Marathon Oil, with operations throughout the United States and Canada, will soon be two companies. The move has been in the works for nearly two years, but low oil and gas prices kept the company from making it until now. Marathon Petroleum will be responsible for refining operations. Marathon Oil will focus exploration and production.
Marathon is an established company operating in a mature industry. Should it be concerned about competitive advantage? What source of competitive advantage does the move to split into two companies represent? Can it become a sustainable competitive advantage?
The business split represents what level of strategy?
From the standpoint of SWOT analysis, why is now a good time for Marathon to make the split?
What type of restructuring strategy does this move represent?
The much-anticipated announcement that the iPhone will be available through Verizon has been made. Industry experts are now analyzing the move in light of capabilities, past problems, and demand (for Verizon) that is difficult to predict. Clearly, AT&T did foresee demand and its network was unable to handle the load. The company claims it responded to these problems and its 4G network is now much faster. AT&T also points out that its customers are able to multi-task with their smart phones while Verizon’s CDMA technology will not allow this. Verizon has the number one-rated network for quality. Company insiders say they have accurately anticipated demand and their network is fully capable of handling new users.
Imagine you are a top-level executive at Verizon. How would you utilize the planning process to ensure the launch of the iPhone goes smoothly and successfully?
The move to offer the iPhone has been in the works for months. What are the benefits of making the announcement (that the phone would be available) early, planning, and delaying availability?
Should planning for the iPhone be short- or long-range? Why?
Without doubt, the move to acquire the iPhone represents strategic planning for Verizon. Consider AT&T’s problems with the iPhone. How can tactical and functional planning help Verizon avoid a similar fate? Do you see any evidence of this from the article?
In terms of planning tools and techniques, what can Verizon do to anticipate demand for the iPhone? What else should Verizon be doing between now and February to make sure it is ready regardless of the situation (e.g., existing customers simply switch phones, an influx of new customers putting pressure on their network)?
Tunisia’s President, Zine al-Abidine Ben Ali, fled the country on Friday after a month of increasingly violent public protests. President Ben Ali had ruled the country for more than 23 years but citizens were becoming ever more frustrated with the economic conditions in the nation. Many in Tunisia live in poverty, face high unemployment and poor economic prospects. In the view of many Tunisians, President Ben Ali’s totalitarian regime ignored their interests and was only focused on keeping his entrenched regime in place. Tunisia’s Prime Minister, Mohamed Ghannouchi, is expected to announce a new unity coalition government on Monday. The public protests that lead to President Ben Ali’s ouster have decreased but the sense is that they will revive if the new government does not maintain progress in changing the nation’s political structure. There have been some skirmishes with gunmen loyal to the ousted president. The entrenched rulers of other Arab nations are worried Tunisia’s political unrest will spill over into other countries. Morocco, Egypt, Jordan and Syria are among the countries seen at the greatest risk of public protests.
QUESTIONS FOR DISCUSSION:
To what extent could social networking sites such as Twitter and Facebook be changing the ability of totalitarian regimes to maintain complete control over their citizens?
The entrenched rulers of other Arab nations are worried that the successful presidential ouster in Tunisia will contribute to contagion and Tunisia’s political unrest will spill over into their countries. Is this likely to happen? Why or why not?
Political risk can be defined as changes in governmental policies that adversely impact the profitability or value of a firm. How can firms plan for and respond to political risks in this region?
China’s Zhejiang Geely Holding Group Co., the new owner of the iconic Swedish car company Volvo, is evaluating strategic options on how to best position the Volvo brand. The brand, which has long been known for building high-quality, safe automobiles, was sold by Ford to Geely in August of 2010. One strategy under consideration is exporting Volvos assembled in China to the United States. Although the company could build a Volvo assembly plant in the United States, the firm’s focus is to boost demand for Volvos in China by increasing production capability there. The company’s profitability is impacted by exchange rate fluctuations, especially the euro-U.S. dollar exchange rate, as Volvos are shipped from Sweden and Belgium for sale in the U.S. Since the U.S. currency and the Chinese currency have a more stable relationship because of China’s active management of its currency, producing Volvos in China would act as a hedge against exchange rate fluctuations. The key concern about exporting Volvos produced in China for sale in the United States is that consumers may not have the same prestige product positioning that they do for Volvos produced in Europe. The strategic move could undermine consumer confidence in the quality of the product.
QUESTIONS FOR DISCUSSION:
According to the article, many Americans readily accept a variety of products made in China, including high-tech computers and iPhones. Are American consumers ready to accept a Chinese-manufactured premium car?
What are the advantages of disadvantages for Volvo for the two production expansion plans it appears to be considering, that is increasing production capability in China or building an assembly plant in the United States?
If Volvo does decide to export Volvos made in China to the United States, what strategic recommendations would you give to Volvo Chief Executive Stefan Jacoby about how to position and market the cars?
Barely a week into January and it is already the human interest story of 2011. A homeless man in Columbus, Ohio is discovered by a videographer for the local newspaper. After capturing the man’s voice on video and posting it to the paper’s website, it goes viral. Ted Williams becomes more popular on the internet than the Hall of Fame baseball player. He also becomes the little darling of the media. Numerous lucrative job offers follow. Is this truly a “rags to riches” story or is Williams likely to be back on the streets somewhere in the future?
You’ve probably seen them before – panhandlers standing at a major intersection in a large city. What thoughts go through your mind? What attributions (about their situation) do you make? Managers make similar attributions about their employees. Think about this – if the Ted Williams that appeared in the original video walked in off the street and asked you for a job, would you hire him?
Talk about it. What role do stereotypes play in the judgments you make about others? Our stereotypes extend not just to the homeless, but also to the opposite sex, people with different ethnicities/nationalities, and people with different levels of attractiveness. How can you guard against misusing stereotypes?
Many wonder how a homeless man could become an overnight sensation. Ted Williams’ personality has a lot to do with it. View video of Mr. Williams. What Big Five personality dimensions draw people to him?
While being homeless is bound to be stressful, Mr. Williams definitely has a lot more to deal with now than he did before his discovery. How would you categorize his current stress? What are the possible reactions he could have if the stress becomes too great?
The nature of business today – shrinking workforces and increasing responsibilities – makes it difficult for employees to focus. Mobile technologies add to the distraction. Once attention has been diverted from a task, it can take as long as 20 minutes to get restarted. The article offers a couple of simple suggestions to help retain focus. More importantly, it gives readers a chance to consider the implications for decision making.
It rarely comes as a surprise any more, when we are talking about a task, that someone in the group says “Did you know there is an app (smart phone application) for that?” Discuss ways that over-availability of information might impede decision making in organizations.
The text makes it clear that information technology changes relationships within and without the organizations. Let’s consider changes on a more fundamental level (as implied by the article). What are the pros and cons of on-the-go (i.e., always in your hand/pocket) information technology?
Are multi-dimensional thinking and multi-tasking the same? Discuss.
As General Motors attempts to make a recovery, one key factor will be its leadership. Many critics argued that GM did not deserve a bailout because its leadership was “too stuck in the past.” Now the company has a CEO that admits he is not a “car guy.” Can the company succeed? Better yet, will Mr. Akerson be happy with a job that is considerably more demanding and pays substantially less than he made at the Carlyle Group. No doubt, there are tensions within the hierarchy of GM, but the initial public offering last November reduced the Government’s stake in the company by more than half.
Would you describe Daniel Akerson as a servant leader? Why or why not?
Mr. Akerson admits he does not have much job-relevant knowledge, a key leadership trait. What traits does he appear to possess? Assess the likelihood of his success at GM.
The article certainly does not depict Mr. Akerson as having a contemporary leadership style. Review the classic leadership styles and assign one to him. What are the reasons for your choice?
One of the provisions of the North American Free Trade Agreement (NAFTA) is that the United States is supposed to allow Mexican truck drivers the ability to transport freight in the U.S. as long as the trucks meet certain safety standards. The U.S. has yet to abide by the terms of this provision and in March of 2009 President Obama cancelled a small pilot program that allowed some Mexican truckers to transport goods in the U.S. The Mexican government retaliated against the trucking ban by imposing $2.4 billion in tariffs on U.S. paper, produce and other goods. The U.S. trucking industry and unions such as the Teamsters union are strenuously opposed to the provision that they contend would cost American jobs and result in more dangerous roads since Mexican trucks may not meet as stringent safety standards as their U.S. counterparts.
The Obama administration recently circulated in Congress a proposal which would open the U.S. trucking sector to Mexican trucking companies. The proposal indentifies conditions that Mexican long-haul truck carriers would have to meet, including safety audits, emissions standards and driver background checks. Mexican officials welcomed the proposal, which was viewed as a first step for attempting to resolve the longstanding trade dispute. President Obama is looking to get key Democrats and others on board before ending the trucking ban, but the White House faces increasing political and economic pressure to end the trade dispute. Many U.S. jobs have been lost and more are in jeopardy in the industries hurt by Mexico’s retaliatory tariffs.
QUESTIONS FOR DISCUSSION:
What are the advantages and disadvantages of President Obama lifting the ban on Mexican trucks operating in the United States? Analyze the issue from the perspective of consumers, from employees and from the government.
International Brotherhood of Teamsters President Jim Hoffa said in response to the proposal: “Why would the DOT [Transportation Department] propose to threaten U.S. truck drivers’ and warehouse workers’ jobs when unemployment is so high?” Evaluate the merits of his comments.
President Barack Obama has called for doubling U.S. exports within five years. At the same time, he has moved to curb trade in certain areas under pressure from Congress and unions. The retaliatory tariffs imposed by Mexico may threaten thousands of U.S. jobs if the trade dispute is not resolved, but U.S. trucking jobs may in jeopardy in the trucking ban is lifted. How can President Obama protect one group of American workers without hurting another?
The International Monetary Fund (IMF) seeks to play a more prominent role in regulating cross-border capital flows. The current patchy economic recovery, which has key emerging markets recovering faster than advanced economies, has contributed to an increase of funds flowing from the advanced to the emerging economies. Investors in advanced economies are seeking higher returns than are available in nations where interest rates are still low. The increase of capital flows into developing economies has contributed to an increase in their currency values and possible asset bubbles forming. Nations such as Brazil, South Korea and Thailand have imposed capital controls to stem the inflow of foreign funds, including taxes on capital inflows and policies designed to shift the length of investment maturities for foreign inflows to longer-term investments.
In a just-released report that was discussed at the December 17 meeting of the IMF’s executive board, IMF officials indicate that the organization should be playing a more active role in monitoring cross-border capital flows. Capital flow restrictions designed to address one nation’s domestic concerns can have significant effects on other countries. The IMF wants to develop guidelines on how nations can effectively use capital flow restrictions and wants increased power to oversee nations who may be misusing capital flow restrictions. Previously the IMF had opposed capital flow restrictions since the inflow of foreign funds helped to promote investment and growth in those economies, but the Asian financial crisis and the events of the current crisis highlighted the dangers to economies when too much foreign capital pulls out of a market at once.
QUESTIONS FOR DISCUSSION:
Analyze the advantages and disadvantages for nations of implementing capital flow restrictions. What are the benefits of allowing foreign capital inflows?
The global economy seems to be moving away from a spirit of cooperation with nations less willing today than they were in 2008 to work collaboratively to find solutions to the economic crisis. Is it likely that nations would support the IMF taking a lead role in crafting policies for cross-border capital flows?
Some of the recommendations proposed by the IMF would require changes to IMF bylaws to give the organization more power. Given that outright opposition by the United States could doom any plan because of the concentration of U.S. voting power for IMF affairs, how could the IMF convince the United States to accept an increased role for the IMF in monitoring the international monetary system?
For 75 years, the focus of the United Auto Workers has been on the Big Three Detroit auto makers. With two of those companies in bankruptcy and membership continuing to decline, the UAW now says it will target foreign-owned car plants for membership drives. Many of the plants are in right-to-work (protecting workers from being forced into unions) states. One labor expert says the move is critical to the UAW’s survival. One thing is certain, the UAW is willing to spend money in this effort. Members approved spending $60 million for organizing from a fund that contains more than $800 million.
Examine the legal protections for workers and legal issues that exist in the workplace. Take a position for or against labor unions and use the information in these sections to build your case.
Review the information on labor unions in the chapter. Aside from being legally permitted to do so, what reasons are there for the UAW to target foreign-owned car plants? Are these reasons legitimate?
Review the practices associated with maintaining a quality workforce. From your reading of the article, what things are foreign-owned car companies currently doing for their workers? Imagine you were the human resources manager at one of these facilities. What strategy would you develop to keep the UAW from being a threat?