At 25 years old, Terence Hon found himself spending most of his time thinking about how to retain the young staff in his company. As a second-year student at the University of Hong Kong, Terence had cofounded GreenPrice, Hong Kong's first sustainable supermarket, with teammates Allison Chan, Ben So, and Cherissa Hung. The venture had found its target customer base among middle-class consumers who were attracted to the concept of purchasing short-dated products at heavily discounted prices. Each GreenPrice store had 1,000 to 1,200 stock-keeping units (SKUs) at any given time, and the supermarket chain saved over 2.55 million items that were set to expire annually. While the eight stores in GreenPrice's retail network were profitable, the high turnover rate among the nearly 100 employees at GreenPrice was keeping Terence awake at night. Terence and his cofounders pondered whether they should have emphasized GreenPrice's social mission more in the recruitment and retainment of its staff, since the commitment to sustainability could be a means to attract young people. They needed to determine whether GreenPrice should favor those who were most capable but were not interested in sustainability or those who were less capable but cared deeply about the environment.
At the height of the COVID-19 crisis, Terence Hon, cofounder of Hong Kong's first sustainable supermarket, GreenPrice, had the option of selling pandemic necessities that were in high demand in addition to his core business of selling short-dated products. Having founded the venture several years ago with teammates Allison Chan, Ben So, and Cherissa Hung when they were still university students, Terence and his cofounders pondered whether they should accept an offer that was tempting for its high margins, even as they needed to determine whether it contributed to their business objectives and their social mission as the first supermarket chain in Hong Kong that sold short-dated products that otherwise ended up in landfills. In addition, while GreenPrice had faced the challenge of high rents in the expensive, real estate-driven city, the ongoing health crisis caused vacancies in shopping malls to go up, resulting in a significant decrease in shop rental fees. Terence and his cofounders needed to make strategic choices on whether to enter the market for pandemic products while determining the optimal locations for expanding their retail network and the customer segments that they should target.
In August 2022, two interns at Miravo Healthcare (Miravo) needed to present a comprehensive marketing plan for Miravo’s over-the-counter (OTC) head lice treatment product, Resultz, to two vice-presidents of the company. Resultz had not been actively advertised in recent years, and the company identified an opportunity to capitalize on an increasing need for head lice products as a result of children returning to school after the COVID-19 pandemic.
In 2023, SonyLIV, a prominent player in India’s rapidly expanding over-the-top (OTT) streaming service industry, appointed Mr. Danish Khan as its new business leader. Despite prior accomplishments in revitalizing the platform and achieving notable growth in subscribers and revenue, Khan faced formidable challenges in his new role. The key challenges were substantial expenses in customer acquisition and content management in an intensely competitive market. This case probes critical strategic questions: Which customer segments should SonyLIV focus on, and does the platform need to reassess its subscription model? Should it contemplate collaborating with industry rivals to access content and engage in cross-promotion? Alternatively, should it explore any other strategies to enhance its market share and financial performance?
Having a human in the loop is critical to mitigating the risks of generative AI errors and biases. But humans are also vulnerable to errors and biases and may trust artificial intelligence either too much or not enough. Findings from a field experiment by MIT and Accenture suggest that targeted friction in the form of labels that flag potential errors and omissions can direct users' attention to content that should be given closer inspection without sacrificing efficiency.
Soha Hayat, CHRO at GST Retail, a fashion retail brand based in the United Arab Emirates (UAE) that had stores across the Middle East region, had just returned from a monthly leadership review meeting. Although the reviews so far in 2022 had been difficult, the October 2022 review was perhaps the most shocking for Hayat. The Human Resources department had been under severe scrutiny for some months, and in this meeting, the leadership team had categorically stated that HR was slowing the entire firm down. Hayat believed that the problem had much deeper roots than what was being projected. GST was recuperating from a massive slowdown induced by the COVID-19 pandemic, which had begun early in 2020 and persisted throughout much of 2021. In the past few months, as customers returned to shop, sales had grown, signaling recovery. The leadership team, which wanted the company to bounce back quickly and instill confidence in their investors, had set ambitious new targets. This came with its own downside for GST, whose workforce count was at an all-time low. Hayat and her team wanted to initiate a revamp of the HR department through a dynamic technological transformation. The existing software deployed at GST was familiar to everyone but incapable of the transformation that was needed. Recently, Hayat had heard a lot about the capabilities of Artificial Intelligence (AI)-based solutions into HR. However, this was a relative new technology which would require substantial planning and as she leaned back in her chair, the question looming over her was, how should she proceed?
In August 2022, two interns at Miravo Healthcare (Miravo) needed to present a comprehensive marketing plan for Miravo's over-the-counter (OTC) head lice treatment product, Resultz, to two vice-presidents of the company. Resultz had not been actively advertised in recent years, and the company identified an opportunity to capitalize on an increasing need for head lice products as a result of children returning to school after the COVID-19 pandemic.
In 2023, SonyLIV, a prominent player in India's rapidly expanding over-the-top (OTT) streaming service industry, appointed Mr. Danish Khan as its new business leader. Despite prior accomplishments in revitalizing the platform and achieving notable growth in subscribers and revenue, Khan faced formidable challenges in his new role. The key challenges were substantial expenses in customer acquisition and content management in an intensely competitive market. This case probes critical strategic questions: Which customer segments should SonyLIV focus on, and does the platform need to reassess its subscription model? Should it contemplate collaborating with industry rivals to access content and engage in cross-promotion? Alternatively, should it explore any other strategies to enhance its market share and financial performance?
This note introduces interest-rate swaps, financial contracts wherein two parties agree to exchange interest-rate cash flows, typically in the form of an exchange between fixed-rate payments and floating-rate payments. Interest-rate swaps are valuable risk-management tools for entities seeking to alter the composition of their interest-rate exposure, as swaps enable them to hedge against fluctuations in interest rates. This note covers how these swaps are priced, the understanding of which is essential for effective risk management and corporate financing decision-making. At the Darden School of Business, this technical note is taught in the first-year "Valuation in Financial Markets" class; it would also be suitable in a module covering interest rates in a derivatives elective course.
On March 8, 2023, Silicon Valley Bank (SVB) disclosed its plans to raise USD 1.75 billion to seal a hole in its balance sheet from an unsuccessful sale of a fixed-income portfolio that had reportedly resulted in substantial losses. This unexpected move triggered a massive withdrawal of deposits, especially by technology and venture capital firms. The liquidity problem was expected to leave losses amounting to USD 20 billion. A fund manager intended to examine the level of financial distress in SVB and identify the possibility of recovery. His clients believed that SVB could still be a good buy at the current valuation. The fund manager examined various risks and applied the probability of financial distress model for analysis.
On February 10, 2023, Toronto mayor John Tory stunned the city by holding an evening press conference to announce his resignation. Tory admitted to having an inappropriate relationship with a junior staff member in his office. While Toronto city council scrambled to deal with the fallout of Tory's abrupt announcement, public opinion about it was deeply divided. From politicians to pundits to the general public, it seemed everyone had something to say about Tory stepping down as mayor and the reason why he did so. In the absence of clear rules and regulations, what should Tory have done? Was his resignation, as some said, too hasty? Or was he correct to step down?
On March 8, 2023, Silicon Valley Bank (SVB) disclosed its plans to raise USD 1.75 billion to seal a hole in its balance sheet from an unsuccessful sale of a fixed-income portfolio that had reportedly resulted in substantial losses. This unexpected move triggered a massive withdrawal of deposits, especially by technology and venture capital firms. The liquidity problem was expected to leave losses amounting to USD 20 billion. A fund manager intended to examine the level of financial distress in SVB and identify the possibility of recovery. His clients believed that SVB could still be a good buy at the current valuation. The fund manager examined various risks and applied the probability of financial distress model for analysis.
On February 10, 2023, Toronto mayor John Tory stunned the city by holding an evening press conference to announce his resignation. Tory admitted to having an inappropriate relationship with a junior staff member in his office. While Toronto city council scrambled to deal with the fallout of Tory’s abrupt announcement, public opinion about it was deeply divided. From politicians to pundits to the general public, it seemed everyone had something to say about Tory stepping down as mayor and the reason why he did so. In the absence of clear rules and regulations, what should Tory have done? Was his resignation, as some said, too hasty? Or was he correct to step down?
Miami-Dade County led the work to get South Florida designated a national climate resilience tech hub, the only one of 31 focused on climate change, an urgent major issue for the region in light of global warming and sea level rise. Venture capitalists saw the potential but not many investable ventures; some entrepreneurs created scalable ventures but without much regional support; economic development agencies were not yet fully building the ecosystem or just getting started. Most wanted more from government, higher education, and others. The label "climate tech hub" had to be backed by specific proposals to attract available funding. What are the gaps and missing ingredients? What actions might fill the gaps?
Channels of distribution are a critical component of a firm's go-to-market strategy. A company may elect to sell its products directly to customers (DTC) without the assistance of any intermediaries or, alternatively, it may seek several channel partners to help it reach various customer segments at various locations. Regardless of the route(s) taken to make products and services available to customers, a company needs to understand the pricing implications of its chosen channel structure. This note covers several key concepts, frameworks, and analyses any business should master in order to effectively link efforts to deliver value (via its channels strategy) and efforts to extract value (via its pricing strategy). In particular, the note covers situations where the channel players apply a margin (or markup) to determine their price, as well as settings where they leverage information on market demand to maximize profits. Sources of pricing friction between manufacturers and retailers are highlighted, such as double marginalization, and ways to mitigate these frictions are featured. Furthermore, a number of key pricing practices that channel members engage in are covered, such as MSRP (manufacturer suggested retail price), MAP (minimum advertised price), pass-through rate, and consignment selling. To help illustrate the key ideas, the note provides multiple examples and intuitively explains the steps involved in setting prices in light of the channel structure.