This chapter discusses some key strategic leadership issues (such as privacy and fake news) facing Facebook leaders Sheryl Sandberg and Mark Zuckerberg. Consider other firms mentioned in the chapter such as Amazon, PepsiCo, Uber, VW, and Starbucks. What social and ethical issues do the leaders of these firms face today? Choose a firm or industry and explore the relevant controversial issues it faces. How should strategic leaders address the major issues you have identified?
> If you were a PepsiCo shareholder, would you support this program? Why or why not?
> What other societal benefits could such a program have in Mexico?
> What are the benefits of this program for PepsiCo? What are its drawbacks?
> Discuss why traditional taxi companies, such as Yellow Cabs and those needing medallions (such as in New York City), are choosing to attempt to prohibit these app-enabled, ride-hailing services rather than aggressively implementing their own app-calling
> What similarities and differences do you find in the way these firms have implemented sometimes similar ideas?
> How would the control-and-reward systems be different?
> What would likely be the cultural differences in the two store concepts?
> How would the organizational structure be different for the two concepts?
> What is the business strategy for each store concept?
> Do you think Five Guys will be as successful outside the United States as it has been in its home market? Why or why not?
> Consider the potential pitfalls of such an approach and how these might be addressed.
> Have each group member explain how this approach might change his/her program of study.
> If large numbers of students decided they would learn some of the core materials best by taking an online course, how might this affect the university’s revenue stream? How might this change the way professors teach courses?
> How might this change the university’s allocation of resources (e.g., would more trained advisors and career counselors be required, and how would they be evaluated)?
> What entrance strategy should the firm employ in expanding the business to new countries? Why?
> Can you recommend three or four other countries Clif Bar should enter? Support your recommendations.
> Given the results from the CAGE model, do the chosen countries make sense? Why or why not?
> Apply the CAGE distance framework to the foreign countries where Clif Bar is operating. What is the relative distance of each to the United States? Rank the order of the countries in terms of relative distance.
> Is there any special consideration a firm should have for its “home country”? Is it ethical to keep profits outside the home country in offshore accounts to avoid paying domestic corporate taxes?
> Should IKEA be considered a Swedish firm with less than 6 percent of sales garnered from the Swedish market? Discuss why or why not in your groups.
> Do you think a trend toward more healthy eating is a threat to Five Guys? If so, what could the company do about it? For example, should the company change its menu to include healthier choices, or should it continue with what made Five Guys so successfu
> Given that traditional U.S. firms like IBM have over 70 percent of their employees and almost two-thirds of their revenues come from outside the United States, what is an appropriate definition of a “U.S. firm”?
> In Strategy Highlight 9.2, Kraft is shown to be prone to using hostile takeovers. These acquisitions are completed over the objections of the acquired firm. As noted in the text, mergers and acquisitions sometimes have difficulty creating enhanced compet
> Using the build-borrow-or-buy framework and other strategic concepts, develop a set of questions to ask the managers of this small business to help you gather information regarding whether to hire new employees with more sophisticated technology expertis
> In your group, list other industry combinations you have seen be successful. Consider why you think the combination has been a success.
> What other industrial or commercial industries could benefit from such potential tourist or recreational revenues? Discuss what new and complementary capabilities would need to be developed in order to succeed.
> If your team was asked to consult for Barnes & Noble Education, which corporate strategies would you recommend to the company’s senior leadership?
> While Amazon as a firm continues to diversify its products, services, and markets under one corporate umbrella, why do firms such as Barnes & Noble choose to split into separate firms for greater focus on each piece of the business? Do these different st
> In your small group, discuss any potential ethical issues with Amazon paying the university administration for direct access into the school’s course textbook system.
> Can you identify a pipeline business that is likely to be disrupted by the firm you discussed in question 2b above? What could this pipeline business do to improve its long-term viability?
> In your group, discuss a company that could be moving toward a platform business or a new firm that is developing as a platform. Sketch out a business model for this firm and the network loop it could be utilizing to drive demand.
> Five Guys’ success led to imitation attempts by more recent entries in the fast-casual “better burger” segment of the restaurant industry such as BurgerFi, Shake Shack, and Smashburger. Do you think these new entrants are competitive threats to Five Guys
> The text discusses the pros and cons of pipeline businesses and platform businesses. Several examples of new platform businesses are mentioned (Uber, Airbnb, Facebook, and Alibaba, for example). Yet it is noted that these multi-sided markets have actuall
> Your team has been asked to consult for Simon Property Group (SPG on NYSE), one of the largest U.S. operators of shopping malls. The company wants to know how its mall space could be repurposed. What blue ocean ideas can your team develop to present to t
> What similarities and differences do you find about Ryanair compared to JetBlue from the ChapterCase?
> If you were a competitor in the European market, such as British Airways or Lufthansa, how would you compete against Ryanair, knowing your cost structure would not allow price parity? If you were a low-cost leader like EasyJet, how would you compete agai
> At the next big family gathering, you want to impress your grandparents with the innovative ideas you have learned in business school. They have decades of experience in investing in the stock market and, from their college days, believe that economic pr
> Strategy Highlight 4.2 explains the rise and fall of Groupon. The company’s strategic vision was to be a global leader in local commerce, based on a core competency that could be described as “local market-making.” Numerous competitors took advantage of
> Brand valuations were mentioned in the chapter as a potential key intangible resource for firms. Some product brands are so well established that the entire category of products (including those made by competitors) may be called by the brand name rather
> How should managers of a textbook publishing company respond to such changes?
> If your group believes that the company is not responsible for personal choices that consumers make to eat unhealthy food, then describe how the company should respond to activist groups and public health officials that are urging companies to stop produ
> Identify other actions that Kraft might take to demonstrate that it is a food company that genuinely cares about children’s health and a company that would like to help reverse the trend of increasing childhood obesity.
> Why is Five Guys so successful? Describe Five Guys’ core competency, explain how the company built it, and why it is essential to its success.
> Visit www.lunchables.com and review the Lunchables products, as well as other packaged food products that Kraft offers. Discuss among your group members the extent to which the product options are healthy choices.
> Will the shifts in technology and business models be likely to raise or lower the textbook industry profits? Explain.
> As a strategist in a major firm, how would you seek to position your company in light of such current and potential future governmental policies?
> What is the appropriate role for governments to encourage or discourage certain purchasing behaviors? You may note many national governments have for decades collected additional taxes on tobacco and alcohol products as a measure to try to moderate consu
> What are the competitive implications of the actions of VW? Does this situation impact the industry rivalry that is discussed in the five forces model, for instance?
> In January 2017, a U.S. grand jury indicted six current and former VW executives for their alleged role in the emissions scandal and its subsequent cover-up. The U.S. Justice Department decided to bring charges against these executives after a 16-month c
> As noted in the chapter, the average compensation for a CEO of an S&P 500 company was $12.4 million, and CEO pay was 300 times the average worker pay. This contrasts with historic values of between 25 and 40 times the average pay. Trying to highlight thi
> The shared value creation framework provides help in making connections between economic needs and social needs in a way that transforms into a business opportunity. Taking the role of consultant to Nike Inc., discuss how Nike might move beyond selling h
> As noted in Chapter 5, many public firms are under intense pressure for short-term (such as quarterly) financial improvements. How might such pressure, in combination with output controls, lead to unethical behaviors?
> Are you concerned that the concept of the sharing economy could be abused by unscrupulous “entrepreneurs” and thus give the entire novel concept a bad reputation? Why or why not? Explain.
> When a player hears the message as “any action will be tolerated as long as you are winning,” there can be serious consequences on and off the field. How could leaders of sports organizations communicate the will to win and develop the necessary skills w
> Discuss the factors that managers of Apple or GE may consider as they focus on continuous innovation rather than the cost of manufacturing. How might governments with an interest in generating employment opportunities try to influence the decisions of fi
> In the fall of 2016 Yahoo disclosed several major security breaches involving more than 1.5 billion user accounts. The results of these disclosures delayed the purchase by Verizon and reduced the Yahoo purchase price by at least $300 million. In June 201
> In this chapter, three main reasons are given for why one firm would acquire another. In July 2016 Verizon announced it was going to acquire Yahoo for $4.8 billion in cash. The announcement discussed Verizon’s earlier purchase of AOL and noted Yahoo woul
> As we look at Google, Facebook and Amazon, all three have potentials for a diversification into the realm of facial recognition. What are the potential benefits? Do the chances of consumer pushback/reputation risks outnumber the potential benefits?
> How do the perspectives on competitive advantage differ when comparing brick-and-mortar stores to online businesses (e.g., Best Buy versus Amazon, Barnes & Noble versus Amazon, Old Navy versus Threadless [Strategy Highlight 5.2], Nordstrom versus Zappos,
> It is legal to take apart publicly available products and services and try to replicate them and even develop work-arounds for relevant patents. But is it ethical? If a key capability protected by patents or trademarks in your firm is being reverse-engin
> The external environment of the global automobile industry is quite complex. Regulations vary from country to country and in the United States even from one state to another. Firms must be prepared to anticipate and respond to these external forces. It a
> How much less salary would (did) you accept to find employment with a company that is aligned with your values?
> Identify your personal values. How do you expect these values to affect your work life or your career choice?
> Citing the Digital Millennium Copyright Act (DMCA), Airbnb is challenging the New York law and others in the United States, arguing that it merely operates a digital marketplace, and thus is not responsible for the content that users place on its site. D
> Do you agree with the assessment that Elon Musk and Tesla successfully fulfilled the first master plan published in 2006? Why or why not? To answer this question, apply the three-step process for crafting a good strategy explained in Section 1.1 (diagnos
> Western Services has three service departments: Information Systems (IS), Personnel, and Administration. There are two operating departments: Residential and Commercial. A summary of costs and other data for each department prior to allocation of service
> Edwin Parts, a job shop, recorded the following transactions in May: 1. Purchased $87,200 in materials on account. 2. Issued $3,650 in supplies from the materials inventory to the production department. 3. Issued $43,600 in direct materials to the produc
> Edwina Industrial Products (EIP) manufactures cleaning products. The Grant Street Plant produces a single product in three departments: Mixing, Refining, and Packaging. Additional materials are added in the Refining Process when units are 40 percent comp
> Rutland Business Services (RBS) provides miscellaneous consulting and services to local businesses. In August, RBS worked for three clients. It worked 270 hours for Selden Contracting, 170 hours for Moenhart Insurance, and 230 hours for Englewood Medical
> Refer to the data in Problem 8-61. The Refining Department uses the FIFO method of process costing. The Mixing Department at the Grant Street Plant uses the weighted-average method of process costing. If the Mixing Department at the Plant had used the FI
> Refer to the information and data in Problem 7-60. Required Graphically illustrate the effect of using monthly rates versus an annual rate for applying overhead. Problem 7-60:
> Refer to the information and data in Problem 7-58. Required Help the managers at Highway 1 Manufacturing by illustrating graphically the effect of using monthly rates versus an annual rate for applying overhead. Problem 7-58:
> Breckenridge Corporation manufactures a part in a single production process in Department B. The company reports the following information about conversion costs for June: Work-in-process ending inventory was 45 percent complete with respect to conversio
> Patton Dyes manufactures colorings, primarily for textiles. Information on the work in process follows: ∙ Beginning inventory, 115,000 partially complete liters. ∙ Ending inventory, 85,000 liters; units are 25 percent complete with respect to materials a
> Refer to the data in Exercise 8-20. Required Compute the equivalent units for materials and conversion costs for December using the FIFO method. Exercise 8-20: Trevor Mills produces agricultural feed at its only plant. Materials are added at the beginni
> Suppose a manager can reduce the processing time for loan applications by reducing the amount of time the application awaits action. How does the reduction add value to the organization?
> Trevor Mills produces agricultural feed at its only plant. Materials are added at the beginning of the process. Information on work-in-process in December follows: ∙ Beginning inventory, 16,000 partially complete units, 10 percent complete with respect t
> Refer to the information in Exercise 11-50 for Forest Products. Required Forest Products uses the estimated net realizable value method to allocate joint costs. What joint costs would be allocated to each of the three products in November? Exercise 11-5
> Forest Products, Inc. manufactures three products (FP-10, FP-20, and FP-40) from a single, joint input. None of the products can be sold without further processing. In November, joint product costs were $240,000. Additional information follows: Required
> Refer to the facts in Exercise 11-47. Required Barrett Chemicals uses the physical quantities method to allocate joint costs. What joint costs would be allocated to each product in May? Exercise 11-47:
> Barrett Chemicals manufactures four chemicals, Chem-1, Chem-2, Chem-3, and Chem-4, from a joint process. The total joint costs in May were $564,000. Additional information follows: Required Barrett Chemicals uses the net realizable value method to alloca
> St. John Mining operates several facilities. At one, a typical batch of an ore, Pryex, run through the processing plant yields three products: PX-10, PX-20, and PX-30. At the split-off point, the $110,000 after incurring additional processing costs of $2
> Refer to the data for Monroe Materials in Exercise 11-41. Required Assign costs to Alpha, Beta, and Gamma for February using the physical quantities method. Exercise 11-41:
> Monroe Materials processes a purchased material, PM-20, and produces three outputs, Alpha, Beta, and Gamma. In February, the costs to process PM-20 are $524,000 for materials and $196,000 for conversion costs. The results of the processing follow: Requir
> Memorial Services, Inc. (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: The direct costs of the service depart
> Refer to the data for Mack Precision Tool and Die in Exercise 11-25. Required Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (startin
> What are examples of two nonvalue-added activities that could be found in organizations that manufacture (a) lumber and (b) furniture?
> Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT reques
> Refer to the data in Exercise 10-59. Required Construct a cost of quality report for year 1 and year 2. Exercise 10-59:
> One of Camely Chemicals’ facilities manufactures a hazardous chemical. The following represents the financial information from the plant for the most recent two years: Required a. Classify these items into prevention (P), appraisal (A),
> Refer to the data in Exercise 10-57. Required Construct a cost of quality report for May and June. Exercise 10-57:
> The following represents the financial information for Plaza Plastics for May and June: Required a. Classify these items into prevention (P), appraisal (A), internal failure (IF), or external failure (EF) costs. b. Calculate the ratio of the prevention,
> Refer to the data in Exercise 10-55. Required Construct a cost of quality report for Quarter 1 and Quarter 2. Exercise 10-55:
> Cass Company has recorded the following information for the last six months of operations from its cost of quality system: Required a. Classify these items into prevention (P), appraisal (A), internal failure (IF), or external failure (EF) costs. b. Calc
> Fraser Plastics produces plastic parts for use in various products. The following represents accounts in its cost of quality system. Required Classify each as prevention (P), appraisal (A), internal failure (IF), or external failure (EF).
> Abbott Business Services (ABS) generated revenue of $637,800 processing accounts payable and payroll transactions for clients. ABS reports the following information about resources in two functions: Required a. Compute the cost of unused resource capacit
> The Shipping Department at Nashville Fabricators reports the following information about resources: Required Compute the cost of unused resource capacity in the Shipping Department at Nashville Fabricators.
> What are examples of two nonvalue-added activities that could be found in each of the following service organizations: (a) a health clinic and (b) a bank?
> Refer to Exercise 10-46. Sales revenue totaled $74,000. a. Prepare a traditional income statement like the one in Exhibit 10.11. b. Prepare an activity-based income statement like the one in Exhibit 10.12. Exercise 10-46:
> Boston Home Center (BHC) offers customers the use of a truck at $40 per trip to take purchased merchandise home. BHC reports the following information about the trucks it has for customer usage: Required Compute the cost of unused operation and administr
