Kaffee Kostuum is a short case that introduces inventory and supply chain management and its financial impact. The case provides a simple context for examining basic inventory performance measures to improve operational, as well as financial, performance. The case has three parts: (1) analyzing reordering decisions, leading to the economic order quantity (EOQ) model and corresponding cycle stock levels; (2) investigating the effect of demand uncertainty, leading to the concept of safety stock; (3) and analyzing the impact of various supply-chain redesign initiatives, such as product rationalization, reshoring, and physical centralization, to reduce inventories. The case shows how the EOQ model can be applied in a multiproduct environment, and it relates safety stocks to forecast accuracy. Indeed, although the classic formula for safety stock setting uses standard deviation in demand, it is, in essence, the forecast error that drives the need for safety stocks. The case also facilitates the understanding of the trade-offs inherent in defining an operations and supply chain strategy. It shows that it is difficult to compete in all dimensions simultaneously (here: variety, price, and responsiveness) while making a profit. One might have to choose which dimension to give up in favor of more focus and improved financial performance.
The pandemic is forcing many B2B companies to cut costs, but conventional approaches to cost reduction may not serve them well. Instead, leaders should intensify their focus on customers by identifying the small, select group of customer value drivers in their companies. They then should cut costs by reducing value-added waste, managing customer acquisition and retention more effectively, and prioritizing and eliminating strategic initiatives that don't align well with customer value.
Set in April 2020, with the backdrop of the Covid 19 pandemic, the case talks about the opportunities for visual search in the online retail market segment and beyond. Visense is a visual search software-as-a-service (SaaS) solutions provider with a pay-as-you-use, API based, market solution that focuses on the retail segment. Visenze had experienced a spike of about 30% in the usage of its solutions between January to April 2020. Predominantly, usage growth had extended across all item categories, with footwear, apparel and jewellery products being the top gainers. The presumed understanding from this trend was that with more time in hand for home browsing during the pandemic, consumers were exposed to more visual inspirations and objects of desire. This inclination had led them to explore ecommerce websites increasingly, paving a direct path to progressive sales conversions. Moreover, consumers had started to demand shorter purchase journeys, in the quest for a frictionless ecommerce experience. While Generation Y and Generation Z were the major users of ecommerce and visual search, older generations (Generation X and Baby Boomers) had also started to increasingly use online channels of shopping. Visual search was firmly in a sweet spot with the promise of collapsing the conversion process from image to purchase in a few seconds. Amidst such market conditions, Oliver Tan, co-founder of Visenze, wondered if his firm required a new market strategy to tap on the latest opportunities. Should Visenze continue to focus on the retail segment? Should it target older consumers in the retail segment? Will its technology need to be enhanced to target the new consumer segment?
An investment manager at Glitz Investments, a firm based in the United States with a focus on the entertainment industry, wanted to identify potential blockbuster movies in the Indian film industry for the firm’s potential investment purposes. The investment manager received a report compiled by analysts at the firm indicating that Bollywood would be an attractive industry for investment. The firm’s analysts had collected data but could the manager determine a quantitative relationship between box office performance and the factors the team had identified? Could Glitz Investments choose movies based on this analysis alone? The investment manager's boss was looking for more specific data on which to base the firm’s investment decisions.
This article examines the "multiunit back-end problem" of open innovation based on a case study of the Banque Populaire Caisse d'Epargne (BPCE) Group, a large French bank with two business units. The multiunit back-end problem occurs when internal business units who consider themselves rivals are asked to collaborate for the success of an open innovation initiative. BPCE failed several times to use external startups to accelerate its digital transformation due to rivalry between its internal business units. This article presents guidelines that firms with rival business units can use to align their front-end and back-end when working with startups to accelerate their digital transformation program.
The Lee family, whose Hong Kong-based Lee Kum Kee company has established itself as a legend within the Chinese and Asian sauce world, sets out to create a daring new vision of what family legacy means. With the family business having been established in 1888, and by 2020 showing no signs of slowing down, the members of the third, fourth, and fifth generations sit down to hash out exactly what it means to be in the family. To this end, they realize that what they need is not a simple one- or two-step succession plan, but a 1,000 Year Plan to guide family governance and values over the next millennium. This grand idea, replete with lofty goals, comes with all types of questions as each generation of the family brings their own perspective. What should those goals be? How can one generation possibly expect to anticipate the needs of the next? Is it right to predetermine the outcomes of a family so far in advance? As the Lee family addresses these questions, they shed light on the more familiar questions about legacy, values, and preparing for the future. Do these same questions not apply even in the case of one generation planning for the next? If a family believes in its ability to hold fast against the chaos of the world, why not plan for the entire future? Each member of the Lee family meets these ideas with their own mix of practical and idealistic solutions, and their landmark document generates a battery of criteria against which other families may compare their own ideas of legacy.
In 2019, Netflix had 167 million subscribers globally and offered thousands of television shows and movies on its streaming application, a growing proportion of which it produced itself. Media giants, who for years had valued the relationship with Netflix because it provided an additional outlet, began to re-evaluate their own (make) versus contract (buy) distribution decision. Leveraging acquisitions, technology investments, and vast content libraries, they entered the streaming wars by going direct to consumers. Was Netflix vulnerable in head-to-head competition in an increasingly fragmented market? How should it respond to entry by its former partners?
In October 2018, Lion Air Flight 610 crashed into the sea soon after takeoff from Jakarta, Indonesia. Investigators identified a problem with the new Boeing 737 MAX jet's stall-prevention system (known as the Maneuvering Characteristics Augmentation System, or MCAS). However, the Federal Aviation Administration (FAA) allowed airlines to continue flying the jet, while Boeing worked on some changes to the MCAS software. Less than five months later, Ethiopian Airlines Flight 302 crashed six minutes after takeoff. Once again, a faulty sensor triggered a misfire of the MCAS software. The system pushed the nose of the plane down repeatedly. The pilots could not determine how to stop the sharp descent, and the plane plunged into the ground at more than 500 miles per hour. Four days later, facing immense pressure from government officials around the world, Boeing grounded its entire fleet of 737 MAX jets. The Boeing board of directors faced a multi-part dilemma. Was the current CEO still the right person to lead the company, or to what degree, if any, was he responsible for the position Boeing found itself in? Had something gone awry with the company's culture after decades of engineering excellence? How did it come to happen that pilots suddenly experienced fatal difficulties flying the latest model of one of the world's most-used passenger jets? And, how could Boeing ensure such a situation would not happen again?
External corporate communications and the rapidly changing ways in which companies engage with their customers received a lot of attention between 2010 and 2020. With social media, online chats, blogs, vlogs, and much more, consumers gained unprecedented access to corporate decision-makers, celebrity spokespeople, endorsement-driven athletes-even the US president. Internal communications, through which companies engage with their employees and inside stakeholders, changed just as quickly for organizations undergoing digital transformations during the same period-without receiving due attention. By mid-2020, the novel coronavirus (COVID-19) had made effective internal corporate communications even more essential. The virus shuttered the physical locations of many businesses, requiring huge swaths of corporate staff to work from home. As a result, employees became increasingly reliant on web-based tools-such as virtual meeting applications, email, Facebook, and Twitter-to collaborate, complete projects, stay in the loop on company developments, and simply keep in touch. This note explores the digital media and internal communications tools being used by firms worldwide, presents the importance of these tools, and gives examples from leading companies that are using information and communications technology.
The protagonist in this case, founder of a successful, privately held tabletop board gaming company, has to make some tough decisions about whether to move forward with two of the company's board games. Recent years had seen a renaissance for board games and their audience, and the board game market, driven primarily by millennials, was estimated to be worth roughly $12 billion dollars by 2023. The decision is whether to print a second run of Taming the East or to publish a new game, Sixth Panzer Army. Both games had controversial elements. Taming the East, despite its wild success, had been the focus of some criticism because it involved maintaining a player's empire through often unsettling means: ruling through intermediary and puppet governments, adopting imperialist and colonialist tactics, and putting down rebellions, particularly in Asian countries, through suppressive, often strong-arm tactics. Although a bit more of a traditional game, Sixth Panzer Army nonetheless involved World War II combat and battles and prominently featured German soldiers, including some SS troops, many of whom had, in reality, been convicted of war crimes. It also referenced some horrific events, such as German soldiers massacring American POWs, and included war crimes as a playable event. While the gaming industry was no stranger to controversy, with a number of well-intentioned and even popular games attracting criticism for violent, sometimes atrocity-laden themes, this was still a tough decision. The protagonist, already conflicted about the nature of both games, will have to explain the decision to commission a second print of Taming the East, and likewise no doubt face criticism about going ahead with Sixth Panzer Army. The public and the gaming press would weigh in about the final decision, and not necessarily in a kind or understanding way.
Founded in 1947 as an affordable women's retailer, J. Crew launched a highly successful catalogue in 1983. J. Crew's brick and mortar operations and catalogue sales experienced healthy growth through the 1990s. Seeking a cash injection to further growth, and to compete with larger catalogue retailers, the company's founders sold a majority stake in 1997 to Texas Pacific Group. A controversial second private equity buyout in 2011 put the company in the hands of a subsidiary of Chinos Holdings, Inc.-a deal made at a time when there were signs that J. Crew was failing to adapt to changing customer trends. A series of debt restructurings dug an even deeper financial hole for the company-leading to J. Crew becoming the first retailer to file for bankruptcy during the COVID-19 pandemic of 2020. In Case A students will learn of the retail trends and private equity-guided deals that led to J. Crew's distress.
Employer-sponsored fintech products can enhance financial resilience and inclusion. PLUS the benefits of a morning routine, the recruitment problem on all-white boards, and more.
A team of researchers found that people who were optimistic about their abilities scored no better than people who doubted themselves on a wide range of tests. And overconfidence, it seems, may even impair performance, especially if it leads to a lack of preparation.
Groupon, a daily deals platform and Uber Technologies, a ride-hailing and delivery platform, faced a common issue related to a new revenue recognition standard (and later amendments) adopted by most public companies in 2018. The amendments were designed to help companies determine whether the nature of their obligation to customers was to provide the specified goods or services to the customer directly (acting as "principal" and reporting revenues on a gross basis) or to arrange for another party to provide them (acting as "agent" and reporting revenues on a net basis).
In 2007, Braeden Ruud was a sophomore in high school when the United States faced one of its worst pet food contaminations in history. In an effort to protect the family pets, his mom, Mary Ann, began preparing home-cooked pet food using ingredients sourced from the family ranch. It wasn't long after that family and friends began requesting this farm-to-table pet food for their own pets. Braeden entered the Master in Science in Entrepreneurial Leadership program at Babson College in 2015 with the goal of graduating with a full-fledged business. He founded Raised Right, a human-grade pet food company. Over the course of five years, Braeden worked on building Raised Right, launching its first product in 2018, and scaling to over 750 retail locations as of February 2020. With so much success, Braeden was soon challenged with sustaining growth and building Raised Right's market presence in a highly competitive environment.
The case documents the evolution of Dress Your Home (DYH) into a profitable line of business for Colcerámica. This was a great achievement since, outside of micro-finance businesses, there were very few large companies that had created successful initiatives with the base of the socio-economic pyramid. DYH initially sought to generate positive social effects through a variety of ways. A decade later, the social effects were focused on two proposals: one, on a small scale, to generate labor inclusion for low-income citizens as sales promoters; the other, on a larger scale, to improve the living conditions of thousands of households through their home improvement products. This is the second pedagogical case about the DYH experience. The first one focused on lessons about the logistics needed to reach the "last mile" (case SKS-116 in the HBP case collection).
In 2001 Iberdrola, which had resulted from a merger between two Spanish utilities nearly 10 years before, held assets that were primarily sustainable but included some powerÂgeneration plants fired by oil and coal. Its footprint was limited to Spain and a bit of Latin America. Looking for a CEO who was willing to challenge traditional industry models and build a better future, the company tapped Galan. His values gave him the grounding to design and lead Iberdrola's green mission, and he describes the past two decades as some of the most rewarding of his career. He and his team focused an ambitious strategy on their core business of generating and distributing sustainable and renewable energy through plants, networks, and storage facilities, doubling down on a low-carbon future. Competitors thought they were crazy, and regulators raised a skeptical brow. Some senior executives retired or left. But since then Iberdrola has expanded into dozens of countries on four continents, grown to serve 100 million people with power, created one of the largest wind energy companies in the world, and closed all its oil and coal plants. Its net profit of 3.4 billion euros in 2019 represents a fivefold increase since 2001.
The pandemic has hastened a rise in remote working for knowledge-based organizations. This has notable benefits: Companies can save on real estate costs, hire and utilize talent globally, mitigate immigration issues, and experience productivity gains, while workers can enjoy geographic flexibility. At the same time, concerns include how to communicate across time zones, share knowledge that isn't yet codified, socialize virtually and prevent professional isolation, protect client data, and avoid slacking. Research into work-from-anywhere (WFA) organizations and groups that include the United States Patent and Trademark Office, Tata Consultancy Services, and GitLab (the world's largest all-remote company) highlights best practices and can help leaders decide whether remote work is right for their organizations.