7A. Any Strategic Thinkers in the House?
Survey finding: When business executives were asked to identify the managerial skills most essential for success in the New Economy, 76 percent chose "Ability to develop and implement business strategy" (the leading response, by far).

Survey finding: When former MBA students were asked one year after graduation to identify an area in which they needed more education, 31 percent chose "Develop strategic plan" (in a tie with "Manage career" for leading response).

Based on "Skills for Success," USA Today (December 13, 2000): 1B; and "What MBA Grads Wish For," USA Today (February 5, 2002): 1B.

Questions: On a scale of 1 = low to 10 = high, how would you rate your ability to develop and implement strategic plans? On the same scale, how strong is your ability to see the "big picture"? What can you do to improve both scores?

For further information about the interactive annotations in this chapter, visit our Web site (/business/kreitner/management/9e/students/annotations).

J. M. Smucker Co., the Ohio-based maker of jams and jellies, ... enlisted a team of 140 employees--7 percent of its workforce--who devoted nearly 50 percent of their time to a major strategy exercise for more than six months. "Instead of having just 12 minds working it, we really used the team of 140 as ambassadors to solicit input from all 2,000 employees," says President Richard K. Smucker. "It gave us a broader perspective, and it brought to the surface a lot of people with special talents." The company, which has struggled to grow in a mature market, now has a dozen viable initiatives that could double its $635 million revenues over the next five years.6

Author Notes 7-A: Any Strategic Thinkers in the House? How are you at chess? Do you play bridge? What both these games have in common is the value of playing with an underlying strategy. In both games, the person who has planned an attack will consistently beat someone who is playing haphazardly. In business, often the same thing is true, a planned attack will generally beat a random approach. This is true for large corporations, small businesses, and individuals handling projects. How are you at strategic planning? For myself, I'm pretty bad at it, although I have helped a number of organizations do a better job with their strategic planning. For my own business, I get too caught up in the trees to step back and look at the forest. I think the biggest challenge to strategic planning is taking the time to step back and take a look. The other factor is that it's not a habit with us. If you want to get better at it, make it a priority, in your work and your life. Schedule planning time, make plans, measure yourself and/or your company against strategic milestones, build a set of goals, and write them down. I'm going to give it a try . . . someday.

7B. Tasty Synergy
Some people think Reese's Peanut Butter Cups are a great example of synergy.

Questions: Why would they say that? Are they right? Explain.

Author Notes 7-B: Tasty Synergy Synergy has been called the 1 + 1 = 3 effect. For chocolate and peanut butter lovers, Reese's Peanut Butter Cups marry two sweet ingredients to produce a taste unlike either peanut butter or chocolate. The resulting taste is better and greater than the sum of the two basic ingredients. Yummmm!

7C. Back to the Opening Case
Can you find an example of synergy in the Dell Computer case? Explain.

Author Notes 7-C: Back to the Opening Case Dell Computer uses a marriage of market and cost synergy effectively and profitably. It consistently looks for products that fit the specific criteria of (1) PC-related, (2) sizable, (3) profitable, and (4) increasingly a commodity, and add them to the company's product line.

7D. Back to the Opening Case
Overall, which of Porter's four generic competitive strategies is Dell Computer pursuing? Explain your rationale.

Author Notes 7-D: Back to the Opening Case Dell is using a cost leadership strategy. The company can do this because of its unique business model and because the team is so good at managing the basics of the business. Cost leadership only works if you really are the low-cost producer. Dell is.

7E. Wintel or Software on Demand?
[Oracle CEO Larry] Ellison maintains that companies will be more productive and cut costs by storing their data, including accounting software, on the Internet--as opposed to on a PC. That way, they won't have to spend time and money to upgrade the software on PCs.

Byron Acohido, "Oracle, Microsoft Battle to Fill Small Firms' Needs," USA Today (November 23, 2001): 2B.

Questions: In the Wintel vs. Oracle business ecosystem battle, which approach is best? Who will likely win? Why?

Author Notes 7-E: Wintel or Software on Demand? Would you be comfortable storing your personal information on a file that you accessed through the Internet? I'm talking about your social security number, address, your checking account number, all credit card numbers, and your PIN number? Essentially, that is what Oracle CEO Larry Ellison is betting companies will be willing to do in the future. Personally, unless things change a lot, I don't think he's right. The average company is too protective of its information to risk storing it on the Internet. What do you think? If you are OK with the idea, maybe Oracle is right. If you're not--don't buy its stock!

7F. A "Sticky" Approach to the Internet?
Yossi Vardi, co-founder of ICQ Inc., the company that has logged the most downloads on the Internet, said there were several common characteristics to successful Internet products. They must enable communication and be interpersonal, they must be very simple, and, most important of all, they must resonate with the user's heart through music, art, or self-expression. They should empower the young.

Bruce Nussbaum, "Davos After Dark," Business Week (February 12, 2001): 34.

Questions: What successful Internet products can you identify that satisfy Vardi's criteria? What about Napster, in its early day? Does your "stickiest" Web site (your absolute favorite) satisfy Vardi's criteria? Explain. Got a Vardi-type dot-com idea yourself?

Author Notes 7-F: A "Sticky" Approach to the Internet? I use the Internet for business all the time, and I draw on its resources for shopping and gathering information. When I needed the words to several patriotic songs, I popped on google.com, typed in "patriotic song lyrics," and found what I needed in about 2 minutes with my high-speed Internet connection. I probably hit an average of 50-80 sites every time I go on the net--because I use search engines to explore the topics I need and can quickly skim a site and move on. For me, most of these sites aren't "sticky." I don't care if I ever see them again. What makes a site stick for me is if the information is something I can use again, or I plan to buy something there in the future. Then they get added to my "favorites" list. Simple is important. Having them "resonate"? I'm not looking for resonating on the Internet. If I want something to resonate, I turn off my computer and put on a special piece of music, go for a walk, design a new art project, garden in my backyard, or play with Omni, our dog.

7G. Back to the Opening Case
Based on the facts of this case and any reasonable assumptions you might make about Dell Computer, what would a situational (SWOT) analysis suggest Dell's strategic direction should be? Hint: First arrange your evidence under these four headings: organizational strengths, organizational weaknesses, environmental opportunities, and environmental threats.

A Author Notes 7-G: Back to the Opening Case Strengths: A strong brand name; low cost of operating; excellent execution of the basics of the business. Weaknesses: The service side of its business is not well thought of. Opportunities: Increased sales in foreign markets; broader product lines. Threats: Rapidly changing industry where today's winners are tomorrow's has-beens. Competition, competition, competition! Based on this quick analysis, working the low-cost angle is a successful strategy to continue to increase market share and dominate a growing list of computer-related markets.

7H. How Fast Is Too Fast?
Speed is one of the great themes of our time, and the big lesson is that you're like a sailboat: Unless you're moving faster than the water around you, you can't control your direction. And the water is moving faster every day. Your competitors, customers, suppliers, and capital providers have continuous, global, real-time information about virtually everything that affects your business, and they act on it quickly.

Geoffrey Colvin, "Mr. Big, Don't Get Too Cozy," Fortune (December 10, 2001): 64.

Questions: What do you like or dislike about the sailboat metaphor? Is there too much emphasis on speed today? Explain.

Author Notes 7-H: How Fast Is Too Fast? A 16-year-old in my town earlier this week passed another car going 60 mph in a 35 mph zone, lost control of the car, and killed himself and at least two others. Sometimes I think speed is the solution brought on by the unthinking. If you're young, faster often seems better, but that isn't always true. Speed is useful, but it's easy to confuse going somewhere fast with getting somewhere. If you're headed in the wrong direction, going there faster will only worsen the situation. Sail your boat with the wind, be swift, but be sure also. Or you could end up swimming, or worse.

7I. A Thin Line Between Corporate Intelligence and Espionage
Competitive intelligence involves legal methods of data collection and analysis, from scouring securities filings and news reports to database research to schmoozing with representatives of rival companies at trade shows. That's different from corporate espionage--the theft of trade secrets through illegal means such as wiretaps, bribery, and cyberintrusions.

Louis Lavelle, "The Case of the Corporate Spy," Business Week (November 26, 2001): 56.

Questions: How widespread do you think illegal corporate espionage is today? Explain. What needs to be done to keep corporate intelligence from crossing into illegal territory?

Author Notes 7-I: A Thin Line Between Corporate Intelligence and Espionage Personal opinion question. I think it depends on the industry. The toy industry, for example, is notorious for its espionage approach to the competition. A combination of tough laws and good safeguards are the best tools to head off this challenge.