MBS 664 Strategies for Growth & Excellence

Instructions:

 

Read the questions carefully and respond to all parts of the questions, drawing on concepts and cases analysed in this unit.

 

Disney has commenced its post-pandemic recovery. At its Q3 2023 earnings call on 9 August 202, Disney reported revenue of $22.3 billion, 4 % growth from the previous year. Disney’s CEO Bob Iger stated: ‘in the eight months since I returned, we’ve undertaken an unprecedented transformation at Disney, and this quarter’s earnings reflect some of what we have accomplished”.

(Iger, B 2023 Disney Q3 2023 Earnings Call, Disney Investor Relations, https:thewaltdisneycompany.com).

 

1.     What actions has Disney undertaken to enable this recovery? Which segment of Disney made the strongest contribution to Disney’s recovery? Which segment of Disney faces challenges and risks in the future, what strategies and tactics can Disney deploy to mitigate these challenges and risks?

 

·      Strategic Initiatives for Facilitating Recovery 

o   Streaming Services: Disney has strategically allocated substantial investments to enhance its streaming services. The company has placed particular emphasis on the direct-to-consumer streaming model, recognizing the heightened demand for online content during the pandemic. 

o   Theme Park Re-opening: The resurgence in revenue can be attributed to the reopening of theme parks, which may have faced closures during the pandemic. The implementation of stringent safety measures and protocols is imperative to instil confidence in visitors and encourage their return. 

o   Content Production: A pivotal driver for revenue growth lies in the creation and release of new content, encompassing movies, TV shows and exclusive offerings for streaming services. Leveraging Disney’s extensive intellectual property enables the development of content with broad audience appeal. 

o   Cost Management: In navigating challenging economic conditions, companies often adopt prudent cost-cutting measures and operational optimizations. This may involve strategic adjustments to the workforce, streamlining operations and implementing other cost-saving strategies. 

·      Contribution across Segments 

o   Streaming Services: The burgeoning growth within the streaming industry suggests that Disney’s streaming segment likely played a pivotal role in its recovery. Disney+, with its expansive content library, stands out as a potential significant contributor to this resurgence.

o   Media Networks: The Media networks segment, encompassing entities such as ESPN and other broadcasting channels, has the potential for substantial contribution, particularly if live sports and events regain popularity in the post-pandemic landscape. 

o   Theme Parks: If theme parks experienced a decline in revenue during the pandemic, their reopening and effective operation could represent a substantial contribution to the overall recovery efforts. 

·      Challenges and Risks

o   Pandemic uncertainty: Persistent global uncertainties stemming from the ongoing pandemic may present challenges to Disney’s operational landscape, particularly in the event of new waves or variants affecting travel and public gatherings. 

o   Content Production Challenges: Any disruptions in content production due to external factors have the potential to impact Disney’s capacity to launch compelling and timely content. 

o   Competition in Streaming: The streaming market is characterized by intense competition. Disney encounters challenges from both established competitors and emerging entrants, necessitating consistent investment in high-quality content and an enhanced user experience to maintain a robust market position. 

·      Strategies       

o   Digital Expansion and Streaming Services: Numerous entertainment enterprises, Disney included, have prioritized the expansion of their digital footprint and streaming services. Disney+, in particular, has emerged as prominent player in this domain, and the augmentation of subscriber to such platforms holds the potential to make substantial contributions to overall revenue. 

o   Cost Optimisation and Operational Efficiency: Companies frequently undertake initiatives to reduce costs and enhance operational efficiency, encompassing measures such as project reassessment, team restructuring and supply chain optimisation. 

o   Innovative Content Production: The creation of compelling and inventive content stands as a pivotal factor in the entertainment industry. Disney may strategically invest in the development of fresh and captivating content across its diverse segments, spanning movies, TV Shows and theme park experiences, with the aim of engaging broad audiences. 

o   International Expansion: Expanding global operations offers the prospect of tapping into new markets and revenue streams. Leveraging its robust global brand, Disney could strategically extend its footprint into emerging markets as a means of furthering its international presence.       

 

 

The Airbnb market has become “…bifurcated, a bust for some, a boom for others, a clear sign that we have hit a turning point in the long running battle over short-term rentals. Some cities have allowed vacation rental listings to multiply virtually unchecked, setting the stage for an oversupply that has come back to bite investors. Other places have cracked down and capped the number of permits, pacifying concerned citizens and preserving the profits of existing Airbnb owners.” (Rodriguez, J and Latu, D 2023, The “Airbnbust’ proves the Wild West days of online vacation rentals are over, Business Insider.com 22 March 2023).

 

2.     What are Airbnb’s future prospects: Growth or Collapse? What strategic decisions could Airbnb use to ensure its future viability and growth? (20 Marks).

 

·      Factors influencing Airbnb’s Future Prospect 

o   Regulatory Environment: The trajectory of Airbnb’s growth is intricately tied to the local regulatory landscape governing short-term rentals. Stringent regulations in certain cities and countries may impede Airbnb’s expansion, while more permissive rules in other regions may facilitate continued growth. 

o   Public Perception: Airbnb’s future prospect is susceptible to public sentiment, particularly negative perceptions arising from issues such as housing shortages, disruptions in neighbourhoods and concerns about safety and security. Managing and improving public perception will be vital for sustained success. 

o   Competition: In a competitive vacation rental market, Airbnb contends with other platforms and traditional lodging options for market share. The company’s capacity to differentiate itself and adapt to evolving market trends will play a pivotal role in determining its future growth and competitiveness/ 

o   Pandemic Impact: External events like the COVID-19 pandemic have exerted a profound influence on the travel and hospitality sector. Airbnb’s ability to navigate and respond to shifting travel patterns and preferences will be pivotal in shaping its resilience and adaptability to unforeseen challenges. 

 

·      Strategic Decision for Future Viability and Growth 

o   Diversification: Airbnb stands to benefit from exploring avenues beyond short-term rentals, including potential expansion into long-term rentals, curated experiences or other related services. This strategic move aims to mitigate reliance on a singular segment, enhancing overall resilience. 

o   Regulatory Compliance: Proactively engaging with regulators and local authorities is essential for Airbnb to foster positive relationships and adeptly navigate the intricate regulatory landscape. Demonstrating a commitment to compliance can effectively minimise risks associated with regulatory scrutiny. 

o   Community Engagement: Alleviating concerns within local communities and cultivating positive relationships with hosts and neighbours is pivotal for improving public perception. Airbnb may consider implementing community-centric initiatives to mitigate any adverse impacts and promote harmonious coexistence. 

o   Technology and Innovation: A steadfast commitment to ongoing investments in technology and innovation is crucial for Airbnb’s competitiveness. This includes enhancing user experiences to cater to a diverse user base and stay at the forefront of industry trends. 

o   Sustainability Initiatives: Embracing sustainability and responsible tourism practices aligns with evolving consumer preferences and contributes to enhancing Airbnb’s brand image. Initiatives such as promoting eco-friendly stays and encouraging hosts to adopt sustainable practices can reinforce the company’s commitment to environmental responsibility. 

o   Global Expansion: Identifying and strategically entering markets with growth potential, coupled with adaptability to local preferences and regulations, is paramount for global expansion. Establishing strategic partnership with local businesses and tourism boards can further augment Airbnb’s presence in diverse markets.

 

 

 

Case 16 Tesla Case Study Analysis Questions

1.     What are the key elements of Tesla’s strategy?

·       Electric Vehicle Focus

·       Innovation and Technology

·       Direct-to-Consumer Sales

·       Autonomous driving

2.     Which one of the five generic competitive strategies discussed in Chapter 5 most closely approximates the competitive approach that Tesla is employing?

·       Differentiation Strategy

                                      i.     Innovative technology. Known for cutting-edge technology, including advanced battery systems, electric drivetrains and autonomous driving.

                                    ii.     Design and Performance. Sleek design, high performance and acceleration capabilities

                                  iii.     Brand Image. Tesla is often seen as synonymous with electric nobility

3.     Are you impressed by the strategy Elon Musk has crafted for Tesla?  Why or why not?

·       Elon Musk’s strategy for Tesla has been widely acknowledged as ambitious and disruptive within the automotive industry.

·       As for going green energy, I am impressed with what Electric vehicles can bring to the environment. However, I believe that the technology is incomplete and the infrastructure to support the initiative is not properly laid out. We are still dependent on coal power plants to charge our Electric Vehicle. Our renewable energy is still not stable enough to supply us with electricity. And the charging station for our Electric Vehicle is not properly set up or strategically located for us to charge.

4.     What is your assessment of Tesla’s financial performance as shown in case Exhibit 2? Use the financial ratio information in Table 4.1 of Chapter 4 to assist you in calculating a revealing set of financial ratios and interpreting them.

·       Total Current Ratios = Total Current Assets / Total Current Liabilities

·       2019: 12,103 / 10,667 = 1.13 (Ratio is higher than 1; shows the firm’s ability to pay current liabilities using assets that can be converted to cash)

5.     Are Musk’s plans to build a second production/assembly plant in Shanghai (with production beginning in 2020) and a third one in Germany (with production starting in 2021), followed by two plants in the United States to build the Model Y, the Cybertruck and probably the Tesla Semi (with production beginning in 2022) too ambitious or too risky? Beyond the company’s means to finance?

·       To ambitious. Considering that the sales of the competitors are slowly gaining grounds, the expansion of Tesla poses too ambitious and too risky at the same time.

6.     What do we learn from the data in case Exhibits 3 and 4? Is Tesla’s executive team too overconfident about the company’s ability to compete successfully against all of the many new electric vehicle models that the major automobile manufacturers have recently introduced and are scheduled to introduce in the remainder of 2020 and in 2021–2022?

·       Tesla still leads the way in Electric Vehicle sales as shown in both Exhibit 3 and Exhibit 4. However, as the demand for more Electric Vehicle rises, competition in the field of Electric Vehicle has become wider as well. Cheaper and of the same quality is becoming more evident in the previous years and albeit, succeeding years. Tesla’s executive team is too confident about the company’s ability to compete successfully that may pose a risk in the company’s profit and marketability.

7.     What are the issues/problems that Elon Musk and other members of Tesla’s top management team need to address as of mid-2020?

·       Production and supply chain

·       Profitability and finances

·       Global expansion

·       Autonomous driving technology

·       Customer services relations

·       Workforce management

·       Environmental and Regulatory Considerations

8.     What, if any, changes/adjustments in Tesla’s strategy would you recommend that Elon Musk consider? You answer should include all of the recommended actions Musk and Tesla should take to deal with the issues identified in question 7.

·       Operational Efficiency. Continue to improve operational efficiency to meet growing demands and minimize production challenges.  

·       Financial Stability. Maintain focus on achieving sustained profitability while strategically investing in research and development.

·       Global Expansion. Prioritize regulatory compliance and stay informed about evolving regulations in different regions.

·       Autonomous Driving. Enhance transparency and communication about the development of autonomous driving technology.

·       Competitiveness. Monitor competitors closely and be ready to adapt to changing market dynamics.

·       Customer Service. Prioritize customer satisfaction through effective customer service and prompt issue resolution.

9.     What is your outlook for Tesla’s future performance and its prospects for revolutionizing the global automotive industry’s use of gasoline-powered engines versus battery-powered engines?

·       Positive Outlook

                                      i.     Leadership. Tesla has established itself as a leader in the electric vehicle market, with a strong brand and a reputation for innovation.

                                    ii.     Demand for EVs. There is a global trend toward increased adoption of vehicles due to environmental concerns, government incentives and advancements in battery technology.

                                  iii.     Autonomous Driving Technology. Tesla’s focus on autonomous driving technology positions the company for a potential competitive advantage in the future.

·       Challenges

                                      i.     Competition. Traditional automakers are increasingly entering the electric vehicle market, posing a threat to Tesla’s market dominance.

·       Tesla’s outlook is influenced by its ability to address challenges, maintain its competitive edge, and navigate the evolving landscape of the automotive and energy sectors. The company’s success has already contributed to changing industry dynamics but the ultimate revolution in the use of gasoline-powered engines versus battery-powered engines will depend on a combination of technological advancements, market forces and regulatory support.

 10.  At the end of August 2020, Tesla split its stock price five for one, bringing its previously sky-high share price of $2,230 down to a more accessible $446 on Aug. 31. Following the split, the share prices eroded to $400.51 at the close of trading on November 2, 2020; this price represented a rather astronomic price-earnings ratio of 770.21 (based on an EPS of $0.52 for the previous 12 months). Would you predict that Tesla’s stock price at the start of 2025 would be above or below $400 per share? Why?

·       Tesla’s revenue multiplied over the last five years. With the launch of Tesla’s highly anticipated Model Y, though coincided with the outbreak, Model Y demand is still high. And forecasted to have a solid increase by year 2025 for Tesla.

 

My Middle Finger Salute you!

Someone forwarded this to me. We've been divorced since 2016 and have been following up our annulment in the Philippines, to no avail. The least that she can do since she got heaps from me, financially and emotionally. 

I wonder where was my savings went? I do have at least 25K Pesos monthly savings for almost two years being sent to her exclusively prior our migration to Australia. 

If I remember it right, she asked to stay in Sydney for awhile with her relatives there and yet the drama of no where to stay. 

Again, my Middle Finger Salutes you! 

 

Case 24 Uber Technologies Case Study Analysis Questions

1.     Describe Uber’s business model. What service is Uber providing to the market? Is its business model financially successful?

·       Ride-Hailing Service. Uber provides a user-friendly mobile app that allows customers to request rides and track their drivers. Uber recruits independent drivers who use their transport to provide transportation services. Payments are made electronically, and Uber takes a percentage of each fare.

·       Uber Eats. Uber expanded its services beyond ride-hailing to food delivery through Uber Eats.

·       Financial Success. Uber has faced both successes and challenges. On one hand, it has achieved significant market penetration globally, becoming a dominant player in the ride-hailing industry. However, Uber had not yet achieved profitability. The Company has experienced losses due to high operating costs, investments in new technologies and competition with other ride-hailing services.

2.     How have Uber’s successes and challenges measured against its competitors and other companies within the software industry?

·       Success

                                      i.     Global Market Prescence. Innovation and Technology.

·       Challenges

                                      i.     Competition

                                    ii.     Labor issues

3.     Using SWOT analysis, what are some examples of external and internal influences that have impacted Uber?

·       STRENGTH

                                      i.     Global Brand Recognition. Uber has established a strong and globally recognized brand in the ride-hailing and transportation industry.

                                    ii.     Innovation. Uber leverages advanced technology to provide a user-friendly platform, real-time tracking and innovative services, contributing to a competitive edge.

·       WEAKNESS

                                      i.     Regulatory issues. Uber has encountered regulatory challenges and legal hurdles in various markets, impacting its ability to operate freely.

                                    ii.     Driver dependencies. Uber’s reliance on a network of independent drivers brings its challenges related to labor disputes, classification and driver satisfaction.

                                  iii.     Profitability challenges. Uber has struggled to achieve profitability, facing losses due to high operating costs, aggressive expansion and competitions.

·       OPPORTUNITIES

                                      i.     Expansion into new markets. Uber has opportunities for growth by expanding its services into new markets and regions, reaching untapped customer bases.

                                    ii.     Partnership and Collaborations. Collaborations with other companies, governments or organizations can open new avenues and strengthen Uber’s market position.

·       THREATS

                                      i.     Competition. Intense competition from other ride-hailing services, traditional taxi companies and emerging mobility solutions can impact market share and pricing.

4.     What are Uber’s options in handling California AB5, an attempt to reclassify Uber’s drivers as employees? What potential impact would each decision have?

·       California AB5. Aimed to reclassify many gig workers, including those working for companies like Uber, as employees rather than independent contractors.

·       Uber’s Options:  

                                      i.     Compliance with AB5. Uber could choose to comply with AB5. This would involve providing employee benefits, such as minimum wage, overtime pay, health insurance, and other benefits as required by California laws. Though treating drivers as employees would likely lead to high labor costs for Uber.

                                    ii.     Legal Challenge. Uber could choose to legally challenge AB5 but the potential impact of this is high legal costs and uncertainty.

                                  iii.     Compromise. Uber could engage in negotiations with relevant stakeholders, including labor unions and legislators, to find a compromise that addresses concerns while allowing some flexibility. Negotiations might lead to compromises that provides some benefits to drivers without full employee classification. Agreements reached through negotiations could set an industry standards for gig economy companies in California though.

5.     Of the options discussed, what is Uber’s best option to continue into the future? How does Uber’s financial situation affect its decision-making process?

·       Engaging in Negotiations. Actively engaging in negotiations with stakeholders to find common ground and compromise solutions that address concerns without a complete shift to employee classification.

·       Legal Challenges and Lobbying. Continuing to legally challenge AB5 while also engaging in lobbying efforts to influence legislative changes that provide a more favorable regulatory environment for gig economy platforms.

·       Uber’s financial situation plays a critical role in the decision-making process, as the company needs to balance the desire for flexibility in its business model with the need to address regulatory concerns and maintain financial sustainability. Ultimately, the best option will be one that aligns with Uber’s strategic objectives, ensures compliance with regulations and preserves its ability to operate in the long term.

#HiredbymyGoodLooksandOozingSexAppeal

 In 2017, I secured my first position as a Fly-in/Fly-out Worker here in West Australia. Back then, finding employment in the mining industry was a formidable task, and I was genuinely grateful for the opportunity.

Around three months into the job, a recruiter reached out to me regarding another job prospect. I informed her that I had just recently started with Orica. To my surprise, she responded with a somewhat mocking tone, asking, “How did you manage to secure a job at Orica?”

It was at this moment that I felt like I was facing discrimination due to my employment with one of West Australia’s premier mining companies. In a light-hearted response, I casually mentioned to her that I was hired by my Good Looks and Oozing Sex Appeal.

This amusing exchange led to the creation of the hashtag, #HiredbymyGoodLooksandOozingSexAppeal. 

 

INTEL

A few weeks following my graduation, I received an invitation for an in-person interview at a prominent global microchip corporation. This initial interview was scheduled at their Makati Office, despite my relative experience, I eagerly anticipated this opportunity, as it marked the beginning of my career as a Mechanical Engineer in the Philippines.

The interview was set for 8 am, and my enthusiasm prompted me to arrive around 7:30 am. Upon arrival, I was greeted by the HR representative who had initially contacted me. I promptly submitted my academic credentials, including my diploma, resume, and transcript of records.

While waiting, I observed a gentleman, whom I assumed to be the manager, engaging in a discussion with the HR representative while reviewing my documents. Approximately five minutes later, the HR representative returned my documents and regretfully conveyed that they had decided not to proceed with my interview.

Feeling utterly disheartened, I inquired about the reason behind their decision. The HR representative informed me that my transcript of records revealed a substantial number of academic failures, which did not align with their company’s hiring criteria.

In my frustration and evident disappointment, I was on the verge of expressing my discontent by forcefully closing their main door and venting my frustration internally. It was disheartening to realize that a company of their stature appeared unprofessional in their candidate assessment.

Regrettably, I later learned that both their Makati office and manufacturing plant had ceased operations around 2008. Most likely because of the two of them. I couldn’t help but wonder about the whereabouts of the HR representative and the presumed manager, contemplating a meeting with them to convey my belief that they deserved to experience unemployment.

 

 

Unilever Case Study Analysis Questions

  1.     Does it seem that Unilever has made a commitment to operating in a socially responsible manner? Based on the five components of a socially responsible strategy depicted in Figure 9.2 in Chapter 9, is Unilever’s strategy socially responsible? How does it address the needs of all of its stakeholders? Explain.

·       Employee Diversity

-       Unilever has taken steps to promote diversity and inclusion within its workplace. This includes initiatives to create an inclusive workplace and ensure equal opportunities for employees, irrespective to their background.

·       Environmental Sustainability

-       The company has set an ambitious targets to reduce its environmental footprint, including goals to reduce carbon emissions.

·       Community Involvement

-       Unilever engages in community involvement through various initiatives, including partnerships to promote hygiene and sanitation in developing countries.

·       Corporate Governance

-       Unilever maintains a system of corporate governance that includes a board of directors responsible for overseeing the company’s performance and ensuring compliance with laws and regulations.

·       Ethics

-       Unilever is committed to maintaining high ethical standards in its marketing practices, with a focus on providing accurate and honest representation of its products and services.

2.     How does Unilever link rewards and incentives to strategically-important employee behaviors and the company’s targeted sustainability outcomes?

·       Performance-based incentives

·       Recognition programs

·       Training and Developments

·       By using these mechanisms, Unilever fosters a corporate culture that values and encourages sustainability. These incentives reinforce the company’s commitment to sustainability and encourage to actively participate in achieving targeted sustainability.

3.     Evaluate the key environmental strategy implementation efforts at Unilever. Has management allocated sufficient resources to the sustainability effort? Exercised strong leadership? Instituted policies and procedures that facilitate good execution of sustainability? Demonstrated prudent financial management, based on your analysis of its recent financial performance? Explain.

·       Resource Allocation

-       Unilever’s “Clean Future” program demonstrates their dedication to environment sustainability.

·       Leadership

-       Unilever’s CEO, Alan Jope, has been a vocal advocate for sustainable business practices.

·       Policies and Procedures

-       Unilever has instituted policies and procedures that facilitate the execution of sustainability efforts. These targets waste reduction, and environmental impact assessment.

·       Financial Management

-       Unilever’s recent financial performance shows a commitment to prudent financial management in the context of sustainability. They have managed to balance sustainable practices with profitability.

4.     What grade would you give to Unilever for its efforts to become a socially responsible, environmentally sustainable corporation?

·       High grade for efforts. “A” grade for efforts to become a socially responsible and environmentally sustainable corporation. Unilever’s holistic approach to sustainability and their efforts to align their business practices with environmental and social responsibility goals are commendable. They have shown that sustainability can be integrated into their core business operations, making a positive impact on both their company and the wider community.

5.     What recommendations would you make to Alan Jope to increase Unilever’s triple bottom-line performance? Provide a justification for these recommendations.

·       Enhance Supply Chain sustainability

·       Be more responsible in sourcing raw materials, reducing waste and minimizing emissions. By fostering sustainability throughout the supply chain, Unilever can achieve better environmental performance and strengthen their social responsibility by improving the well-being of communities and workers in their supply chain

·       Strengthen Employee Engagement

·       Unilever should implement initiatives that empower and motivate their workforce to actively contribute to the company’s sustainability goals. This can enhance social responsibility and boost overall performance through increased motivation and productivity

·       Expand Philanthropic Efforts

·       Unilever should consider expanding its philanthropic efforts, with a particular focus on addressing global social and environmental challenges. Increase charitable contributions and partnerships in area like clean water access, poverty alleviation and climate action.