Founded in 2009 by Tyler Gage and Dan MacCombie, Runa was the result of their experience living with local communities. After six years of operation, Runa had built new markets for teas and energy drinks based on guayusa. Their marketing efforts in the United States had put their products in over 5,800 stores and had doubled their revenues between 2014 and 2015. Tyler and Dan decided to shape their start-up on the principles of fair trade and sustainable business models, with the aim of improving the livelihoods of the Kichwa and contributing to the development and sustainability of the guayusa value chain. Their business had a commercial for-profit branch led by Runa LLC in the United States and Runatarpuna Exportadora S.A. in Ecuador. Fundación Runa in Ecuador and the Runa Foundation in the United States constituted Runa's nonprofit branch. The RG supported the development of local economic capacity by offering producers a 15% premium on all purchased guayusa. This premium was placed in a Fair Trade Social Premium Fund to be administered by the farmer associations. RG increased the incomes and favored the inclusion of small indigenous producers in the guayusa value chain. The foundations focused on research, improvement in the farmers' productive activities and community development, and on the promotion of fair public policies, while the for-profit companies focused on the production, marketing, and sales of the final products for the United States market. From the perspective of RG founders, 2017 would be critical to demonstrate that their business model could be sustainable, and that they could keep on growing as a business while benefiting the farmers and protecting the environment. This teaching case focuses on the challenges and dilemmas of modeling a sustainable business that is founded not only on the pursuit of the entrepreneurial venture's economic consolidation and growth, but also on a multiple stakeholders' view of value creation.
In 2016, a luxury cosmetic company approached BEworks Inc. (BEworks), a management consulting firm based in Toronto, Ontario, to gain a better understanding of its customers in an effort to develop better-tailored communications. BEworks was the world’s first management consulting firm to specialize in solutions for real-world challenges by applying behavioural economics—an emerging field that sought to understand human behaviour in the context of psychological, social, cognitive, and emotional influences. Of special interest to the luxury cosmetic company was the design of key messages to drive sales growth. BEworks offered a unique approach to strategic problems by using empirical data obtained through experiments. The client and BEworks together decided on a variety of promising messages to assess. BEworks needed to decide on the design of a test to best gauge the effectiveness of these messages.
The chief operating officer (CEO) at Cambridge Cooling Systems (CCS), an industrial cooling system manufacturer, has been asked for his recommendations on CCS’s plants in Canada and Mexico. The company has had a reversal in its strategic plan in the past year and is shifting from a focus on growth to looking for operating efficiencies. CCS’s global plants are running below full capacity, and opportunity exists to reduce costs through the consolidation of operations. The current focus is on Canada and Mexico, and the CEO is exploring moving custom work from Canada to Mexico, where labour and overhead rates are lower. The challenge for the CEO is to consider the implications of such a move. He needs to determine if it is economically preferable to move production to Mexico, and consider the implications of making changes to CCS’s operations strategy.
In 2016, a luxury cosmetic company approached BEworks Inc. (BEworks), a management consulting firm based in Toronto, Ontario, to gain a better understanding of its customers in an effort to develop better-tailored communications. BEworks was the world's first management consulting firm to specialize in solutions for real-world challenges by applying behavioural economics-an emerging field that sought to understand human behaviour in the context of psychological, social, cognitive, and emotional influences. Of special interest to the luxury cosmetic company was the design of key messages to drive sales growth. BEworks offered a unique approach to strategic problems by using empirical data obtained through experiments. The client and BEworks together decided on a variety of promising messages to assess. BEworks needed to decide on the design of a test to best gauge the effectiveness of these messages.
In January 2012, Alberta-based energy infrastructure business, AltaGas Ltd. (AltaGas),was considering the purchase of U.S.-based green energy power producer Decker Energy International, Inc. The move into renewable energy and into the United States would be a departure for AltaGas, which was primarily focused on traditional energy and infrastructure businesses in Canada. The financial lead on the acquisition project was looking at the assumptions provided. His task was to value the U.S. power producer's assets and provide feedback on issues that could affect the deal.
The chief operating officer (CEO) at Cambridge Cooling Systems (CCS), an industrial cooling system manufacturer, has been asked for his recommendations on CCS's plants in Canada and Mexico. The company has had a reversal in its strategic plan in the past year and is shifting from a focus on growth to looking for operating efficiencies. CCS's global plants are running below full capacity, and opportunity exists to reduce costs through the consolidation of operations. The current focus is on Canada and Mexico, and the CEO is exploring moving custom work from Canada to Mexico, where labour and overhead rates are lower. The challenge for the CEO is to consider the implications of such a move. He needs to determine if it is economically preferable to move production to Mexico, and consider the implications of making changes to CCS's operations strategy.
In 2017, the German company mymuesli GmbH (mymuesli) was operating in six European countries. Having begun to successfully distribute its customizable organic breakfast cereals online, mymuesli built on its growing popularity by opening stores in various cities across Germany, Austria, Switzerland, the Netherlands, and Sweden, where the most popular versions of the product were sold. The relatively young company differentiated itself with its customizable, premium organic products, and relied on its strengths to adapt to lifestyle and health trends. After a conversation in early 2017 with fellow hotel guests hailing from different European countries, the three founders of mymuesli were convinced that entering new countries might be a promising option for the company's future growth. They began to analyze the maturing industry and its impacts on the company's growth plans.
Joe Morrisroe, executive director for NYC311, had some gut instincts but no definitive answer to the question he was just asked by one of the Mayor's deputies: "Are some communities being underserved by 311? How do we know we are hearing from the right people?" Founded in 2003 as a phone number for residents to dial (311) from a landline for information on city services and to log complaints, the city launched a 311 website and mobile app in 2009, and social media support in 2011. In 2016, NYC311 received over 35 million requests for services and information. Technological progress had made it considerably easier to hear from NYC residents. Were those gains from innovation being shared equally? More recently, the city began using the data to create predictive models that might help direct inspectors and other workers. Morrisroe and his team had considered the potential downsides of agencies relying too heavily on NYC311 data or on its predictive power. In the sheer volume of the data and its potential to enable a new approach to city services, were biases around income, education, race, gender, neighborhood, home ownership, and other factors, hiding too? Morrisroe considered the question posed to him and its implications. He asked for the data and a team to assess it: Are we hearing from everyone?
In January 2012, Alberta-based energy infrastructure business, AltaGas Ltd. (AltaGas),was considering the purchase of U.S.-based green energy power producer Decker Energy International, Inc. The move into renewable energy and into the United States would be a departure for AltaGas, which was primarily focused on traditional energy and infrastructure businesses in Canada. The financial lead on the acquisition project was looking at the assumptions provided. His task was to value the U.S. power producer’s assets and provide feedback on issues that could affect the deal.
In April 2016, the owner of Apoorva Mess (Apoorva) in Manipal, India, wanted to open a full-service economical restaurant to reach out to customers, beat the competition, improve his sales, and fulfil his dream of serving quality food at affordable rates to the lower middle class. He was facing a dilemma over selecting the best location for establishing his new restaurant, knowing that the wrong choice would spell disaster for his business in the long run. A number of conflicting constraints were making it difficult for him to come to a decision. He wanted to follow a systematic approach to pinpoint the final location.
In October 2010, Ira Pittelman, lead producer of the Broadway musical American Idiot, had to evaluate one week's grosses from when star musician, Billie Joe Armstrong, was put into the show in New York City. The rock star had been enthusiastic about filling in for an actor in the musical based on an album by his band, Green Day. Audiences had also been enthusiastic, and revenues for the play were up. The producer had to determine whether Armstrong was the source of the increased revenue and, if so, how much his performance had contributed. He needed to determine how to respond should Armstrong offer to act in the musical again. Should he accept such an offer? How much compensation should he offer the star?
It is June 2016. Superstar basketball player LeBron James and his childhood friend and business partner Maverick Carter are celebrating James' third NBA championship. The duo will soon have to decide on a strategy for their media businesses-their film and television production company SpringHill Entertainment as well as their digital sports platform Uninterrupted. In 2015, Carter and James negotiated a first-of-its-kind, three-year agreement with Hollywood studio Warner Bros. Entertainment that gave SpringHill Entertainment a first-look movie deal, an exclusive television deal, significant development resources that also could be used for the creation of digital content, and space on the studio lot. Later that year, Warner Bros. signed on as a lead investor in Uninterrupted. Were Carter and James right to partner with Warner Bros. in this manner? And with renewal negotiations just around the corner, how could they make the most of the opportunity?