~ ' ~ Pergamon European Management Journal Vol. 14, No. 3, pp. 331-332, 1996 Published by Elsevier Science Ltd. Printed in Great Britain

0263-2373/96 $15.00 + 0.00

Books for Managers European Casebook on Finance by PAUL STONHAM and KEITH REDHEAD, Prentice Hall, London, 1995, 503 pp, ISBN 0-I3-291030 6

A new addition to the European Casebook on Management series, this book presents a total of 32 cases across three broad areas of:

1. Alliances, acquisitions and privatisations.

2. Corporate finance and restructuring.

3. Risk management.

The cases are drawn from a range of countries, and all have a European dimension. The cases range from big names, such as the HSBC/Midland takeover, Eurotunnel, and Eurodisney, to smaller businesses such as a Spanish food company, Ibersnacks SA, and a UK wine importer, Hallgarten Wines Ltd, and the contributors include some of Europe's best known case writers in this field.

This contrast between large and small businesses is a particularly strong feature of the book. To give an example, Hallgarten wines has a turnover of some £4 million and 30 staff. The case puts over clearly the problems posed for the company by the variability of exchange rates, with a basic strategy of staying in the wine business and avoiding currency speculation. Past strategies based largely on relying on the bank manager's advice have proved 'disappointing', leading to the exploration of more sophisticated methods both to assess and to hedge against risk. Turn then to the appropriately titled case 'If Foresight were as Clear as Hindsight' and we read of Lufthansa's strategies to cope with a $500 million exposure in early I985. The solution - to hedge half the amount with a forward currency purchase - seems no more

sophisticated than the approach taken by the smaller business.

Similarly the contrast between business environments in different countries is well brought out in this book. It is illuminating, for example, to contrast the pervasive influence of government in major business decisions in the French cases with the more laissez faire UK environment.

The one extra element that the authors might usefully consider including in their second edition is that of finance in the local government sector.

Overall this book provides a splendid illustration of how the case teaching method can be supported by first-c_lass materials. It will be welcomed by teachers who want to provide topical, well pitched, thought-provoking material.

John Blake

Ten Golden Rules by LEN HARDY, Published Windrush, 1995, .~15.99

My personal and unprepossessing introduction to the formidable Len Hardy, erstwhile Lever Chairman, happened one New Year nearly a generation ago. I can date the meeting with precision. I had retumed to Lever Britain from the balmiest of pastures in Switzerland, to join his Board, as Marketing Director, a job he had done himself, and on which the entire world knew he had the firmest of ideas. 'Second best job in Unilever' he volunteered, a hint of menace detectable behind the West Country burr, 'Mine's the best!' I had the further good fortune not to be 'his' choice, having been foisted upon him by Unilever's worldwide board. Not a propitious start to a relationship you might

say, but it never thereafter looked back.

He didn't beat about the bush. Fixing me with his renowned gimlet look he said 'You can join us in here, Andrew - we have an important decision to make.' Procter had savagely cut the price of Lenor, their no. 2 brand in the fast growing softener market. No one doubted what Hardy's Lever would do. That part of the decision took two minutes. (Hardy's Golden Rule no. 8 - 2qever start a Price War you Can't Win.') Did Newcastle imagine they could win this? You must be joking.

What surprised me was Hardy's apparent belief that Lever could do it first and better. Hadn't P&G announced the cut already? Hardy's rule no. 3 was to operate however- 'Be First, be Right.' We could be. We were. By cutting the price of existing supplies, ahead of P&G, Comfort's shelf price came down first. Lever made big volume gains, increasing brand dominance, and demonstrating in the process Hardy's rule no. 5: 'Never attack the Brand Leader Head-on.'

This book returns to strategic basics. Len Hardy is not one for today's fad of company reengineering on which consultants generate the fattest of current fees. Global management passes him by: 'you can't run a strong national business from Brussels' I have heard him growl. He believes unashamedly in centres of excellence - his Lever UK is one of them. Finally, management empowerment achieves scant feature in Hardy's golden rules company - he knew, and we all knew, that the best form of management liberation was to win convincingly in a competitive market place. On this philosophy there are few equals among business writers or practitioners.

Winning has always played a huge part in Hardy's make up and, (taking

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a swipe at Kipling's 'If' and the British school en route) he lives his business life by rule no. 6 'If You Can't Win - Don't Play.' It's a lesson that today's company, for all its technical skill, plethora of information, and stock market sensitivity has chosen too often to ignore. He is at his best describing competitive issues - long before Hamel and Prahalad became famous for the doctrine, Hardy intoned to generation after generation of Lever managers, something he grasped years before most of his contemporaries viz. Golden Rule no. 4: ~Real Business Success Demands a Competitive Advantage.'

This is a message that doesn't grow old. Any of our team at The Added Value Company in 1995, could have written this 'If you are a keen believer in ... added value and consider it a valid measure of success, you ... must ensure that everyone in your business works to make certain that significant competitive advantage is built into every one of your brands.'

And of course, the brand, Hardy knows exactly where he stands.

'Successful brands make successful companies. A successful brand invariably has a significant competitive advantage.' This is a straightforward precept but Western business would perform better if it espoused core strategy and ensured that they had the culture, method and people to drive home competitive advantage on their key brands.

Markets where rivals 'slug it out with brands that ... are almost identical ... are unlikely to provide adequate profit levels to the contestants ... they invariably drift into becoming price markets where the only brand differential which applies is ... the periodic lower price special.' Sadly it is the Eastern tiger companies (Sony, Honda, Fuji, Shiseido, Kao) that take this lesson to heart more than their Western counterparts: it is they who realise the issues are long term, and that only genuine 'differentials' to use Hardy's word, or 'innovation' - mine - has sufficient cutting edge to win through in today's toughest markets.

Ten Golden Rules is not written for entertainment - the business of

business for Len Hardy is not and never was a lighthearted matter. As his message suggests, Len Hardy knows Golden Rule no. 1 - How to 'Stick to His Knitting' and does just this in the text. He writes persuasively about the hard work which needs to go into the establishment of what 'your knitting' is, analysing our own long term competitor from Cincinatti and Newcastle in this regard 'exploiting the work of the research laboratory ... which provided a product extra that facilitated the development of significant competitive advantage.'

This is a clear and consistent message from one of the UK's toughest business leaders. It should be read by anyone who wants to follow any kind of career in brand marketing. Boards of directors will do well to study and stick to the strategies behind the Golden Rule precepts, and students will find his summaries and examples simple and illuminating.

Andrew S e t h

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