Q ROTHAERMEL EXERCISE 1 INSTRUCTIONS Individual Assignments Chapter 1 Rothaermel Text 1. Discussion Question 1.1 (There are several parts to this Discussion Question.) Consider the brief description of Target’s stakeholder relationships and combine that information with your experience shopping in a Target store. How might Target’s stakeholders, in particular its employees, customers, local communities, and suppliers, influence the manager’s decisions about building competitive advantage in the analysis stage of the AFI framework? How might Target gather information from its stakeholders to inspire a better customer experience in the formulation stage in order to differentiate? Or in order to lower costs? Brainstorm by jotting down as many ideas as you can think of about how key stakeholders may affect or be affected by the implementation stage. 1. Discussion Question 1.2 BP’s experience in the Gulf of Mexico has made it the poster company for how not to manage stakeholder relationships effectively (see Strategy Highlight 1.2). What advice would you give to BP’s managers to help them continue to rebuild stakeholder relationships in the gulf region and beyond? How can BP repair its damaged reputation? Brainstorm ways that top management might leverage the experience gained by reactions in the gulf and use that knowledge to motivate local managers and employees in other locales to build stakeholder relationships proactively so that BP avoids this type of negative publicity. 1. Discussion Question 1.3 (There are 2 parts to this Discussion Question.) As noted in the chapter, research found that firm effects are more important than industry effects. What does this mean? Can you think of situations where this might not be true? Explain. Chapter 2 Rothaermel Text 1. Discussion Question 2.4 Identify an industry that is undergoing intense competition or is being featured in the business press. Discuss how scenario planning might be used by companies to prepare for future events. Can some industries benefit more than others from this type of process? Explain why. Chapter 3 Rothaermel Text • Discussion Question 3.1 (This is an important question; make sure you understand that the factors of the external environment are also referred to as the demand shifters.) Why is it important for any organization (firms, nonprofits, etc.) to study and understand its external environment? • Discussion Question 3.2 (Make sure to discuss each of the 5 forces.) How do the five competitive forces in Porter’s model affect the average profitability of the industry? For example, in what way might weak forces increase industry profits, and in what way do strong forces reduce industry profits? Identify an industry in which many of the competitors seem to be having financial performance problems. Which of the five forces seems to be strongest? Chapter 4 Rothaermel Text • Discussion Question 4.1 Why is it important to study the internal resources, capabilities, and activities of firms? What insights can be gained? • Discussion Question 4.2 (Complete both 4.2.a. and 4.2.b.) a. Conduct a value chain analysis for McDonald’s. What are its primary activities? What are its support activities? Identify the activities that add the most value for the customer. Why? Which activities help McDonald’s to contain cost? Why? b. In the past few years, McDonald’s has made a lot of changes to its menu, adding more healthy choices and more higher-priced items, such as those offered in McCafé (e.g., premium roast coffee, frappé, and fruit smoothies), and has also enhanced its in-restaurant services (e.g., free, unlimited Wi-Fi; upgraded interiors). Did McDonald’s new priorities—in terms of a broader, healthier menu and an improved in-restaurant experience—require changes to its traditional value chain activities? If so, how? Try to be as specific as possible in comparing the McDonald’s from the recent past (focusing on low-cost burgers) to the McDonald’s of today. • Discussion Question 4.3 (NOTE: The resource-based view of the firm originally was from Jay Barney’s research agenda. Do not hesitate to conduct outside research on this important topic before answering this Discussion Question.) The resource-based view of the firm identifies four criteria that managers can use to evaluate whether particular resources and capabilities are core competencies and can, therefore, provide a basis for sustainable competitive advantage. Are these measures independent or interdependent? Explain. If (some of) the measures are interdependent, what implications does that fact have for managers wanting to create and sustain a competitive advantage? Chapter 5 Rothaermel Text Small Group Exercise 5.1 (NOTE: This question is to be completed individually; there are 4 parts to this question.) As discussed in the chapter, a balanced scorecard views the performance of an organization through four lenses: customer, innovation and learning, internal business, and financial. According to surveys from Bain & Company (a consulting firm), in recent years about 60 percent of firms in both public and private sectors have used a balanced scorecard for performance measures.44 With your group, create a balanced scorecard for the business school at your university. You might start by looking at your school’s web page for a mission or vision statement. Then divide up the four perspectives among the team members to develop key elements for each one. It may be helpful to remember the four key balanced-scorecard questions from the chapter: 1. How do customers view us? (Hint: First discuss the following: Who are the customers? The students? The companies that hire students? Others?) 2. How do we create value? 3. What core competencies do we need? 4. How do shareholders view us? (For public universities, the shareholders are the taxpayers who invest their taxes into the university. For private universities, the shareholders are the people or organizations that endow the university.) • Small Group Exercise 5.2 (NOTE: This question is to be completed individually. For this question, submit your “elevator speech” in a Word document; the minimum word count is 300 words. ) At the next big family gathering, you want to impress your grandparents with the innovative ideas you have learned in business school. They have decades of experience in investing in the stock market and, from their college days, believe that economic profitability is a business’s primary responsibility. You would like to convince them that a triple-bottom-line approach is the modern path to stronger economic performance. With your group members, prepare a casual yet informative speech that you can use to persuade them. They probably will not listen for more than two minutes, so you know you have to be clear and concise with interesting examples. You may want to reinforce your argument by consulting “The Bottom Line of Corporate Good,” published in Forbes.45 Present your speech in whatever way your instructor requests—to your group, the entire class, or post a video on YouTube. Submit this assignment via SafeAssign by 11:59 p.m. (ET) Sunday of Module/Week 1.