Introduction This paper analyses the strategies adopted by failed and successful companies. Together there are 10 cases.

The first 5 cases are successful companies followed by 5 cases of failed companies. For each case, the paper will define the strategy pursued by the company, specify the company that used it, how the company become successful or failures, and what the symptoms or outcomes for their success and failures.

1. Low Cost Leadership The low cost strategy is achieved when a firm in an industry become the cost leader as compared to its rivals. This means the firm can sell its products or services at average industry prices or even lower than its rivals. The former enables the firm to earn a profit higher than its rival while the latter is practiced when firm intends to gain more market share (Porter 1980). Wal-Mart uses this strategy. The strategy has transformed Wal-Mart into the worlds largest retailer. This is achieved by implementing sophisticated technology, adopt a frugal corporate culture and a corporate mission to reduce price all the times, thus the mission statement everyday low prices Through technology, Wal-Mart adopted radio frequency identification technology (RFID) to lower overall operation cost by streamlining the overall value chain. The RFID technology enables Wal-Mart to possess superb control over its inventory. It helps to track its inventory real time meaning anytime anywhere. As the whole supply chain is connected, supplier will be notified automatically whenever stock level reaches reorder point. Such feature has reduces out of stock situation significantly which a major issue faced by retailer. Besides RFID technology, Wal-Mart frugal culture is another success factors and part of its low cost strategy. Wal-Mart only spends on needs and cut down what deem unnecessary. Its headquarter office is located away from expensive city. The building is old and dull. Executives do not drive limousines and work longer than other. They even share hotel rooms with employees. The objective is to keep operation cost low so that savings could be passing on to customers, thus lower retail price. It is estimated that Wal-Mart is able to help shoppers to save about 15 percent on each cart of groceries (Fishman, 2006). Last but not least, being the largest retailer in the world bestow Wal-Mart the power to control its suppliers especially on prices by leading and helping them to become cost efficient. For example, supplier who wants to supply to Wal-Mart must implement the RFID system. Others include participating in suppliers research and development process, such as Coca Cola. I find Wal-Mart successful in many ways. First, it successfully transforms itself into the worlds biggest retailer with 2009 revenue more than USD400 billion, about 5.7 times more than second largest retailer Home Depot. Back. In 2006, it has opened about 6,200 outlets and employs more than 1.6 million employee (Wilbert, and created 70 percent of all new retail jobs in United States from 1994 to 2004 (Fishman, 2006).

The return of equity (ROE) is compounding at more than 20 percent. This means Wal-Mart is efficient in utilising shareholders fund, thus its fruitful return. Last but not least, Wal-Mart has successfully achieved its mission every day low prices. 2. Differentiation Strategy Porter (1980) defines the strategy where firm has the ability to persuade or make customer perceive their products and services to be as highly valuable and unique as compared to their competitors. The strategy of differentiation can be in many forms. It could be an elite or exclusive brand, new technology, special product or service features, superb customer services, quality consistency, and many. Louis Vuitton (LV) uses this strategy to differentiate its products from its peers. To date, LV has become the worlds largest profitable luxury brand (Matlack, 2002). How does LV do that? What is it capabilities and strengths? How does LV translate the strategy into actions? Why people want a piece of it so badly? LV products are never put on discount nor on sale and you can only purchase the product at the original own brand stores. This differentiates the product in terms of its value and exclusivity towards its customers. Such kind of differentiations induces some kind of desire and emotion towards LVs customers. To them, owning LVs product is about trendy, exclusivity, status, luxurious, possession and prestigious. Lee (2009) shows the reason customer buy again from LV is to experience the exclusive feeling. Consequently, overtime coupled with successful advertisings, such associations create true brand loyalty in customers. Another key area to its success is the joining of famous French designer, Marc Jacobs as LVs creative director. He comes up with creative and innovation product designs that successfully mix the traditional and modern values of the LV brand. He said it is human instinct to want to be part of the elite brand that is also highly recognizable (Anonymous, 2009). Last but not least is the persistent quality of the products. Every product produced goes through stringent quality test to ensure top quality. This includes resistance to fading test using ultraviolet rays, zipper durability test by open and shut it by 5000 times, and bracelets shaking test where a mechanical dummy wears bracelets and shake it strongly to ensure none of them fall off, and handbag durability testing where a 3.5kg handbag is hang on a

robotic dummy arm half a meter from the floor, lift and drop consecutively for four days (Matlack, 2004). Its success can be identified by its steady sales growth with profit from USD11.5 billion to USD17.1 billion in ten years time. The latest financial statements release shows the firm performs well under both good and bad economic environment, continue to gain market shares in key markets, achieved double digit growth in revenue and superb profitability, increase free cash flow and reduce debt by significant percentage (Press Release July 27) and last but not least, its share price increase by about 20 percent in first half of 2010 (Spencer 2010). 3. New Product Development Strategy The strategy is defined as to create new products or services to serve existing market in order to sustain firms bottom-line. This could be an extension of current products or services or an entire new product or services to serve existing market (Luck 2008). Kraft Food, the largest manufacturer for food and beverage in US and the world second largest after Nestle uses this strategy. Kraft uses this strategy to increase its top line growth at the same time retain and sustain its bottom-line. This is achieved in three ways. First, the firm improvises on existing products in terms of quality, packaging style or new benefits. Second, it creates new extension lines of products and develops new products. Third, it acquires new brands through acquisition. The key success factors to Kraft success lies in its ability to identify the markets that fits with new product development, accompany with proper fund allocation and research in those markets. There are four strategic platforms identified for such purpose. There are convenient meals, beverages, health and wellness. Such ability is supported by sound formulation and execution strategy. Strategy formulation includes defining projects potential and gathering consumer feedback through research. Information collected includes consumer acceptance on new product, potential size of the business, potential sales of the product, and the overall potential of the product. This will tell Kraft whether the new project fits with overall corporate strategies, its sustainability, how much time and money will be needed and whether is worthwhile and efficient to pursue. This initial planning is critical to Kraft as it prevent failure at later stage which is costly to firms resources.

One example is the Tombstone Mexican Style Pizza, an extension focused at specific customer group. Krafts consumer research shows young boys love Mexican cuisine and pizza is their favourite. With this information, a new product is developed based on young boys in mind couples with notions of convenient and healthy food for parents who perceive pizza as junk food. The new product was a hit when introduced and has contributed significantly to Krafts top line as well as bottom-line. Its investment in time and money has been worthwhile. Besides that, acquisition is part of its success. Through acquisition, Kraft is able to flood the marketplace with new products. This happened when Kraft acquires Balance Bar and Boca Burger. Acquisition can complement and enhance Krafts business as well. For example, Kraft gains both good brands and products when it acquired Nabisco. Other than that, Kraft also technology knowledge and expertise from Nabisco which complements Kraft core technologies (Lori, 2002). For the past ten years, the firm sales grow from USD22 billion to USD40 billion with profit (Kraft Foods Inc: Financial Statement 2010). For the past three financial years, free cash flow increased by about 65 percent, dividends per share increased by almost 12 percent, and earnings per share increased by almost 20 percent (Kraft Food 2009 Fact Sheet 2010). 4. Supply Chain Management Strategy Supply chain strategy is defined as how a supply chain should operate in order to compete (Happek 2005). It ensures the right product reach the right place at the right time or shortest possible time in the right quantity as per customers need and expectation by developing and utilizing effective and efficient production and delivery mechanism and processes (Fisher 2002). Spanish clothing retailer Zara is well known for its ability to design and distribute its product to its customer market in just 15 days where its competitors take months, thus the term fast fashion system (Ferdows 2005). This is achieved through effective and efficient supply chain strategy which serves as Zaras competitive advantage. Here is how the whole supply chain works. At Zara retail store, customer always find new product with limited quantity and very often sold off if customers are not fast enough. This is a marketing strategy to portray product exclusiveness by the firm. To support such concept, the firm must be able to replenish stock in small quantity fast. The firm created 40000 designs a year where 10000 will be marketed (Ferdows 2005). Hence, information flow along the supply chain is critical. That is why the

firms structure, operations, office layouts are designed to streamline information flow along the supply chain. The firm organisation structure is designed in such a way that design and production facilities are centralised at headquarters, and are divided into three lines, mainly men, women and children. Each line has its own designers, salesman, purchasers, and production planners. Though is costly to operate this way but it improves the accuracy and speed of information flow, thus improving the responsiveness of the supply chain. The firm hired hundreds of young designers in their early twenties who are enthusiastic and talented only. In terms of office orientation, they sit and work closely with planners, market specialists and buyer where large tables are located for adhoc meeting; walls are hanged with latest fashion magazines catalogs, and prototype shop to encourage discussion and feedback on latest fashion information. Such close working distance among employees improves the speed and quality of operations processes, interactions and collaborations. Designer confirms new designs with marketers who are constantly in talk with store managers retrieving and feeding latest information regarding fashion designs trends and market pricing. Buyer and planners estimates cost and production capacity status. Cross functional teams then finalised design and commit resources needed. All these are achieved in just few hours time (Ferdows, Lewis & Machuca 2005). Last but not least, Zara uses technology to connect retail stores and headquarter in real time mode. This means information exchange can be done anytime anywhere. This has minimised the costly bullwhip effect to traditional retailers. Collaboration among members along the supply chain is also key to its success. Zara success includes being the worlds largest fashion retailers after took over American rival Gap Inc in 2008 (Gammell, 2008) and being the leader in product to market timing of 15 days. In terms of numbers, Zaras sales, profit, free cash flow and equity fund grew 200 percent for past 6 years (Financial Data 2010).

5. Market development strategy This is a growth strategy where a firm looks for new market to sell its existing product. This includes exporting product to new market, seek new distribution channel, introduce new packaging and create new pricing policies to attract different customer groups and market segments (Luck 2008). Procter & Gamble (P&G) uses this strategy to sustain and fuel its future business growth when she realised is not enough by just relying on internal innovation and costly research and development (R&D) work, which believed to have reached a stagnated point due to intense competition, flattening sales, declining earning and stock price (Huston, 2006). Since then, P&G seeks to develop in emerging markets in developing nations. In 2009, more than a third of its total sales were derived from developing nations, a steady increase since 2002, where the percentage of sales is only 20 percent of revenue of USD8 billion. This shows a steady contribution from new markets (P&G 2009 Annual Report 2009). Moving forward, P&G wish to extend presence and grow sales in China and India. The target is one billion customers by 2014 (Cheng 2010). Over the past 5 years, P&G products have been doing well in China and Russia, thus P&G will focus to establish more of its products in this market. The success is due to wide distribution network coverage in China (800 million people) and Russia (80 percent of population) (P&G Annual Report 2008). Besides network coverage, the products fit to target market requirements is important too. To achieve that, P&G must understand target market and its consumer behaviour well, of which it did. For example, the introduction of Downy Single Rinse in countries where consumers use limited water to wash clothes. Understanding consumer spending power on P&G products is important also in estimating sales. The average spending power for Mexican is USD20, USD3 for Chinese and USD1 for India. P&G could add 40 billion to its top line if it can match the sales level in China and India to Mexico. P&Gs success for the past 10 years, include its ability to grow sales by 100 percent, improve profit margin from single digit to double digit, improve earnings per share over 200 percent and share price increase 100 percent .

6. Stuck in the middle strategy / vague strategy According to Porter (1985), a firm which failed to adopt a strategy out of the generic strategies, mainly focused, differentiation and low cost leadership, is stuck in the middle and is considered the worst strategic situation a firm can be in. This is so because the firm do not have clear objectives or direction. Is like a ship without a rudder. My company is currently in such situation. The company supplies flexible packaging material to different industry ranging from consumer goods to medical products. The company failed to do well because it does not have a clear corporate and business strategy. The firm is unable to tell where to compete, how to compete and what to compete. Besides, it does not know its strengths and weaknesses as well as the external forces that shape the industry. No industry analysis, competitor analysis or SWOT analysis are done. All these are pre-requisites to good strategy formulation processes. Lacking of such knowledge has created a blurred corporation with blurred culture. As you have guessed so, such uncertainty has lead to poor execution in everyday activities and failed to link daily routines to business objectives. This poor execution translates into high cost of operation. Production cost is often high due to high internal wastage and quality deficiency. As a result, delivery to customers is often delayed and goods are often short. Customers are not satisfied with the service and thus move to other competitors. Besides, employees are not held accountable or responsible for major mistakes and thus keep repeating the same costly mistake again and again. No clear goals are set for employees in different departments. Very often, performance appraisal and incentive system is not emphasized thus there is no need to outperform oneself. Employees are not motivated, absenteeism and turnover is high. Weak human resource policies are part of the causes here. Over time, the firm lost its high volume customers who demand low price to low cost competitors. It also lost its high margin customers to competitors who are focused on high margin targets. The lost of sales has make the firm hard to sustain itself financially. Consequently, the firm freeze its headcount and promotion back in 2008 credit crunch. The indications of failure are many. The firms revenues are declining every year due to shrinking market share, not making any profit for years; employee motivation is low and high absenteeism, share price declining over time and shrinking shareholders fund.

7. Organisational Restructuring strategy Ramu (1999) defines this strategy as a strategy that involves changing the firms structure for the purpose to increase its efficiencies and effectiveness, to make it more profitable and better organised to fit current business needs. Due to changing economic and competitive conditions over time, firms with non-differentiated products are left to compete on price, thus emphasizing the need for low cost strategy. To avoid this, Sun Microsystems chooses differentiate focus strategy where it produces high powered and expensive machines in selected market segments than those standard one offered by its competitors. The strategy was working well and firms sale increased as customers pays a premium on the products. This does not last long as competitors capabilities and market changes. That is when competitors introduced same products that match its high performance but with cheaper price. Failed to retaliate and left with no choice, Sun decided to change its strategy from differentiate focus to low cost focusing on standardised products to compete with its rivals. As firm structure follows strategy, such change has put Sun into more troubles. The failure is due to new strategy not supported by the old capabilities, skills and resources, which favour differentiation strategy for years, and not low cost. Different strategies demands different capabilities. Attempting to execute a new strategy with old capabilities can only lead to massive problems. The indications of failure are decline in sales when customer switched to competitors cheaper products offerings, thus losing market share and affecting top line and bottom-line. Its shares price headed south tremendously to USD3.50 from a high of USD65 in 2000 (Hrebeniak 2005). In 2008, in order sustain its business, the firm restructured further to reduce operating cost by retrenching 18 percent (6000 workers) of its global workforce (Rogers 2008). But to no avail, the firm was completed acquired by Oracle early 2010 (SHankland 2010).

8. Merger Merger is defined as joining of two or more firms after they have come under common ownership (Lajoux 2006). Both Daimler and Chrysler use this strategy thus formed DaimlerChrysler. The purpose of such merger strategy is to tap on each other strengths to create competitive advantage to compete globally by introducing a new series of small cars to the emerging classes. Chrysler will use Daimlers Mercedes technology while Daimler could use Chryslers as hedging platform when the luxury car market segment deteriorates. It was believed the merger breed synergies and cost savings but this was not the case (Welch, 2005). The merger failed due to poor planning and poor execution which leads to poor merger results. Inadequate due diligence is a critical aspect in DaimlerChrysler merger planning. This include cultural due diligence which is vital to the merger success. This is the soft matters related to culture similarities and differences between merger partners such as people, culture, values, and this is where DaimlerChrysler merger failed to carried out. The cultural differences between the German and American firms were vast. For example, the merger failed to integrate its operation and management successfully due to difference in management style. Daimlers management style is structured, formal, centralised and dominant while Chrysler was flexible, informal, decentralised, and non-authoritarian. On top of that, there were different views on compensation schedules that caused serious cultural and perceived equity problems. The style and process differences have made the cultural integration difficult. As a result, the merger faced poor performance, high employee dissatisfaction and high employee turnover (Ojha 2008). Failed merger is often costly. In this case, the merger was formed with value USD36 billion in 1998. In 2006, Chrysler posted operating loss of USD1.5 billion and dropped to rank four in the car market behind Toyota. In 2007, Chrysler restructured by cutting off 16 percent (13,000 workers) of its global workforce. The same year, Daimler put it on sale options and sold it for USD7.4 billion. In 2009, Chrysler seeks for bankruptcy protection (Daimler AG 2010).

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9. Distribution strategy This strategy defines how to get a product upon creation to the right place, to the right person, at the right time in an efficient and effective approach. The objective is to minimize the overall distribution cost, select the best target markets and suitable channels for each market depending on the product characteristics (Harper 2003). Apple practices such strategy in 1990s. Apple revamps its distribution strategy by selling direct to computer reseller (with sales threshold conditions) and bypassing the firms distributors. The objective is to save the additional mark-up added at distributors level. This means the resellers were able to reap a discount by buying direct from Apple than they bought through distribution channel. Not only did the revamp failed to meet its objectives, it turns out to be a disaster. The reason behind the failure is that Apple does not have the system to handle direct sales operations at that time. Resellers failed to receive goods from Apple as lower priority was given to them because they are buying less than distributors and larger superstores. But the resellers are preferred customers to the distributors. There were no proper logistics systems to track new incoming direct customers as well as those who leave the program. Worst still, there were no additional sales force cater to handle problems arises and to settle dispute between resellers and Apple. The firms largest distributor said the problem arises when Apple sells more in the direct channel than the distribution channel. As such, the Apple incapability in handling distribution complexities has led to destroy its own channel. Less than two years, the distributor sales plummeted by 75 percent (Kanellos 1997) From the case, the failure is purely a result of a weak strategy in both formulation and execution. This is because Apple lack of understanding of its current operations and have not discussed or analyze the kind of impacts the revamp could have on the value chain with the value chain members, in this case, the distributors the resellers or dealers. Such poor planning and execution comes with great cost. The negative results for such revamp include sales loss to Apple as resellers could not get products. Consequently, to fulfil customers orders, resellers were forced to buy from superstores thus setoff the cost savings they should have through direct channel. Distributors lost millions of sales and promotion commission. All these add up to be total loss for Apple. Besides numbers, the program caused hostile arguments with distributors, thus damaging years of good relationship.

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10. International Strategy International strategy is a strategy where firms used to acquire growth value by bringing home products and services to foreign markets where these products and services do not exist (Kozami 2002). With the strategy, overseas production is controlled by firm and product offered are standardised with little differentiation. In 1990s, Kelloggs experienced declining growth in the cereal industry in its two major US and European markets. As a result, Kelloggs look outside these markets to look for cereal consumers and had selected India due to its huge population. The India market is so big that a mere 2 percent market share is greater than US market. As such, Kelloggs invested millions of dollars to launch its signature product (Haig 2003). Unfortunately, the results were not as rosy as Kelloggs expected. First obstacles is cereal breakfast is new to Indian and they favoured hot vegetables for breakfast. So, the debut sales were acceptable but not at later point. The second issue is product was expensive. Kelloggs not lowering the price at the same time introduce more products without engage in further market research. The outcome was none of them were sellable. Kelloggs tried to blend the products with Indian flavour but turn out disastrous. Kelloggs re-strategise and sells biscuit. The causes for failure were Kelloggs lack of market research towards India and blinded by its population. Even though the population is huge only a fraction of it was middle class. Kelloggs later find out affordable consumer segment accounted for 100 million only and their buying behaviour varies significantly across the regions. Others include speaking many types of languages and believe in many religions throughout the states. This leads to the cause of failure, that is do not understand Indian culture. So, only companies who know the cultural complexities will be able to do and get business in India. Such poor strategy formulation and execution has led Kelloggs wasted millions of dollar of invested, time and effort. Besides, the worst dilemma is whether its brand would be associate d more with biscuit than cereal by the Indians, thus spoiling its brand identity there.

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Conclusion In conclusion, it is essential to note that strategy formulation is not an easy task and strategy execution is much more difficult. From the cases discussed above, the successful ones clearly demonstrate certain key success factors. They are clear with their business strategies and able to align its core competence to strategies, and execute it smoothly. Whereas for those failed cases, most of them failed because they have poor planning, failed to manage cultural clashes or manage change, do not have proper strategy formulation which leads to poor execution and poor results. Different companies can adopt same strategies but each may get different results. Very often, the success and failures of a company lies in its strength and weaknesses and not a bad strategy but only bad execution.

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