In the summer of 2019, Yu Sasaki, Head of the Game Division of DeNA, a Japanese mobile gaming company, is evaluating various growth strategies for its recent game Othellonia. Sasaki needs to decide if he should focus on customer acquisition, retention, or monetization.
This case looks at the deal-making process between Celgene, a large publicly traded pharmaceutical company, and Agios, an early-stage biotech company. The framework of a potential deal is explored and the potential road-blocks to Agios' profitability are discussed. The relationship between a fledgling biotech company and an established pharmaceutical company as well as the expectations from both sides regarding their deal are examined.
James "Hondo" Geurts, the Acquisition Executive for U.S. Special Operations Command was in the middle of his Senate confirmation hearing in 2017 to become Assistant Secretary of the Navy for Research, Development and Acquisition. Overseeing acquisitions in one of the most secretive parts of the U.S. military, Geurts had founded SOFWERX, an open platform to diversify and speed the rate of new ideas into Navy SEALs, Army Special Forces, and the like. His approach helped source the idea for the EZ-Fly, a hoverboard, from a YouTube video. At his confirmation hearing, the Senators' questions had a common theme: How should things like SOFWERX and protypes like the EZ-Fly find a place within the Navy writ large? How would Geurts's experience running an innovative procurement effort for U.S. Special Forces units enable him to change a much larger-and much more rigid-organization like the U.S. Navy?
In October 2018, Tesla, Inc. (Tesla), an American automotive and energy company, received an approval from Shanghai’s mayor to acquire a plot of land to build a new electric-vehicle (EV) factory, which was expected to produce its first cars in three years, and to have initial capacity of about 250,000 vehicles a year. This move was in response to a significant rise in the Chinese EV market and the additional tariffs imposed by the Chinese government during its 2018 trade war with the United States. Since 2013, Tesla had partnered with Panasonic Corporation (Panasonic)—the consumer electronics company and a world leader in battery technology—to build Gigafactory 1 and Gigafactory 2 in the United States for manufacturing Tesla’s batteries. The Chinese automotive market was a business environment much different from any that the Tesla–Panasonic partnership had previously experienced. Given the Chinese government’s regulations, requirements, and incentives, what should be Tesla’s growth strategy in the world’s largest automotive market—China. Should Tesla continue its partnership with Panasonic in China or should it look to derive more potential benefits from other suppliers?
In 2018, a new challenge confronted the executive director of the Inside-Out Center in Philadelphia, who was also the founder of the Inside-Out Prison Exchange Program, an international network of educators providing university courses in prisons for both incarcerated individuals and university students. Despite the program’s many success stories, to gain new funders, the founder needed to communicate the program’s impact through measurable effects. Assessing long-term impacts seemed nearly impossible because of difficulties in tracking the participants as they graduated from their university programs or completed their prison sentences and returned to the outside world. The measurement effort was also controversial because although the use of quantitative measures would help to raise funds, it could also challenge the value of the program’s well-established practices and could change the relative roles and influence of various key stakeholders. Whose definitions of “impact” should be prioritized, and how could the program’s impact be measured and communicated?
In the summer of 2018, after over 25 years of leading AREUFIT Health Services, Inc. (AREUFIT), the founder and president of assessed her company’s position in the evolving health services market. She had grown AREUFIT from a sole proprietor start-up to its current position as the Philadelphia region’s award-winning provider of preventive health and biometric screenings, corporate health and disease prevention programs, and wellness services, with annual revenues that exceeded US$1 million. The founder had spent the last three years working with an outside consultant in preparation for the next stage in the life cycle of her company. When a competitor approached her with an offer to buy AREUFIT she knew she had to make some tough decisions, while remaining true to her values and business practices. She wanted to preserve the company and culture she had built, protect her key employees, and ensure that the brand reputation of AREUFIT would endure.
Elon Musk was charged with contempt-of-court for tweeting that Tesla would produce about 500,000 vehicles in 2019. The lesson is obvious—even a rocket scientist can get into trouble using social media. However, seemingly rational social media interactions can also land a brand in hot water with consumers. While an organization can still exert some control over who speaks to the press, it is nearly impossible to control employees’ use of social media. Thus, the next best thing is a social media policy vetted and implemented by the board to provide guidelines. The goal of the authors’ research was to identify themes and elements of effective policies in order to offer a best-practice guide to help companies better manage the risks they face. Using corporate social media policies from 85 publicly traded firms in North America, they performed content analysis to identify keywords and phrases related to the use of social media by members of the firms. As the authors examined the social media policies, four themes emerged: representation, legal, control, and judgement. During a social media controversy, if it can be demonstrated that a) the employee was speaking on her or his own behalf, and that b) the employee was not following the company’s communicated policy, then the firm can limit its liability.
Sales managers need to understand that linear relationships may be the exception rather than the rule. These managers have the unenviable job of trying to perpetually improve team performance. To do this, they must hire people with the right skills and then provide training, evaluation, and compensation programs. We normally label these attributes “good” or “bad” in respect to sales performance—for example, providing sales training is good; hiring arrogant salespeople is bad. But to understand the drivers and inhibitors of a sales team’s performance, a more nuanced view is needed. Relationships between key drivers or inhibitors and the sales team’s performance are more likely to follow a non-linear pattern, where diminishing or negative returns are realized. For example, a certain number of training hours improves salesperson performance, but additional training may have no impact, which becomes an unnecessary expense. In this article, the author looks at four common statements using linear logic, sales management realities, and non-linear rationales for comparison. These are 1) the use of customer relationship management technology improves a sales representative’s performance; 2) the more customer oriented a sales representative is, the better; 3) give salespeople more product lines to sell and they will sell more products; and 4) role stress has a negative impact on a sales representative’s performance.
Older companies have weathered numerous tumultuous business cycles and other crises and, as a result, have some inherent smarts. Accenture performed research on 577 multinational companies from non-tech sectors. In this group of firms, all established before 2000, it found 69 companies that stood out for their strong growth in the digital age. A closer look revealed that each has developed the confidence to look dispassionately at disruption—even digital disruption. As a result, each has cultivated an immunity to market pressure. These companies invest prudently rather than impulsively follow trends. How can other mature firms turn their age into an advantage? The confidence and prudence displayed by the growing firms in the study stem from two behaviours born of experience. First, these companies keep investing in their core businesses—even when it would be tempting to let them coast. Second, older companies know how to pace themselves. If the time is not right, they do not sprint into new business activities, even if competitors do. Being aware of competition and context is paramount to marketplace success. But trusting your company’s strengths and teasing out the overarching lessons it has learned over the years can make an even bigger difference.
Want a potential new boss to be satisfied after hiring you? Then resist the initial salary offer. This article is the result of a survey conducted of decision-makers during hiring to determine how counteroffers affect the workplace. The main research question was how employer perceptions of value, loyalty, and personal likeability are affected when a candidate responds to an initial salary offer with a counteroffer. Other issues addressed were how variables such as gender, tactic utilized, amount of the initial offer, and amount of the counteroffer affect employer perceptions. The article’s research found that, on average, when a candidate responds to an initial salary offer with a counteroffer, the end result is an increase in employer perceptions of value, a slight increase in perceptions of loyalty, and no change in perceptions of personal likeability. Furthermore, among male employers, these positive perceptions of value and loyalty were even more significant (perceptions of personal likeability remained unchanged). The research found that requesting a moderate increase is likely more advantageous than requesting a small increase. It also confirms the general negotiations principles of “be first” and “be high.” In addition, while controlling for all other variables, a male candidate’s counteroffer resulted in a markedly better offer than a female candidate’s counteroffer.
Most companies find it extremely difficult to achieve high organizational fluidity—even leading firms like Cisco and Microsoft. However, Huawei has made significant strides toward closing the gap between internal flexibility and the rate of external market change. The authors of this article carried out face-to-face interviews in Shenzhen over a period of five weeks, beginning in September 2015, with 15 former senior executives of Huawei, including seven vice presidents, two senior vice presidents, and one executive vice president. So how does Huawei achieve superfluidity? First, Huawei is structured primarily around customer needs so as to ensure the customer is at the centre of everything. Second, its support functions are built around flexible platforms. Third, its management-level employees are continually rotated between different jobs. Fourth, its culture is one obsessed with maintaining the pace of change. Huawei’s recipe for creating a superfluid organization is radical. It overturns the conventional wisdom that manufacturing companies need to be structured as a matrix of product-based business units, functions, and geographic subsidiaries, in favour of the kind of project-based organization used by construction companies, consultants, and investment banks.
In 2012, Nalin Jain, then head of GE aviation for South Asia, was given the added responsibility for GE's transportation business in India, including bidding for a $2.5 billion contract to manufacture, service and maintain 1,000 diesel locomotives for state owned Indian Railways (IR). The deal, which would have been "the largest deal on the planet" for the transportation business, had been under discussion for six years, and many within GE had given up hope that it would materialize, but Jain persisted. In February 2015, when IR requested companies to submit a financial bid in six months, Jain quickly built an autonomous team, sequestered from the rest of GE, with people from multiple businesses and functions. His team overcame internal resistance from people at headquarters and stiff competition to help GE win the deal by a narrow margin. Jain was then tasked with executing the deal. As many of his earlier team members had moved on, Jain hired new people and built a new diverse yet integrated team for execution, with members able to put aside their many differences, look beyond their functional silos, and focus on the project deliverables. However, 2017 brought a series of challenges. GE changed India's organization structure, making India business leaders report only to their respective global business leaders instead of reporting to both their business leaders and the India country leader. Jain's mandate was expanded to include the entire international operations of GE's transportation business. And, sub-optimal company performance forced GE to announce cost cuts of $2 billion. In the face of this turmoil, Jain wonders, "Have I created an agile team that can succeed in GE's matrix environment and deal with the internal challenges? Do the team members have the maturity and motivation required for the project to succeed?"
This is an industry note on renewable energy-wind, solar, governmental incentives and storage. It covers the recent history of both the wind and solar industries, an extensive look at governmental policies in the United States, including the Green New Deal, and supply-demand-price developments in those sectors.
Unilever subsidiary Dove soap became a "brand with a purpose" and created shared value when the company decided to launch a Campaign for Real Beauty to combat the artificial media-driven stereotype of female beauty that causes appearance anxiety in women and girls around the world. From as young as 6 years of age, girls develop concerns about their body image that affect their self-confidence, relationships, health and careers. Through research and evidence-based practices, Dove developed a global campaign including advertisements, school curricula, online resources, public events, policy advocacy, and training sessions that reached more than 35 million girls and women across 140 countries. Rigorous evaluations demonstrated positive impact in self-esteem and body image while driving a decade of consecutive sales growth for Dove, ultimately becoming Unilever's biggest brand. Yet the challenge of deciding how to allocate funds between advertising the product and conducting educational programs to deliver social impact remained. The company also faced criticism about other Unilever brands, such as Axe or Fair & Lovely, that contradicted the Dove campaign.
In 2012, Nalin Jain, then head of GE aviation for South Asia, was given the added responsibility for GE's transportation business in India, including bidding for a $2.5 billion contract to manufacture, service and maintain 1,000 diesel locomotives for state owned Indian Railways (IR). The deal, which would have been "the largest deal on the planet" for the transportation business, had been under discussion for six years, and many within GE had given up hope that it would materialize, but Jain persisted. In February 2015, when IR requested companies to submit a financial bid in six months, Jain quickly built an autonomous team, sequestered from the rest of GE, with people from multiple businesses and functions. His team overcame internal resistance from people at headquarters and stiff competition to help GE win the deal by a narrow margin. Jain was then tasked with executing the deal. As many of his earlier team members had moved on, Jain hired new people and built a new diverse yet integrated team for execution, with members able to put aside their many differences, look beyond their functional silos, and focus on the project deliverables. However, 2017 brought a series of challenges. GE changed India's organization structure, making India business leaders report only to their respective global business leaders instead of reporting to both their business leaders and the India country leader. Jain's mandate was expanded to include the entire international operations of GE's transportation business. And, sub-optimal company performance forced GE to announce cost cuts of $2 billion. In the face of this turmoil, Jain wonders, "Have I created an agile team that can succeed in GE's matrix environment and deal with the internal challenges? Do the team members have the maturity and motivation required for the project to succeed?"
By the end of 2018, a recent business program graduate had found that his first social enterprise had been a success, and he wanted to start his next venture in the Kenyan agricultural market. He identified three challenges in this area-climate change, lack of market access, and ineffective education systems-and he wanted to try to address one of these with a new business. Case A explores how he needed to perform a market assessment to understand the opportunities and constraints of the Kenyan market, identify the resources and processes that would be available to him when starting the business, and form strategies for performing customer research.