1. Schedule for dead week • Monday (sec 003)/Tuesday (sec 001&002) • Kimpton Hotels • Update on cases • Teaching evaluations • Wednesday/Thursday: we will not meet because Quiz 4 will be on line. (see Quiz 4 instructions) • I will be in my office 9am – 11am Wednesday and Thursday. • Thursday 5 June office hours cancelled.

2. QUIZ 4 Instructions • Quiz • Chapters 11, 12, & 13 • 15 multiple choice and 5 short essay questions • Questions are randomly drawn. • 45 minutes • On line (Blackboard) • Available 10am Wed 4 June to 5pm Sun 8 June • We will check: 9am Thursday and 10:00am Friday. • No make-ups. Length of time available should be sufficient.

3. Update on Cases

4. Fig. 4.1: Identifying the Components ofa Single-Business Company’s Strategy

5. Strategy Options

6. Whole Foods • Focused differentiation in a fragmented industry • Positioned as a retailer of wholesome, natural, organic goods for home consumption • Question: Were owners passionate about the product or did they see an opening?

7. Whole Foods • Issue: Ability to manage growth? • Ranked among the 100 best companies to work for by Fortune (8th year in a row) • Improved financial performance • Some controversy with acquisition of Wild Oats

8. Jet Blue • Focused low cost in a mature industry • Limited routes (new airline) • “bring humanity back to air travel” • Low cost operations • Describes how this was achieved through leadership and management style, human resources, use of technology

9. Jet Blue • In 2005, highest ranked airline in quality ratings scores: • denied boarding lowest, customer complaints second best (to Southwest), • on-time performance dropped, • mishandled baggage rate still best but deteriorated (4.06 per 1000 passengers). • Higher revenue passenger miles but lost money in 2005. • Slowed expansion as fuel costs rose and encountered string of quarterly losses • Lufthansa acquired 19% stake??

10. Apple • Broader differentiation through diversification in high tech sector • Describes launch of the iPod and entry into MP3 business • Complement to the computer business • Example of how a company struggles through ownership, leadership changes, and failed products, as it brings out winners

11. Apple • Continues to expand services available in iPod through iTunes, e.g. MTV products, Nikelodeon, etc, • 1gig iPod nano at $149 • iPhone • In 2006, • Unveiled Mac mini with Intel Dual core • Boot Camp – allows Intel-based Macs to run Windows XP

12. adidas • Broad differentiation in an industry dominated by few players • “best portfolio of sports brands in the world” • Diversification through acquisition (Salomon) • Restructuring through divestment of Salomon and acquisition of Reebock

13. adidas • After restructuring • Net income rose from $80.3 b in 2004 to $80.4b in 2005 primarily due to expected demand for World Cup products • TaylorMade-adidas Golf experienced 12% sales increase • Consolidate Reebock in its financial reporting

14. Starbucks • Focused differentiation and chaining in a fragmented industry • Characteristics of a fragmented industry • Advantages as a chain • Vision of owners • Development of idea • Execution through people, e.g. training, incentives and compensation, systems, etc.

15. Starbucks • Issue was prospects of continued growth • As at 2006, • record results with revenues up 22% • number of stores 11,225 (up from 10,241 in 2005) • In 2007, started advertising as revenue growth was lackluster.

16. Monsanto • Classic ethical case. • This is an example of technology providing opportunities while creating risks to stakeholders that may be difficult to quantify. • Also an example of complex issues of intellectual property protection.

17. Monsanto • Percy Schmeiser continues to be a thorn in Monsanto’s side - • Since he is prohibited from growing GMO canola, he requested Monsanto to remove the unwanted plants. • Since he would not agree to Monsanto’s terms, i.e. release from lawsuits, he did it himself and invoiced Monsanto.

18. Kimpton Hotels • Focused differentiation in a fragmented industry. • Themed properties, owned by the company, providing service to discerning customers • Execution decentralized organizational structure (e.g. autonomous GMs)

19. Kimpton Hotels • How does a specific initiative, EarthCare, fit overall strategy • Proceed with Phase II, particularly organic linens? • As of Oct 2005, implementing Phase II but with challenges, particularly organic linen. • Considering subsidizing products that cost more with cost savings generated through water, energy, and waste reduction initiatives.

20. Kimpton Hotels • Kimpton EarthCare is now organization-wide • Cleaning supplies: all rooms • Soy Inks: All corporate communications use soy based ink • Organic beverages: all complimentary lobby coffee is organic • Towel/Linen Reuse • Energy Conservation: back of the house retrofitted and audited

21. Kimpton Hotels • EarthCare metrics • Waste reduction • Energy and water usage • Kilowatt hours and gallons • Increase employee retention and morale through this sense of purpose at work