B case to CU268 In October 2003, leading Dutch supermarket chain Albert Heijn slashed prices up to 30 on more than 1,000 items to counter a loss in market share caused by consumer perception of high prices. AH continued the strategy for the ensuing three years, forcing competing supermarkets to match the markdowns or risk customer defections. Game theory adherents and analysts questioned the strategy, noting price wars often jeopardize profits of both individual companies and their industries. In this two-part case students analyze the risks and benefits of pursing a price-cutting strategy, considering profit margins, market-share data, and select financial information for AH and its competitors.
All hiring managers want to hire the "right" person for each position. Only half succeed. The other half end in failure, impeding direct projects as well as indirectly eroding revenue, EBITDA, and company valuation. Given such high stakes, managers should be clear on what it will take for a candidate to succeed in a given job, and be disciplined in hiring a person who fits the bill. This note outlines the process of finding and vetting candidates for success.
Pinpoint Consulting, a multi-billion dollar strategy consulting firm, has been hired by Dart Financial Corporation to provide advice on the potential acquisition of a credit card portfolio. An analyst has the task of building a model and making recommendations. The price is set at $60 million and the analyst must assess whether the portfolio is an attractive opportunity and a suitable fit for Dart Financial.
The case deals with poor acceptance of Aravind’s eye care service by the rural population in the South Indian state of Tamil Nadu. One of the factors causing poor acceptance is the lack of awareness among the rural population that many cases of blindness are curable. Fear of surgery and cost are the other major barriers to acceptance by these consumers. Aravind is the largest eye care provider in the world and has pioneered many process innovations that have reduced the cost of eye treatment substantially. The company has a culture that encourages responsive service by a trained and motivated staff. It has experimented with a number of options to educate and provide eye care service to rural consumers. The manager must examine options in the areas of promotion and service delivery to enhance the acceptance of eye care service by rural consumers.
Nokia, headquartered in Finland, was a global telecommunications equipment manufacturer. It operated Vertu, a luxury mobile phone brand that had pioneered the luxury mobile phone market in the late 1990s by using precious materials such as diamonds, sapphires, titanium, and exotic leather for phone production. The company had enjoyed impressive growth in almost 70 countries and had sold hundreds of thousands of phones in the eight years since its launch. On February 11, 2011, Stephen Elop, the new CEO of Nokia, announced a new mobile strategy to adopt Microsoft’s new but unproven Windows Phone as its primary smartphone operating system. The market reacted poorly, and the company’s share price took a 14 per cent dive on the day of announcement. How should Vertu respond to this new Nokia mobile strategy? Was Vertu well positioned to take the brand forward under the new Nokia? Should this U.K.-based wholly owned subsidiary be left alone and continue to be managed at arm’s length from Nokia? Changes to Vertu were inevitable — it was not a matter of if, but when.
This case focuses on Black Canyon Coffee, as it begins to develop its strategy for the firm’s second decade. Founded in 1993, Black Canyon had grown to become the largest chain of coffee houses in Thailand in 2003. Over its first decade, it grew from a single location to 78 retail outlets, serving a mix of hot and cold coffee beverages, as well as Asian cuisine. Thus far, the company had been profitable, and had managed the threat posed by local and foreign competitors, including Starbucks. The coffee house market in Thailand was an emerging industry segment that was expected to grow rapidly. While the company was in a strong position in 2003, competition in the industry was expected to become more intense. One key issue was determining what goals and markets the company should pursue in coming years. Managing director Pravit C. Pong believed that the company should strive for a total of 200 stores in the next decade, while business consultant Michael Holland suggested a more ambitious goal of 1,000 locations. Additionally, the company needed to consider the relative emphasis of domestic versus international expansion, as well as the potential to diversify into other markets. Access to capital and supply chain infrastructure were both tied to the growth targets that the firm pursued.
Finland-headquartered Nokia was a global telecommunications equipment manufacturer. It operated a luxury mobile phone brand called Vertu, founded by Frank Nuovo in the late 1990s, which pioneered the luxury mobile phone market by using precious materials such as diamonds, sapphires, titanium and exotic leather for phone production. The company enjoyed impressive growth in almost 70 countries, and sold hundreds of thousands of phones in the eight years following its launch. On February 11, 2011, Stephen Elop, the new CEO who had been at the helm at Nokia for only five months, announced a new mobile strategy to adopt Microsoft's new but unproven Windows Phone as its primary smartphone operating system. The market reacted poorly, and the company's share price took a 14 per cent dive on the day of announcement. How should Vertu respond to this new Nokia mobile strategy? Was Vertu well positioned to take the brand forward under the new Nokia? Should this UK-based wholly owned subsidiary be left alone and continue to be managed at arm's length from Nokia? Changes to Vertu were inevitable-it was not a matter of if, but of when.
This case focuses on Black Canyon Coffee, as it begins to develop its strategy for the firm's second decade. Founded in 1993, Black Canyon had grown to become the largest chain of coffee houses in Thailand in 2003. Over its first decade, Black Canyon grew from a single location to 78 retail outlets, serving a mix of hot and cold coffee beverages, as well as Asian cuisine. The founders had no prior experience in either coffee houses or food services, but were successful entrepreneurs in an unrelated industry. Thus far, the company had been profitable, and had managed the threat posed by both foreign (e.g., Starbucks) and local competitors. The coffee house market in Thailand was an emerging industry segment, and expected to grow rapidly. While the company was in a strong position in 2003, competition in the industry was expected to become more intense in coming years. One key issue in the case involves the goals and markets that the company should pursue in coming years. Managing Director Pravit C. Pong believed the company should aspire to a total of 200 stores in the next ten years, while Michael Holland suggested a more ambitious goal of 1,000 locations. Additionally, the company must consider the relative emphasis of domestic versus international expansion, as well as the potential to diversify into other markets. There are a number of tactical and operational issues that the company must confront as well. For example, access to capital and the supply chain infrastructure are both tied to the level and type of growth targets that the firm will pursue.
This case analyzes the internationalization process of Marcopolo, the leading manufacturer of buses in Brazil, tracking the company's international development and its approach to global growth. In the process it signs various strategic alliances with local partners in the different countries it tries to enter. After a few setbacks, some due to the global financial crisis, the company questions if the process was the correct one and what to do next.
BP CEO Tony Hayward (UK) faced intense public scrutiny from many different constituencies in the US in the wake of the oil spill in the Gulf of Mexico. The case focuses on how his words and actions were perceived by the US media and government, and how these perceptions had critical business and personal outcomes.
This case describes IKEA's strategy, aiming to show how the Swedish company has developed and maintained its competitive advantage over decades while expanding its business worldwide.
The founding team at ScoreBig, an event ticketing company, is on the verge of a public launch of their product. The company has made great progress in negotiating access to tickets, designing its interface, and building a proprietary architecture. For consumers, ScoreBig offered the opportunity to buy tickets at below face value. For event managers, ScoreBig helped solve the problem of filling empty seats and recruiting new customers in a way that did not harm other forms of ticket sales. ScoreBig has raised over $20 million in three rounds of financing.
Brian Chesky, Joe Gebbia, and Nathan Blecharczyk, the three founders of Airbnb, an online private accommodation rental market, stared at each other across the kitchen table in their San Francisco apartment. It was March of 2009. A single sheet of paper sat on the table in front of them. The three founders were on the verge of finishing the three month program at YCombinator (YC), a business accelerator located in Mountain View, CA.
This case describes how Cold Stone Creamery created the business model of the premium customized ice cream experience. The case allows the instructor to develop the details of the key factors that have allowed Cold Stone Creamery to deliver the values that its customers desire.
Brightcove, a technology and services provider to content owners in the Internet television field, aimed to become a media distribution company in its own right. On October 30, 2006, it relaunched its Website-and, in effect, its business. With its new, consumer-facing home page, and with new offerings for advertisers and affiliates as well as video publishers, Brightcove sought to build a four-sided business (or "platform") around the rapidly expanding online video industry. Simultaneously, CEO Jeremy Allaire was completing a major funding round that would enable the company to make strategic investments in some or all of several categories: technology, media distribution infrastructure, international expansion, and acquisitions. As Allaire and his fellow executives weighed those options, they confronted competitive threats in multiple quarters, but particularly from YouTube, a hugely popular video-sharing site that online search giant Google had recently acquired. Covers Brightcove's vision for its multi-sided business, its technology offering and early business model, its efforts to shift to a new model based on media distribution, and its chief competitors in that market space.
In 2005, Ganesh Natarajan, CEO of Zensar, a Pune, India-based software company, and his senior management team are considering consolidating staff and resources at the firms. Natarajan proposes an additional, possible controversial business unit to the proposed new structure. The additional unit would explore new markets for the firm's promising innovation-Solution BluePrint (SBP). While he knew that some on his team would resist his proposal, he was eager to get the new technology into the field, and felt he had the right manager to lead the proposed group. Natarajan felt sure a group dedicated to SBP led by one of the firm's most respected technologists would help spur adoption.
After Proposing a fourth business unit to help grow the market for zensar's innovative technology, to be led by Dilip Ittyera, CEO Natarajan adopted a new organizational structure focused on industry verticals.