Wuxi Suntech was founded in 2001 by Dr. Shi Zhengrong, an internationally recognized scholar in the photovoltaic (PV) and renewable energy engineering. Suntech, the first private Chinese company to list on the New York Stock Exchange, was the largest solar PV manufacturer in China and the world's third largest. Its story was once recognized as a 'perfect match' of the promising new energy industry with the technical know-how and the comparative advantage of Chinese manufactured exports as well as the financial power of global capital markets. The bankruptcy of such a successful company was hence a puzzle to the business society in China and the world. How did the company rapidly emerge as an industry leader in the booming solar PV market but suddenly fail during the global financial crisis period? The case of Wuxi Suntech's bankruptcy under Dr. Shi's leadership provides rich material for the analysis of business strategy, industry structure, entrepreneurship, emerging markets and finance.
In January 2016, two entrepreneurial brothers attended an academic conference on small business and entrepreneurship to sell their product, the Online Venture Challenge, a web-based software-as-a-service retail simulation system. The brothers also hoped to demonstrate their second product idea, Launchboard, an interactive product that enabled users to make development plans and record their progress. Both products were intended as tools for entrepreneurship educators. The brothers did not have much success selling their first product during the conference, but two professors wanted to use Launchboard that semester. The brothers needed to decide how to position their product line. Should the Online Venture Challenge be promoted as one primary product that offered multiple complementary features? Or should their two products be positioned as two separate but complementary products? Or was it better to have two stand-alone products and two corresponding businesses? The brothers needed to better understand their own business ideas to determine the approach they should take. Fittingly, Launchboard, the new tool they had created, might actually help them to do just that.
In 2015, the Indian retail industry contributed around 10 per cent to India’s gross domestic product, and online retail had a growth rate of 85 per cent. In the same year, food and grocery made up 60 per cent of the Indian retail market, and the online grocery segment was estimated at US$600,000. To capture its share of this market, Amazon India launched its own online grocery arm, KiranaNow, with a marketplace model. As it set out to carve out a space for itself in the online grocery market, KiranaNow faced challenges related to merchandising, managing human resources, customer perceptions, and technology hurdles, including the question of whether its chosen business model was sustainable. The company needed to overcome these challenges to find success in the Indian online grocery market.
In May 2015, the new director at Schneider Electric’s plant in Rudrapur, India, faced a challenging situation. The company had an ongoing struggle with quality issues and consistently missed its production targets. From a human relations perspective, employee engagement and morale were low and the shop-floor workers had very little respect for the plant’s management team. The new director quickly launched a program of human resource initiatives aimed to turn the plant around, but in the midst of his efforts, a sister plant submitted a high-volume order that seemed well beyond Rudrapur’s production capabilities. Against the advice of his superiors, and in the face of some resistance from his staff at the plant, the plant director accepted the order and used an adaptive leadership approach to implement several plant-level changes in the production processes at Rudrapur. While the team had made a lot of progress in improving the overall function of the Rudrapur plant, there was still a long way to go and a huge production hurdle to be crossed. Were the director’s interventions likely to succeed? Should he adopt a different approach to meet the challenges?
Student spreadsheet for product 9B17A010. The easy template is to be used when students are not very proficient in writing equations in Excel or when students already know the equations and more time is to be dedicated for discussion of qualitative factors.
Student spreadsheet for product 9B17A010. The hard template is to be used when students are comfortable with Excel and the instructor wants the students to understand how to arrive at the numbers of break-even/profitability analysis and to gain knowledge about the associated equations.
Impex, a division of the South Indian firm KCM Appliances, dealt with kitchen, household, and home entertainment appliances. KCM’s managing director needed to decide on a year-end sales promotion for Impex. One option was direct-response advertising in the Times of India newspaper, which could potentially help Impex expand its reach in India. This option was in contrast to the previous year’s promotion, which involved collaboration with distributors and retailers in the Kerala region of South India. Deciding between the two options required a quantitative analysis to estimate the incremental volume and sales revenue gained from the previous year’s promotion. Those gains could then be compared with the break-even volumes required to cover the costs of the promotion with the Times of India. Impex also needed to consider a qualitative analysis by examining the tensions created by the two options, including channel relations versus brand awareness, an existing market focus versus a future market focus, and product management versus sales management. Should Impex repeat the previous year’s tried-and-tested promotion, or pursue the Times of India offer, whereby it could sidestep its local channel partners and directly sell to consumers?
In early 2013, three young Nepalese entrepreneurs were deciding whether to launch Kaffeine, the first of a large chain of coffee shops, in Kathmandu, the capital city of Nepal. As experienced entrepreneurs, the partners were interested in a recently vacated location near Durbar Marg, a major street and shopping destination in Kathmandu that represented a unique opportunity to build a highly successful coffee chain. Coupled with the increasing trend in Nepal toward coffee drinking rather than tea, this was an opportunity the trio felt they could not pass up. The entrepreneurs had many things to consider, such as location, competition, target market, and how to measure the feasibility of this new venture.
Black Friday, the day after American Thanksgiving, marked the official start of the Christmas shopping season in the United States. It was a day that generally brought smiles to the executives of retailing giant Nordstrom, Inc. (Nordstrom). However, on November 28, 2014, Nordstrom had to deal with the tragic loss of a seasonal worker at a Nordstrom store in downtown Chicago. She had been killed in a workplace violence incident involving her former boyfriend. The event was a reminder of an earlier incident involving an Indianapolis-based employee who was terminated in November 2013. Even though Nordstrom had been a strong advocate for workplace safety, the retailer had endured public scrutiny after terminating the employee, who was victimized by her ex-boyfriend. These two workplace violence incidents made it necessary for Nordstrom’s management to determine how best to protect all Nordstrom stakeholders in the future.
Drawing from a wealth of negotiation research, my previous installment of Negotiating Life advised negotiators to make the first offer if they can. But sometimes they can't. Sometimes, despite a negotiator's best efforts, the other side moves first. In this article, I provide a framework for responding to another negotiator's first offer, suggesting that the appropriate response varies markedly depending on the quality of the offer. This makes for a more comprehensive strategy for making and managing early offers in a negotiation.
More than ever, business practitioners perceive feedback as a vital tool for increasing sustainable business competitiveness; however, research on feedback shows mixed results in terms of its effectiveness. Three problems underlie the paradox of feedback. First, the word 'feedback' lacks definition. Both scholars and practitioners have different understandings of what feedback means. This lack of clarity hampers successful implementation of feedback as a corporate reflex. Second, feedback can be destructive. In fact, toxic feedback might disengage employees from their jobs. Third, giving and receiving feedback is more difficult than we sometimes like to think. The mantra "our organization has an open feedback culture" does not alone suffice to support effective feedback behavior. This Executive Digest addresses these issues and introduces the feedback ecosystem: a four-step process (receive, reflect, plan, act) bridging theory and practice to anchor effective feedback within organizations. In addition, evidence-based advice is offered on how to implement each step of the feedback ecosystem.
As customer participation in business transactions increases, it is important to investigate how consumers approach financial transactions with firms in terms of selfishness and fairness. Pay-what-you-wish pricing models continue to attract managerial and academic interest as allowing customers to set prices provides an unorthodox setting in which to examine forces that drive buyer-seller interactions. This Executive Digest provides an overview of the current state of pay-what-you-wish (PWYW) pricing and the benefits it can provide to a firm.
Budgets are considered by many to be a necessary evil. Within organizations, budgets are used to allocate financial resources to individuals who are charged with managing funds. This allows them to accomplish corporate goals and objectives. When reviewing the differences between actual and planned spending for a number of cost centers evidenced in data covering a 4-year period, it was noted that favorable variances exceeded unfavorable ones more than 50% of the time, although probability suggests that favorable and unfavorable results are equally likely to occur. As budgets are only best guesses about the future, these results indicate that planned spending was intended to manage uncertainty. In other words, the budgets were intentionally misstated-that is, they were lies. This Executive Digest explores ways of uncovering these lies. The consequences of intentional misstatement of planned spending are serious. In such cases, financial resources are not only misallocated, but also allocated in a suboptimal way. This means that future borrowing costs may increase, important projects could be delayed, and necessary operating expenditures are not made.
Bestsellers like The Lean Startup and Business Model Generation have suggested that ideation-the generation and selection of ideas-is important to new venture creation; yet little empirical research on the topic has been conducted. Using a creative problem solving approach, we developed and tested a new scale that found imaginativeness predicts new venture ideation over and above the effects of the usual suspects of attitude, knowledge, and evaluation. Imaginativeness is an ideational skill that combines task-relevant knowledge in three distinct domains-creative, social, and practical-with the latent ability of imagination. In the article, we explain why a new scale was needed, why imaginativeness appears to be especially useful to individuals who lack entrepreneurial experience, and how imaginativeness enables just about anyone to generate and select new venture ideas with the proficiency of a habitual entrepreneur.
In 2014, Dairy Khoury, a medium-sized family dairy located in Lebanon, was accused of using a health-threatening carcinogenic substance as a preservative in its products. The news created an immediate food safety concern and a product harm crisis, resulting in dramatic reputation loss and operational risks to Dairy Khoury. In this article, we analyze Dairy Khoury's response to the product harm crisis through an examination of the communication strategies used to address internal and external stakeholders. We then introduce traditional corrective action response strategies from the crisis communication literature. In the Dairy Khoury case study, the company opted to defend its reputation and clarify the misunderstanding using catalytic defiance, a long-term crisis response strategy. Our analysis provides insight regarding the risks and benefits of pursuing long-term versus short-term strategies during crisis recovery. This article contributes to crisis communication theory and practice and sheds light on the dynamics of crisis management in family businesses.
Many successful companies spend substantial time and effort engaging with potential consumers on social media sites. They determine how consumers spend their time online and develop interesting content to increase awareness and enjoyment of the brand-often only to lose those potential customers because the purchase process becomes too difficult once consumers have decided to buy the product. New technology recently introduced by third-party vendors allows companies to offer a sales option directly on social media websites such as Facebook and Instagram. In this article, we present the effects on the consumer decision process created by the 'Buy Now' option across the consideration, evaluation, purchase, and post-purchase stages. We compare and contrast three distinct decision models: (1) traditional media only, (2) traditional media and social media with only a communication capability, and (3) traditional media and social media with the added function of immediate purchase. We argue that though the possibility of buying on social media will decrease the number of brands considered and evaluated, the number of purchases and amount of brand advocacy will increase significantly due to the ease of purchase. We conclude with some recommendations on future research.
Organizational transactions are handled along a continuum of the firm's customer relationships, ranging from relational and friendly to more adversarial and us-versus-them in demeanor. For top customers, the approach is almost always close and relational. In this article, we question this view and suggest that there is benefit from conditioning the firm's relationship development efforts on an understanding of the true value to be gained from partnering and increased closeness. We provide a framework with which managers can diagnose their current portfolio of relationships with key customers or suppliers and offer suggestions for action. We provide an empirical illustration of the typical distribution of responses among five regions of the framework and discuss its implications.
Talent management continues to be a topic of interest for employers who face significant challenges dealing with the uncertainty of the supply and demand of talent in organizations. In particular, employers often speak of a talent gap that exists between the skills possessed by applicants and the skills needed in organizations. Supply chain management (SCM), a field that focuses on matching product supply with consumer demand, offers several concepts and models that could apply to and help resolve issues related to the skills mismatch. In order to address this issue, we base our conceptual development on a theoretical framework used in SCM called the collaborative, planning, forecasting, and replenishment (CPFR) approach. We use this approach to develop a comprehensive model of talent supply chain management (TSCM) that applies concepts related to the field of SCM to managing the development and flow of talent. We further go on to describe how organizations can utilize TSCM to enhance connections with talent suppliers to get their labor demands fulfilled with individuals who have the necessary skills for success.