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The EC Rains on Oracle/Sun (A)
Oracle's proposed acquisition of Sun was on a fast track until the EC's antitrust concerns about open-source MySQL ignited a translantic war of words delaying the deal. Sun's performance suffered and its customers were approached by competitors while regulatory objections were debated and tensions rose between U.S. and EC regulators. -
Do You Know What Really Drives Your Business's Performance?
Over the past 30 years, she notes, researchers have developed tools designed to help managers understand the drivers of performance in their businesses. But in many cases, managers make assumptions about presumed links that they haven't fully tested. One study found that only 21% of managers who said they implemented strategy maps had tested the links within their own organizations; many of those who had tested the links found their early assumptions were flawed. This article emerged from research related to the "service profit chain,"a well-known body of research focused on the drivers of performance in service industries that was developed by James L. Heskett, W. Earl Sasser Jr., and Leonard A. Schlesinger. The service profit chain proposes a mirror effect between employee satisfaction and loyalty on the one hand, and customer satisfaction and loyalty on the other, which in turn drives financial performance. However, in analyzing data from two British retail chains -a superstore chain and a home improvement store chain -the author found that the assumptions contained in the model were not always supported by the empirical evidence from the two retailing organizations. "Although intuitively appealing,"the author writes, "strategy maps and models such as the service profit chain have a common pitfall: They encourage managers to embrace assumptions about the drivers of financial performance that may not stand up to close scrutiny in their own organizations."At the superstore chain, for example, rather than finding a positive relationship between employee satisfaction and productivity and profit, she found negative correlations. She found further negative correlations between employee satisfaction and sales growth, and between employee loyalty and both profit and productivity. The service profit chain posits that the most productive, profitable, and highest-growth stores would be the ones where employees are likely to be most satisfied and loyal. -
Improving Analytics Capabilities Through Crowdsourcing
For centuries, plant breeding has been a labor-intensive process that depended largely on trial and error. To find the most successful variety of corn, for example, a breeder might pollinate hundreds or even thousands of plants by hand to see what happened. Syngenta had been involved in a large-scale version of trial-and-error research and development, conducting field tests on hundreds of thousands of plants each year in more than 150 locations around the world. But given that the results of experiments are often shaped by quirks and idiosyncrasies, it was sometimes difficult to draw meaningful conclusions. Syngenta's idea was to use data analytics to study a wide range of plant and seed varieties so it could identify the most desirable plants early and make optimal use of resources (everything from capital to labor to land to time). Rather than investing time and resources on more and more testing, its aim was to make decisions about plant portfolios using hard data and science. The vision, write authors Joseph Byrum and Alpheus Bingham, "was to create a suite of software tools that would replace intuition in plant breeding with data-backed science." The authors describe how open innovation can help companies tackle complex business problems that they can't solve on their own. They also discuss lessons Syngenta learned as the company turned to several online crowdsourcing platforms to find talent that could help it increase its R&D efficiency. The effort paid off: Within eight years, Syngenta tripled the average annual improvement rate of its soybean portfolio. In April 2015, an independent panel of academic and business experts in operations research validated the company's efforts and their applicability beyond agriculture, awarding Syngenta the 2015 Franz Edelman Award for Achievement in Operations Research and the Management Sciences. -
What Makes Work Meaningful - Or Meaningless
The authors discovered five unexpected features of meaningfulness at work: (1) it is often self-transcendent, in the sense that individuals tend to experience their work as meaningful when it has an impact on others, (2) it can be associated with poignant or difficult experiences, not just happy ones, (3) the experience of meaningfulness at work tends to be episodic rather than sustained, (4) it is often only appreciated upon reflection rather than in the moment, and (5) it is personal, and managers and organizations matter relatively little in individuals'experience of meaningfulness. The authors also found that meaningfulness appears to be driven up and decreased by different factors. Whereas meaningfulness was something individuals tended to discover for themselves, meaninglessness at work was generally a function of how people were treated by managers. Seven factors within the control of managers emerged as destroyers of meaningfulness: disconnecting people from their values; taking employees for granted; giving people pointless work to do; treating people unfairly; overriding individuals'better judgment; disconnecting people from supportive relationships; and putting people at risk of physical or emotional harm. The authors note that, given meaningfulness's personal and intangible nature, organizations cannot effectively control or mandate meaningfulness, but rather should focus on creating an ecosystem that is conducive to meaningfulness at work. They argue that there are four elements to a holistic meaningfulness ecosystem: organizational, job, task, and interactional meaningfulness. Experiencing work as meaningful can be a moving and even uncomfortable experience, but organizations that are successful in fostering holistic meaningfulness are more likely to create the kind of workplaces where human beings can thrive. -
WPP's CEO on Turning a Portfolio of Companies Into a Growth Machine
In 1985 WPP was a small, publicly traded company, worth about $1.3 million. It manufactured shopping carts and other wire and plastic products. Today it is the world's largest advertising and marketing services company, worth about $30 billion. Sorrell details how that growth occurred and why it continues, even in an industry with constraints on the top line. Within two years of buying WPP, which he always intended to use as a shell company, Sorrell and his team had made 18 acquisitions, focusing on firms that specialized in "below the line" marketing functions: packaging, design, and promotions. ("'Above the line,'" he writes, "is the sexy, creative, Don Draper stuff.") They went on to acquire J. Walter Thompson and Ogilvy & Mather in deals worth a combined $1 billion plus. When the economy went into recession, WPP found itself overleveraged; the author concluded that he needed to justify the parent company's existence. The leadership team focused on investments in its people and in real estate and launched a number of programs to cultivate and retain talent. It colocated operating companies in multiple markets throughout the world, centralized procurement, and standardized hardware and software across the group. Its effort to create horizontality, which has accelerated over the past decade, gives clients access to the best talent and ideas from WPP's entire portfolio and keeps the company growing. -
Life's Work: Greg Louganis
The Olympic gold medalist in diving talks about his early training, why he mentors rather than coaches other divers, finally winning a place on the Wheaties box, and more. -
Aggressive Growth Plans For Zimmer Spine
Steve Healy, the President of Zimmer Spine, has to transform his organization into a market leader. Zimmer is a major medical device firm, but the Spine division has underperformed and it's core technology did not get the expanded FDA label that had been expected. The case reviews the industry, the competitive landscape, and the potential growth strategies for Zimmer Spine to consider. -
The Sri Lankan Health Crisis and the Middle Man
In 2015, many people in southwest Sri Lanka were experiencing severe health problems as a result of poor water sanitation, decaying pumps and pipes, and the resultant unsanitary water. With Sri Lanka’s dubious credit record and extremely poor economy, the country's government was unsure of how to raise the US$70 million that was required to build new sanitation plants and replace many aging pipes throughout the region. Would it have to accept the first offer of support or would its long-time allies from other foreign governments come to the rescue? There was little doubt that Sri Lanka would be faced with a number of caveats and conditions as part of any agreement to secure the necessary funding. Furthermore, even if the country could find the funds, would the designated officials use them appropriately without falling prey to corruption? As in any developing country, there were many concerns that needed to be addressed, and very few resources with which to address them. -
Netflix Inc.: Streaming Across Borders and Into Original Content (A)
In 2015, the chief content officer at Netflix was responsible for the company’s globalization strategy, which included $5 billion in new content and an expansion to nearly every part of the world by the end of 2017. Although original programming helped Netflix to grow its subscriber base, it was also very expensive. As a result, Netflix earnings were declining even as the company added new subscribers. The company's chief financial officer warned that the financial situation would only worsen due to the high fixed costs associated with content development and international expansion. See supplement 9B16M119.<br><br>The case is a sequel to “Netflix lnc.: Streaming Away From DVDs” (9B12M040), which provides a history of Netflix, examines its U.S. strategy, and familiarizes students with both the impact of disruptive technologies and the link between technology and business model viability. This case can be used to build on the lessons outlined in the previous case. It also works as a stand-alone case, either to focus on international market entry and globalization or to examine the challenges that digital media companies face, particularly piracy and content regulations. -
Netflix Inc.: Streaming Across Borders and Into Original Content (B)
The case supplement focuses on the implementation of Netflix's global expansion in early 2016. As criticism of its strategy mounts, the company's share price declines and Netflix encounters problems with censorship and content laws in various countries. ln some locations, governments attempt to block the service. This is a supplement to 9B16M118. -
Rajghat Power House: The Economy or the Environment
In response to a recommendation at a government-sponsored power forum, Delhi's aging and inefficient Rajghat Power House (RPH) was scheduled to close its doors. The coal-based plant had reached the end of its 25-year useful life, and its outdated equipment spewed toxins into Delhi's air and water on a daily basis. Environmentalist bodies and power-distributing units in Delhi had made similar recommendations for the RPH's closure over the years, and while the government had gone so far as to approve some of those plans, nothing had ever come of them. With the arrival of the forum's recommended date of October 2015 for the plant's closure, Delhi's government officials faced a difficult decision. Should they ignore the environmental degradation to achieve a high growth rate in the short run, or should they protect the environment to achieve a sustainable growth rate in the long run? -
Rajghat Power House: The Economy or the Environment
In response to a recommendation at a government-sponsored power forum, Delhi’s aging and inefficient Rajghat Power House (RPH) was scheduled to close its doors. The coal-based plant had reached the end of its 25-year useful life, and its outdated equipment spewed toxins into Delhi’s air and water on a daily basis. Environmentalist bodies and power-distributing units in Delhi had made similar recommendations for the RPH’s closure over the years, and while the government had gone so far as to approve some of those plans, nothing had ever come of them. With the arrival of the forum’s recommended date of October 2015 for the plant’s closure, Delhi’s government officials faced a difficult decision. Should they ignore the environmental degradation to achieve a high growth rate in the short run, or should they protect the environment to achieve a sustainable growth rate in the long run? -
Rx Pharmacy: Physical Versus Online Options
<p>This <a href="https://www.iveypublishing.ca/s/category/collection/general-managementstrategy/0ZG5c000000k9bU?c__results_layout_state=%7B%7D">general management case study</a> explores what happened in May 2015, when Alankit Life Care Limited was concerned about the future of Rx Pharmacy, its online pharmacy retail venture. The company had both a physical and an online platform for Rx Pharmacy, but the physical stores were not doing well due to aggressive marketing strategies adopted by competitors. Government regulations also presented a threat to the future of the online pharmacy. Rx Pharmacy was targeting a customer base of 50,000 customers and 2,000 associated retail pharmacies by 2016. It also hoped to achieve a pan-India presence, like the other companies within Alankit Group. However, the company was unsure about how to achieve its goals. Would Rx Pharmacy need both a physical and a digital retail platform, or was it best to pursue only the online path? What strategies could help to strengthen the online business?</p> -
Thakur Engineering Works: Treading into the Future
At the end of 2014, the owner of India-based Thakur Engineering Works (TEW) was at a crossroads in determining his company’s future. After more than two decades of solidly building the family business’s reputation at home, the producer and supplier of auto parts was poised for expansion either domestically or globally. TEW already produced parts that were shipped overseas via domestic exporters. The owner could not help but wonder about the possibility of simply shipping the parts directly to foreign clients. While that decision would require changes to its logistics and operations and would incur costs related to exports, the owner could not ignore the pay-off in profits. In India, the auto parts market was experiencing a slowdown, resulting in fierce competition, price reductions, and pressure to deliver parts faster. Despite these challenges, the Indian market was one he understood, so expansion there carried little risk. Should TEW continue to focus on increasing its market position domestically or was the time right for TEW to target the more profitable global market? -
Amazon and Future Group: Rethinking the Alliance Strategy
In 2014, the chief executives officers of Amazon and Future Group led their companies into an alliance that, while initially successful, encountered some difficulties in regards to discounts on their retail products. With the global retail industry standing at US$25.4 trillion in 2016, and the percentage of which e-commerce made up 7.4 per cent, the partners would have to decide if they should resolve their conflict and remain allies, or if they should consider becoming independent companies again. If one partner placed a higher value on the use of discounts than the other, how much was the alliance really worth? -
Burger King France: Acquiring the Quick Chain
In 2015, Burger King France operated 26 Burger King restaurants in France and had ambitious plans for growth. In a press release, Burger King France shareholders announced the projected acquisition of Quick, a chain of 509 fast-food restaurants operating in France and a few other countries. Burger King France intended to gradually convert the Quick restaurants into Burger King restaurants—a move that would turn Burger King into the second-largest fast-food chain in France. While this acquisition provided a significant growth option for the Burger King chain, it also posed several challenges in the form of brand image, company culture, and the many issues that could come with the process of converting and internationalizing a chain within its home country. -
Devonian Coast Wineries: Overcoming Provincial Barriers
By late 2015, the chief executive officer of Devonian Coast Wineries in the Canadian province of Nova Scotia had invested in the business and had broadened the distribution of the wines he produced. His chief concern was growing sales beyond Nova Scotia’s provincial borders. Selling wines in other provinces was difficult because it required approaching the various provincial liquor control boards. He had three options: continue to engage with each provincial liquor board’s buyers, lobby for greater retail access, or pursue the removal of provincial barriers to wine trade within the Atlantic provinces. If all interprovincial barriers were removed, he would need to compete with other provinces’ larger wine producers, and they would likely gain market share at the expense of local wineries. What was the best strategy to expand Devonian Coast Wineries’ distribution beyond Nova Scotia? -
Burger King France: Acquiring the Quick Chain
In 2015, Burger King France operated 26 Burger King restaurants in France and had ambitious plans for growth. In a press release, Burger King France shareholders announced the projected acquisition of Quick, a chain of 509 fast-food restaurants operating in France and a few other countries. Burger King France intended to gradually convert the Quick restaurants into Burger King restaurants-a move that would turn Burger King into the second-largest fast-food chain in France. While this acquisition provided a significant growth option for the Burger King chain, it also posed several challenges in the form of brand image, company culture, and the many issues that could come with the process of converting and internationalizing a chain within its home country. -
Devonian Coast Wineries: Overcoming Provincial Barriers
By late 2015, the chief executive officer of Devonian Coast Wineries in the Canadian province of Nova Scotia had invested in the business and had broadened the distribution of the wines he produced. His chief concern was growing sales beyond Nova Scotia's provincial borders. Selling wines in other provinces was difficult because it required approaching the various provincial liquor control boards. He had three options: continue to engage with each provincial liquor board's buyers, lobby for greater retail access, or pursue the removal of provincial barriers to wine trade within the Atlantic provinces. If all interprovincial barriers were removed, he would need to compete with other provinces' larger wine producers, and they would likely gain market share at the expense of local wineries. What was the best strategy to expand Devonian Coast Wineries' distribution beyond Nova Scotia? -
Amazon and Future Group: Rethinking the Alliance Strategy
In 2014, the chief executives officers of Amazon and Future Group led their companies into an alliance that, while initially successful, encountered some difficulties in regards to discounts on their retail products. With the global retail industry standing at US$25.4 trillion in 2016, and the percentage of which e-commerce made up 7.4 per cent, the partners would have to decide if they should resolve their conflict and remain allies, or if they should consider becoming independent companies again. If one partner placed a higher value on the use of discounts than the other, how much was the alliance really worth?