Select a company in the news and apply one or more of the strategic concepts from Chapter 1 to the company. Be sure to state what concept and page from the textbook you are applying. Examples could be such concepts as romantic view of leadership versus control view (pages 57), competitive advantage (page 8), four key attributes (page 9), realized versus intended strategy (page 12), corporate governance, stakeholder management, NGOs, and more. Next, critically evaluate the applications proposed by your classmates.

company : apple

What makes the study of strategic management so interesting? For one, struggling firms can become stars, while high flyers can become earthbound very rapidly. As colorfully noted by Arthur Martinez, Sears former chairman: Todays peacock is tomorrows feather duster. Consider, for example, the change in membership on the prestigious Fortune 500 list of the largest U.S. firms: 1 Of the 500 companies that appeared on the first list in 1955, only 62, ranked by revenue, have appeared on the list every year since. Some of the most powerful companies on todays listbusinesses like Intel, Apple, and Googlegrew from nothing to great on the strength of new technologies, bumping venerable old companies off the list. Nearly 2,000 companies have appeared on the list since its inception, and most are long gone from it. Just making the list guarantees nothing about your ability to endure. In 2009 and 2010, admittedly more volatile years than most, 71 companiesincluding Bear Stearns, Circuit City, Merrill Lynch, and Tribunedropped off the 500. Lets take a look at another fallen star, Nokia, the Finnish phone manufacturer. Nokia captured the emerging market for mobile phones and built the industrys most powerful brand in the 1990s. 2 Its handsets virtually defined the industry from the time it launched the first GSM phone in 1992. Then from 1996 to 2001, its revenues increased almost fivefold, and in 1998 it was the worlds largest mobile manufacturer. In 2005 it sold its billionth handset, an 1100 model, to a customer in Nigeria. Unfortunately, Nokias market dominance was short-lived. What happened? While Nokia focused on emerging markets, it took its eye off the ball in developed economies, where the smartphone revolution was on its way. Nokias focus on mobile phones for voice communication turned out to be their most disastrous call in the past 10 years. In addition to voice communications, customers also demanded interactive applications, Web browsing, and global positioning systemsas provided by Apples iPhone and RIMs BlackBerry. As noted in The Economist: Apples iPhone and Googles Android range compete on cool. BlackBerry is synonymous with business. But what does Nokia stand for? Nokias inability to meet customer needs in both established and emerging markets resulted in a significant drop in its market share. It dropped from almost 51 percent in the fourth quarter of 2007 to less than 41 percent in the fourth quarter of 2008. Since Apple introduced its first iPhone on January 9, 2007, Nokias stock dropped 45 percent over the next three yearswiping out about $77 billion in the firms market capitalization. Over the same period, Apples shares soared 234 percent! Further, the 2010 global brands ranking by Millward Brown Optimor, placed Nokia in 43rd place, i.e., 30 places down compared to its position in 2009. Its profit margins had also been shrinking, along with its market share and the average price of its phones. Finally, at its peak, Nokia accounted for 4 percent of Finlands gross national productby 2009, that share was down to only 1.6 percent, according to Helsinki-based economic research institute, ETLA. Nokia also suffered from its location. Building a mobile telephone giant in Finland was a great achievement. However, Nokia wasnt surrounded by Internet companies or consumer electronics manufacturers. It wasnt exposed to a culture of innovation which would have forced it to question its assumptions and business decisions. Maybe in short, Nokia needed to be where the action was, that is, in the middle of the computer industry as well as the film, music, and Internet businesses. As suggested by Bloomberg BusinessWeek: Nokia should have relocated to California a decade ago. It would have caused an outcry in Finland, and probably Brussels as well. And it would have been worth it. Nokia needed to pitch itself into the cauldron of technological change. Maybe that way it could have held onto its brand leadership, rather than surrender it to a computer manufacturer that looked dead on its feet a decade ago. The cruel truthfor all its residual market shareis that Nokia misread the way the mobile phone industry was merging with the computer industry and social networking. And now, maybe its too late to turn that around. Todays leaders, such as those at Nokia, face a large number of complex challenges in the global marketplace. In considering how much credit (or blame) they deserve, two perspectives of leadership come immediately to mind: the romantic and external control perspectives.3 First, lets look at the romantic view of leadership. Here, the implicit assumption is that the leader is the key force in determining an organizations successor lack thereof.4 This view dominates the popular press in business magazines such as Fortune, BusinessWeek, and Forbes, wherein the CEO is either lauded for his or her firms success or chided for the organizations demise. 5 Consider, for example, the credit that has been bestowed on leaders such as Jack Welch, Andrew Grove, and Herb Kelleher for the tremendous accomplishments of their firms, General Electric, Intel, and Southwest Airlines, respectively. romantic view of leadership situations in which the leader is the key force determining the organizations successor lack thereof. Similarly, Apples success in the last decade has been attributed almost entirely to Steve Jobs, its CEO.6 Apples string of hit products such as iMac computers, iPods, and iPhones are testament to his genius for developing innovative, user-friendly, and aesthetically pleasing products. In addition to being a perfectionist in product design, Jobs also is a master showman with a cult following. On January 14, 2009, he announced that he was taking a medical leave through June. Perhaps not surprisingly, Apples stock immediately dropped 10 percent. And, almost exactly two years later, on January 17, 2011, Jobs announced that he was taking another medical leave. The immediate reaction: Apples shares went down 6 percent the following weekthis reflects a drop of around $20 billion in the firms market value.7 Finally, consider how George Buckley reinvigorated 3Ms focus on innovation. 3M, with $23 billion in 2010 revenues, produces an astonishing 55,000 different products. Its goal has always been to generate 30 percent of its sales from products introduced in the past five years. However, when the board asked Buckley in 2005 to assume the CEO position, this benchmark had dropped to only 21percent. Strategy Spotlight 1.1 describes Buckleys strong initiatives to accelerate 3Ms rate of innovation.