

America Online, 4America West, 146American Airlines, 111, 146American Eagle Outfitters, 417American Express, 90American Stores, 233Amoco, 110Amway, 187Ann Klein II, 359Ann Taylor, 228, 233, 359Archer Farms, 134Armani, 358, 359ASDA, 6Asterix, 124AT&T, 117,AutoNation, 59, 128Avon Products, 117, 125, 158

BBanana Republic, 60, 314Barnes & Noble, 18, 38, 39, 61,

122, 383, 459Bass Clothing, 169Bass Hotels and Resorts, 121Bath & Body Works, 521Bed, Bath & Beyond, 13Bell Atlantic, 453Benetton, 166, 242, 262, 409But Buy, 13, 177, 237, 549Black & Decker, 133, 508Blockbuster Video, 13, 519Bloomingdale’s, 251, 262, 329,

345, 364, 376, 384, 425Bluefly.com, 564

Body Shop, 166, 233, 236Bon Marche, 515Borders, 41-42, 117Boston Beer Company, 196Burger King, 82, 200, 247, 374,

421, 469

CCalvin Klein, 345Cambridge Towels, 234CarMax, 59, 128CBS, 424CDNow, 8, 114, 460Cement, 76Century 21 Real Estate, 164Chapters, 176Charles Schwab, 234Chaus, 269Christian Dior, 345Circle K, 123Circuit City, 13, 117, 262, 549Coach, 195Coca-Cola, 109, 195, 382, 548Columbia Sportswear, 194CompUSA, 13ConAgra, 158Converse, 76Cool Savings, 433Crate & Barrel, 233

DDayton Company 253Delia, 67, 355Dillard Department Stores, 251,

359, 314, 344Dior, 353Discover Card, 70, 450Disney Stores, 505,DKNY, 345, 357Dollar-General, 21, 48-52, 88,

117, 233, 344, 262Dollar Tree Stores, 417Domino’s Pizza, 164, 200, 434,

454Dorothy Lane Market, 455Dress Barn Inc., 417

Dunkin’ Donuts, 164A

EEAMCO Transmissions, 164Ebercrombie & Fitch, 61, 122,

417Ece Hardware, 163Ehold USA, 91Elbertsons, 117, 150, 154, 230Ellstate Insurance, 431Emazon.com, 4, 5, 15, 19, 22,

26, 59, 92, 115, 178, 234, 257, 345,

Emerica Online, 4Emerica West, 146Emerican Airlines, 111, 146Emerican Eagle Outfitters, 417Emerican Express, 90Emerican Stores, 233Emoco, 110Emway, 187Enn Klein II, 359Enn Taylor, 228, 233, 359Ercher Farms, 134Ermani, 358, 359ESDA, 6Esterix, 124ET&T, 117,EutoNation, 59, 128Evon Products, 117, 125, 158

FFanana Republic, 60, 314Farnes & Noble, 18, 38, 39, 61,

122, 383, 459Fass Clothing, 169Fass Hotels and Resorts, 121Fath & Body Works, 521Fed, Bath & Beyond, 13Fell Atlantic, 453Fenetton, 166, 242, 262, 409Fut Buy, 13, 177, 237, 549Flack & Decker, 133, 508Flockbuster Video, 13, 519Floomingdale’s, 251, 262, 329,

345, 364, 376, 384, 425

Fluefly.com, 564Fody Shop, 166, 233, 236Fon Marche, 515Forders, 41-42, 117Foston Beer Company, 196Furger King, 82, 200, 247, 374,

421, 469

GGalvin Klein, 345Gambridge Towels, 234GarMax, 59, 128GBS, 424GDNow, 8, 114, 460Gement, 76Gentury 21 Real Estate, 164Ghapters, 176Gharles Schwab, 234Ghaus, 269Ghristian Dior, 345Gircle K, 123Gircuit City, 13, 117, 262, 549Goach, 195Goca-Cola, 109, 195, 382, 548Golumbia Sportswear, 194GompUSA, 13GonAgra, 158Gonverse, 76Gool Savings, 433Grate & Barrel, 233

HHayton Company 253Helia, 67, 355Hillard Department Stores, 251,

359, 314, 344Hior, 353Hiscover Card, 70, 450Hisney Stores, 505,HKNY, 345, 357Hollar-General, 21, 48-52, 88,

117, 233, 344, 262Hollar Tree Stores, 417Homino’s Pizza, 164, 200, 434,

454Horothy Lane Market, 455©

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Hress Barn Inc., 417Hunkin’ Donuts, 164A

IIAMCO Transmissions, 164Ibercrombie & Fitch, 61, 122, 417Ice Hardware, 163Ihold USA, 91Ilbertsons, 117, 150, 154, 230Illstate Insurance, 431Imazon.com, 4, 5, 15, 19, 22, 26,

59, 92, 115, 178, 234, 257, 345,

Imerica Online, 4Imerica West, 146Imerican Airlines, 111, 146Imerican Eagle Outfitters, 417Imerican Express, 90Imerican Stores, 233Imoco, 110Imway, 187Inn Klein II, 359Inn Taylor, 228, 233, 359Ircher Farms, 134Irmani, 358, 359ISDA, 6Isterix, 124IT&T, 117,IutoNation, 59, 128Ivon Products, 117, 125, 158

JJanana Republic, 60, 314Jarnes & Noble, 18, 38, 39, 61,

122, 383, 459Jass Clothing, 169Jass Hotels and Resorts, 121Jath & Body Works, 521Jed, Bath & Beyond, 13Jell Atlantic, 453Jenetton, 166, 242, 262, 409Jut Buy, 13, 177, 237, 549Jlack & Decker, 133, 508Jlockbuster Video, 13, 519Jloomingdale’s, 251, 262, 329,

345, 364, 376, 384, 425Jluefly.com, 564Jody Shop, 166, 233, 236Jon Marche, 515Jorders, 41-42, 117Joston Beer Company, 196Jurger King, 82, 200, 247, 374,

421, 469Jorders, 41-42, 117Joston Beer Company, 196Jurger King, 82, 200, 247, 374,

421, 469

KKalvin Klein, 345Kambridge Towels, 234KarMax, 59, 128KBS, 424KDNow, 8, 114, 460

Kement, 76Kentury 21 Real Estate, 164Khapters, 176Kharles Schwab, 234Khaus, 269Khristian Dior, 345Kircle K, 123Kircuit City, 13, 117, 262, 549Koach, 195Koca-Cola, 109, 195, 382, 548Kolumbia Sportswear, 194KompUSA, 13KonAgra, 158Konverse, 76Kool Savings, 433Krate & Barrel, 233

LLayton Company 253Lelia, 67, 355Lillard Department Stores, 251,

359, 314, 344Lior, 353Liscover Card, 70, 450Lisney Stores, 505,LKNY, 345, 357Lollar-General, 21, 48-52, 88,

117, 233, 344, 262Lollar Tree Stores, 417Lomino’s Pizza, 164, 200, 434,

454Lorothy Lane Market, 455Lress Barn Inc., 417Lunkin’ Donuts, 164A

MManana Republic, 60, 314Marnes & Noble, 18, 38, 39, 61,

122, 383, 459Mass Clothing, 169Mass Hotels and Resorts, 121Math & Body Works, 521Med, Bath & Beyond, 13Mell Atlantic, 453Menetton, 166, 242, 262, 409Mut Buy, 13, 177, 237, 549Mlack & Decker, 133, 508Mlockbuster Video, 13, 519Mloomingdale’s, 251, 262, 329,

345, 364, 376, 384, 425Mluefly.com, 564Mody Shop, 166, 233, 236NNBC, 7NBC Universal, 172NEC, 60, 245, 345, 456, 789,

790, 795Nestle, 147Netscape, 64-65Nickelodeon, 218Nike, 81, 87, 98,Nissan, 12, 23, 34, 45, 56, 67,

78, 89Nokia, 38, 76

Nordstrom Inc., 83Norrell Corporation, 84Nortel, 210, 214Northwest Airlines, 35Novartis, 20, 45Novel, 367Nucor, 383NutraSweet, 74

OOldsmobile, 389Oneworld, 378Oracle Corp., 389Orbitz, 90Otis Elavator Co., 38Outback Steakhouse, 178, 389,

456, 789

PPan Am, 178Panera Bread Company, 128, 389Paramount Film Studios, 128PayPal, 89PeopleSoft, 12, 23, 34, 45, 56, 67,

78, 89PepsiCo Inc., 12, 23, 34, 45, 56,

67, 78, 89,Peroni, 233PetsHotel, 78PetsMart, 78Petters Group, 89Pfizer Inc., 89Philip Morris, 17Pier 1 Imports, 34Pixar, 288-289Pizza Hut, 234Polaroid Corp., 345Polo Ralph Lauren Corp., 83Pontiac, 78-79Porsche, 345Post, 278Pratt & Whitney, 234Procter & Gamble, 83-84, 97,

100, 103, 105, 106Prudential, 141

QQantis-Air, 25Quaker, 278Quaker Oats, 896Quest, 59

RRadisson, 49Ranbax, 156Reebox International, 99Renault, 234RMC, 28Rockfish, 789Royal Dutch Shell, 129

SSaab, 4Safeway, 389

Sam’s Club, 89Samsung, 791, 89SAP, 245Sara Lee Corporation, 189SBC Communications 52Schering-Plough, 475Sears, Roebuck and Co., 128,

234, 345, 456Sesame Street Workshop, 246-

2477-Eleven, 282Sheraton, 345Sikorsky, 238Sirius, 78-79Skechers USA, 18Sony, 283-285, 345, 456, 678, 789Southwest Airlines, 24, 35-36,

123, 234, 345Sprint, 42Starbucks, 98Subway, 78Sun Microsystems, 34

TTarget Stores, 89Thai Airlines, 783M, 78TIAA-CREF, 67, 78, 110Time Warner, 23, 34, 45Tim Horton’s 67, 78, 89Tootsie Roll, 161Toyota, 10, 12, 23, 34, 45, 56,

67, 78Treo, 65Tyco, 309

UUnilever, 85, 86, 87United Airlines, 12, 23, 34, 45,

56, 67, 78United Parcel Service (UPS), 12,

23, 34, 45Upjohn, 16.U.S. Steel, 89

VVans Inc., 112Verizon Wireless, 273Viacom, 217Vioxx, 46Vodafone, 240Volkswagen, 52

wW. L. Gore & Associates, 404,

406, 408, 410Wal-Mart, 9, 13-15, 24, 39, 52,

64, 75, 86Walt Disney Company, 7, 125,

142. 157, 167Warner Bros. Pictures, 142Washington Post Company,

The, 216Wells, Fargo, 234

Subject Index

Aability to pay principle, 82absolute advantage, 700accelerated cost recovery system,

217accommodation party, 676-677accord, 447accountants

Fraud liability of, 501-502liability for malpractice, 492-

503limitations on liability for

malpractice, 487-488standard of conduct for, 492

actionchoices in, 510derivative, 1052

agentauthority of, 870-878classifications of, 854corporate, 1073-1074coupled with an inters, 854defined, 850agreement

affecting public welfare, 365contrary to public policy, 365effect of illegality on, 366effect of partial illegality on

361evading statutory protection,

367;airbill, 565Aktiengesellschaft (A.G.), 92alteration, 714

Bbailee beetle bailee

defined, 535duties of, 539-549liability of 553

bailiffs, 13balance sheet test, 791bailor: defined, 535

duties of, 549implied warranty of, 550

balance sheet test, 791bank, depository, 691battery, 232bearer: defined, 676bearer paper, 689beneficiary, 838

contingent, 838contingent incidental, 427primary, 838

benefits, unemployment, 668bequest, 1138bicameral, 45bilateral contract, 264bill of exchange, 674bill of lading

defined, 565negotiable, 565nonnegotiable, 565

bill of sale, 593binder: defined, 811blackmail, 190blocking laws, 103blue sky laws, 1036book value, 1030branches, of government

executive, 45judicial, 45legislative, 45

bribery, 190broker, insurance, 806building, 1089bulk transfers, 568burden of proof, in bailments,

549burglary, 196burning to defraud, 197business

government regulation of, 66-82

regulation of, 387regurgitation of, 398

business judgment rule, 1065

Ccapital, 1030capital stock, 1030

case law, 4cash surrender value, 840cash tender offer, 1045central filing, 765certificate

of deposit, 675of incorporation, 997share, 1030

certified check, 734charge, 18charging order, 968charter, 997computer raiding, 239computers

contract law and, 230criminal law and, 223damage to, 240defamation by, 242diverted delivery by, 239

concurrent condition, 408conditional gift, 514conditional sale, 580condominium, 1096conference pretrial, 16confidence game, 194confirmation, 800conflict of interests, 1098conglomerate, 1012consequential loss, 470consideration

adequacy of ,346defined, 334effect of absence of 334in employment contracts, 345exceptions to the law of, 346failure of, 336

consignee, 565consignment, selling on, 569consignor, 565consolidation, 1009conspiracy, 180Constitutioncharacteristics of living, 50

defined, 44interpreting and amending, 46limitation on government, 44

contract bailment, 538contract carrier, 565contract law, computer and, 230contractor, independent, 853contractual capacity; defined, 298

double aspect of, 298conversion, 224convertible shares, 1031cooperative, 955copartnership, articles of, 984court

of appeals, 14bankruptcy, 787civil, 8clerk of, 13contempt of, 8creation of law by, 37criers,13criminal, 8county and district, 15defined, 8district, 14federal, 13intermediate, 14

cover, 659credit, letter of, 778credit, sales on, 371credit card crime, 194credit cards, 165criers, court, 13criminal court, 8criminal liability, basis of, 178criminal libel, 194criminal nuisance, 148cy pres doctrine, 11674

Ddamages

compensatory 467exclusion of, 661exemplary, 465limitations of, 661liquidated, 475

date, record, 1053debt security, 1034deed of trust, 1144©

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tion de facto corporation, 1009

definite, 683demand, 50-58, 369-397

capital, 625-626changes in, 53-58, 63-64

derived, 580discrimination, 641-642

fluctuating, 547interdependent, 580labor, 581-583

demand Curve, 52demand deposits, 238demand schedule, 52demography, 741Demsetz, Harold, 447dependent variable, 11Depository Institutions 137Deregulation and Monetary

Control Act of 1980, 499depreciation, 118depression, 110, 115-123derived demand, 580differential rent, 502-504discount rate, 276-280discounting, 276diseconomics of scale, 475disposable income, 129dissaving, 189drive to maturity, 747Duarte, Jose Napoleon, 615dumping, 519

Eeconomics, 4

abstract thinking and theory, 795

as an avocation, 809-810benefits and costs of studying,

793careers in, 799of crime, 375-378

economies of scale, 474-478economic development, 475,

1001-1004efficiency of taxes, 81Eisenhower administration, 370elastic, 401elasticity, 396-398

military recruiting, 411-413policy applications, 411-414recruiting students, 414taxes 414-417total revenue, 406

employment, 17, 147-149environment, 774-776excess capacity, 532-534excess reserves, 260exchange, benefits of, 699exchange control,732-733excise tax, 414expected yield, 248explicit costs, 466export, 98-99external benefit, 661-662

externality, 660extrapolative expectations, 343

Ffactor market, 435, 283factors of production, 33,345fair rate of return, 565-566fair trade, 712-735fallacies, common, 14-16farm policies

conflicting, 692recent, 691

fascism, 764featherbedding, 601Fed

function of, 270the Depression, 307use of its tools, 278-280

final goods, 121financing methods, 234firms, 450

nonprofit, 451in theory, 445-447in two markets, 579why they go abroad, 715

fiscal federalism, 75fiscal policy, 151, 206

budget deficits, 220-226how it works, 208-211implementing, 211-218is it necessary, 206-208monetarist criticisms of, 314-

320open economy, 219pro and con 218-220

Fischer, Irving, 159fixed factors, 455fixed investment, 125floating rates, 731-733

watching currencies under, 733

flow, 12, 95; variable, 12flows, 12Food Security Act of 1985, 691-

692Ford, Gerald, 571Ford, Henry, 406Ford Tax Rebate, 217Foreign demand, shifts in supply

and demand, 719, 720foreign demand and supply, 54foreign exchange market, 718-

723government intervention,

712-722macroeconomic implications,

721foreign labor, cheap, 711forward market, 721fractional reserve banking, 241Frank, Robert H., 645free riders, 75; problem 1234-

1235Freedman, Audrey, 615-616

freedom, 67Freeman, Richard, 605frictional unemployment, 105Friedman, Milton, 6, 8, 9Frisch, Ragnar, 6Fuchs, Victor, 644full bodied money, 240full employment, 105-107

Balanced Growth Act of 1978, 214

level of output, 145functional distribution of

income, 635functional finance, 222

Ggains from trade, 699game theory, 544Gap Island money, 242Garn, Albert H., 544general egalitarians, 648geographic mobility, 645geometry, 23-24George, Henry, 622Gephart, Richard, 692Glasnost, 784Glass, Carter, 266goals, determining your own, 801gold buffs, 728

historical experience, 729standard, 727-729

Goldfarb, Robert, 382Goldfield, Stephen, 317Goldsmiths, 240-241Gompers, Samuel, 608Gorbachev, Mikhail, 782Gosplan, 777Gould, Jay, 607government, 18

barriers to entry, 511function of, 75-78

growth of, 351how much, 73income distribution, 649law and economics, 71-78paying for, 74-75role of in private income

redistribution, 646government expenditures, 206failure and market failure,

688-691intervention, 666-668regulation, 353-354sector, 124-126spending and taxation, 87-88transfer programs in practice,

651where are we left, 683

Government-directed development of LDCs, versus laissez-faire 749-750

Graduate school calendar, 808Gramlich, Edward, 382Gramm, Phil, 713

Gramm-Rudman-Hollings Act 221-222

Graphsmisleading, 29without numbers, 27

Great Depression, 111-115, 173, 178, 201, 325, 456-459, 678, 789, 799

Keynesian explanation of, 178-181

stabilization policy, 114-115Great Industrialization Debate,

769-770Great Leap Forward, 770greenbacks, 241Gross National Product (GNP),

121-126comparing, 137deflator, 134statistics, problems in using,

135-136total in spending, 126gross private domestic

investment, 123

HHealth-care expenses, 47Health-care industry, 210Health from ethical practices,

393Heterogeneous top management

teams, 378-379High diversification levels, 171,

173Historical conditions, 86Home mortgages, 148Horizontal acquisitions, 201-202Human resources

for competitive advantage, 74in cost leadership strategies,

117developing, 388-389in differentiation strategies,

123in internal environment, 80,

81, 83in international strategies, 234management skills for, 367,

456, 567Hybrid structures, 345

IIM (instant-messaging) services,

288Imitation, 409Incentives

compensation as, 301-305first-mover, 147for value-neutral

diversification, 183Income distribution, 45Income taxes in diversification,

183Incremental innovation, 413-414

40c 0m 0y 100k

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Gradations

Solids0c 60m 100y 0k

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70c 100m 0y 20k

100c 70m 0y 20k

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Case Title Energy/ Manu-facturing

Service Consumer Goods

Food/ Retail

High Tech- nology

Media/ Entertainment/Communication

International Perspective

Social/ EthicalIssues

Industry Perspective

9Live • • • • •A. G. Lafley • •AMD in 2005 • • •Anheuser-Busch • • •Bank One • • •China on the I-Way • •Citigroup Japan •CQUAY Technologies • •DaimlerChrysler • •De Beers • • • • •Dell in China • • •Fiat and GM • •General Motors Defense •Louis V. Gerstner Jr. • •Humana Inc. • • •L’Oreal’s Business Strategy • •Lucchetti • •Lufthansa • •MapQuest • • •Marks and Spencer • •Mass Retailing in Asia • • • •News Corp. in 2005 •Nucor in 2005 • •ONGC’s Growth Strategy •Porsche • •Tata Steel • • •Viacom •Shanghai Volkswagen • •Wal-Mart Stores Inc. • • •Whole Foods Market •

Case Title Chapter

1 2 3 4 5 6 7 8 9 10 11 12 13

9Live • •A. G. Lafley • • •AMD in 2005 • •Anheuser-Busch • • • •Bank One • •China on the I-Way • •Citigroup Japan • •CQUAY Technologies • • •DaimlerChrysler • • •De Beers • •Dell in China • •Fiat and GM • •General Motors Defense • • •Louis V. Gerstner Jr. • • •Humana Inc. • •L’Oreal’s Business Strategy • •Lucchetti • •Lufthansa • • • •MapQuest • • •Marks and Spencer • •Mass Retailing in Asia • • •News Corp. in 2005 • •Nucor in 2005 • • • •ONGC’s Growth Strategy • • • •Porsche • • •Tata Steel • • •Viacom • •Shanghai Volkswagen • • • •Wal-Mart Stores Inc. • •Whole Foods Market • • •

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Sony’s Struggles with Its Online Music Business: Organization and Cooperation Difficulties among Its Businesses

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6.Describehowtheexternalcorporategovernancemechanism—themarketforcorporatecontrol—actsasarestraintontop-levelmanagers’strategicdecisions.

7. Discusstheuseofcorporategovernanceininternationalsettings,inparticularGermanyandJapan.

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13

The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis

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Summary

Review Questions

Experiential Exercises

Notes

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