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| Note: The FORTUNE Preview Guide is created in HTML. If you are unable to properly view the cover image, Course Connector, or hyperlinks, please view the online version at http://www.fortuneeducation.com/preview_guides/index.html. |
| COURSE CONNECTOR |
| ARTICLE SUMMARIES AND QUESTIONS |
| "Catch
a Rising Star," pp. 46-50: For centuries, the scarcest,
most valuable resource any business could have was financial capital.
With the rise of the global, info-based economy, however, all that
has changed. Today, companies can create vast shareholder wealth
— the real scorecard in capitalism — using very little
financial capital. The lifeblood of the 21st-century company is
human capital, and the war for top talent is on. Talent of every
type is in short supply, but the greatest shortage of all is skilled,
effective managers. While managers are still expected to deliver
killer results, the preferred management style has evolved over
the past decade. The best managers aren't just barking orders at
their subordinates. They're asking smart questions, motivating
and engaging their workers, and clearly communicating their expectations.
And they bring to the job on-the-ground operating experience, preferably
from outside the U.S., and the kind of boundless energy one needs
to meet the demands of global travel and a 24/7 world. For those
few stars who have it all, the timing is just right, and they're
in the rather enviable position of watching blue-chip companies
fight for their services. Students will see how changes in the economy and in management techniques have made talented managers the hottest commodity in business. Discussion Questions:
"The Pepsi Machine," pp. 68-72: Remember the cola wars? In the 1980s and 1990s, it seemed that Coca-Cola and PepsiCo were battling it out at every turn to become the No. 1 soft-drink maker in the world. Funny thing is, there really was no competition — Pepsi never beat Coke in sales or profits — and by 1996, even FORTUNE had written Pepsi off. What no one expected then was that Pepsi had a powerful plan for resurgence. Coke's dominance of the cola market forced the company to broaden its horizons, expanding into snack foods, bottled water, sports drinks and so-called New Age drinks. The results have been nothing short of amazing. In 10 years, Pepsi's operating margins have climbed from 16% to 23%, its net margins from 6% to 14%. Profits, effectively flat through the late 1990s, have climbed more than 100% since 2000, on track to reach $4.5 billion on $32 billion in sales this year. And Coke? Its stock has sunk 30% over the past five years. While Pepsi has benefited from some business missteps by Coke, much of its success can be attributed to its leader, CEO Steve Reinemund. Reinemund's vision and competitive determination have served the company well during its reinvention, allowing Pepsi to finally outmuscle its 108-year rival. This article shows why losing the cola wars was the best thing that ever happened to Pepsi. Discussion Questions:
"How to Beat the High Cost of Gasoline Forever!" pp. 74-88: Sometime in the future, our cars will run on a wonder fuel that is cheap and environmentally friendly, provides jobs to hard-working Americans, and saves us the trouble of dealing with rogue Middle Eastern governments to obtain oil at a reasonable price. Sounds like a pipe dream, right? Wrong. The fuel is called ethanol, and it’s a present-day reality. In fact, your car might already be equipped to run on it. So what is this ethanol and how can we get it? Ethanol is derived from corn, sugar cane, and more recently, thanks to biotech breakthroughs, agricultural waste like wood chips, grass and tree bark. It's already used as a gasoline additive, and if an unlikely alliance of venture capitalists, Wall Streeters, automakers, environmentalists, farmers, and even politicians has its way, it soon will be coming to a gas station near you. The U.S. need only look to Brazil to see that it is possible. Its lush sugar cane crops certainly make ethanol a natural fit for the South American country. But what really made the renewable fuel take off as an everyday alternative to gasoline was the introduction three years ago of new engines that let drivers switch between ethanol and gasoline. These "flex-fuel" cars eliminate fears of a fuel shortage and allow drivers to fill up on whichever fuel is less expensive at the moment. In the U.S., the oil superstructure is simply too efficient and too entrenched to change rapidly. But whatever the business and technological challenges, it is quickly becoming apparent that the U.S. can't afford not to invest in alternative fuels. And a world of abundant, clean ethanol is suddenly looking a lot more realistic than a return to the days of cheap, inexhaustible oil. In this article, students will take a closer look at a practical alternative to gasoline that might solve some of the nation's most challenging energy problems. Discussion Questions:
"Canon’s Big Gun," pp. 92-98: Fujio Mitarai is arguably the most effective CEO Japan has seen in a decade. In 1995, when he took over Canon, the technology company founded by his uncle, it was a debt-ridden industry also-ran. Since then, Canon has emerged as the world's largest manufacturer of office copying equipment and has eclipsed Sony as the world's No. 1 maker of digital cameras. Sales are up 40%, while earnings have improved sixfold. And in 2004, Canon reported a net profit of $3.1 billion on sales of $32.1 billion — making almost as much money as Hewlett-Packard, a business more than twice its size. So how has he done it? For one thing, he's not afraid to make tough decisions. He wasted no time in yanking the plug on Canon's personal-computer business, and ordered the company out of six other money-losing divisions. He also introduced new, more efficient manufacturing approaches to save money on the factory floor. While his moves have earned him the reputation in his homeland of an "American-style" reformer, Mitarai prefers a different label — pragmatist. For Mitarai, what works is research, and his substantial investment in R&D has resulted in some of the hottest tech products on the market. Whether his latest gamble on SED television screens pays off remains to be seen. But one thing is for certain — if the SED technology falls behind projections, Mitarai won’t hesitate to move on to bigger and better things. Students will analyze how Fujio Mitarai turned Canon around by focusing on development and cutting ties with sluggish ventures Discussion Questions:
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