James Yuille Strategies for Networking

Don’t front up at a neworking function expecting to make a sale. “Networking is an opportunity to meet people in a neutral environment, to form relationship and to built trust. People who are too anxious about making a dollar will only ostracise themselves from the rest of the group.” Other tips include: be open-minded, don’t be pushy, be a good listener and think to long-term. [...] “I have known someone [though networking] for 12 year and only last year did that relationship come up with business.”

From: BRW, September 2—8, 2010, p. 38

Peter Murmann: These tips can be applied not only to win business but also to advance one’s career.

Dramatic Challenge to Barnes & Nobles Business Model

This one of the most vivid examples of challenges to the existing business model of a firm. The Wall Street Journal reports:

After nearly 17 years of consistent growth, Barnes & Noble is stumbling. Revenue fell 3% to $5.12 billion for the fiscal year ended Jan. 31, 2009, while earnings dropped about 45% to $76 million.

When it launched the iPad last month, Apple championed a new approach to e-book pricing. Earlier this year, most large publishers agreed to establish a so-called agency model, where the publisher receives 70% of the digital price while e-book sellers act as agents and receive 30%. While some best sellers remain at $9.99, many major authors are priced at $12.99 or $14.99.

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Google’s New Search Homepage: Integrating Quantitative and Qualitative Data as well as Intuitions

Duplicity

Rarely is a Hollywood movie such a great teaching instrument. Duplicity gives a wonderful picture of how far large companies go in figuring out what their competition is up to. What’s more, the principles of game theory are very well illustrated by Julia Roberts and Clive Owen, who make a wonderful pair. I recommend that every Strategic Management student watch this film.

Rolls-Royce: Transforming its Jet-Engine Business Model

The Economist reports how Rolls-Royse figured out a different way to make money in the jet engine business:
The big pay-off from getting engines under more wings comes from selling spares and servicing them. This is because selling aircraft engines is like selling razors. The razor and engine make little if any profit; that comes later, from blades or spare parts and servicing (see chart 3). Gross margins from rebuilding engines are thought to be about 35%; analysts at Credit Suisse, an investment bank, estimate that some makers of jet engines get about seven times as much revenue from servicing and selling spare parts as they do from selling engines. Many analysts suspect that Rolls-Royce (and others) sell engines at a loss. Judging this is hard, though, because of the way Rolls-Royce accounts for long-term contracts, often by booking a profit on the sale for income that will be received only over many years. Rolls-Royce says that, on average, engines are sold at a profit. The trouble with selling razors at a loss is that someone else may make the blades to fit them. And the juicy margins in engine maintenance have indeed attracted a swarm of independent servicing firms (and engine-makers after each other’s business).

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What the Financial Crisis Taught us about Human Decision Making

David Brooks writes in the NY Times:
Once there was just Newtonian physics and the world seemed neat and mechanical. Then quantum physics came along and revealed that deep down things are much weirder than they seem. Something similar is now happening with public policy.Once, classical economics dominated policy thinking. The classical models presumed a certain sort of orderly human makeup. Inside each person, reason rides the passions the way a rider sits atop a horse. Sometimes people do stupid things, but generally the rider makes deliberative decisions, and the market rewards rational behavior. Markets tend toward efficiency. People respond in pretty straightforward ways to incentives. The invisible hand forms a spontaneous, dynamic order. Economic behavior can be accurately predicted through elegant models. This view explains a lot, but not the current financial crisis — how so many people could be so stupid, incompetent and self-destructive all at once. The crisis has delivered a blow to classical economics and taken a body of psychological work that was at the edge of public policy thought and brought it front and center. In this new body of thought, you get a very different picture of human nature. Reason is not like a rider atop a horse. Instead, each person’s mind contains a panoply of instincts, strategies, intuitions, emotions, memories and habits, which vie for supremacy. An irregular, idiosyncratic and largely unconscious process determines which of these internal players gets to control behavior at any instant.

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Dell Needs to Change its Business Model

In SMI we are doing a case study of how Dell developed a market positioning and orgnanizational strategy that allowed it to outcompete all other firms in the PC industry. Dell seemed unstoppable and.  The Economist reports on the current troubles of Dell and how the returned founder of the firm tries to turn the firm around and restore it to glory, i.e. growth and profitability.  Read Story
September 5, 2008 update: Dell plans to sell all its factories

Ford Turnaround

Ford has tried to regain a competitive position a number of times without success. Will the company succeed this time as its struggles for survial. Read article on WSJ.com.

April 24, 2008: In Surprise, Ford Swings to Profit in First Quarter

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Book Review Instructions

During the SMY, each student will present a review of a book or an article that has extended their thinking about Strategic Management. The article or book should not be a core management text that most students would be already familiar with. New insights often come from another domain. For this reason we encourage you to look far afield for texts that provide you with some insight into the problems of the general manager or entrepreneur. For example, “It’s Only a Game” by John O’Neill (former CEO of the Australian Rugby Union and Football Federation of Australia) is a good insight into managing a complex organisation. We have posted an example of such a book review on the eLearning website along with some background information on the value of this assignment.

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