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CHAPTER 5 • STRATEGIES IN ACTION 169

Instructions
Step 1 Go to your college library and find a recent journal article that focuses on a strategic-
management topic. Select your article from one of the journals listed previously, not from
a magazine. Copy the article and bring it to class.
Step 2 Give a 3-minute oral report summarizing the most important information in your
article. Include comments giving your personal reaction to the article. Pass your
article around in class.

Assurance of Learning Exercise 5C

Classifying Some Year 2009 Strategies

Purpose
This exercise can improve your understanding of various strategies by giving you experi-
ence classifying strategies. This skill will help you use the strategy-formulation tools
presented later. Consider the following 8 actual year-2009 strategies by various firms:
1. Microsoft developed a new videocamera for its Xbox 360 console that allowed players to
control games with the movement of their bodies, rather than by holding a plastic wand in
their hands, as required with Nintendo’s popular Wii game console.
2. Wells Fargo and Bank of America began to “tweet”—post messages of 140 characters or less
on Twitter.com, so customers could see product features. Banks are also putting marketing
videos on YouTube.
3. The United Kingdom’s huge telecom firm, BT Group PLC, cut 15,000 more jobs on top of the
15,000 the prior year.
4. Japanese electronics maker Panasonic Corp. acquired Osaka, Japan-based Sanyo Electric
Company.
5. News Corp. sold off many of its television stations.
6. More than 1,000 Chrysler dealers closed their doors and ceased doing business.
7. Germany’s Metro AG, the world’s fourth-largest retailer after Wal-Mart, Carrefour SA, and
Home Depot, is expanding aggressively into China.
8. Time Warner plans to spin off or sell all or part of AOL.

Instructions
Step 1 On a separate sheet of paper, number from 1 to 8. These numbers correspond to the
strategies described.
Step 2 What type of strategy best describes the 8 actions cited? Indicate your answers.
Step 3 Exchange papers with a classmate, and grade each other’s paper as your instructor gives
the right answers.

Assurance of Learning Exercise 5D

How Risky Are Various Alternative Strategies?

Purpose
This exercise focuses on how risky various alternative strategies are for organizations to
pursue. Different degrees of risk are based largely on varying degrees of externality,
defined as movement away from present business into new markets and products. In
general, the greater the degree of externality, the greater the probability of loss resulting
from unexpected events. High-risk strategies generally are less attractive than low-risk
strategies.
Instructions
Step 1 On a separate sheet of paper, number vertically from 1 to 10. Think of 1 as “most risky,”
2 as “next most risky,” and so forth to 10, “least risky.”
Step 2 Write the following strategies beside the appropriate number to indicate how risky you
believe the strategy is to pursue: horizontal integration, related diversification, liquidation,