In July 2019, the uncertainty that had been surrounding Brexit since the public referendum in June 2016 had led to a crisis for Owen Barry Inc. (Owen Barry), a luxury goods manufacturing enterprise in the United Kingdom. The company’s finance and production manager had voted in favour of Brexit but was hardly prepared for the deadlock that followed. He was now weighing different options for navigating a way out of the company’s predicament. His three main concerns were: How should he deal with the exchange rate fluctuations that had been affecting the company’s revenues and margins? How should he deal with issues around sourcing and importing essential raw materials? How should he deal with problems around the recruitment and retention of the skilled workforce at the company’s manufacturing plant near London?
In 2019, a small investor was reviewing her portfolio mix, which included quick-service restaurants. During her research, she learned of new-product launches by two companies: Impossible Foods and Beyond Meat. Both companies produced plant-based products that simulated meat, and both were distributing their products not only in grocery stores but also in quick-service restaurants. Both also used innovative marketing, such as insisting that their products be placed in the meat aisle and not in a separate aisle for plant-based food. The companies suggested their products were better for animals, human health, and the environment than animal-based meat, but faced pushback and regulation. Would plant-based meat be a good investment?
In February 2019, the chief executive officer (CEO) of the Daily Bread Food Bank (Daily Bread) in Toronto, Ontario reflected on the charity’s strong performance in the past year. Despite Daily Bread’s success, the CEO felt there were opportunities to do more. Toronto’s food insecurity rate had been rising in recent years, and food banks across the city had been struggling to meet demand. The CEO had several potential ideas for contributing to the long-term sustainability of the food bank and delivering the highest impact in the community. Daily Bread’s underused kitchen could be turned into a social enterprise and used to generate more funds to gain additional engagement with the local community in the fight against hunger; the kitchen could also be rented out for special events after hours and on weekends; extra shifts and truck deliveries would help grow the charity’s operations; or the organization could keep the status quo and let the charity grow naturally. Most importantly, however, the decision would have to align with the charity’s mission and current operations. With the advisory board of directors’ meeting rapidly approaching, the CEO had to make a decision on how to maximize the food bank’s resources.
Although evolutionary notions about business often lack direct grounding in Darwin’s work, evolutionary theory can still help us understand how organizations, institutions, and markets change. Unfortunately, when used to illuminate business strategy, many evolutionary concepts are misapplied. This paper strives to address the garbled strategic advice created by misinterpretations of evolutionary theory, which have led to incorrect assessments of markets and market participants. We examine three widely held beliefs that are based on misapplications of evolutionary theory: 1) profit-maximization strategies inevitably lead to the best outcomes, 2) business is survival of the fittest, and 3) specialization makes you stronger. Applying four standard games (Prisoners’ Dilemma, Chicken, Battle of the Sexes, and the Stag Hunt) to the business world, we created models of competition to track interactions between market entities and demonstrate why many business ideas are based on garbled interpretations of the evolutionary concepts of selection, frequency dependence, and adaptation. The key takeaways from our research are: 1) selection on outcomes does not dictate that aiming for profit maximization will always lead to the best outcomes, 2) frequency dependence means there can be no unidimensional fitness to aspire towards, and 3) it is not survival of the fittest, but best fitted for any particular contest. Simply put, adaptation (both proactive and reactive), not specialization, is the key to success. Recognizing this requires a fundamental shift, inverting the normal strategy sequence by suggesting firms change themselves, rather than seeking to change their world.
In March 2018, Snap Inc. (Snap), based in Venice, California, and commonly known as Snapchat for its application that allowed users to send photos that disappeared, was looking for ways to grow its user base in the competitive social media platform industry and to differentiate itself from the other major platforms. To do this, it was trying to position itself as a “camera” company and to become relevant to a larger target market: adults aged 25 and older, a demographic that seemed already well-served by current social media platform options.
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 June 2016, the augmented reality game Pokémon GO quickly became one of the hottest topics in the world, changing both the online and offline behaviours of players. Pokémon GO was jointly developed by the San Francisco-based firm Niantic Inc. and The Pokémon Company, based in Japan, and was underwritten by the Japanese video game giant Nintendo. The game, which overlaid virtual items and creatures onto the physical world, allowed smartphone users to seek out and capture a variety of virtual monsters in real-world locations. With easy-to-follow game rules, Pokémon GO rapidly picked up a wide range of players and, within a relatively short period of time, generated considerable income through in-app purchases. The sudden popularity (and the eventual decline in interest) of the new game provoked debates about the technology behind it. How could developers use augmented reality technology to satisfy customer needs, address business challenges, and promote social welfare?
An investment analyst was tasked with determining the impact of political controversy on firm performance in the aftermath of the highly charged 2016 U.S. presidential election. After this election, U.S. firms such as New Balance, GrubHub, and PepsiCo faced boycotts from aggrieved activists. The analyst needed to better understand the downsides—and potential benefits—of firms’ involvement in political controversy. To do so, she needed to graph the impact, if any, political events had on the companies’ stock returns. But were markets truly efficient and rational—that is, could they reliably capture the impact of political controversy on firm performance?
Following a report by the Premier’s Advisory Council on Government Assets in 2015, the sale of beverage alcohol products in Ontario was deregulated: in 2016, 60 grocery stores were licensed to sell beer and cider to consumers. The intention was for up to 450 grocery stores to eventually sell beer and cider products, and for 300 of these stores to also sell wine. The move to deregulate the industry was contentious; the province generated substantial tax revenues from its provincially owned liquor stores, and many stakeholders had concerns about expanding the availability of alcohol. <br><br><br><br>Retailers, policy-makers, and consumers faced questions about the role of regulation in a market. The provincial government had been trying to achieve specific historic and public-welfare goals by regulating the sale of alcohol and taxing sales of this controlled substance. Policy-makers needed to consider the impact of deregulation on health care and on tax revenues. Independent grocers wondered whether substituting their current products with beverage alcohol products would boost their overall income; they also wondered what future restrictions the government would place on the sale of beverage alcohol products. The impact of this regulation was felt by consumers and by industry players, including retail stores, restaurants, and alcoholic beverage manufacturers.
Gathering the evidence required to back up a corporate claim has always been important, but the case for effective evidence gathering has never been greater than today. Unfortunately, while the data that organizations ordinarily collect can be useful, it is often insufficient to answer relevant questions. In other words, the evidence required typically isn’t ready to be analyzed and often must be developed using real-world experimentation. This paper examines how businesses can perform randomized controlled trials. To help you conduct better testing for your own business, we also address three questions: What if you can’t run a randomized controlled trial in a lab? Which organizations should conduct tests? How should you conduct your testing? The potential for confusing correlation and causation only becomes greater in a world of big data. Determine if an outcome is significant by using a simple statistical test such as the T-test, and specify your required level of significance before running the test. One way to achieve the best of both worlds is to use a field experiment—an experiment run in the real world but with as many confounding influences as possible removed. Although messier than lab tests, field experiments inspire greater confidence that the results will be relevant. Whenever it is feasible to randomize what you offer your customers, you have the potential to gain a better idea of what works best. Testing can save your organization money, make your actions more effective, and improve outcomes for your customers.
In the summer of 2016, PepsiCo Beverages Canada faced a choice: whether to launch its new product, organic Gatorade, in Canada. Only a few months previously, PepsiCo North America Beverages’ chief executive officer had announced a company-wide initiative that was designed to offer consumers a greater variety of healthier products. Would such a product ultimately make PepsiCo more competitive in the Canadian market in light of recent trends that emphasized healthy options? Did Canadian consumers want organic Gatorade? PepsiCo also had to keep in mind its long-standing competition with The Coca-Cola Company, and decide how that would affect its strategic choices.
Kelsey, a newly minted MBA hired by a firm that provides analysis of companies, has been given a task to present an assessment of six very different firms described by her manager as “retailers.” She has been given the performance details of these companies and is expected to quickly analyze the metrics related to the firms’ performance, such as return on assets, inventory turns and staff productivity. Her manager also wants her to assess and compare the six firms more broadly. Which firm should Kelsey recommend investing in?
In the fall of 2014, the Alibaba Group, an e-commerce company that operates domestic and international marketplaces and provides Internet-based services from its headquarters in Hangzhou, China, startled the world with its record-breaking initial public offering on the New York Stock Exchange. The company’s business plan differs from other major Internet companies such as Amazon and eBay by its strategies that are tailored to the particular circumstances of the Chinese economy and Chinese consumers. Now, the executive team has set its sights on achieving the next big thing — developing its online-to-offline business, a market sector estimated to be worth a trillion dollars in the age of the mobile Internet. However, the company faces stiff competition from Tencent, the other Internet titan in China. How can Alibaba integrate online and offline activities to increase sales and improve the consumer’s experience — and, therefore, improve its own bottom line?
An executive at Freezer Foods, a manufacturer of ready-to-eat frozen meals, has just been told by a major customer, a retail supermarket chain, that it wants one of its two suppliers of frozen food to take over as category captain. A category captain is a third party, usually a manufacturer, who manages a category of goods for a retailer. The executive needs to think through the objectives of category captaincy from the retailer’s perspective and develop an attractive bid to win the category captaincy. In doing so, the executive develops an opinion on the benefits and challenges associated with category captaincy from the point of view of four parties: the retailer, the winning category captain, the manufacturer whose rival becomes the category captain, and consumers.
As the ride-sharing app, Uber, expands into China, it is confronted by government regulatory concerns and local competition, while also facing opportunities generated by a fast-growing emerging market and aided by local collaborators. Uber endeavours to take the lead in the market, but, as the newcomer, it needs to make many decisions. The case study highlights China’s online chauffeuring market and the challenges facing Uber. As students attempt to develop a feasible plan for Uber to succeed, they will review Uber’s service offering and the strategies that both Uber and its competitors have adopted. The case also explores other opportunities and challenges that Uber faces as the company works with local businesses and government responses toward the new business sector.
A young analyst decides to collect Twitter data to better understand who is promoting the Net Promoter matrix on the social media site in late July 2015. How widely is the metric mentioned and how much of the dialogue involves conversations rather than tweets being sent as general broadcast messages? He considers the social network of these users, their relationships and the network as a whole to create a network graph and wonders what he can do to improve the way it can be viewed and understood.