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| COURSE CONNECTOR |
| ARTICLE SUMMARIES AND QUESTIONS |
"The Pepsi Challenge: Can This Snack and Soda Giant Go Healthy?" pp. 54-66: Indra Nooyi isn't your typical CEO. The head of PepsiCo since 2006, the 52-year-old India native sings karaoke, plays electric guitar and is more likely to socialize with government ministers from India or Mexico than with traditional pinstriped business types. But no matter. She is proving she has the mettle to not only run the FORTUNE 500 company, but also transform it. A vegetarian who has been talking about the importance of "gut health" for years, Nooyi is determined to make PepsiCo one of the good guys in the worldwide fight against obesity. That means less emphasis on Pepsi’s traditional products — soda and salty snacks like Doritos and Cheetos — and more on new product acquisitions, such as Naked Juice, IZZE sparkling beverages, Flat Earth fruit and vegetable chips and Stacy's Simply Naked pita chips. So far, the company's strategic moves indicate the culture shift is more than just for show. But Nooyi and PepsiCo face some challenges. Prices are soaring for ingredients like corn and cooking oil. The current economy may make budget-conscious consumers think twice before buying premium-priced juices. And Coke is gearing up to revive the cola wars with healthier product lines of its own. The true test of Nooyi's leadership is yet to come.
In this article, students read about how Indra Nooyi is reshaping the face of PepsiCo through her vision and uncommon management style.
Discussion Questions:- Describe Indra Nooyi's view of corporate responsibility. What steps has she taken to align PepsiCo's growth strategies with her own vision?
- What standout moments in Nooyi's career do you believe most influenced PepsiCo's board to name her CEO? What other qualities make her a good fit for the company?
- What do you consider Nooyi's most significant management strength to be? Would it work as well for her in the political sphere as it has in business? Explain your answer.
"Made to Measure," pp. 68-74: Some in the business world wondered about David Calhoun's motives when he took the helm of Nielsen, the world-renowned data measuring company, in 2006. After all, just two years ago Calhoun was a mega-star at GE, named "the most lusted-after managerial star who isn’t already a CEO" by FORTUNE. As GE's vice chairman, he ran the company's sprawling $47-billion-a-year infrastructure business — ten times bigger, by revenue, than Nielsen is. So what was the appeal? Many, including FORTUNE, speculated it was the $100 million Calhoun stands to earn if the three private equity firms currently in control of Nielsen decide to take the company public or sell it in a few years. For his part, Calhoun insists that money isn't what motivates him. Instead, he was intrigued by the unique perch Nielsen occupies at the intersection of commerce and media, giving it an influence that arguably goes far beyond its size. Then there's the nature of the task at hand. Rather than merely wring more efficiency out of a plodding quasi-monopoly, Calhoun wants to recast Nielsen as a customer-focused, tech-savvy enterprise that is as vital in the world of Google, Slingbox, and the iPhone as it was when TV viewing went from black-and-white to color. A tall order, perhaps, but Calhoun is no neophyte — and there's a pretty big private equity payoff in his future if he succeeds.
Students examine why David Calhoun landed at Nielsen, how he has handled the job so far, and where he hopes to steer the company.
Discussion Questions:
- In what ways is Nielsen a natural fit for David Calhoun? How can the company benefit from his experience and managerial skill sets?
- How do companies use the information that Nielsen provides? What rivals do you believe pose the biggest threat to Nielsen’s dominance of its market? Explain.
- What criticisms has Nielsen faced since Calhoun took over? Do you believe they are linked in any way to Calhoun's leadership, as some have suggested? Why or why not?
"Welcome to Dubai World," pp. 76-82: Djibouti seems about as close to being a vacation paradise as Siberia. The tiny East African country has little fresh water, a nearly 60% unemployment rate, and a chief export business of skins and hides. But Sultan Ahmed bin Sulayem sees something different — resorts, golf courses, hotels, even paved roads. In other words, he sees another Dubai. Before you scoff at him for being almost insanely optimistic, consider what bin Sulayem has witnessed. As a young man, his hometown of Dubai was little more than a struggling stretch of desert with a tiny bit of oil. Some 30 years later, it is a bustling hub of Las Vegas-style tourism and New York-style capitalism, with countless luxury hotels, dozens of skyscrapers, and 20% GDP growth in 2006. As founder and chairman of the Dubai World development company, bin Sulayem believes he can recreate that magic in Djibouti, as well as many other unlikely places. And he’s putting his money where his mouth is. His company has already invested $800 million in the country, in projects such as a new port and free-trade zone, an opulent hotel, and even a national airline carrier. Needless to say, Djibouti's transformation won't happen overnight, but that’s okay with bin Sulayem. "Long term is good," he says. "Short term is not relevant."
This article reveals the ambitious development plans Sultan Ahmed bin Sulayem and his company, Dubai World, have for Djibouti and similar sites around the world.
Discussion Questions:
- Why do the governments of small, struggling countries like Djibouti and Rwanda have so much confidence in Dubai World? How has Dubai become almost a brand to other nations?
- What role did Sultan Ahmed bin Sulayem play in Dubai's success? In what ways are his development plans unique?
- What do some analysts say about companies like Dubai World and rival Emaar Properties? Do you agree? Explain.
"A Real Estate Mogul Risks It All," pp. 84-90: Real estate developer Harry Macklowe has a long history of unconventional behavior. Take, for example, his now-famous decision in 1985 to order a late-night demolition, without a permit, of four buildings, including a welfare hotel, in Manhattan's Times Square. The man's definitely a risk-taker, but it hasn't all been negative. It was his idea to build the wildly popular sunken Apple flagship store on the plaza of his beloved General Motors Building. Pure genius. But now, after years of great highs and devastating lows, the comeback king may lose his prized GM building in the most celebrated commercial real estate catastrophe in the subprime mortgage crisis. Last winter, he bought seven skyscrapers at the peak of the market, when plenty of easy money was available. He financed almost the entire purchase price, and personally guaranteed that $1.2 billion would be paid back in February 2008. When the credit markets began to collapse, he couldn't refinance the loan. Now, without the capital to make good on the loan, he is forced to return his holdings, including his precious GM building. This isn't new territory for Macklowe, who's been down plenty of times before, but one must wonder if the 70-year-old has another comeback left in him.
Students take a closer look at how real estate entrepreneur Harry Macklowe made his fortune — and how he now may lose it.
Discussion Questions:
- Why is the entire real estate business watching to see how Harry Macklowe's dilemma plays out? How does this one differ from tight spots Macklowe has found himself in before?
- Why did Macklowe have the Times Square buildings demolished in the 1980s? What were the ramifications? What eventually happened to the property on which the buildings stood?
- Do you believe Macklowe will find his way out of his latest jam? How? What advice would you offer him moving forward?
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