Amazon is encouraging employee spinouts. They are offering employees $10,000 plus 3 months salary to quit and form entrepreneurial ventures in their Delivery Service Partner Program. This makes for an excellent “ripped from the headlines” case. I ask students to read a brief packet of news articles on the program and complete a poll before class (here is the poll I used). Since the program started, Amazon has shifted 30-50% of its delivery needs away from big vendors (USPS, UPS, FedEx, etc.) in favor of internal and small external service providers. It brings out multiple strategic issues and can be used to frame a semesters worth of strategy issues:
- Market structure: How does this alter the market structure for Amazon? On the other side, what is the market structure that employee entrepreneurs face?
- Competitive dynamics: How will players respond? (FedEx has now declined to serve Amazon)
- Internal analysis: How might this move enhance Amazon’s competitive advantage? Do the entrepreneurial ventures enjoy any competitive advantages?
- Entrepreneurship: Is the opportunity for employee entrepreneurs attractive?
- Corporate: Should Amazon vertically integrate into the delivery business? How does their tapered integration affect the market?
- Alliances: How do the collaborative relationships between Amazon and its partners differ between big and small partners?
I have created a student spreadsheet that allows students to analyze the proposal from the perspective of an employee. It helps them consider two key sources of uncertainty: 1) how much help will Amazon provide on an ongoing basis? and 2) how smoothly will their implementation go? This is then compared against buying a FedEx route since there is an active market for these businesses. This is shown in the decision tree above. In addition, this is a final spreadsheet with the scenarios and decision tree completed.
Contributed by Russ Coff
Team projects are quite common in strategy classes. While the topic of team effectiveness is usually more central for organizational behavior courses, it is essential for organizational effectiveness … and team projects. While you may not want to allocate a lot of time and resources to the topic, you may want to get teams off to a good start so you don’t have to address dysfunctions later in the semester. One reason things may go south is the team’s desire for a “fast and enthusiastic start.” A bias for action can sometimes sabotage collaborative efforts. That well-meaning call to action — “let’s get this done!” – can result in a “sloppy start.”
The Alphabet Soup
As 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. 
Class participation is typically a major component of grades in strategy courses. Some students are quite comfortable participating. Others not so much. This video from 
Strategy classes often give short shrift to managing change but this is where the rubber hits the road. 
Some fear that eventually and robots will be 
Generic strategies are easy enough to explain and students typically feel that they understand. But do they really? Could they develop and implement a sound strategy? Sometimes it’s worth a bit of additional hands-on experience to make sure the lessons stick. Probably the most important message is alignment — the need to design the organization and product to fit the strategy. In other words, to make the appropriate tradeoffs. 
Entrepreneurship students often think they’ve found a “no brainer” idea – one that everyone “obviously” will want. We’ve all seen it before – an idea that is so good that it requires zero dollars for customer acquisition because word of mouth and social media will lead to infinite sales, virtually overnight.
Strategic 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 
It’s been a red letter week in terms of the 
The term “core competence” has taken hold in the business world. Not many academic terms break through to common usage so this might be viewed as a tremendous success. Unfortunately, it isn’t clear that it is particularly useful with the modified practitioner definition. As it is commonly used, it seems to mean “stuff the firm is pretty good at.” Unlike 
When leading a case discussion, wouldn’t it be nice to know exactly what positions students were prepared to defend? You want to bring people into the conversation who you know will have diverse perspectives to bring about a balanced discussion. 
A related innovation is tents that display the letters A through D. This can be used for cases that offer up to 5 alternatives that students might vote for (a,b,c,d, and no tent). 
With 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:
Strategies 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” 
Inflate 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.
takes 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.
This is another in our series of explorations in 
Carpenter Strategy Toolbox 