31.
Award: 1.00 point
Nike’s position as undisputed leader in the athletic shoe and apparel industry is largely due to the relationship and contributions of Phil Knight and Bill
Bowerman. Their relationship and contributions exemplify which aspect of competitive advantage?
Intellectual property protection
Causal ambiguity
Social complexity
Path dependence
Isolating mechanisms
Social complexity describes a situation in which different social and business systems interact with each other—Bill Bowerman was Phil Knight’s former
running coach (a reflection of the social system); and they eventually partnered to found Nike (the business system).
References
Multiple Choice
Difficulty: 2 Medium
Learning Objective: 04-05 Evaluate different conditions that allow
a firm to sustain a competitive advantage.
When Will P&G Play to Win Again?
Procter & Gamble, said to be the world’s largest consumer products company, has struggled in recent years to stay ahead of the competition. As a result of
failing to predict online shopping trends, cycling through several CEOs, and focusing heavily on the domestic market rather than the international market,
P&G has had to revise its business strategy in order to maintain its position at the top of the consumer products industry.
Read the minicase below and answer the questions that follow.
With revenues of some $80 billion and business in more than 180 countries, Procter & Gamble (P&G) is the world’s largest consumer products company.
Some of its category-defining brands include Ivory soap, Tide detergent, Crest toothpaste, and Pampers diapers. Among its many offerings, P&G has more
than 20 consumer brands in its lineup that each achieve over $1 billion in annual sales. P&G’s iconic brands are a result of a clearly formulated and
effectively implemented business strategy. The company pursues a differentiation strategy and attempts to create higher perceived value for its customers
than its competitors by delivering products with unique features and attributes. Creating higher perceived value generally goes along with higher product
costs due to greater R&D and promotion expenses, among other things. Successful differentiators are able to command a premium price for their
products, but they must also control their costs.
Detailing how P&G created many market-winning brands, P&G’s long-term CEO A.G. Lafley published (with strategy consultant Roger Martin) the best-
selling book
Playing to Win: How Strategy Really Works
(in 2013). In recent years, however, P&G’s strategic position has weakened considerably, and P&G
seems to be losing rather than winning. P&G lost market share in key “product-country combinations,” including beauty in the United States and oral care
in China, amid an overall lackluster performance in many emerging economies. As a consequence, profits have declined. P&G posted a sustained
