Journal Articles …

BP’s New Chief Puts Stress on Safety — In Wake of Oil Spill, Dudley Breaks Up Exploration-and-Production Unit; Drilling Head Departs

Guy Chazan. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 30, 2010. pg. B.1

 BP puts stress on safety because of the challenges and trials they have recently faced with the oil spill. When the spill happened they really had to re-evaluate their core competences and promote the fact that they really do care about the environment and will work hard to do so.

Corporate News — Advertising: ABC Sells Stations Some of Its Ad Slots

Sam Schechner. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 30, 2010. pg. B.7

 ABC is going against a 60 year tradition of selling advertisements. Prior to this year, they sold national ads (for elections) for last minute small dollar ads but with the slump in the market, ABC has decided to take a new stance and sell prime time slots for the low-charge national adds. They are doing this to just merely meet the financial needs of the company- even though it goes against the 60 year tradition of company goals.

WEEKEND INVESTOR — The Intelligent Investor: What’s in a Name: If It’s ‘China,’ a Pick-Me-Up

Jason Zweig. Wall Street Journal. (Eastern edition). New York, N.Y.: Mar 20, 2010. pg. B.7

 Companies are adding “China” to their company name to boost company image and gain higher stock ticker. This name change among young businesses is a core competence because it alters the value perceived by the customers, increases its marketability, and is not easily mimicked among competitors.

Car and technology in the News.

Since my future will be in the car business, I looked for articles that would help me understand the market better.

 

Can Hyundai Sell Pragmatic Prestige?

Mike Ramsey. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 20, 2010. pg. B.1

                I enjoyed this article about the new Hyundai’s luxury model of the Sedan, Equus. The goal to lure affluent buyers  and to raise the company’s image is strategic. It will affect the company’s image and organizational structure if it succeeds. The investment is long term and will also affect long term conditions and positioning. Do I think their attempt to enter the luxury market will succeed? NO. Many time people buy luxury for the “image” it represents. By selling a $13,000 car on the same lot as $60,000 luxury vehicle, the image many are looking for will be lost. In my opinion, it will not be a strategy that will succeed.

Corporate News: Nissan Charges Ahead in China

Norihiko Shirouzu. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 21, 2010. pg. B.3

                The car industry is moving toward electrical technology in order to keep up with demand and competition. This venture in China is definitely a part of their strategic plan to stay competitive in the near future. It is both a monetary commitment and will have a long term impact on the future. This venture beginning in China will directly impact the organization as a whole because the venture will change the future of the car industry.

Dell Teases Next Tablet — CEO Shows Device With Seven-Inch Screen, Google Software

Ian Sherr. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 23, 2010. pg. B.4

                Dell’s  new tablet device designed to compete with the iPad is purely a competitive tactic to compete with Apple. Their seven inch screen pad which doubles as a smart phone is an investment that I see as strategic in order to sustain against competition. It is a long term investment and have long term impact in order to create technology that will compete with Apple. This new device could affect the entire organization’s structure if it hits the mainstream as a PC version of the iPad. Dell is in survival mode in my opinion as they continue to react to the creative innovations that Apple continues to provide their customers.

Sears joins Fashion Pizzazz

Corporate News: Sears Seeks Trendier ‘Vibe’ With Forever 21

Karen Talley. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 22, 2010. pg. B.4

                Sears Holdings Corp faced with extra space in Sears department stores, is joining with hot fashion chair Forever 21. They are going to expand the store-with-in-a-store concept.  Forever 21 will take 15% of the space in the Costa Mesa, CA Sears department store. This transition hopes to generate rent revenue and fashion pizzazz/ traffic. This store-with-in-a-store concept is not new for sears as they have partnered with Land’s End. This joining is strategic by intent. There is a corporate monetary and structural affect taking place. The joining is intended to be long term although it is experimental at this point therefore it is a part of Sears strategy to increase traffic of you teens and women to their stores.

Poor Strategy at R&D

Big Blue’s R&D Machine Helps Shareholders

Rolfe Winkler. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 20, 2010. pg. C.8

                R&D paid investors by doubling operating profit margins, but in doing so research and development might be at risk. The article claims that this is an issue of “robbing peter to pay Paul.” This action to pay investors their profit margin could have long term consequences, could be a costly monetary investment and affect the entire organization. Although the article seems to believe this was a bad move as it will affect the advancement of research and development, the action was a part of CEOs strategic plan. Although we do not have the insight of his decision yet it was made strategically because of the affects it had on the company.

Wall Street Strategy

Citi Gets New Cards Chief

Randall Smith. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 15, 2010. pg. C.13

 Action: Citigroup Inc. snagged top executive, Jud Linville, of American Express’s card-services business to run the credit card operations at Citi.

 Strategy: This course of action by Citigroup would be considered strategic because hiring an executive with many years of experience has long term ambitions. Citi is hiring Linville to increase the penetration of Citigroup credit cards among affluent customers which was one of AmEx’s strengths. This decision could in fact change the entire organization because the credit card services could spring to knew highs. Last, the executive hiring has a long monetary commitment to Linville as there were probably signing agreements and contracts regarding his pay and compensations.

China’s ‘Finlandization’ Strategy in the Pacific

Andrew F. Krepinevich. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 11, 2010. pg. A.13

 Action: China is trying to stop U.S. from its long standing interest in the region by drawing partners/ alliances with Japan, South Korea and Taiwan. China is attempting to build up their military strengths and alliances.

Strategy: This attempt to draw alliances with other Western Asian countries is definitely a part of their military’s strategic plan. Their strategy is compared to Finlandization, which is idea of subduing the enemy (U.S) with out fighting. This strategy would serve a long-term  commitment for China to gain alliances. The alliances would affect the entire Chinese military because they would then have alliances to support their military efforts and would involve monetary support from both alliances.

Corporate News: BCE to Pay $1.26 Billion for CTV

Ben Dummett. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 11, 2010. pg. B.5

Action: BCE, a Canadian broadcaster, bought CTV’s network which includes 27 stations, 30 specialty channels and 34 radio stations.

Strategy: BCE’s strategy to buy a large network, like CTV, hopes to give leverage in negotiating with rivals to license content. The article claims this strategy is risk but could be profitable. The action is considered strategic because buying a company yields a large monetary commitment (1.3 billion to be exact), will affect the entire organization because they will now gain several capital games with the buy-out. BCE intends for this move to be long term and hopes to seen as a fierce competitor.

Strategy? or not?

Using Wall Street Journal articles, I have listed what makes a company action strategic according to the different articles:

1. Caterpillar Restarts Its Growth Engine – in the South

    By James R. Hagerty and Bob Tita

    August 13, 2010 B1

 Action: Caterpiller’s expansion project in Victoria, Texas.  

 Strategy: It is definitely a part of their strategic plan to expand the company in Victoria, Texas. This move will affect the entire organization because the new location/ branch will alter even the logistics of the companies dispatching. Because the decision to move a manufacturing plant to Texas was a long term commitment that would cost a large sum of money to execute, the business move can be considered strategic. The article commented that the plant was “strategically” planted in this lower-cost area where it could stimulate the local economy by bringing nearly 1000 new jobs to the community.

2. Ranks of Car Dealers Continue to Decline

    By Jeff Bennett

    August 13, 2010 B3

Action: Dealerships are continuing to close showrooms.

Strategy: My first response was that this move was strategic but after learning more about the criteria of strategic formation I found that the business decision was merely tactical. GM s choice to close there showrooms as a response to the instability of the market was tactical because it was not long term but hopefully only until the market sees success through innovation and ambition.

3. Banks Get New Restraints

By Damian Paletta

Action:  The U.S. Treasury is putting new restraints on banks to protect against risky activities that can result in financial struggle. The rules are being phased in over the course of eight years.

Strategic Plan: I would say this is a strategic move although I am not sure about the monetary commitment element of the Strategic formation identification process. Although the new restraints are going to be long term once they are implemented and will affect the whole organizations process understanding and responding to financial struggle. (P.S  As for the banks across America these new rules will challenge their strategic plans and more than likely cause them to be revised. )

4. Broken Pipeline Pushes Up Crude Price

Jerry DiColo 9/12/10

Action: Enbridge Inc. the Canadian company that operates crude oil lines, has been experiencing oil leaks and has been investigating the leaks since the happenings.

Strategic Plan: At first look, the recovery appeared strategic but after analyzing further it is primarily operational. The action will not affect them long term, affect the organization as a whole or commit large sums monetarily. Unless the lines are unrepeatable the repairs and clean up are only temporary.

5. H-P Nears Deal to Buy ArcSight for 1.5 Billion

Ben Worthen 9/12/10

Action: H-P plans or is suspected to buy the small technology company of security software, ArcSight Inc.

Strategic Plan: If H-P buys the software and technology company of ArcSight, it will be a long term decision to add their product to the H-P line and will affect the entire company as it will increase market share, saturation, and logistics. Last, buying a company involves monetary risk and commitment therefore H-Ps plan to buy the small company is definitely strategic.

6. China Airline to Join Sky Team Alliance

   Wall Street Sept 14, 2010

Action: China Airline Ltd. Is joining alliances with Sky Team global airlines.

Strategy: This is a part of Sky Team’s strategy to dominate and expand in  Asia. It will be a long term collaboration that is seen as wise business move to dominate cross-strait flights.  It will affect the entire organization, as it will open up more air ways and more business (= more money).  It will be a large monetary investment but will open up opportunity for more revenue as they can compete with other top global-airlines.