MINICASE 1 Michael Phelps: Strategizing for Gold
DISCUSSION QUESTIONS
Review Chapter 1: What Is Strategy and Why Is It Important?

1. How did Michael Phelps turn into a “global brand”?
Michael Phelps and his manager began with a goal of winning a gold medal in each of his events in the Beijing Summer Olympics. Starting with this goal in mind, Michael and Peter Carlisle mapped out their strategy, and each had a mission: Michael would prepare for the Olympics while Peter prepared Michael’s stardom. Phelps had been gradually building up his exposure on the global market for years in both the real and virtual world. Michael Phelps’s unprecedented eight Olympic gold medal wins and seven new world records, further exposed him as “one of the greatest athletes of all time.”

2. What does the story of Michael Phelps have to do with strategic management?
In order to market Michael Phelps as a “global brand,” Michael Phelps and Peter Carlisle followed the AFI framework, allowing them to reach their goals. They analysed Michael’s situation, formulated a strategy on how Michael would win at the Olympics and Peter would increase Michael’s worldwide recognition, and implemented the workout routine and marketing of Michael Phelps.

3. Following the Beijing Olympics, a photo published by a British tabloid showed Michael Phelps using a “bong,” a device for smoking marijuana, at a party in South Carolina. Kellogg’s withdrew Phelps’s endorsement contract. What does this incident tell you about maintaining and increasing brand value over time?

Ethics plays a role in value creation and says a great deal about an organization. Unethical behaviour or the support of unethical behaviour can spread throughout a company. If Kellogg’s had continued to endorse Michael Phelps after those images were published, then Kellogg’s image may have been one of a firm that supports the use of illegal substances, and that would perhaps damage internal and external stakeholders’ image of Kellogg’s.

4. According to a study by two economics professors at the University of California, Davis, another recent example of an athlete who lost significant “brand value” is Tiger Woods, who destroyed an estimated $12 billion in stock market value of the firms sponsoring him—Accenture, Gillette, Nike, PepsiCo (Gatorade), and Electronic Arts (EA). As a manager, what lessons about celebrity endorsements can you draw from the examples of Phelps and Woods? What is some general take-always that a strategist should keep in mind?

* Endorsing celebrities have the potential to either enhance or damage a company’s image. Celebrities are often in the spotlight, so their behaviours need to correlate with the mission and values of the firm. If a celebrity does something that goes against the company’s values or mission, it can negatively affect how internal and external stakeholders view the company. * Strategists should keep in mind how company decisions affect stakeholders, and whether their decisions fit into the company’s vision, mission, and values. Strategists should also utilize real options in the strategic planning, scenario planning, and strategic actions to develop the strategy.

(Answer this after reading Chapter 2.)

5. Did Michael Phelps or his team follow one of the approaches to strategy making discussed in Chapter 2? Why or why not?

* If yes, Bob Bowman demonstrated strategic planning as the coach by developing the workout routine Michael Phelps would implement. Michael Phelps also implemented strategic actions. * If not, the student may respond that Michael Phelps and his team were just lucky. However, in this situation, this is difficult to argue with the well planned three-fold “attack” of Michael Phelps, his manager, and his coach.