Consumer Products

The end is near: Blackberry’s GRIM Reaper story

BlackBerry smartphoneBy Benjawan Thanachotipan, Jesse Randall, Peter Graham, Sriram Sridharan, Timothy Webb and Tyler McElhaney

Research in Motion [RIMM: $60.81], known for its private data security and e-mail addicts, may be on the verge of disappearing. Drawing this conclusion may seem strange in light of its recent stock price increases, its 27 percent market share, and the pending release of its iPad competitor, the Playbook. However, RIM’s demise isn’t apparent on the surface. Its misaligned long-term strategy is what will ultimately bring RIM to its knees.

Technology and innovation in the smart phone industry have developed at an extremely fast pace.  This has caused consumers to upgrade their devices on an annual basis if not sooner. As these devices increasingly become an extension of the life of today’s consumers, supplying innovative, advanced devices is more important than ever. This shifting consumer preference towards iPhone and Android devices (even in the business user segment) is causing RIM to lose market share at an exponential rate.

Under Armour, Under Performing

Under Armour global strategyBy Gael Marchal, Hardy Drackett, Kali Poza, Robert Bigot, Venkat Srinivasan and Veronica Borrowdale

“We must protect this house” is Under Armour’s rally cry; however, in broadening its brand the company has failed to protect the market it created. Under Armour recently has made several strategic missteps compromising its unique position. Its failure to make difficult trade-offs and CEO Kevin Plank’s inability to articulate a clear strategic focus will ultimately dilute the Under Armour brand and hurt the bottom line.

Since its inception in 1996, Under Armour has been seen as an improbable success story in an extremely developed and competitive industry.  It effectively created the performance apparel market, a blue ocean within the sports apparel industry.  In this market, Under Armour’s focus was centered on compression fit and moisture wicking fabrics, a product that filled the needs of many athletes unhappy with the standard cotton t-shirt.  This blue ocean allowed for tremendous company growth, expanding from $17,000 in sales in 1996 to $856.4 million in revenues in 2009. (2009 Annual Report)  Along with this growth came a very strong and recognizable brand.  In fact, according to a survey of teenagers, Under Armour “is now the #2 brand among teens, behind Nike”.  (Lefton) Naturally, this success has bred imitation and, together with Under Armour’s failure to protect their position, the blue ocean has turned red.

McDonald's adapts to India

McDonald's strategy in IndiaBy Alick Gordon, Arvind Deshmukh, Deviki Gupta, Sam Hung and Chul Won Baek

Like many young men his age, Rohan was a bit nervous about his first date with Neha. They had been friends for many years, but this was the first time they had been out on their own together. After ordering their food, the waitress responded with the ubiquitous question, “Would you like fries with that?” “Yes please,” responded Rohan before paying and carrying his and Neha’s trays of food back to their table.

Unlike in the United States, where most young adults would never think of going on a date to McDonald’s, in India it is a widely accepted and welcomed destination. McDonald’s India has carved a niche for itself in an increasingly competitive Indian fast food market by adapting itself in ways uncommon for the company in other parts of the globe. Through the company’s focus on teenagers and young adults as well as a highly specialized menu, McDonald’s has found success in India when many people said it could not be done.

Why looking southeast may be a wise move for Dell

Dell global strategyWhat do you do when your best friend meets the new kid on the block who happens to be cooler than you and has better toys? You can pick up new toys, find a more loyal friend, or move to a new block. To be safe, you should try all three.

For most kids, where our parents settle down is rarely a function of our popularity, but in this particular case, we’re not talking about Johnny losing Sally to Tommy. We’re talking about Dell. The block is the U.S. market. The best friend is the domestic consumer. And the new kid? Well, kids is more appropriate, but the coolest one on the street is the guitar playing, cigarette smoking, surf board riding Apple, which has resumed its role as a harbinger of counter-culture radicalization of the PC marketplace.

Time for Louis Vuitton to come home

Louis Vuitton strategy“The whole problem that we all have, and Louis Vuitton is the leader of the industry – is to manage what I call the ‘paradox of luxury.’ How can you grow year after year, and give the satisfaction to many more customers, in many more countries, and at the same time keep this sort of exclusivity of luxury?” — Yves Carcelle, February 2008

By Swecha Bhavana, Rodrigo Castillo, Sampad Das, Noah Emery, Estella He and Ho Young Kim

In an interview with Yves Carcelle, the president and CEO of Louis Vuitton (LV), he touched on a unique strategic issue faced by LV and other luxury brands equally. The interview was given during LV’s expansion into Turkey in February 2008. He used a phrase, “the paradox of luxury,” to describe the expansion and growth of the luxury market. The paradox, according to Mr. Carcelle is aiming to increase the opportunities for growth while attempting to maintain the exclusivity of the brand. LV’s current strategy is focused on geographic expansion into emerging markets where the levels of disposable income have risen, creating new customers for the luxury goods market. At such a juncture, it becomes paramount for LV to avoid risk of diluted brand image. The fact that LV’s products are sold at only the 390 stores all over the world is one of the strategies around the paradox.

HP's strategic shortfall: A paradox of choice

HP global strategyBy Manish Chhokar, Andres Camacho, Maria Teresa Morazan, Archit Kansal, Aaron Sanchez and Michael A. Sherry

After a long week at his hectic new consulting job in New York, Robert Baron was anticipating a relaxing evening at the new restaurant in town. He was seated quickly upon his arrival and given an amazing table near the front of the establishment. As he settled in to his booth, and opened the massive menu that lay on his table, he quickly realized that something was off, hampering his ability to truly enjoy the experience that he was about to have.

At first, he was unsure of what was bothering him, but something about being a patron of this particular restaurant was causing him to feel overwhelmed and anxious. As he scanned the 60+ different entree and combination choices staring him in the face, he quickly realized that he was suffering from overwhelm, due to more choices than his brain could effectively process.

This phenomenon has been further examined by psychological studies that have directly correlated the number of choices offered and the inability of human beings to be decisive and confident in their decisions. There are only so many options that the human brain can effectively process and decide upon. Too many options can cause the human brain to enter what experts refer to as “paralysis of analysis,” a syndrome that is linked to having an overabundance of choices.

Louis Vuitton and the crusade against piracy in China

Counterfeit goods sold openly in China can be hard to distinguish from the genuine article.By Jayce Crowther, Max Cheng, Josh Lunbeck, Alice Cheng and Chiu Chien-Kuo

Louis Vuitton Moet Hennessy (LVMH) knows the importance of doing business in China. In its 2009 annual report, it stated that Asia excluding Japan, accounted for more that 28 percent of revenue in leather goods, more than any other region. LVMH’s flagship brand in this industry is Louis Vuitton (LV), and the report commented that “the brand has made spectacular headway in Asia (especially China.)”[i] In fact, LV already has stores in 27 Chinese cities and is one of the most popular luxury brands there.  However, with great success comes imitation, and in LV’s case this isn’t done purely through rivals, but though counterfeit items - exact copies of the very same goods that LV sells.  Although counterfeit goods can be found in any country, the problem is especially prevalent in China, where it is a major industry and fake goods can be found on the street and in major markets.  The consumers are also different.  In other countries customers may be duped into buying fake goods, but in China customers knowingly make purchases of counterfeit items.  Thus far, tough stances taken by companies such as LV have been met with limited success.  To successfully tackle the problem of piracy in China, LV will need to better understand Chinese consumers and culture.


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