Two entrepreneurs have created a not-for-profit online back office system that can be used at no charge by any of Canada's 70,000 charities to reduce their operating costs. The cost of maintaining the system has been underwritten by major financial service firms. Just as the entrepreneurs are about to launch, a for-profit service announces a similar service that targets the same charities. The entrepreneurs are concerned about overlap, pre-emption and possible confusion in the market. They wonder if they should alter their planned strategy or perhaps should just abandon the project.
Quack.com was in dire straits. An early entrant in the voice portal market, Quack was quickly running out of money. The company's management team had just returned from a road show for a second round of venture financing, but they had been unsuccessful. To exacerbate this issue, Quack's two major competitors had each received substantial funding. At the current burn rate, Quack could survive on its bridge financing for only three more months. Moreover, after the first few months of running the voice portal, Quack's business-to-consumer model for voice portals was already showing signs of weakness. Quack's management believed the failure of its road show could be related to its B2C focus. The company was facing many major decisions that would reshape and dictate the future of the firm. This case deals with the possible options for new strategic direction.
The Percy Group is a diversified real estate development company. The president must decide whether to invest $7.9 million to convert one of the company's apartment buildings into a retirement home. The company had not previously converted or operated a retirement home. He must evaluate industry trends and the expected cash flows necessary to determine whether the investment is expected to earn the company's cost of capital. He must also undertake sensitivity analysis and a qualitative evaluation.