Bob Lutz: Life Lessons From the Car Guy

This fascinating excerpt from Bob Lutz’s book highlights a couple of key issues: one needs to have deep knowledge about an industry to make the right decisions, one needs to select the right leadership style for the organizational context, and finally if one wants to have a long last impact, one needs to institutionalize the change. The reason why Lutz failed to institutionalize is product develop process at Chrysler but believes that it will stick may have nothing to do with him: GM went through bankruptcy and the old ways may have been forced to retreat.

Read full story at WSJ.com

A few days later Lutz was interviewed about the book and the article by the WSJ. Click on

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Posted on Jun 12, 11

Nokia Announces its Turnaround strategy:  Ally with Microsoft for High-end Smartphones

You can read the full story behind this graph on Economist.com/

Posted on Feb 11, 11

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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Posted on Jan 17, 09

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

Posted on May 06, 08

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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Posted on Apr 23, 08