Cases Covered in the Solution:
Assessing Competitive Advantage: Apple vs. BlackBerry
LEGO’s Turnaround: Brick by Brick
Solution Pages: 9
Files that you will download:
Questions Covered in the Solution/ Structure:
Provide a well written summary of the Apple and BlackBerry CASE and identifies and describes a reasonably complete set of problems present in the leadership situation, utilizing appropriate concepts and theory to define and explain the situation. Articulates a degree of inter-relatedness and complexity in describing elements of the problem. Carries out problem analysis before recommending solutions. Recommends a path forward.
Answers the following questions regarding the Apple and BlackBerry:
- Conduct a DuPont analysis of Apple and BlackBerry (Exhibit MC16.2, attached)
- Has the performance of Apple/BlackBerry improved (or not)
- Has the operating margin increased or not? What does that imply? In your own words explain why ROE, ROA, operating margin and leverage are important (or not).
- If you are an investor, would you invest in Apple/BlackBerry, why or why not?
Provide a well written summary of the LEGO’s Turnaround CASE and identifies and describes a reasonably complete set of problems present in the leadership situation, utilizing appropriate concepts and theory to define and explain the situation. Articulates a degree of inter relatedness and complexity in describing elements of the problem. Carries out problem analysis before recommending solutions. Recommends a path forward.
Answers the following questions regarding the LEGO’s Turnaround CASE:
5. Is LEGO (attached) successful? What additional qualitative and/or quantitative information, if any, is needed to evaluate success?
Sample of Solution:
Although, Blackberry was leading the smartphone industry while catering greater market share and realizing greater profit margins through the years till 2007. Whereas, Apple launched iPhone in 2007 and its exceptional performance eventually appreciated leading position in the smartphone industry. Although, Blackberry introduced the smartphone phenomenon and made it a corporate symbol. But eventually, with exclusive quality high performing smartphones, Apple was able to reap greater profit margins and hold inelastic demand for its products. Premium brand placement by Apple, exceptionally realized long-term competitive advantage for the company. Moreover, it can be realized from the ROIC, that Apple has competitively managed to execute its sales while realizing greater gross margins and reducing its COGS.
Question # 1: Conduct a DuPont analysis of Apple and BlackBerry
|Apple||Profit Margin: 21.48%
Total Asset Turnover: 86.75%
Equity Multiplier: 1.57
ROE = 29.31%
|Profit Margin: 23.95%
Total Asset Turnover: 93.02%
Equity Multiplier: 1.52
ROE = 33.84%
|Profit Margin: 26.67%
Total Asset Turnover: 88.89%
Equity Multiplier: 1.49
ROE = 35.31%
|BlackBerry||Profit Margin: 17.13%
Total Asset Turnover: 154.6%
Equity Multiplier: 1.44
ROE = 38.15%
|Profit Margin: 6.32%
Total Asset Turnover: 134.2%
Equity Multiplier: 1.36
ROE = 11.53%
|Profit Margin: -5.83%
Total Asset Turnover: 84.11%
Equity Multiplier: 1.39
ROE = 6.82%
Being founded in 1932 by Ole Kirk Kristiansen, LEGO has been leading the toy market by catering to not only children but also adult consumers’ demands. Since the company was a private firm with sophisticated procedures and also didn’t diversify to higher profit margin markets, it was exposed to serious threats of Bankruptcy in 2003. Being on the verge of Bankruptcy, Kristiansen family, the owners, out of sheer desperation hired new CEO, named Jorgen Vig Knudstorp who essentially changed the fate of company through its eloquent leadership.