News case study analysis

A total of 10 chapters, 8 to 10 chapters will be sent separately.

Samples from Previous Semesters(each news story contains the concept of two chapters)

News Case Study Week/ Module 1

Source: New York Times (https://www.nytimes.com)

  • Economic View
  • “Using the Airbnb Model to Protect the Environment”
  • Seema Jayachandran December 29, 2017

Company/industry: nonprofit Nature Conservancy, Environmental

  • Conservation Programs
  • Crowdsourced data from amateur bird-watchers
  • Occurring all over the world
    • Article mentions United States, Uganda, Africa

News: Programs that pay people to preserve land through deals to protect nature on their own land.

  • It is increasingly expensive to set aside big tracts to protect endangered species and carbon-rich forests.
    • Much as homeowners can use Airbnb and other services to turn their living space into pop-up hotels when demand warrants it, conservationists are creating “pop-up nature reserves” on idle land.
  • In the United States, Nature Conservancy has been a pioneer in bringing the “sharing economy” business model to conservation.
    • They pay farmers to flood their fields for a 4-8 week period in order to create a temporary expanding wetland for migratory birds.
    • Short-lived nature preserves fulfill the needs of migratory birds, but long-lasting conservation efforts using private land are urgently needed, too.
  • The United States already enters into 30-year and permanent easement contracts with landowners to protect wetlands or to retire land from farming.
    • Other parts of the world have governments and nonprofits paying people to preserve forests.
  • This market-based approach can balance conservation goals with critical needs like growing food.
    • Reason why proper pricing is important.
      • Appropriate payments will not interest the best farmers because they can earn more by expanding their farms, while the mediocre ones will sign up.

Chapter Concept:

Ch. 1 Business Model (page 7, LO4)

  • Value Proposition
    • Company’s approach to satisfying what the buyer wants/needs at a price that the customers will consider a good value
      • Nature Conservancy must find the appropriate listing price in order to entice the right customer
      • Too high of a price- many interested individuals would flood the market and lower food supply
      • Too low of a price- no interested individuals because they can make better money elsewhere
  • Profit Formula
    • Company’s approach to determining a cost structure that will allow for acceptable profits given the pricing tied to its customer value proposition.
      • Nature Conservancy is a nonprofit. They need to make enough money to do their job.

Ch. 2 Strategy-Making Process, Step 1 (page 20, LO1)

  • While this was not mentioned in the article itself, I went to the Nature Conservancy website and found their mission and vision statements. These are both involved in the first step of the strategy making process. (https://www.nature.org/about-us/vision-mission/index.htm?intc=nature.tnav.about)
    • Mission: to conserve the lands and waters on which all life depends.
    • Vision: is a world where the diversity of life thrives and people act to conserve nature for its own sake and its ability to fulfill our needs and enrich our lives.

News Case Study Week/ Module 3

Source: New York Times (https://www.nytimes.com)

  • Economic View
  • “Toys “R” Us to Close 182 Stores as Part of Restructuring”
  • Michael Corkery (Jan. 24, 2018)

Company/industry: Retail Industry

  • Brick and Mortar vs. E-commerce
  • Toys “R” Us
  • United States Stores

News: Toys “R” Us is planning to close as many as 183 of its stores as it struggles to reorganize in bankruptcy.

  • Filed bankruptcy this past September. Most recent court filing was yesterday, January 23, 2018 where the news was announced.
    • Planned closings represent 20% of Toys “R” Us stores in the United States which span from California to New York.
    • Selected stores were said to have failed to meet “performance standards”.
  • Back in September, after declaring bankruptcy, Toys “R” Us hired more people in anticipation of the holiday season (November-December).
    • The store closings may have been accelerated by what the company said was a “rough holiday season”. Noting that the sales were disappointing… “Operational missteps”.
  • As many as 4,500 workers could be effected. Terminated workers would be paid severance.
    • The company said it would seek to pay bonuses of up to $3.6 million to employees who work at the stores that are closing and help them meet their liquidation targets.
  • Like many brick-and-mortar retailers, Toys “R” Us has struggles to adjust its business models to deal with the rise of e-commerce while also drowning in debt.
    • Rough total debt being $5 billion
    • Company’s lawyers trying to steer the company to solvency are charging as much as $1,745 an hour for their work on the case.
  • Last year, the United States trustee overseeing the case in federal court objected to a proposal to pay its 17 most senior executives up to $32 million in bonuses if the company would hit certain financial targets.
    • This came on top of the $8.2 million in retention bonuses that five of those executive received immediately before the bankruptcy filing.
      • …deliver not only ‘children their biggest smiles of the year’ but the insiders, too…

Chapter Concepts:

Ch. 3 Figure 3.2 The Five-Forces Model of Competition (pg 41 LO2)

  • Rivalry among Competing Sellers
    • Competitive pressures created by the jockeying of rival sellers for better market position and competitive advantage.
      • All brick-and-mortar retail stores are getting beat up by the e-commerce. Online stores have found their competitive advantage aligning with what Buyers (competitive pressures stemming from seller-buyer collaboration and bargaining) want- easy, convenient buying experiences.

Ch. 4 How Well is the Company’s Strategy Working? (pg 70 LO1)

  • Two best indicators 1) Recording Gains and Profitability? 2) Competitive Strength Improving?
    • Persistence shortfalls in meeting company financial performance targets and weak performance relative to rivals are reliable warning signs.
    • Toys “R” Us has filed bankruptcy. They probably should have really focused in on this step over the past few years and changed their business model to adapt to the changing market.

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