Category Archives: Technology/innovation

Melissa’s Marvelous Movies: The Innovation Collection

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As many of us prepare to move our strategy courses online, we need video “shorts” that introduce core strategy principles to go along with key readings. By now, you may have already seen collections by David Kryscynski, Shad Morris, and others in the toolbox. In an earlier post, Melissa Schilling provided a set of videos oriented around a basic strategy course. Now, she has provided an additional set oriented around innovation strategy. Below is her video introducing individual creativity as a sample.

In addition, she covers the following topics that may be useful for an innovation course (note that there is some overlap with her strategy collection):

Contributed by Melissa Schilling

Teaching the Zoom Case Online

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ZoomTortureThe Zoom live case is provided in an earlier post. Most instructors are all or partially online now so I’m sharing some online tips for teaching the case. The key task here is to use some asynchronous learning before a synchronous session so you can hit the ground running. One really important tip: Use worksheet assignments and Google docs for group breakouts in synchronous sessions. Here’s how:

Asynchronous Zoom Assignments. I’ve created “worksheets” using essay questions in the Canvas survey/quiz tool. These questions are structured so the answers need not be long and are easy to grade. I have two worksheet assignments.

  • Strategy Diamond Worksheet. I use Hambrick & Fredrickson’s strategy diamond framework to answer the question “what is strategy?” I entered the worksheet as a quiz/survey in canvas but the link is the answer key in MS Word. Specifically, the prompt is: Zoom recently entered conferencing hardware, describe the strategy using the framework (e.g., Arena, Differentiator, Staging/Pacing, Vehicles, Economic Logic). While these are short essay questions, it is easy to see if they are able to understand the framework and allows synchronous sessions to move faster.
  • 5 Forces Worksheet. The 5 forces worksheet is also entered as a canvas survey. For each force, students list 3 actors ordered by their impact on industry profitability. Then they explain their ordering briefly. For buyer power: List several types of buyers in the video conferencing industry (at least 3) where each might be thought of as a market niche. Put them in order reflecting their willingness to pay (high to low). Then indicate a few factors that drive the differences in willingness to pay. Again, it is easy to grade since it is clear whether they understand from the order.

Synchronous Activities. Here, I rely on group breakouts with Google docs. Here are two such activities.

  • Industry evolution. The link goes to a 5 forces worksheet for before, during and after the pandemic (3 tables in the doc). As a breakout exercise, I assigned 2 teams to each page of the worksheet and told them to start at different places in the framework. Then, after 10 minutes, I brought them to the main room, shared the Google Doc and asked the teams to describe their analysis to predict how the industry will develop (post pandemic) – rivalry, growth, willingness to pay, etc. These are used to develop assumptions in the next exercise.
  • Financial Scenario Analysis. This link goes to a Google sheet with 8 Zoom financial models based on: 1) Rival product quality 2) Rival price competition, and 3) Zoom’s continued innovation/quality. Varying these 3 sources of uncertainty (H/L) generates 8 scenarios. I assigned each team to a scenario and at breakout, sent them all to the Google sheet to predict profit margins and revenue growth in that scenario. We then discussed the probabilities associated with each scenario. the bottom line was that the market capitalization was so high that selling the company should probably be considered as a very real alternative (e.g., what problem are you trying to solve?).

Contributed by Russ Coff

Zoom Wars Live Case

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a53d805c5fbe0510926a423c6e184518I like to start the semester with a “ripped from the headlines” case. This is especially helpful if some of one’s cases are older. This semester, Zoom is a great alternative. The current market capitalization is about $80B which puts it well above many more established companies (including the combined value of the 7 largest airlines). I have compiled a short packet of news articles for the case. In addition, I have created a spreadsheet that guides students through key scenarios and how they would affect the value of the company (Do rivals match on quality? Is there a price war, Does Zoom keep innovating?). This highlights how qualitative analysis affects assumptions in quantitative models. It is also an introduction to decision trees as a simple tool for modeling complex sources of uncertainty (this is available in a separate instructor spreadsheet that uses PrecisionTree to model the uncertainty). The Zoom context hits just about every key aspect of a strategy course so you can circle back to it repeatedly:

  • What is Zoom’s strategy? I use the strategy diamond framework (arena, vehicles differentiators, staging/pacing…) but one can use a standard set of questions to explore this.
  • Trends/PEST. The industry was growing at about 10% — what were the drivers of this and how will this change in the future?
  • Industry analysis:
    • Why was the videoconferencing market attractive (pre-COVID)? (e.g., network effects, value produced)
    • How did COVID change the market attractiveness?
    • Rivalry: Competitors like Microsoft and Cisco are putting substantial resources into their products. Will they match the quality? Will there be a price war?
    • Evolution: How will the industry change going forward?
  • Resources and Capabilities:
    • Why has Zoom been so successful even before the COVID pandemic?
    • Why has Zoom been more effective than rivals during the pandemic?
    • Will they be able to keep up the rate of innovation after COVID?
  • Corporate strategies. Do business portfolios confer an advantage to rivals?
    • Consider Microsoft’s complementary assets (e.g., MS Office) – Why might they be important?
    • Consider Cisco’s complementary assets  (e.g., enterprise networks) – Why might they be important?
    • Zoom has entered the hardware industry through multiple alliances with DTEN, Poly, NEAT and others. Evaluate both the strategy to enter the hardware arena and the vehicle (alliances).
  • Zoom’s global strategy? Zoom has operations all over the world. What is their global strategy? Is it sound?
  • Technology/Entrepreneurship. Of course, these are key aspects of the context. Why did Zoom CEO, Eric Yuan, leave WebEx? Why did his nascent company do so well against established, well-resourced, rivals.

There are many videos you can bring into this including (Thanks to Rich Makadok for suggestions):

Contributed by Russ Coff

Melissa’s Marvelous Movies: The Strategy Collection

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As many of us prepare to move our strategy courses online, we need video “shorts” that introduce core strategy principles to go along with key readings. By now, you may have already seen collections by David Kryscynski, Shad Morris, and others in the toolbox. Melissa Schilling has graciously made a new set of videos available that address core strategy principles not found in the other collections. See also her related collection focused around innovation strategy (note that there is some overlap). Below is her video introducing agency problems as a sample.

In addition, she covers the following topics that may be useful for a strategy course:

Contributed by Melissa Schilling

MicroTech: Negotiating Online Teaching

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HandshakeHow can we make online courses more interactive? Often people create videos of their PPT lectures as the basis of an online course. We know we can do better. It turns out that negotiation exercises can work surprisingly well online. My MicroTech negotiation exercise is described in a previous post. Here, I describe a simple adaptation to use it in an online course. The negotiation focuses on the problems promoting cooperation across divisions (for example to achieve synergies). In the exercise, two general managers negotiate over the terms to transfer a technology to take advantage of a market opportunity. Sub-optimal agreements (money left on the table) represent transaction costs and inefficiencies that must be overcome to create corporate value. The debrief can also focus on alignment of activities/units to achieve a strategy. The discussion focuses on how to achieve requisite cooperation. This is hard to achieve in a competitive culture. How, then, can the firm create a cooperative culture? This, it turns out, may be a VRIO resource…

To conduct this exercise online, follow these steps

  1. Assign roles and negotiation partners from the class list (1/2 of the class in each role). The roles can be emailed to the individuals with their assigned negotiating partners. I would try to pair them with people they may be less likely to know well to simulate negotiating across divisions (usually not someone on the same project team, etc.).
  2. Students conduct the negotiation (outside of class) at a time of their choosing. It can be done through video conference, email, or in person.
  3. Collect agreements (have them emailed back) by the night before class. Better yet, you might want to set up a simple poll to collect the agreements (like this one which will allow you to download the results and copy them into the spreadsheet that is used to summarize/analyze the results).
  4. Debrief can be synchronous or asynchronous
    • Synchronous. In a synchronous session, you can present the results of the negotiation and engage in a rich discussion of organizational design and strategy. What levers would students suggest changing to increase coordination between units? (focus on things like incentives, structure, people, processes/routines, etc.). But this takes a lot of class time to do it right.
    • Asynchronous debrief of outcome. I recommend recording or posting an overview of the results and conduct the discussion asynchronously (here is an example of a recorded debrief). This allows you focus the synchronous debrief on organizational design solutions for the company (to promote cooperation across divisions). That is the essence of the problem and it is best to devote as much class time to it as possible.
    • Synchronous discussion of organizational design. The key learning objective for me is to get them to understand how hard cooperation can be to achieve. It is critical to get to this in the debrief. I assigned teams (4-6 students) to make recommendations to improve coordination (less $ left on the table). Each team focused on a lever (of Galbraith’s Star Framework) such as incentives, org structure, people (hiring/firing), or processes/routines. I had each team work in breakout groups (or offline) in a shared Google worksheet. The asynchronous approach may work better as teams can think through their recommendations.

Click here are all of the required materials (roles, spreadsheet, PowerPoint, etc.).

Contributed by Russ Coff

COVID Innovation Scavenger Hunt

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frugal-innovationMuch of the news focuses on how hard businesses have been hit by the pandemic. However, strategy is about finding opportunities and adapting in a dynamic environment. Let’s not forget to focus on inspirational examples along these lines. Send students on a scavenger hunt (like the business combination scavenger hunt) to find unique examples. Invite students to identify 5 innovations have each student introduce an innovation and others who have the same innovation must cross it off their list. Note that this could be done in an online discussion forum. See how many unique innovations your class can identify. This can be done easily in a synchronous online session or in threaded discussion. Some types of examples to consider:

  • Innovations to meet critical shortages. The shortage of ventilators has spurred multiple innovations such as the possibility of one ventilator serving up to 4 patients and the adaptation of CPAP machines.  Many innovations have increased the supply of protective equipment (PPE) including companies re-purposing production facilities.
  • New Treatments. Of course many firms are working to find treatments and/or an effective vaccine. These efforts are spread around the world so it is a race to see what will be most effective.
  • Product Adaptations. Some products can be adapted to new uses and it is a question of how to recognize those opportunities. For example, Kinsa thermometers has collected data on fevers due to normal influenza patterns. The were then able to back out normal patterns to identify atypical fevers that might be due to COVID before patients began showing up in emergency rooms.
  • Process Adaptations: Many service firms have adapted their processes to avoid contact. Some firms may be better equipped to do this than others (physical facilities, etc.) and it may help them survive. Even some farmers who have lost distribution channels have created contactless alternatives while others have had to destroy food that they could not get to market.
  • Delivery Partners as a lifeline. Restaurants and other businesses often rely on partners to get their products to consumers. While these partners may have been a side business previously, they are a critical lifeline now (see EatStreet, GrubHub, DoorDash and others). Amazon has also done better than other retailers for this reason.
  • Products in heavy demand. It isn’t just toilet paper and hand sanitizer. Other products have experienced significant demand and need to adapt their supply chains and processes to meet needs. Automatic door openers, video conferencing tools like zoom, door cameras like ring, are all in greater demand than anticipated.
  • Innovation on the front lines. Healthcare workers and others on the front line are also innovating to try and do their jobs safely. Telemedicine has taken off sharply as a way to treat COVID and other types of medical problems while limiting the spread of COVID. These may also highlight opportunities for firms.

Contributed by Russ Coff

Bringing COVID into Your Classroom (not literally, please)

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Health-Workers-COVID-19I have taught during numerous crises (various wars, 911, 2008 crash, etc.) and always regretted missing opportunities to bring the events into the classroom. So how can we encourage our students to think strategically about the COVID crisis? Here are a few ideas for discussion or team projects (but please add more ideas in the comments):

  • Dynamic capabilities and Resource Redeployment. How can different types of firms redeploy their resources in this crisis to: 1) help others survive the pandemic, and/or 2) keep the business from going under? How does this redeployment lesson link to other types of challenges? Consider, for example, Eight Oaks’ distillery conversion to produce hand sanitizer.
  • Resource Acquisition & Retention. Many resources (especially Human capital) have been released. This could be an opportunity for some firms to access resources. For others, the challenge is to retain the resources through the crisis so they are able to ramp up once the crisis passes. How should firms respond?
  • Firms’ Ethical Responsibilities. The two issues above raise inherently ethical problems. What are the firm’s responsibilities to its employees? To shareholders? To society? To survive?
  • Generic virus strategies. China opted for extensive testing, isolated those who test positive from their families, and limited travel. The policies are well aligned (like a generic strategy) to limit spread. Is there an alternative aligned strategy involving limited testing? To what extent are countries “stuck in the middle?”
  • Technology strategy. What new technologies can be deployed to fight the virus? For example, Kinsa produces a connected thermometer that allows them to map parts of the US where there are unusual fevers— a week before people need hospitalization. How can this new resource be effectively deployed?
  • Entrepreneurial Strategy. What business opportunities are created by the crisis? How can an entrepreneur pursue them when resources are scarce? What are the implications for social entrepreneurship?
  • Global strategy. How can firms adapt to disrupted supply chains? Are there global opportunities created by the crisis? Along the lines of the first bullet, this could be opportunities to help those in hard hit areas or those that allow the firm to survive.
  • Diversification. Are there portfolios of businesses that are more or less likely to survive COVID? What do firms need to do to leverage those parts of their portfolio? What is the role of the corporate HQ?
  • Rigorous Data Analysis. The media presents data on cases and deaths at the country level. There are so many questions one might raise. Is the country the right level of analysis? Given the limited testing in some countries, does the number of known cases even provide useful data? How do we interpret missing data in countries like China and Russia?

Contributed by Russ Coff

Architectural Innovation … in a Word

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scrabbleThe Alphabet Soup exercise was posted here earlier as a general exercise to flesh out the impact of cognitive traps when applying frameworks. This focuses students to think about how frameworks, while valuable, could lead them astray as they try to analyze complex problems. A special application of this lesson is in the discussion of the problem of Architectural Innovation (see Henderson and Clark, ASQ 1990). That is, when firms are very familiar with a set of components, a small change in how they interact may create a very difficult adaptation challenge. Here, the letters in the alphabet are the components and a simple priming tool gets people focused on how these components relate.  This exercise is very easy to run and makes the point powerfully how such cognitive frames may prevent people from reaching obvious solutions.

Continue reading →

Netflix Sequel: Bidding Wars the Movie

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disney-leaves-netflixAs Netflix’s strategy unfolds it becomes clearer the extent to which it threatens traditional media companies. Initially, Netflix was a welcome partner who paid for access to older entertainment assets – new income streams for studios. More recently they have developed new content and lure top talent away from traditional media companies. Now, by offering a compelling portfolio of options, they compete more directly against traditional media companies. AT&T, Comcast, Fox, and Disney have taken notice of Netflix’s increasingly vertically integrated business model that bypasses traditional distributors (cable, DSL, satellite) and doesn’t rely on advertising revenue. The new model is driving mega mergers & bidding wars as rivals try to build compelling portfolios to offer streaming services. This is a great live case to frame many strategic management course topics including:

  • What is strategy? I use the Strategy Diamond and Netflix is a great case to look at things like staging and pacing, vehicles, and arenas.
  • Market structure – How attractive is the media industry and how has this streaming model affected industry profitability
  • Resources/Capabilities – Rivals lack some resources and some of their substantial existing resources have become “core rigidities” that hinder adaptation
  • Competitive dynamics – What strategic moves can we observe? How will Netflix respond?
  • Disruptive innovation – Netflix started as a limited low-cost alternative but added features that eventually made it a significant threat to incumbents.
  • Corporate strategy – The billions rivals spent on M&A are another critical angle. This also provides a vehicle to discuss when vertical integration creates value.

I have assembled some useful materials to frame a discussion of this case. First, the case can be taught using a series of recent news articles (sample article pack). In addition, I have prepared a spreadsheet to explore scenarios for how various events might affect the value of Netflix. For instance, what would happen to its business model if the market started to value the company  as a traditional media company as opposed to a tech firm? Similarly, what will happen if rivals’ M&A strategies succeed and pose a critical challenge? Finally, here is a link to a sample pre-class survey to help students think about the strategic issues before class.

Contributed by Russ Coff

 

Will a Robot Take Your Job?

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robot-sculpture-03Some fear that eventually and robots will be able to do anything that humans can — better. Many have hailed the dangers of artificial intelligence to society (see Stephan Hawking, Elon Musk, Bill Gates, etc.). Hundreds of millions of jobs would be affected. Trillions of dollars of wealth created (and captured by whom?). These are the potential impacts of a coming wave of automation. In this episode of Moving Upstream (below), the Wall Street Journal traveled to Asia to see the next generation of industrial robots, what they’re capable of, and whether they’re friend or foe to low-skilled workers. Interestingly, new innovations in robotics allow robots to work safely side-by-side with humans and this achieves higher levels of productivity than either humans alone or robots alone. This is because most processes are not 100% programmable and working side-by-side allows for greater flexibility in handling exceptions to programmed routines. This is a great video to discuss topics like technological innovation, substitution of capital for labor, and interfaces between humans and technology.

Heard through Nicolai Foss

 

How Shipping Stays Afloat

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As the container shipping industry continues to boom, companies are adopting new technologies to move cargo faster and shifting to crewless ships. But it’s not all been smooth sailing and the future will see fewer players stay above water. This WSJ video takes students through the history and shows how the industry structure has changed with new innovations. Excellent for teaching industry analysis and innovation (architectural/systemic innovation).

Heard through Nicolai Foss

Print the Legend: A multidimensional case

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Print the Legend (2014) is a documentary about the 3-D printing industry, that offers an engaging case study covering industry, firm & technology life cycles, disruptive technologies, and strategy in emerging firms & industries. This industry was established in the 1980s focusing on large expensive printers for industrial use – Two key players dominated using different technologies. The market was seriously shaken by startups in the 2010s that drastically reduced pricing created a consumer market. As such, we see two distinct market segments (industrial & consumer) and two technologies (stereolithography & fused-deposition) all battling it out.

The film follows two startups from emergence through VC funding, and shows their diverging paths as one is acquired and one remains independent. MakerBot, hires an experienced Strategy Director who (with the VC) radically shifts the founding strategy. This leads to high turnover and eventually, founder exit and acquisition by a leading industrial 3-D printing incumbent. In contrast, FormLabs, takes a more emergent approach to strategizing and positioning. The award-winning film is very well-made and fun to watch – Students love it and learn from it. It features a prominent VC (Brad Feld) and startups that students may be aware of.

Teaching notes: The film (available on Netflix) runs 100 minutes, so with discussion, it takes a full 3-hour class. It is helpful toward the end of the semester as a “movie day” with popcorn and snacks – students appreciate a break the week before their big final project is due. It is helpful to spend about 20 minutes at the start of class giving a mini-lecture on firm & industry life cycles and disruptive technologies, to set up the film, as well as about 10 minutes at the end for a debrief. One can show the film in 10-20 minute segments, pausing to discuss what has happened so far. This case has been a big hit over the 2 years it has been in use. It’s a little logistically complex, and requires strict adherence to a schedule, but once you have it down, it’s a very easy class and case to teach. Full teaching notes, assigned pre-reading, slides, and film segments are available on Gina’s shared teaching site.

Contributed by Gina Dokko

Tom Petty & the Perils of Strategic Alliances

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AllianceFourCStrategic Alliances don’t make the news the way M&A do so some may struggle for examples. It is especially helpful to make students aware that, while Alliances may be less risky than M&A, there are still risks that need to be analyzed. Tom Petty provided a useful example to apply the “Four C” alliance framework. Like many musicians, he signed a contract with a record label before he made it. He and ABC had Complementary capabilities needed to develop and promote hits. Initially, they had Congruent Goals in that their interests were aligned to make the band a hit. Organizationally, they were Compatible in that they were able to coordinate effectively. What Petty failed to anticipate was how things would Change over the course of their agreement. By their 3rd album, he felt that the arrangement was so unfair that he tried to back out of the agreement claiming that ABC had no right to sell the contract to MCA. Ultimately, he only got out of it by declaring bankruptcy. The song, Refugee captures the anger he felt over how he was treated by the record companies and offers a nice lead in to the discussion. This also brings out a discussion of bargaining power and how it may change over time.

Contributed by Russ Coff

Amazon Eats Whole Foods

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amazonwholefoodsWith its $13.7B bid, Amazon agreed to pay a 27% premium over Whole Foods’ previous market valuation. This makes for a nice live case case in your strategy classroom. Was this a sound business decision? The market rewarded Amazon with an increase in its stock price. While some opportunities are apparent, it remains unclear exactly how Whole Foods will be worth 27% more to Amazon (and that’s just to break even). A five forces analysis will reveal that the grocery market is highly competitive with exceptionally thin margins — not an especially attractive industry to enter. So how can they win in this game? There are many possibilities that may come up in a discussion. For example, Amazon may:

  • Build online grocery sales, a tiny but growing portion of the industry.
  • Lower costs by applying automation technology and their supply chain expertise.
  • Use customer data to build sales through Amazon or to sell some higher margin “impulse” items at Whole Foods.
  • Leverage the market’s expectations that Amazon won’t pay dividends or post significant profit to lower prices and invest in the business.

Of course, these are highly speculative and carry significant risks. What is the likelihood that any of these will be achieved? Can Amazon manage change in such a large acquisition? Will other grocers make similar changes (or be bought out by tech companies with similar capabilities)? There is lots of fodder to discuss. Here is a packet of news articles that may be helpful. Also, I have prepared a spreadsheet to explore different scenarios for how this might play out where the starting point is Whole Foods’ recent financial performance (note that the decision tree requires the PrecisionTree Excel Add-in). Finally, here is a very brief poll to help assure that students come to class prepared and with an opinion on the deal.

Contributed by Russ Coff

Deflategate: Letting the air out of strategic planning

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ballStrategies rarely work out as planned but somehow, students remain eternally hopeful that everything will go exactly as they expect. This experiential exercise allows students to “feel” Mintzberg’s (1994) critique of strategic planning. It also helps to illustrate and compare causation and effectuation decision-making logics (e.g., finding entrepreneurial opportunities). You can bring “Deflategate” (from the 2015 NFL season) to a classroom near you. The exercise proceeds as follows:

  1. Air pumpInflate ball & sit on it. Ask 2 volunteers to inflate a heavy duty inflatable ball using a small air pump (one can buy these a sport store) and try to sit on it afterwards for a minute. While introducing the exercise, the instructor should keep the plug hidden in her/his pocket. Inflating the ball is amusing (both the volunteers and the audience). It is not easy or quick to inflate the ball.
  2. Where’s the plug? After inflating, students look for a plug. The instructor waits a few seconds and plugtakes the plug out admitting that she/he had it all the time. The class will laugh. It may be frustrating for the volunteers but then we begin the debrief and explain the reason for the deception in the exercise.
  3. Debrief: According to Mintzberg, decision-makers (those who inflate the ball) expect everything will go smoothly according to what they planned but usually some unexpected circumstances occur that alter the plan’s effectiveness. Decision-makers cannot anticipate everything and the exercise drives this home and shifts focus to decision-makers’ bounded rationality. It is quite rare that students will look for a plug before doing the exercise (though it happens on occasion). One might move from here to discuss innovation, business models and disruptive innovation.

Other related toolbox exercises that demonstrate the challenge of predicting outcomes and implementing effectively include the Tinkertoy Exercise, the Strategy Puzzle, and the Paper fight. There are also some materials under the topic of scenario planning.

Contributed by Piotr WÓJCIK

Failure: The sequel

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learning-failuretosuccessThis is another in our series of explorations in learning from failure (and learning from success). The Swedish Museum of Failures reminds us of some of the most spectacular product failures. Interestingly, most of them can be closely linked to some spectacular product successes. A complete failure may be a near miss. Perhaps a slight pivot away from extreme success. This video offers a window into some of the more interesting exhibits in the museum. One might ask students to review the video and imagine how a well-placed pivot might have helped each failure turn the corner. This might also fit with some of the toolbox posts on pivoting.

Contributed by Russ Coff

Trumped up Strategy Class

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This isn’t the first time polls have been wrong. The election of Donald Trump was a shock to many college students (as well as the press) and this may warrant some class time. Some instructors responded by providing space for students to express their feelings and this may be within the scope of the educational objectives for some classes. For a strategy class, a more relevant focus might be to examine the implications of the outcome for business strategies or to examine the campaigns from a strategic perspective. This might be considered as a template for how to discuss other sudden world events in the strategy classroom. Here are some takes on how to bring the election in while still emphasizing the pedagogical objectives of a strategy course:

  • Project case scenario analyses (Aya Chacar). Scenario analysis is designed to unearth factors that affect the efficacy of a given strategy. In a global context, country risk is a central factor in assessing strategic alternatives. In class, students discussed the likely impact of the election on the companies their teams are studying. Can you help the company? What do you think “could” be the impact on the companies under the new American administration -based on stated positions or past behavior? The companies they chose to study in this class are Amazon, Auchan, Didi Chuxing, General Motors, Naver, Uber, Volkswagen, and Walmart. All already have major international presence with some but not all having significant operations in China, Europe, India, Japan, Mexico, South Korea, SouthEast Asia and the US.
  • Entrepreneurship/Opportunity Recognition. The pollsters were all wrong. Often businesses and whole industries miss critical trends in consumer preferences and this probably means that there is unserved market space. Given trends that are now unearthed by the election, what market opportunities might there be for firms in various industries? One could use the project firms, cases you have done or specific firms that you think might be affected.
  • SWOT on campaigns (Peter Klein). While this framework is not preferred by most strategy scholars, it may raise some good points. A few examples from the Clinton campaign: O: demographics (e.g., increased Hispanic population, more socially tolerant electorate), unpopular opponent,chance to make history. T: middle-class concerns about economic inequality, backlash against political correctness, Clinton fatigue, incumbent fatigue, WikiLeaks. S: experience; support from major media, Wall Street, large corporations; ties to Obama and WJ Clinton; large staff of handlers; polish. W: experience; support from major media, Wall Street, large corporations; ties to Obama and WJ Clinton; large staff of handlers; polish.
  • Resources/Capabilities. Many of the campaign strengths turn out to be weaknesses depending on the context (experience, polish, support from corporations, etc.). What resources give a party a sustained advantage? What does “sustained” mean in this context? This might bring in a discussion of core rigidities and how once valuable resources can become critical weaknesses over time.
  • Disruptive Innovation (David Burkus). Clay Christensen described disruptive innovations as an innovation (typically from an outsider) that creates a new market and value network that eventually disrupts an existing market and value network, displacing established market leading firms, products and alliances. The Trump campaign might be viewed in this light as a disruptive strategy that overtook the conventional establishment.
  • PESTEL. Of course, this demonstrates the value/importance of looking outside of the industry for trends that may influence whether a given strategy will be effective or not. The PESTEL framework is a simple tool for bringing this in to the analysis (Political, Economic, Social Technological, Environmental, and Legal).
  • First 100 Days. Trump offered an ambitious list of things he planned to try and accomplish in the first 100 days. One can divide the list among groups and ask them to identify the implications of the policies for business in general or, preferably, for a specific firm/client.

Contributed by Russ Coff

Will Mitchell on Industry Analysis (5 Forces + 3 more)

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Will presents his 5 forces plus 3 more framework. In the video, he discussed the standard 5 forces framework but adds the following 3 critical elements that are left out of the five forces: Complementors, Social forces, and new strategies. Complementors are organizations that provide complementary products or services to an industry (e.g., cases for iPhones). New strategies refer mostly to rivals who are pursuing distinct strategies that may alter the fundamental way that firms compete in the industry. Social forces refer to the customer values and norms that may affect their preferences and thus, their willingness to pay. In short, these additions may serve to unpack factors that drive change in the five forces over time in an industry. Here is the video:

Contributed by Will Mitchell

Will Pokémon Keep GOing?

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The augmented reality (AR) game, Pokémon Go, has taken the world by storm as players roam the real world catching Pokémon and battling in Pokémon gyms. The game has set 5 records since its launch in July 2016 — including the most revenue by a mobile game in its first month ($206.5 million). Nintendo’s stock doubled 15 days into the release, adding $7.5B in value, but then settled back into a mere 50% increase when it became clear that Nintendo was a partner with limited ownership in the company that developed the game (Niantic, a Google spinoff). Although the game is free, users can make purchases in the app store to support their Pokémon ‘hunting’. The bewildering success must clearly be keeping Niantic’s CEO, John Hanke, and his crew awake at night. Besides the operational issues related to scaling up, intellectual property (IP) had become a big issue. A slew of imitators were emerging as well as a number of companies trying to steal the game’s data content and algorithm. In addition, the formidable international expansion faces roadblocks in the most populous Asian countries while potential users were impatient. There were many additional potential revenue sources to be tapped and explored such as the recent win-win partnership with McDonalds Japan. Moreover, while getting gamers out and about was good, there were a number of unintended consequences. On the plus side, many entrepreneurs were finding ways to make money from the game — for example restaurants could lure in customers if there was a Pokestop nearby. At the same time, users and non-users worried about possible injuries, trespassing, and invasion of privacy among other things. Naturally, this makes an outstanding ripped-from-the-headlines case for strategy courses. It is a great vehicle to cover key topics such as entrepreneurship, strategic alliances, internal analysis/capabilities, and external analysis. The following are some materials that are useful for the case:

Contributed by Aya Chacar and Russ Coff

K-Cosmetics: Covering the Globe

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Successful strategy is often a combination of luck firm specific skills and favorable conditions. AmorePacfic makes a great ripped-from-the-headlines case since it rose to be the #1 South Korean firm buoyed by a growing and large domestic demand from a growing population. Hallyu – the Korean equivalent of Hollywood was also a driving factor as South Koreans want to look like their favorite stars and use the same cosmetic products and that includes men. In fact, it is estimated that a whopping 20% of South Korean men use cosmetic products on a regular basis. AmorPacific capitalized on this growing trend by building up its brand and investing in R&D and ultimately riding the popularity of K-pop and K-movies to expand internationally. At a time that demand is softening, K-cosmetics are still growing with exports increasingly exceeding imports and Korean cosmetics brands now more popular than European brands in China and increasing their penetration in many countries including China, Hong Kong, Japan, the US, Vietnam, and in a surprising list of other countries such as Poland where their addition to Sephora’s product line and other large retailers will ensure broad distribution. How has a $150 1.7 oz managed to gain global popularity? Some materials for the case might include:

Contributed by Aya Chacar