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Ubernomics (A)
The rapid rise of app-based "ridesharing" services, led by San Francisco-based companies Uber and Lyft, had a disruptive effect on the existing market. Uber and Lyft dominated the ridesharing market in the United States and many other markets, although other companies such as Sidecar and Cabulous drove key innovations in the service. By 2015 Uber was clearly the dominant firm. Despite encountering opposition from regulators and traditional taxi companies all over the world, Uber managed to expand to 58 countries and more than 300 cities. In a world of smartphones, apps, and GPS systems, the methods of traditional taxis suddenly seemed obsolete. Was ridesharing truly a value-creating innovation or just a cleverly devised scheme to mask the illegal maneuvers of an unregulated insurgent? Were Uber and Lyft just technology companies that revolutionized the market-making power of advanced data systems and free markets to serve the basic desire of every traveler to get from point to point quickly, conveniently, and cheaply? Or were they glorified illegal cab services, flagrantly cannibalizing an established taxi system? -
Ubernomics (B): Uber's Car Services
Uber offered a variety of car services that varied by city. The full-range of services included UberX, UberBLACK, UberSUV, UberSELECT/PLUS, UberXL, UberLUX, and UberTAXI. The services varied by type of car offered and fare charged. In large cities, the option to select among a variety of private transportation services and car types existed long before Uber and other ridesharing services came on the scene. It seemed straightforward then that differentiation of service level must be profitable. But was the provision of this variety of service levels better for riders as well? What was the rationale for offering service-level variety for products and or services that were clear substitutes for each other? When did differentiation by service level make sense for both riders and the service provider? And how many service levels should there be? -
Ubernomics (C): Driver and Passenger Ratings
A key difference between ridesharing services and standard yellow taxis was the rating system. After a trip using a ridesharing service, riders were encouraged to rate their drivers on a scale of one to five stars. The rating systems put immense pressure on drivers to maintain as high a rating as possible. Many drivers regarded the rating system as unfair, because they were sometimes penalized for factors out of their control. But just as passengers could rate drivers, drivers could also rate passengers. When low-rated passengers attempted to summon rides in the future, there was a greater likelihood of rejection by drivers. The rating systems used by ridesharing services seemed to be a key differentiator from taxicabs and for-hire services. But did the systems work as they should? Did the use of a ratings system lead to an improvement in service quality over competing services? Or were its flaws too serious and unfair to ensure anything other than additional stress for drivers? -
Renault-Nissan Alliance: Will Further Integration Create More Synergies?
Renault-Nissan Alliance (RNA) launched four convergence projects in four key functions (research and development, manufacturing and logistics, purchasing, and human resources). The projects required the two independent entities, Renault and Nissan, to increase collaboration and integration to strengthen economies of scale, and thus reduce costs in order to better compete globally in both developed and emerging markets. However, as the alliance increased the level of integration and opened possibilities for inviting new partners, it also increased the time and resources needed to reach joint strategic decisions between the two companies. RNA had many difficult decisions to make with respect to moving forward - not least of which involved finding an eventual replacement for the alliance's 61-year-old chief executive officer. -
BandPage (A)
BandPage CEO James "J" Sider is about to receive results from BandPage's targeted advertising campaign on music streaming service Rhapsody and learn whether BandPage's strategy to improve ad click through rates and generate revenue has succeeded. BandPage, which began as a Facebook app to help musicians build professional-looking pages and convert fan "likes" into revenue, has become a major hub in the online music network. BandPage has deals with upstream and downstream music partners, from streaming services to ticket sellers to merchandise companies, and has built relationships with artists by providing a one stop shop to update current band information across most major music sites simultaneously. BandPage's most recent project has been to differentiate fans by their behavior on streaming sites in order to target super fans with high priced, exclusive and/or personalized offers from artists. At a time when tensions are high between streaming services and artists who believe that they are not being fairly compensated for the use of their music, Sider is convinced that BandPage can help streaming services drive revenue growth for artists through ticket, merchandise and exclusive offer sales. If the Rhapsody data proves that BandPage's strategy is working, the potential revenue growth for BandPage and all of its partners is massive. -
Clearwater Seafoods
Clearwater sought to market value-added shellfish products in a traditionally commodities based industry, while facing supply uncertainties and regulatory, environmental, and foreign exchange challenges. Clearwater harvested lobsters, clams, scallops, shrimp, and other marine creatures from the Canadian Atlantic, and sold the seafood all over the world. Although seafood buyers traditionally bought on price, Clearwater's innovations and technology investments enabled it to produce higher quality products; still, it faced the challenge of convincing buyers to pay a premium price. The firm's managers also prided themselves on their sustainable fishing practices, which were not the historical norm for the industry; here, again, translating these practices into increased willingness to pay was a challenge. As background, the case also discusses the challenges of fishery management at the national and international levels, using the collapse of the cod fishing industry as an example, and discussing the economics and politics of the fishery in classical terms of externalities and public goods. -
OMV Petrom: Investment as Partnership-When It Takes Three to Tango
Petrom was privatized by the Romanian state in 2004 and acquired by Austrian oil company OMV, with the state retaining a 20.6% stake in the company. The situation was particularly challenging for the foreign investor since the sector in which the company operated was strategic, was regulated by the Romanian state and the company was a key employer and tax payer in a country that was undergoing major structural change. Under OMV and CEO Mariana Gheorghe's leadership, OMV Petrom saw its net profit and sales almost double since 2005, while headcount was reduced by 50%. Gheorghe had negotiated challenges stemming from Petrom's legacy as a state owned company, such as lack of investment, aged assets, operational inefficiency, and bureaucracy while successfully managing the triangular partnership between the acquirer OMV, acquiree OMV Petrom and the Romanian government. -
Ellen Harvey
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DPDHL Group: Employee Safety and Wellbeing
Management at Deutsche Post DHL Group is designing a three-country test of investment in a new health and wellbeing strategy. -
Deutsche Bahn AG: The heartless train conductor
Ulrich Homburg must have had an unpleasant déjà -vu experience on January 28, 2010 when hearing of headlines in Germany's leading tabloid Bild about "Schaffnerin Herzlos", the "heartless train conductor". The board member of Germany's national railway company, Deutsche Bahn AG (DB), and head of its passenger transportation division was confronted with media reports about a minor girl who had been thrown off the train just the night before by a DB train conductor. The incident happened on what turned out to be the coldest night of the winter, in one of the most deserted provincial train stations in the German state of Brandenburg. The girl was traveling without a valid train ticket. This incident was not the first of its kind. In the fall of 2008, Bahn employees had also forced several children and youths off of trains. The train company had subsequently given service personnel very clear instructions: Under no circumstances shall minors be asked to leave the train. Now, Homburg had to ask himself if further action was necessary. -
Suntech Power: Competition and Financing in China's Solar Industry
In 2011, Suntech Power, the world's largest solar panel manufacturer, found itself in a highly problematic position. Recent developments in the Chinese solar power industry had negatively impacted the company's operations. As the industry had matured, the demand for Suntech Power's products had become highly volatile. Changing policy regulations, the ambiguous financial structure of the firm and a shift in consumers' perceptions of the product were only some of the issues that further compounded the problem. As a result of these changing dynamics within the global solar power industry, the company's share price had plummeted by roughly 90 per cent. To remedy the problem, in May 2011, the founder and chief executive officer of Suntech Power hired a new chief financial officer and they faced the arduous task of turning the company around. How should they tackle changing political and economic conditions? What decisions needed to be made to maintain the position of the company in the global solar energy market? -
Sophia Tannis: Life Choices (A)
Sophia Tannis and her husband, Richard, had to choose between following her career or his. The pair chose to accept Sophia's new job offer, which involved relocating geographically. Over the ensuing five years, Sophia and Richard became parents to two children and gradually settled into their new roles. Since putting his own career second to Sophia's, Richard successfully built up a reputation as a future leader within his organization, and has recently been offered his next big job opportunity. As fate would have it, Richard's promotion was announced the same day Sophia's boss handed her the chance to take her next big career step. Also see case B supplement 9B15M102. Students may be interested in the associated case Sophia Tannis: The European Transfer, product 9B13C027. -
Sophia Tannis: Life Choices (B)
Supplement to case A: 9B15M101. -
Gender at Work
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Whirlpool Corp.: Structuring the Deal to Acquire Hefei Rongshida Sanyo Electric Company
Ian Lee, Whirlpool's VP for North Asia, had been negotiating a possible acquisition with Jackie Jin, the chairman of a leading Chinese appliance manufacturer named Hefei Rongshida Sanyo Electric Company (Hefei Sanyo), for almost six months when suddenly Hefei Sanyo's stock price jumped 25% in the first two weeks of May 2013. The sudden price increase not only increased the likely acquisition price for an ownership stake in Hefei Sanyo, but also meant that Whirlpool had lost the luxury of both time and secrecy. Lee had to quickly decide how to structure a deal that enabled Whirlpool to acquire controlling ownership position (>50%) in the state-owned enterprise (SOE)-something that had not been done before; how much to pay for the stake; and how to ensure commercial, regulatory, and political approval for the deal. -
The Portfolio Improvement Rule and the CAPM
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Whirlpool Corp.: Structuring the Deal to Acquire Hefei Rongshida Sanyo Electric Company, Spreadsheet Supplement
Spreadsheet Supplement for product #216702 -
Ozark Feed and Ag Corporation: The ERP Decision
This case describes a medium size business that manufactures animal feed for commercial and companion animals. The company has been growing rapidly, and is considering whether or not to implement an ERP system. Ozark currently uses an IT system built and refined in-house, and though less flexible than desired, allowed for some specific functionality the company used, such as a pricing system tied to the company's commodity hedging positions on a real time, as well as off the shelf systems for recording financial transactions and reporting, purchasing, warehouse management, and manufacturing execution. The case provides an overview of ERP systems and implementation. Ozark is deciding among 3 ERP options; different senior executives support different options. -
Becoming Ambicultural: A Guide for Managers and Organizations
Ambicultural organizations and executives go a step beyond simply embracing different thoughts and behaviors-they transcend divisions to integrate such "opposites" as competition and cooperation, East and West or Chinese and American business approaches and strategies. They combine the best of two or more entities-cultures, ideas, practices-while avoiding the shortcomings of each. -
Mabel's Labels: Leading in a Results-Only Work Environment
This case describes the implementation of a results-only work environment (ROWE) at Mabel's Labels, a successful entrepreneurial firm in Canada. Under ROWE, employee performance is managed by examining outcomes and accomplishments, not by measuring the amount of time people spend at the workplace. The case provides details of the change process and ROWE implementation. The change leader views ROWE as a strategic initiative to enhance the organizational culture and is pleased with employee attitudes and productivity under ROWE. She wonders, however, what next steps are needed to mitigate emerging issues, such as employee coordination, team building and the assimilation of new employees.