Online payment processing systems

The case discusses Birchbox, a New York-based beauty products subscription start-up which had executed a second round of lay-offs in June 2016 in an attempt to steer itself toward profitability. Birchbox was founded in 2010 by Hayley Barna (Barna) and Katia Beauchamp (Beauchamp) when they met at Harvard Business School. The idea was to enable consumers to discover great products at their convenience. The concept was popularized as discovery retailing. Over the years, Birchbox had sustainably grown its subscriber base to 1 million but in 2016 it found itself at a critical point where it had to slow down its growth owing to lack of funds even as copycat businesses were shadowing its subscriber base. In 2016, Birchbox’s subscriber base had fallen by 7%. Competitors backed with better resources were giving it a tough time. New businesses which had popped up and operated in their own niches had gained a cult following.
Birchbox’s operations were labor intensive, which was a limiting factor and kept the company from exploring more customization while keeping the same cost structure. Subscribers were finding a mismatch between their preferences and the samples which Birchbox delivered to them. The surprise element which happened to be one of the core offerings of Birchbox was fading. Birchbox’s only way to effectively monetize its model was to convert the subscribers to full product buyers on its online portal. But Birchbox’s subscription also boosted its competitors’ sales as customers were free to make full purchases from any site of their choice. Birchbox had a generous loyalty program in place but its effectiveness came into question because there was a view that the subscribers were keener on earning loyalty points than on the products themselves.
The case concludes with Beauchamp remaining optimistic about the future of Birchbox though Barna has stepped down as co-CEO and there is no funding in sight.
Issues
· The case is structured to achieve the following teaching objectives:Examine Birchbox’s business model and identify the key challenges pertaining to its model which limit the growth of the company..
· Evaluate the competitive environment of the industry in which Birchbox is operating.
· Inspect and critically evaluate the measures taken my Birchbox in the wake of the challenges it is facing.
· Estimate the threats Birchbox might face in the immediate future. Analyze and devise a plan for counter measures.
2.
This case discusses US-based software giant, Microsoft Corporation’s (Microsoft) 4Afrika initiative, launched in February 2013 as a US$ 75 million project with the stated aim of engaging in Africa’s economic development and thereby improving its global competitiveness. Through the 4Afrika initiative, Microsoft aimed to increase Internet accessibility using affordable smart devices, promote new Africentric technologies, and educate the next generation of African web developers.
As part of the 4Afrika initiative, Microsoft collaborated with Chinese multinational networking and telecommunications equipment and services company, Huawei Technologies Co. Ltd. (Huawei) in February 2013, and launched Huawei 4Afrika, a Windows 8 smartphone to increase the adoption of smartphones. The software giant also announced the deployment of a pilot project with the Kenyan Ministry of Information and Communications and Kenyan Internet service provider, Indigo Telecom Ltd. for improving technology access across Kenya.
Issues
The case is structured to achieve the following teaching objectives:
· Analyze the 4Afrika initiative launched by Microsoft in Africa.
· Understand how the 4Afrika initiatives will help in fuelling Africa’s growth through technology and increase its global competitiveness.
3.
In May 2015, Steve Easterbrook, CEO of McDonald’s Corporation (McDonald’s), one of the world’s leading fast food restaurant companies, announced a turnaround plan to revive the sagging fortunes of the company. This came in the aftermath of several consecutive quarters of sales drop. McDonald’s same store sales in the US slipped and the fall was attributed to lower customer traffic, growing competition, and customers’ preference for healthy food besides overstuffed menus — McDonald’s had added several new items to its menus in order to bring in new customers. Compared to 2007, 40 new items had been added to the menu by 2015. In several of its international markets too, McDonald’s performance was not up to the mark. At the same time, the franchisees who owned more than 80% of all the McDonald’s restaurants were staring at complicated menus, falling sales, growing expenses, and dropping service levels
Issues
· The case is structured to achieve the following teaching objectives:To understand the impact of a dynamically changing competitive environment.
· To recognize the need to understand customer requirements and bring about appropriate strategy changes.
· To identify the measures needed to contain the downward spiral of a company in trouble.
· To retain customers in the face of growing competition and changing preferences and perceptions.
· To understand how competitors’ strategies impact business decisions.
4.
The case “Growth Through Co-Ventures: Etihad’s Strategy In The Competitive Aviation Industry” talks about the growth of Abu Dhabi-based Etihad Airways (Etihad) into one of the leading airlines in the world through a co-venturing strategy with other airlines. The case starts out by providing details about the initial days of Etihad’s operations and its financial troubles. The case then documents the adoption of its unique ‘equity alliance’ strategy, wherein Etihad took stakes in troubled, but regionally important airlines in Europe and Asia. The case describes how Etihad capitalized on its various partnerships to build a large network that spurred revenues. The case concludes with an insight into the potential risks of such a strategy, including the exposure of Etihad to regulatory scrutiny in Europe and the US.
Issues
· The case is structured to achieve the following teaching objectives:Evaluate co-ventures as a strategy for growth of a global airline company
· A framework to choose co-venture partners using appropriate parameters
· Formulate a strategy to deal with the backlash from competitors for the co-venture strategy
5.
GlaxoSmithKline plc (GSK) is redefining the way pharmaceutical industry works. In an industry which is known for secrecy and non-transparency, GSK has taken to radically defining openness by adapting open innovation and opening its labs for collaborations. It is also sharing its clinical trials data and intellectual property in order to promote transparency and is hoping to discover drugs faster and save millions of people suffering from various diseases. On the other critics opined that this open strategy is a part of market segmentation strategy to cater to patients in both the developing countries and the developed countries. They say that there is no major difference to patients on the ground as the price of GSK’s products were still out of the pocket of millions residing in least developed countries.
Issues
· The case is structured to achieve the following teaching objectives:Identify the driving forces behind radical Openness.
· Understand the role played by Radical Openness in a secretive pharmaceutical industry
· Identify the quantum of benefits that GSK realized as a result of Radical Openness
· Debate on Radical Openness as a competitive Advantage
6.
The case “Building a Gambling Empire: The Sheldon Adelson Way,” talks about the entrepreneurial journey of Sheldon Adelson (Adelson) in setting up the world’s largest gaming company, Las Vegas Sands Corp. (LVSC). The case starts out by mentioning the early business ventures of Adelson that helped him become a millionaire. It then sets out to describe the strategy behind the establishment of the highly successful integrated resort ‘The Venetian’ in Las Vegas, US. It highlights Adelson’s propensity to take measured risks, apart from moving away from established industry norms to succeed in his businesses…
Issues
· The case is structured to achieve the following teaching objectives:To appreciate how serial entrepreneurs pursue multiple opportunities with persistence.
· To analyze the risk taking propensity of entrepreneurs.
· To recognize the need for entrepreneurs to question industry norms and use new business models.
· To grasp the importance of targeting the right customer segment.
7.
The case “Blackberry – Set for a Turnaround?” talks about the efforts of John Chen (Chen) — CEO of the financially struggling Blackberry Ltd. — to bring about a turnaround in the company’s fortunes. The case starts out with a brief mention of the history of Blackberry and its gradual rise to become the market leader of the global smartphone industry, by 2008. It then traces the fall in the company’s fortunes after it failed to adapt to the changes sweeping through the global smartphone market. The case elaborates on the various strategies undertaken by Chen to prevent a further fall in the company’s fortunes and to put it back on the path of growth. The case ends with an analysis of the future prospects of the company.
Issues
· The case is structured to achieve the following teaching objectives:To understand the impact of a dynamically changing competitive environment
· To recognize the need to understand customer requirements and bring about appropriate strategy changes
· To identify the measures needed to contain the downward spiral of a company in trouble
· To appreciate the need for strong leadership to bring about a turnaround
8.
In February 2014, American Express launched a new credit card targeted at students and housewives called ‘Amex EveryDay Credit Card’. American Express had also launched some other products like Serve and Bluebird as part of its new strategy to expand its reach to the mass market. Since the time when American Express entered the financial services business, the company limited its focus on a limited number of affluent customers and operated a closed-loop network.
It charged higher commissions from merchants than other card companies as it offered them access to rich customers with higher spending power. However, the company started facing new competition from other players in the market since the mid-2000s. Credit card companies and banks started offering premium cards which offered similar features to that of the cards from American Express. Online payment processing companies like PayPal gave heavy competition to American Express with their cheap and safe payment solutions.
Issues
The case is structured to achieve the following teaching objectives:
· Challenges faced by market leaders in their areas of business
· How market leaders can face competition from new entrants into the market
· Need to change business strategies depending upon the changing market conditions
· Impact of latest technologies on the business models of companies.