Managing a Business: AOL & Time Warner, Sunbeam & Dunlap, Harley-Davidson

In your text, review the readings and answer all of the associated questions for the following Cases for Critical Thinking:


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AOL and Time Warner: Fragile Promises
(Pages 161-162).


  1. Why did the media refer to the merger as the deal of the century?
  2. Why was Time Warner eager to merge with AOL?
  3. What challenges did AOL and Time Warner face as a merged company?
  4. Visit the TimeWarner Website ( Review the site to get the latest news about the fate of the merger. How is the company doing financially? How much turnover has occurred among high-level executives? If any parts of the business have been sold off, what has the acquiring company said about future prospects?

The Ax Falls on Sunbeam’s Chainsaw Al.
(Pages 187-188). Questions:

  1. Why were Dunlap’s goals unrealistic for Sunbeam?
  2. Was Dunlap’s slice-and-dice plan a long-term or short-term strategy. Please explain.
  3. Why did Dunlap’s turnaround strategy backfire?

Harley-Davidson-From Dysfunctional to Cross-Functional.
(Pages 212-213). Questions:

  1. During Teerlink’s tenure as Harley’s Chief Financial Officer, was the
    organization structure flat or tall? Centralized or decentralized?
    Explain your answers.
  2. As Chief Executive Officer, how did Teerlink change the organizational structure?
  3. Why does Harley-Davidson include outside suppliers on its cross-functional teams?
    © BrainMass Inc. March 21, 2019, 11:26 am ad1c9bdddf
    Solution Preview

AOL and Time Warner: Fragile Promises
(Pages 161-162).

  1. Why did the media refer to the merger as the deal of the century?

The media referred to the merger as the deal of the century because this is really a merger that allows each of the companies to get a piece of the Internet future that they could not themselves provide. In Time Warner’s case, AOL really helps them move onto the Internet, you know, in a coherent and mass fashion. They were one of the early old media companies to embrace the Internet and have had some successes there, but not all of their attempts to organize the vast content that they have, have been real hits with consumers.

For AOL, this was largely a deal about technology; that is to say, America Online has been the dominant leader in what might be termed the sort of first stage of Internet usage, that is people going on-line for e-mail and Web surfing. But they have not had much of a strategy to go to the next level, so-called broadband access, where access to the Internet would be much faster and will allow for a much more complicated tasks. For example, one of the things the two companies talked today about is streaming video through your computer, whether that would be you just call up a video that you want to see, or to watch live news through the Internet in a way that one would through television, downloading music, these kinds of applications that right now are very difficult to do at the access speeds that most consumers have to the Internet. Time Warner, with its Road Runner service, potentially has the ability to deliver that, and AOL wants to be the content on what’s going into those homes. So it makes sense from a strategic perspective, and of course, it also creates a globally powerful company that combines both old media power and content with new media speed.

  1. Why was Time Warner eager to merge with AOL?

Time Warner was eager to merge with Time Warner is if you look at the company as a whole, $30 billion of revenue, which is tremendous, growing at about 10 to 15 percent a year, but where were they going to go from there? A great business, but what is the opportunity there? The opportunity is in the Internet. And as I look at it, I see that the torch has been passed to a new generation, and the new generation is the Internet. And that’s where the opportunity lies in increased revenue beyond the 10 to 15% that Time Warner is currently making.

  1. What challenges did AOL and Time Warner face as a merged company?

The company faced the challenges of fraud charges to the tune of $210 million, the company reported the largest loss of nearly $100 billion, the largest in the corporate history, the justice department opened an inquiry into the accounting practices of its online division. And the ouster of the chief operating officer and the resignation of the media chief Steve Case cast doubts on the viability of the merger.

From the point of view of the marketing the challenges were that this was the beginning of a profound transformation, and so what Time Warner gets out of this is, first, advantage, moving enter the Internet. What AOL gets out of this is the incredible access of that content. And now what they both have to do, one of the many challenges they face, is to say, well, how do we then begin to create this next generation of media and content? How do we leverage all these connections in terms of marketing, in terms of relating to your audience?

Because beneath all this is this unrelenting fact, which is that the Internet has fragmented and created a very heterogeneous media landscape. And it’s very troubling for these big companies because we’ve shifted from this homogeneous, simple, you know, …

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