August 2012

Aug 05, 2012

Best BuyA corporate strategy article by Thunderbird students Ahmed, Farrow, Goosen, Jones, Kortgard and Turra

Are the days of big box consumer electronics retailers coming to an end, or can Best Buy prove it has what it takes to adapt and compete in a changing global marketplace?

Rapid growth in the 90’s and early 2000’s propelled Best Buy to become the world’s largest and most successful consumer electronics (CE) retailer with global revenue exceeding $50 billion. However, myriad challenges have converged to create a hostile environment for traditional CE retailers. Accelerating commoditization of products and increasing acceptance of online purchasing are allowing non-traditional competitors, such as Amazon, to capture an ever-growing share of the global electronics market.  Some Wall Street analysts suggest Amazon should purchase Best Buy to complement its online growth strategy and capitalize on Best Buy’s strengths, namely its 1,400 brick & mortar locations[1]. Others argue that Best Buy will ultimately experience the same demise as Circuit City, CompUSA, and Borders.  Hulking shells of former big box stores are a stark reminder of how global markets are evolving at rates never seen before.  At best, the triumphant days of big box retail are being severely challenged. At worst, they could come to an end.

Aug 05, 2012

Anheuser-Busch InBevA corporate strategy article by Thunderbird students Andrea Bly, Sangeetha Nagaratnam, Joseph Rosing, David Roudybush and William Todd

Can, or even should, the global leader in brewing take on the numerous craft beer companies, whose sole focus is on satisfying the unique tastes of their local customers?

Blame the Carmel Macchiato. Or maybe the Mocha Frappuccino. I am not sure exactly when the tipping point struck, but at some time post-millennium, the U.S. society morphed into an environment where consumers attempt to display individualism through their sophisticated and differentiated purchases. Accordingly, companies were anxious to provide expanded and unique assortment to meet the evolving consumer demand. Starbucks now has 87,000 different combinations of drinks, which dwarfs the 31 flavors of Baskin Robbins that offered significant variety for many generations of Americans. [1]

Aug 05, 2012

BlackberryAs mobile technology has made leaps and bounds, Research in Motion (RIM) maker of the once popular Blackberry mobile phone struggles to survive. Can the company save itself from bankruptcy or is it too late?

Turned off…
Thorsten Heins, the new CEO of Research In Motion (RIM) probably cancelled his subscription to the New York Times. One of the United States’ leading daily papers decided to drop its app for BlackBerry after seeing a notable drop off in user traffic on its app. The app will no longer load news stories, essentially turning off. This follows a series of unflattering developments regarding the maker of the once dominant mobile phone brand BlackBerry. Large multinational companies such as Halliburton and Qantas recently decided to no longer use BlackBerry services and have been switching their employees to Apple’s iPhone. The US Government’s procurement agency has also followed suit, starting the switch from BlackBerry to iPhone for all US Government Agencies..(1) (2)

Aug 04, 2012

vodafoneA corporate strategy article by Thunderbird students Edyette Key, Kara Nguyen, Cole Augustine, Ilan Fehler, Giff Bloom and F. Trevor Rogers

Economies and industries go through periods of consolidation; from the bust of the .coms, recent restructuring of the banks and even the funneling of the beer industry. In some cases these consolidations aren’t because the biggest player in the market is gobbling up all the little ones, but rather the lean and agile end up with more capital and are able to buy into a controlling position of a much bigger and strapped for cash giant. One such example is the acquisition of miller brewing company by the South African Brewery that has propelled SAB to be one of the top three breweries in the world. The communications industry is no different and many companies seek to enter new markets through acquisition. This article dissects the motivations of Vodafone’s further acquisition of Verizon and its potential to weaken Vodafone’s current global growth momentum.

Aug 03, 2012

razorTo Shave or Not to Shave

Like most men around the world, Prakash, a thirty-year-old Indian port worker wakes up in the morning facing the unpleasant but necessary task of having to shave. But unlike most men in the developed world, for Prakash shaving means sitting on the floor with a small amount of still water, balancing a hand-held mirror in low light, and experiencing frequent nicks and cuts from his double-edged razor[1].

On the other side of the globe, with headquarters in Cincinnati, Ohio, Procter and Gamble (P&G) is one of the largest consumer products companies in the world with operations in more than 80 countries and more than 300 marketed brands sold in 160 countries. Traditionally, P&G’s product mix has focused on high-end products geared towards the developed markets. Hurt by slowing sales growth in developed markets during the recent global recession and European economic crisis P&G began to look at emerging markets for long-term growth[2].  P&G’s historic focus on developed markets left them unprepared to enter the emerging markets where they were blindsided by their competitions’ market penetration. P&G underestimated the cost of building its presence in developing countries resulting in a shortage of funds to finance its expansion in emerging markets and an inability to achieve economies of scale. This resulted in higher priced products in these regions. Compared to its competitors like Unilever or Colgate-Palmolive, P&G has been slower at reverse engineering its products to be affordable to the bottom of pyramid market segment in emerging markets.

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