Tag: Case Study

  • Nike Creating a Global Brand Image in Case Study!

    Nike Creating a Global Brand Image in Case Study!

    Nike Brand Image Case Study; Nike, Inc. is an American multinational corporation that engages in the design, development, manufacturing, and worldwide marketing and sales of footwear, apparel, equipment, accessories, and services. The company headquarters is near Beaverton, Oregon, in the Portland metropolitan area. It is the world’s largest supplier of athletic shoes and apparel and a major manufacturer of sports equipment, with revenue over US$24.1 billion in its fiscal year 2012 (ending May 31, 2012). As of 2012, it employed more than 44,000 people worldwide. In 2014 the brand alone was valued at $19 billion, making it the most valuable brand among sports businesses. As of 2017, the Nike brand image value at $29.6 billion. Also learn, a Case Study on the Marketing Strategy of IBM!

    Case Study on Nike Creating a Global Brand Image!

    The company was founded on January 25, 1964, as Blue Ribbon Sports, by Bill Bowerman and Phil Knight, and officially became Nike, Inc. on May 30, 1971. The company takes its name from Nike, the Greek goddess of victory. Nike markets its products under its brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Blazers, Air Force 1, Nike Dunk, Air Max, Foamposite, Nike Skateboarding, and subsidiaries including Brand Jordan, Hurley International, and Converse. Nike also owned Bauer Hockey (later renamed Nike Bauer) from 1995 and 2008, and previously owned Cole Haan and Umbro. In addition to manufacturing sportswear and equipment, the company operates retail stores under the Niketown name. Nike sponsors many high-profile athletes and sports teams around the world, with the highly recognized trademarks of “Just Do It” and the Swoosh logo.

    Nike Brand Image History!

    The idea of Nike began way back in the 1950s. A track coach by the name of Bill Bowerman was at the University of Oregon training his team. Bill was always looking for a competitive edge for his runners, like most of us today look for any advantage we can get. He said he tried using different shoes for his runners as well as trying other things to try and make his athletes better. He tried to contact the shoe manufacturers in an attempt to try out his ideas for running shoes. This however failed.

    1955;

    In 1955 a track runner by the name of Phil Knight enrolled at Oregon. He was on the track team under Bill, Phil graduated from Oregon and acquired his MBA from Stanford University.

    Phil went on to write a paper that talked about how quality shoes could makeover in Japan and they would be cheaper. He called a company in Japan and became a distributor of Tiger shoes in the United States of America. He sent some pairs of shoes to his old track coach trying to get Bill to buy the shoes. Instead of buying these shoes, Bill offered Phil a partnership to create better running shoes.

    1964;

    In 1964 Bill and Phil shook hands and formed Blue Ribbon Sports. The companies’ first move was to order three hundred pairs of shoes from the company in Japan. While Bill examined these shoes and tried to make them better Phil was outselling the shoes.

    Bill had his track team at Oregon try out his new creations. This became the foundation of Nike. Because Bill and Phil still had full-time jobs, they hired Jeff Johnson as their first full-time employee. Jeff soon became an invaluable utility man for the company.

    1971;

    In 1971 Jeff created brochures, marketing materials and even shot photos for a catalog. The very first Blue Ribbon store was opened by Jeff. Meanwhile, the relationship between Blue Ribbon and the company from Japan was starting to deteriorate. Bill and Phil made the jump to manufacturing and designing their footwear. The trademarks swoosh which was introduced at this time.

    The Nike line of footwear was unveiled in 1972, during the U.S. Track and Field Trials. One pair of shoes had a huge impression on a dozen multiple runners that wore the new shoes. These shoes incorporated a new style of soles that had nubs on them that resembled the ridges of a waffle iron. These shoes were also a lot less heavy than most running shoes at the time.

    With the new image, Nike started looking for athletes to wear, promote and elevate the new shoes. The first athlete they found was Steve Prefontaine. Prefontaine never lost a race that was over a mile in distance in his college career between 1969 and 1973. Prefontaine challenged Bill, Phil, and their new company to stretch their talents. In turn, Prefontaine became an ambassador for Blur Ribbon Sports and Nike.

    1975;

    In 1975 Prefontaine died at the age of 24, but his spirit still lives on within Nike. Prefontaine became the “soul of Nike”. When 1980 hit Nike entered the stock market and became a publicly-traded company. Once this happened many of the people that started the company moved on with their lives. This included Phil Knight who resigned from his president spot for over a year. In the mid-1980s Nike started to slip from the top of its industry. This started to change when Michael Jordan released a new shoe through Nike. When this happened Nike’s bottom line got a boost.

    1988;

    In 1988 the slogan that we all know today “Just do it” was introduced as a way for Nike to build on its momentum from their “Revolution” campaign. The Just do it campaign included three advertisements in which a young athlete by the name of Bo Jackson was involved. By the end of the decade, Nike was at the top of their industry once again. The ’90s brought a series of outreach for Nike. At this point, Nike deepened their commitment to other sports such as soccer and golf. In 1995 Nike signed the whole World Cup-winning Brazilian National Team. This also allowed Nike to create jerseys for the team.

    Nike also landed contracts with both the men’s and women’s teams for the United States. The biggest thing that Nike existed criticized for was when they signed a young golfer by the name of Eldrick “Tiger” Woods for the huge deal. All of the competition said this was a dumb idea till Tiger won the 1997 Masters by a record 12 strokes.

    2000;

    In 2000 a new shoe existed introduced. This shoe went by the name of the Nike Shox. This shoe combined more than 15 years of dedication and perseverance. Nike is still the industry leader in its markets and continues to grow more and more each year around the world. This company will have much more to offer in the future.

    Brand Equity!

    Having and holding customers is likely to be a competitive battle which each brand tries all efforts to win. They compete for functional attributes, distinctive services, or innovative technologies. So what are the emotional and functional benefits which Nike provides for their customers?

    Since Nike stood set up by someone who has a deep passion for athletics and running; it should come as no surprise that the product is important. Products that are comfortable, authentic, functionally innovative, and uniquely designed. The innovative technology considers as one of the defining dimensions of Nike’s brand identity and corporate culture.

    The simple driving concept has led to some impressive innovations; which consider as one of the defining dimensions of Nike’s brand identity and corporate culture. The first highlight was Air cushioning, using pressurized gas to cushion impact and new materials such as Urethane; which existed used first with the Air Max running shoes.

    More recently, to obtain maximum performance, Nike Sports Research laboratory has discovered innovative technology such as Shox; which make most of rubber and spring back adding more power to a runner’s stride, and Total 90 Concept, a range of equipment to help players perform over 90 minutes of a soccer match. Such innovative technology which Nike has used has gained a stronghold in consumers’ perceptions.

    The functional benefit is the fundamental and classical features to communicate with customers. However, if Nike just provided high-quality running shoes to enhance athletic performance, Nike would not be a strong brand. Big brands need to be beyond purely functional relationships. They should create a more strong emotional attachment with core consumers because emotional benefits add richness and depth to the brand and the experience of owning and using the brand.

    Offers;

    Nike offers emotional benefits which are “the exhilaration of athletic performance excellence; feeling engaged, active, and healthy; exhilaration from admiring professional and college athletes as they perform wearing “your brand” – when they win, you win too”.

    The associated brand with the top athletes, Nike tells the story of brands whose main themes are sportsmanship and unrelenting effort. These are the story of Michael Jordan who won a record 10th scoring title and existed selected as one of the 50 Greatest Players in American’s National basketball association championship. Lance Armstrong survived and won a second straight Tour de France while Tiger Woods completed the career Grand Slam, ensuring his place in golf history at the age where most of us are still wondering what we will do when we grow up.

    The most three prominent athletes have generated inspiration for the young and next generation of athletes. Nike has succeeded to transfer their inspirations to every single purchaser. Wearing every pair of Nike shoes is to engage a passion for excellence and encourage you to do your own thing. “Just do it” – the tagline could sum up all the greatest values of the brand which is.

    “Just Do It” Campaign!

    Products are no longer just products, they move beyond the functional meanings. Nowadays, they are social tools serving as a means of communication between the individual and his significant references. Product considers as a symbol of individuality and uniqueness, and also the symbol of affiliation and social identification. It’s particularly true with fashion brands. Fashion brands such as clothes, bags, shoes, etc satisfy opposing functions, both social identification, and distinction among individuals.

    Nike must have understood the recipe well. The “Just Do It” campaign in the early 1990s would be a perfect example. Losing ground to archival Reebok which was the quick initiative on designing “style”, “fashion” aerobics shoes in the 1980s, Nike responded dramatically and forcefully by launching the “Just do it” campaign which was mainly focused on the person wearing on products instead of the product itself.

    Sales;

    Purchasing an athlete-endorsed product is one means of symbolically and publicly demonstrating aspirations to be a part of the group and such behaviors direct influence by the extent to which a fan identifies with an athlete endorser. Heroes and hero-worship were being built as the main themes of advertising. Celebrity endorsements such as Bo Jackson, John McEnroe, and Michael Jordon appealed to the consumer’s sense of belonging and “hipness”.

    In other words, American consumers were convinced that wearing for every part of their life was smart (the shoe design for comfort) and hip (everyone else is wearing them; you too can belong to this group). “Just Do It” campaign succeeded (Nike increased its share of the domestic sports shoe business after launching this campaign in America from 18 percent to 43 percent, regained the leader position) because it could fascinate customers in both separating ways. Wearing Nike as a self-fulfilling image declaration – “if you are hip, you are probably wearing Nike”. But perhaps most importantly, it could create the desirable needs -“if you want to be hip, wear Nike”.

    Brand Loyalty!

    Luring by the good shoe with innovative functionality and athletic aspiration value, Nike has indeed come to the mind and heart of its customers. By the mid of the 1990s, 77 percent of male Americans from the age of 18 to 25 chose Nike as their favorite shoe. The figure remains stable despite that “up” and “down” year Nike has been experiencing, gaining the high score of customer satisfaction at 79 percent rated by The American Customer Satisfaction Index Organization.

    It could say that loyalty to the Nike brand image stands driven by many external and internal factors such as brands’ subjective and objective characteristics and loyalty-building programs. One visible example of creating an innovative method to capture the strong relationships with Nike users is that creating Joga.com, a social network site for football fans.

    Launching quietly in early 2006, the site became an instant hit, peaking at 7.5 million viewers when Nike showed Ronaldinho video clips. More than 1 million members from 140 countries signed up by mid-July. On this site, fans can create their blogs, build communities around favorite teams or players, download videos and organize pickup games. By enrolling consumers in building and shaping the content of the website, Nike pulled their loyal customers closer, nurtured deeper bonds of loyalty and advocacy.

    Brand Awareness!

    Brand awareness is the first and crucial stage of a consumer’s preference. It refers to the strength of a brand’s presence in the consumers’ minds. Nike has been successful in building awareness. The “Swoosh” symbol has been appeared everywhere, on shoes, hats, billboards, and soccer balls across the globe too remarkably to such extent that one author used the title “The Swooshification of the World” on Sports Illustrated column that imaged a future in which the swoosh could surpass sports to become a letter of the alphabet and the new presidential seal, among other things. True told the recognition of the ‘swoosh’ is extremely high.

    As of 2000, 97 percent of American citizens recognized the brand logo, as the strong brand penetration. Nike could recognize consistently without the identification of the brand name, even by the youngest group (aged from 4 to 6 years old). This perhaps may reflect the general level of advertising and promotion that children expose to.

    How has Nike done to build brand image awareness?

    Sponsorships, advertising, and experience-focused retailing (Nike town) are three vivid channels that Nike has applied to enhance its brand image and awareness. Among these strategies, athlete endorsements could consider as the most significant success of the Nike brand image.

    Nike has been invested millions of dollars to associate their brand names with easily recognizable athletes with the aim of brand image building. Athletes at the top of their respective sport such as Micheal Jordan, Tiger Woods, and Lance Armstrong who are well-liked and respected by members of the brand’s target audience chose as endorsers to associate the Nike brand image with the athlete’s celebrity image. This strategy has been paid off; for example, since Tiger Woods and Nike cooperated, annual sales for Nike Golf have exceeded nearly 500 million dollars with an estimated 24 percent growth per year in the first five years of the agreement.

    Nike Creating a Global Brand Image in Case Study - ilearnlot
    Nike Creating a Global Brand Image in Case Study!
  • Case Study on Marketing Strategy of IBM!

    Case Study on Marketing Strategy of IBM!

    Learn, Case Study on Marketing Strategy of IBM!

    International Business Machines Corporation, better known as IBM, is a multinational IT company involved in the manufacture and retail of computer hardware and software applications, and IT consulting services. The company has established itself as one of the selected information technology companies since the 19th century. Adoption of marketing strategies for IBM has been a planned structure since the 19th century and by means of these strategies, it has earned enough success all over the world. With its growth in the manufacturing as well as marketing domains of computer hardware and software, it has gained the nickname of “Big Blue”. On marketing grounds, IBM follows strict infrastructural services, added by hosting provisions and consulting services in various areas from mainframe computers to the persuasion of nanotechnology. Also learn, Tata Motors Acquisition of Jaguar and Land Rover, Case Study on Marketing Strategy of IBM!

    Well – devised and efficient marketing strategies have been the key to IBM’ global success. The company strongly believes that devising effective marketing strategies requires making appropriate decisions that can well enhance all kinds of competitive advantages and can create all kinds of new sources of value for the purpose of improving the organizational revenue growth. According to Luq Niazi, Leader of Strategy and Change at IBM, “when the leaders of an organization think about their business as components, it becomes clear which ones they need to own – and which they do not”. This clearly indicates the great emphasis that IBM places on the performance and decision-making capabilities of leaders in devising effective marketing strategies. In addition, the firm also considers understanding the requirements and needs of customers as crucial for developing effective marketing strategies. Understanding the innovative demands of customers lies at the core of developing effective marketing strategies.

    Based on IBM’ market share and dominance in the IT industry, the firm can be aptly described as a ‘market leader’. Being a market leader, an important marketing strategy which IBM uses against its competitors is the defensive marketing warfare strategy. The defensive marketing strategy involves the firm employing tactics to maintain its market share. There are several tactics that firms use for defending their market shares, such as fortification, counterattack, mobile defense and strategic retreat. Being the courageous market leader that IBM is, the firm adopts the best defensive marketing strategy which is “self-attack”. IBM’ strategy is “cheaper and better than IBM”. Aware of IBM’ tactic, customers wait for IBM’ new prospects as they know that the Big Blue will constantly introduce new and better products which makes the firm’ own products obsolete. Another key marketing strategy employed by IBM for sustaining its market leadership is product differentiation strategies.

    Product differentiation can be achieved using a variety of factors such as distinctive products, reliability, durability, product design etc. IBM uses a product differentiation strategy based on the quality of performance. In line with its quest for further growth and market leadership, the firm adopts a diversification strategy. The importance of IBM’ growth strategy has heightened in the current economic situation with companies in the computer industry had faced a massive drop in the industrial production and productivity of computer hardware and the future growth for this segment also appearing dim. In such a context, IBM has strategically reduced its exposure to hardware by diversifying into software and services.

    IBM also realizes the importance of maintaining good relationships with its customers and in line the firm lays great emphasis on trust-based marketing strategies. Trust-based marketing strategies stress the need for organizations to gain ethical hold over consumer dealings and also be honest and open about its products and the services. For IBM, adoption of this strategy has been very effective in developing its brand identity and image. In all of its marketing activities, the firm strives at building customer trust and loyalty.

    IBM and E-Business Strategies!

    The motive of any electronic business is to efficiently meet consumer demands through internet networking. The internet provides a medium for businesses to reach out to customers globally at very low costs. It is an exclusive means adopted through the dealings related to information and communication technologies. In case of IBM, the role of e-business is very strong. Through e-business strategies, IBM is equipping itself with all kinds of external activities and is applying determined relationships for respective business dealings; with individuals, diversified groups and corporate clients. According to ‘Who Says Elephants Can’t Dance?’; a book by a former CEO of IBM, Louis Gerstner (2003), IBM’ approach for e-Business strategies is handled by specialized e-business teams operating under IBM’s marketing department.

    It is through its e-business strategies that IBM is able to link it’s internal as well as external data processing systems with greater efficiency and flexibility. E-business helped IBM in reaching closer to its consumers, conveying the message of reliability and inurn enhancing customer loyalty to the brand. The proceedings led by IBM for the development and implementation of e-business concentrate on the diversified functions occurring through electronic capabilities. IBM is also a part of the entire value chain proceeding for more profitable dominance over the local as well as global market. There are some predominant sectors where the e-business strategies are applied to gain more trust and money from the consumer. These activities are noted below;

    • Electronic purchasing.
    • Supply chain management.
    • Processing orders electronically.
    • Handling customer service, and.
    • Cooperating with business partners.

    These proceedings add special technical standards in the e-business structure of IBM. The firm also utilizes e-business strategies to exchange of data between its partners and associate companies. As a matter of fact, the e-business strategies of IBM are not much different from the other marketing strategies. The basic difference, however, depends on the expansion of management for sending and receiving contracts from the consumer. Case Study on Corporate Governance for Satyam Scam!

    It is under this strategic implementation that IBM has adopted many local dealers to be a part of its services. These dealers are of course selected through some professional modes. The reputations of these dealers are marked by IBM first before offering the partnership. In terms of services for each product sold through e-business, IBM provides appropriate training to all those people who are a part of this structure. With strategic planning, IBM is also in the dealings related to integrated intra and inter-firm business proceedings.

    Importance and Use of Information in IBM Marketing Strategy!

    The importance and use of information are vital to gaining success. In line, IBM adopted the strategy to take up Social Networking to the workplace. It is an absolute means of sharing ideas, complains and letters of appreciation in public. By means of adopting networking opportunities, IBM established its stronghold over competitive market. It is through the provision of Social Networking (SN), that IBM established its commitment to technology and developed an enterprise-wide SN mindset. IBM is the first major IT supplier that has got potential provisions for social networking and is in the process of changing the entire enterprise along with a credit application to address the market.

    By means of investments made in the social networking domain, IBM has gained enough market strengths in the enterprise lineage, global services, deep pockets and above all in gaining loyal customers. By the success of social networking, IBM proved to be a fine player in the domain of information networking. The proceedings have added many advantages to its organizational global services. Social networking for enterprises have been implemented with enough marketing strategies and this is what is providing IBM with technical expertise in the field of organizational/adoption issues.

    The launching of more facilities related to social networking is relevant to the competition of the market. The launcher came up with a new idea and launched it much before the thought had developed in anyone’ mind. The second big thing to the adoption of marketing strategy is the IBM’s mindset in the launching of Lotus Connection. It is an informal networking process with the collaboration-centric approach to social networking and helps in information sharing and uninterrupted workflow. By few minutes of exploration, anybody can well get hold over its functionalities. IBM kept it easy and user-friendly; the basics of marketing strategies. Google’s Acquisition of Motorola Mobility for Case Study!

    When it comes to the use of information system in IBM, the adoption of unique kind of marketing strategies is predominant. The basic approach is in being innovative and adopting something that is very user-friendly and easy for the customer to adopt. Complicacies in the same field can lead to failure of the same. This is the reason that IBM lays emphasis on making it simple, easy and sharing more than the consumer can expect. Once there is a kind of trust and sense of being facilitated gets into the consumer, he hardly will opt for any other company and this is what IBM believes to the core. Application of innovative ideas in the field of information sharing units can be at great risk, but under the marketing strategy of IBM, this risk has been taken again and again with enough success.

    Global Context in IBM Marketing Planning!

    In the global context, IBM has proved itself as a strong contender by managing to sustain in the most difficult situations. It has overcome the twists and turns it initially faced in adjusting to the ‘bricks-and-clicks’ business structure. Overcoming all the hurdles IBM is now achieving milestones through the advantages forwarded by brick-and-click enterprises. It is through this enterprise structure that IBM has transformed into a major player in terms of getting hold over global marketing plans. Its formalizations are inclusive of creating a global brand blueprint. It is a mode that usually gets expressed locally and after attaining some success approaches on global grounds. IBM always follows the process of establishing the central framework and then architects the relevant consumer experiences to gain consistency with the brand.

    IBM always concentrates on gaining the single view from its consumers and that helps in assessing the risk factors of global marketing strategies. In order to meet the diversified point of views, IBM follows the structure noted below;

    • The process of analyzing the context of ‘when’, ‘where’ and ‘how’ the appropriate and relevant customer data can be collected. This is an approach that is done under the provision of the practical market survey.
    • The means to create absolute governance framework with special attention led by management policies and overall practices. These are the sources that are collected through the purpose of encouraging customer centricity added by the scope to safeguard customer privacy.
    • Approaches led by institute consistent processes for target customer is the next step. In this process, the relationship led by the management across all the domains of sales and provided services of the organization are scrutinized professionally.
    • The process of appointing efficient team leaders and strong management initiators. IBM also appoints a leader who can perform as a single customer advocate and is very much accountable for all the sorted touch points.

    The marketing strategies adopted by IBM to meet global demands and competitions are well inclusive of a robust infrastructure. It has the provision for optimizing flexibility and a hub-and-spoke architecture for collecting consumer demands on the global arena. There is also well-marked acknowledgment for all the innovative ways adopted by the partners of IBM. Developments attain by the partners of IBM in global terms is also directly related to the marketing strategies followed by IBM. IBM understands the fact that partners can add much hold over the local market and can reach the consumer with more in-depth formulations. This is the reason that they believe in developing the capitalized relationship with these partners for future opportunities.

    Inference!

    It can be well concluded that the marketing strategies adopted by IBM are very much structured on the basis of trust-based marketing strategies. It is through this theoretical approach that IBM has established itself very strongly, amidst burgeoning and very unpredictable online as well as the global marketplace. IBM concentrates on providing its consumer every possible facility that he demands and that too with very balanced services. It is more about having the trust of every single consumer, rather than having lots of them without the trust. The products and services provided by IBM can guarantee their utility to the customer’s satisfaction. In a nutshell, IBM has got professional and the courage to take a risk for innovative ideas. It explores the consumer’s domain through proper hold over the local and global proceedings.

    Case Study on Marketing Strategy of IBM - ilearnlot

  • Case Study on Debt Collection Management!

    Case Study on Debt Collection Management!

    Unlock the best learn Case studies on debt collection management. Understand the strategies used in the pursuit of unpaid debts and the role of collection agencies in this process.

    Learn, Two Case Study on Debt Collection Management!

    What is Debt Recovery? Debt recovery and debt collection are similar terms with one small, but very important distinction. The difference is who is trying to retrieve a debt. Debt collection is a creditor’s attempt to recover consumer credit and loans that have not been payback by a customer. Debt collection is the process of pursuing payments of debts owed by individuals or businesses.

    An organization that specializes in debt collection is known as a collection agency or debt collector. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed. Also Learn, Case Study on Corporate Governance for Satyam Scam! Two Case Study on Debt Collection Management!

    Debt recovery is when a loan such as a credit card balance continues to go unpaid, and a creditor hires a third party, known as a collection service, to focus on collecting the money. Debt recovery is important because it is directly correlating to your credit score. If you are being contacted by a debt recovery service, it means there is a record that you have defaulted on a loan and currently have delinquencies. These delinquencies get the report to the credit bureaus, damaging your credit score, which can potentially hurt any future loan opportunities.

    Case Study 1: HDFC Bank Recovery!

    Mr.Kaushik Agarwal, about 18 months back had purchased 1 Tata Indigo, finance from HDFC bank. His EMI for this month (May’08) bounce due to some reasons.

    The recovery person calls him on the 22nd May for the payment of the same. He was out of town at that moment so Mr.Kaushik had asked him to send someone to his office on the 24th to collect cash.

    Now on 24th, it slips out of Kaushik’s mind that he had to pay cash to HDFC Bank and hence he did not withdraw any cash from the bank. As it was a Saturday so when the person came for collection. He requests him to come on Monday, as the bank was already closed the day.

    On this, the person, who had called Kaushik earlier on the 22nd, called him again and started shouting at him and speaking in a very bad language. The person told Mr. Kaushik that they know his Residence addresses. So if he doesn’t pay them today they will come to his house and will insult him in the neighborhood. The person also passed threat on him that if Kaushik doesn’t pay within 5 minutes it would be very bad for him. The person kept using foul words and shouting at him until he disconnected the phone.

    After this Kaushik had no option to go to his local police station and lodge a complaint against that person. Mr. Kaushik has also decided to put a case against that person and HDFC bank in consumer court as well as the civil court.

    Kaushik has also posted a complaint with HDFC Grievance cell, docket no. TF22534017. Kaushik requests the concerned authority to take some action on this. Also learn, Google’s Acquisition of Motorola Mobility for Case Study!

    Case Study 2: ABC Bank Debt Recovery!

    ABC Bank had granted a personal loan of Rs. 60,000 to XY, a lower-middle-class individual, for consumption needs. The loan was to repaid in installments by XY. The loan was without any tangible security and also without any third party guarantee. The borrower XY could not repay in time some installments and therefore the loan became overdue.

    The ABC Bank gave XY’s Case to Z recovery agent, along with other overdue loans for recovery. The Z recovery agent called XY a couple of times and also visited him at his residence. As XY was not able to repay the amount in default. Z used abusive and harsh languages in front of XY’s wife and daughters to make recovery. During one of the visits to XY’s house, Z and his colleagues took away forcibly some of the things. That were available in XY’s house in front of his wife and daughters and also used threatening language for payment of the dues.

    XY felt very much humiliated and also depressed. Being unable to repay the dues. XY committed killed themself. He left a suicide note, blaming Z for harassing him endlessly. Mentioned the abuses he had suffered at the hands of Z before his wife and daughters. Also mentioned the threat Z gave that he would suffer dire consequences if he failed to repay the overdue amount.

    Following the suicide death of XY, the local police arrested Z and his colleagues (who used to accompany Z during his visits to XY’s house) on charges of abetment of suicide. A case was also filed against the ABC Bank, which has to pay an ex-gratia payment of Rs.20 lakhs to the deceased’s family. The incident has also been publishing in the press and has damaged the Bank’s reputation in public eye, at least for the time being.

  • Case Study on Corporate Governance for Satyam Scam

    Case Study on Corporate Governance for Satyam Scam

    Corporate Governance for Satyam Scam; Satyam Computers services limited was a consulting and an Information Technology (IT) services company founded by Mr. Ramalingam Raju in 1988. It was India’s fourth-largest company in India’s IT industry, offering a variety of IT services to many types of businesses. It is networking spanned from 46 countries, across 6 continents and employing over 20,000 IT professionals. On 7th January 2009, the Satyam scandal was publicly announced & Mr. Ramalingam confessed and notified SEBI of having falsified the account. Also learn, Tata Motors Acquisition of Jaguar and Land Rover for Case Study, Corporate Governance for Satyam Scam! 

    Learn, Case Study on Corporate Governance for Satyam Scam, Explanation.

    What is Fraud? Fraud is a worldwide phenomenon that affects all continents and all sectors of the economy. Fraud encompasses a wide-range of illicit practices and illegal acts involving intentional deception, or misrepresentation. According to the Association of Certified Fraud Examiners (ACFE), fraud is “a deception or misrepresentation that an individual or entity makes knowing that misrepresentation could result in some unauthorized benefit to the individual or the entity or some other party”. In other words, mistakes are not a fraud. Indeed, in fraud, groups of unscrupulous individuals manipulate or influence the activities of a target business to make money or obtain goods through illegal or unfair means.

    Fraud cheats the target organization of its legitimate income and results in a loss of goods, money, and even goodwill and reputation. Fraud often employs illegal and immoral, or unfair means. Organizations must build processes, procedures, and controls that do not needlessly put employees in a position to commit fraud and that effectively detect fraudulent activity if it occurs. The fraud involving persons from the leadership level is known under the name “managerial fraud” and the one involving only the entity’s employees is named “fraud by employees’ association”.

    Raju confessed that Satyam’s balance sheet of 30 September 2008 contained:

    • Inflated figures for cash and bank balances of Rs 5,040 crores (US$ 1.04 billion) [as against Rs 5,361 crores (US$ 1.1 billion) reflected in the books].
    • An accrued interest of Rs. 376 crores (US$ 77.46 million) which were non-existent.
    • An understated liability of Rs. 1,230 crores (US$ 253.38 million) on account of funds which were arranged by himself.
    • An overstated debtors’ position of Rs. 490 crores (US$ 100.94 million) [as against Rs. 2,651 crores (US$ 546.11 million) in the books].
    • The letter by B Ramalinga Raju where he confessed to inflating his company’s revenues contained the following statements:

    “What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It has attained unmanageable proportions as the size of company operations grew significantly [annualized revenue run rate of Rs 11,276 crores (US$ 2.32 billion) in the September quarter of 2008 and official reserves of Rs 8,392 crores (US$ 1.73 billion)]. As the promoters held a small percentage of equity, the concern was that poor performance would result in a takeover, thereby exposing the gap. Also, the aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. It was like riding a tiger, not knowing how to get off without being eaten”. Also learn, Intrapreneurship Better than Entrepreneurship!

    The Scandal:

    The scandal all came to light with a successful effort on the part of investors to prevent an attempt by the minority shareholding promoters to use the firm’s cash reserves to buy two companies owned by them i.e. Maytas Properties and Maytas Infra. As a result, this aborted an attempt of expansion on Satyam’s part, which in turn led to a collapse in the price of company’s stock following with a shocking confession by Raju, The truth was its’ promoters had decided to inflate the revenue and profit figures of Satyam thereby manipulating their balance sheet consisting non-existent assets, cash reserves and liabilities.

    The Probable Reasons:

    Deriving high stock values would allow the promoters to enjoy benefits allowing them to buy real wealth outside the company and thereby allowing them to derive money to acquire large stakes in other firms on another hand. There could be the reason as to why Raju’s family build its shareholding and shed it when required. Also learn, What is Bookkeeping?

    After the scandal, on 10 January 2009, the Company Law Board decided to bar the current board of Satyam from functioning and appoint 10 nominal directors. On 5th February 2009, the six-member board appointed by the Government of India named A. S. Murthy as the new CEO of the firm with immediate effect. Also learn, What is Organizational Climate? The board consisted of:

    1) Banker Deepak Parekh.

    2) IT expert Kiran Karnik.

    3) Former SEBI member C Achuthan S Balakrishnan of Life Insurance Corporation.

    4) Tarun Das, chief mentor of the Confederation of Indian Industry, and.

    5) T N Manoharan, former President of the Institute of Chartered Accountants of India.

    Investigation: Criminal and Civil Charges!

    The investigation that followed the revelation of the fraud has led to charges against several different groups of people involved with Satyam. Indian authorities arrested Mr. Raju, Mr. Raju’s brother, B. Ramu Raju, its former managing director, Srinivas Vdlamani, the company’s head of internal audit, and its CFO on criminal charges of fraud. Indian authorities also arrested and charged several of the company’s auditors (PwC) with fraud. The Institute of Chartered Accountants of India ruled that “the CFO and the auditor were guilty of professional misconduct”. As well as, The CBI is also in the course of investigating the CEO’s overseas assets. There were also several civil charges filed in the US against Satyam by the holders of its ADRs.

    The investigation also implicated several Indian politicians. Both civil and criminal litigation cases continue in India and civil litigation continues in the United States. Some of the main victims were: employees, clients, shareholders, bankers and the Indian government. In the aftermath of Satyam, India’s markets recovered and Satyam now lives on. India’s stock market is currently trading near record highs, as it appears that a global economic recovery is taking place. Civil litigation and criminal charges continue against Satyam. Tech Mahindra purchased 51% of Satyam on April 16, 2009, successfully saving the firm from a complete collapse. With the right changes, India can minimize the rate and size of accounting fraud in the Indian capital markets.

    Corporate Governance Issues at Satyam:

    Every quarter, Satyam’s earnings grew. Mr. Raju admitted that the fraud which he committed amounted to nearly $276 million. In the process, Satyam grossly violated all rules of corporate governance. As well as, The Satyam scam had been the example of following “poor” CG practices. It had failed to show a good relationship between the shareholders and employees. CG issue at Satyam arose because of the non-fulfillment of the obligation of the company towards the various stakeholders. Of specific interest are the following: distinguishing the roles of board and management; separation of the roles of the CEO and chairman; an appointment to the board; directors and executive compensation; protection of shareholder’s rights and their executives. Also read it, Dell Social Business Strategy for Case Study!

    Lessons Learned from Satyam Scam:

    The 2009 Satyam scandal in India highlighted the nefarious potential of an improperly governed corporate leader. As the fallout continues, and the effects were felt throughout the global economy, the prevailing hope is that some good can come from the scandal in terms of lessons learning. Here are some lessons learning from the Satyam Scandal:

    1] Investigate All Inaccuracies:

    The fraud scheme at Satyam started very small, eventually growing into $276 million white-elephant in the room. Indeed, a lot of fraud schemes initially start small, with the perpetrator thinking that small changes here and there would not make a big difference and is less likely to detect. This sends a message to a lot of companies: if your accounts are not balancing, or if something seems inaccurate (even just a tiny bit), it is worth investigating. Dividing responsibilities across a team of people makes it easier to detect irregularities or misappropriated funds.

    2] Ruined Reputations:

    Fraud does not just look bad on a company; it looks bad on the whole industry and a country. “India’s biggest corporate scandal in memory threatens future foreign investment flows into Asia’s third-largest economy and casts a cloud over growth in its once-booming outsourcing sector. Also, the news sent Indian equity markets into a tail-spin, with Bombay’s main benchmark index tumbling 7.3% and the Indian rupee fell”. Now, because of the Satyam scandal, Indian rivals will come under greater scrutiny by the regulators, investors, and customers.

    3] Corporate Governance Needs to Be Stronger:

    The Satyam case is just another example supporting the need for stronger CG. All public companies must be careful when selecting executives and top-level managers. These are the people who set the tone for the company: if there is corruption at the top, it is bound to trickle-down. Also, separate the role of CEO and Chairman of the Board. Splitting up the roles, thus, helps avoid situations like the one at Satyam.

    The Satyam Computer Services scandal brought to light the importance of ethics and its relevance to corporate culture. The fraud committed by the founders of Satyam is a testament to the fact that “the science of conduct” is swayed in large by human greed, ambition, and hunger for power, money, fame, and glory. Also Learn, Good for Company, The Corporate Entrepreneurship Categories, and Organizational Thinking!

    Case Study on Corporate Governance for Satyam Scam - ilearnlot
    Case Study on Corporate Governance for Satyam Scam, Image from Online.

  • Google’s Acquisition of Motorola Mobility for Case Study!

    Google’s Acquisition of Motorola Mobility for Case Study!

    Motorola Mobility, which was previously known as the mobile devices division of Motorola, until January 2011 when it was separated. The company produces smartphones, set-top boxes, an end to end video solutions and cable modems. As soon as automobiles were becoming popular, Motorola helped with entertaining the passengers, as it introduced the world’s first commercial portable cell phone. On the other Hand, Google a privately held company, founded by Larry Page and Sergey Brin, two Ph.D. students at the University of Stanford, it has been focused on technology innovations to help its users find the information with unprecedented levels of ease, accuracy, and relevancy. Also learn, Dell Social Business Strategy, Google’s Acquisition of Motorola Mobility for Case Study! 

    Learn, Google’s Acquisition of Motorola Mobility for Case Study!

    Google primarily concentrated on the areas of search, advertising, operating systems and platforms, enterprise and hardware products. These programs include AdWords, AdSense, Google Display and Google Mobile, with Android and Google Chrome serve as its operating system and platforms. Google generate revenues primarily through delivering advertising to promote products and services for businesses. Currently, it moves to the new area, except for providing specific features to mobile device users, Google also operates in the mobile segment, as it made an acquisition of Motorola Mobility Holdings Inc. (Motorola) on May 22, 2012.

    Strategy, Finance, and Valuation Behind the Acquisition!

    Google is considered as one of the top web property in the global market. It provides different organization from all sizes with measurable results. The base of Google is located in Silicon Valley, however, they have offices all over the world. In 2011, Google managed to buy Motorola at a share price of $40 per share. This acquisition will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.

    Google made a deal with Motorola Mobility to buy the latter company for the sum of 12.5 billion dollars. Motorola was the only smartphone company that didn’t join Microsoft windows phone reboot, which was rewarded by Google which bought the company for $12.5 billion. The move Google made showed a bold move into the hardware business. Google plans included Motorola whereas they would run Motorola Mobility as a separate business that only licenses the software. The reasons behind the acquisition of Motorola, was none other than the intellectual property, whereas the patent portfolio of the company was described as an asset that will strengthen the position of Google with respect to threats coming from Apple and other companies such as Microsoft.

    According to the founder of Google and the CEO Lary page, he said ” “Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners, and developers. I look forward to welcoming Motorolans to our family of Googlers.” The Corporate Entrepreneurship Categories and Organizational Thinking!

    On the other hand, Motorola Mobility Holdings, Inc., is a manufacturer of cellular phones, whereas it combines innovative technology with human insights in order to connect people and enrich their lives. They are not solitary focused on cellular phones, as they manufacture wireless accessories, data delivery; and management solutions. During that time, Motorola was struggling in their market, to keep up with Samsung and HTC in Android innovation.

    For Motorola to get $12.5 billion for the company would be a great thing, as it is 63% premium over the share price. Even though the company was enjoying the launch of Droid and Droid X, however, it was losing after Motorola XOOM wasn’t selling, furthermore, delays occurred with the launching of the 4G smartphones. So the amount paid by Google only shows the how the CEO of Motorola Sanjay Jha has the ability to capitalize on a company desperate for patent protection.

    According to Sanjay Jha, the CEO of Motorola Mobility, the transaction between Google and Motorola will offer major value to the stakeholders, offers new opportunities to the employees, customers, and partners around the world. The partnership will take the Android platform to another level, a level that will enable them to deliver better mobile devices.

    Before the acquisition, took place, Google wanted to buy Motorola for a high-$20s, low-$30s per share, they made their first bid on the 1st of August, where they offered $30 per share, after 10 days from making the initial bid, Google made 2 more bids, the second bid was for the price of $37 and the final bid was for $40. But our question is, how could a company like Google, that is fond of number reach to this amount?

    It all started n July, when Sanjay Jha, said that it would be hard for Motorola to stay alone as an entity if it sold a large number of patents. This prompted Google to buy Motorola Mobility, so they requested to buy the company for the price of $30 per share in cash since Motorola has almost 299 million shares, the total bid equated to $9 Billion in Cash.

    However, Motorola used Quatalyst partners (Investment Bankers) to make contact with Google in August Whereas they suggested that Google should pay the amount of $43.5 per share (New York times), that’s when Google increased the bid up to $37 per share, which was later declined by both Motorola and Quatalyst partners, but Google still had a chance, as they replied with an offer of $40.5 per share or higher.” Google made the offer of $40.00 per share, or $11.96 billion. With the addition of options, the total amount reached up to $12.5 billion in Cash, which was finally agreed to by Motorola Mobility.

    Google’s acquisition of Motorola Mobility is considered the largest in the company’s history, reaching the value of $12.5 billion, it is considered as the strongest merger and Acquisition within the sector of high-tech since the year 2007 according to data from Thomson Reuters.

    This acquisition is considered overpriced to the media, as 63% premium is paid on the below par device makers. However many analysts and the media around the world believe that the purchase was only because of Motorola Patents, for this reason, Google should prepare itself to stand in court in case of lawsuits.

    Some would argue that the reason behind the purchase is to start a war with Apple. After all, Google will start the process of manufacturing phones that could run on the Android platform, this means that Google is looking for a head to head battle with the iPads and iPhones manufacturers that use Apple platform. With this acquisition, Google managed to enter into the business of manufacturing phones.

    Regulatory Implications!

    In order for the acquisition to take place, Google had to get the approval from the US government, European Commission and the Chinese government. Google managed to get approval from the US government and European Commission in February 2011. The US government had its doubts to give approval as it wasn’t sure if the acquisition would harm the Cell phone market. As the government is on guard to see if Google would use patents in the wireless device industry and “will not hesitate to take appropriate enforcement action” against violators.

    On the other hand, the Chinese government took more time to approve the transaction. As the Chinese law clearly states that any company that is selling its products with a revenue greater than $63 million domestically or $1.5 billion globally must get the approval from its ministry of commerce. However, Google must keep the operating system of Android free for all users and open for at least five years, in order to give approval of the acquisition.

    Is Google’s acquisition of Motorola Mobility Working Out?

    Everyone was surprised by the Google’s acquisition of Motorola Mobility, there are many good reasons why the business world was shocked. To begin with, its really rare to see a software company, moving into the hardware business. Could Motorola be the right choice for Google to purchase?

    The main reason behind the Google’s acquisition of Motorola Mobility was the 17,000 portfolio of patents owned by Motorola mobility plus 7000 pending patent applications, which are mostly related to the mobile technologies. Before Google actually bought Motorola, they had lost around 6,000 patents that belonged to Nortel. A group of investors from different companies such as Microsoft, Sony, and apple, who pitched in to pay the sum of $4.5 billion. This left Google out cold and started one of Google’s now-infamous screed against the patent system. Google had to look for another source of patents, that’s why it settled for Motorola Mobility.

    At the start of the merger, Google posted its first revenue report in July 2012, the report included Motorola acquisition, the overall numbers shown were actually good, which came as a shock. The total revenue reaches up to $12.1 billion, which was 21% more than the same quarter of last year. On the other hand, Motorola who had lost cash in 14 out of the last 16 quarters, was expected to drag Google’s cash flow down. Even though it was true, it wasn’t as bad as many analysts thought.

    As almost $1.25 billion that Google earned came from none other than Motorola, plus almost $840 million that came from selling Motorola Handset. Even though the sales of Low-end phones were still decreasing, other phones such as Motorola’s Droid Razr Maxx was selling really well. If it was still working as a separate entity, it would have almost the total sum of $38 million, which is not really a huge number, as it only forms about 3% of the total revenue generated.

    But is it really working out between the two companies? As Google’s main reason behind the acquisition was the patents. These patents, are with no doubt bringing Google healthy royalty revenue. However, since the acquisition took place, Google tried to assert the patents owned by Motorola against other competitors such as Apple and Microsoft with no luck, it also tried to protect Android, but still, there are no produced results. Instead of showing good result, the acquisition is actually attracting negative attention from around the world, as it was from Judges, Regulators or even both. According to Duncan, he says ” Google may have turned the patent fight between high-tech companies from a high-stakes bout to an old-school, 40-round, bare-knuckle brawls — and that’s pretty much the opposite of what patents are supposed to do”.

    Google Sells Motorola to Lenovo!

    After one and a half year, Motorola Mobility LLC, which owned by Google has been sold again to Lenovo, which a Chinese company whom an expert in a computer manufacturing for only $2.91 billion. Most of the people said that Google’s decision to sell Motorola Mobility is a fool.

    Google has several reasons why they sell Motorola Mobility to Lenovo. The first reason is Google only bought Motorola Mobility for its patents, not for manufacturing. Because Motorola had a massive patent library that can be used defensively against Apple’s patent attacks on Android licensees which makes the Android or Google’s customer worried. Google acquired Motorola Mobility, including its approximately 17,000 patents for $12.4 billion in May 2012 (all figures in US dollars). They sold the set-top box business (and 1,000 patients) to Arris in December 2012 for $2.35 billion in cash and stock. And now they’ve sold the handset business (and 2,000 patients) to Lenovo for $2.91 billion.

    Now, the purchase of Motorola came with $2.9 billion in cash, so what we’re left with is $4.24 billion for around 14,000 patents. (You can shrink that number further by taking into account things like $2.4 billion in deferred tax assets Google obtained in the original acquisition, but we’ll set that aside for the sake of this argument.) According to regulatory filings, Google had valued the original 17,000 patents at $5.5 billion (by far the biggest piece in their valuation of the acquisition).

    Now, anyone in the patent licensing business will tell you calculating a per-patent valuation for a portfolio is an over-simplification. But with all necessary disclaimers, this works out to around $294,000 each, and that they paid $303,000 each for the 14,000 they still have. That’s pretty close to their original valuation. And does that valuation hold water? Probably the easiest checkpoint is Rockstar’s purchase of around 6,000 Nortel patents for $4.5 billion. That’s $750,000 per patent.

    The second reason is Google can become a neutral company as an operating system broker for many vendors and make the money circulate faster than when with Motorola. Because, once Google bought Motorola, many big companies like Samsung and LG start to create their new operating system for mobile like Samsung’s Tizen. From these two reasons, Google’s decision to sell Motorola Mobility to Lenovo is a wise decision and profitable.

    Google's Acquisition of Motorola Mobility for Case Study! - ilearnlot
  • Dell Social Business Strategy for Case Study!

    Dell Social Business Strategy for Case Study!

    Dell Social Business Strategy; Dell Inc. is one of the world’ largest multinational technology corporation. That manufactures sells and supports personal computer and other computer related. Dell was founded as PC’s Limited in 1984 by Michael Dell, with start-up money totaling $1,000. When he was attending the University of Texas. Michael Dell started his business with a simple concept that selling computer systems directly to the customer would be the best way to understand their needs and give them the most computing solutions. Also learn, Tata Motors Acquisition of Jaguar and Land Rover for Case Study! Dell Social Business Strategy for Case Study! 

    Learn, Explaining, Dell Social Business Strategy for Case Study!

    Dell Social Business Strategy; The first product of the company is a self-designs computer call Turbo PC which had lower prices than major brands. PC’s Limited was not the first company to do this but was the first to succeed, grossing $73 million in its first year trading. Dell Social Business History: The company changed its name to Dell Computer Corporation in 1988.

    They try to sell computer through stores in 1990 but was unsuccessful and they return to sell directly to customers. Dell was including in Fortune Magazine as one of the world’s 500 largest companies in 1992. Four years later, Dell began to sell computer through its website. In 1999, Dell beat Compaq and became the biggest seller PCs in the US with $25 billion in revenue. In 2003, the company’s name was changed to Dell Inc.

    The Case Discussion for Dell Social Business Strategy:

    • First, How to manage the social media presence and what strategy the company should adopt for its social media presence?
    • Second, How to engage employees and other stakeholders in the social media platforms and how to use the information in organizational decision making?
    • Third, How to generate good ROI from social media marketing initiatives and profit from social media presence?
    • And last, What technologies and platforms are to use for social media and how to measure ROI?

    In June of 2005.

    Jeff Jarvis bought a Dell Lemon and paid a premium for the four-year in-home service plan. He started to face problems with the machine immediately and he contacted Dell for fixing the problems, but there was no proper response from Dell. Dell did not provide good service to Jarvis and with no other option, he posted his angry bust on poor Dell Service on his blog Buzz Machine titled “Dell lies. dell sucks”.

    His blog post generated severe criticism of Dell and other unhappy customers joined and the whole blogosphere started a critical discussion of the poor quality of products and how bad is Dell Technical Support service. Dell which was already struggling with poor revenues and blogosphere criticism added fuel to the poor financial performance and hurt Dell reputation badly.

    The problem of poor customer service and quality of products was not new as Dell was not listening to the customer complaints for long and the blogs had just publicized and gave an opportunity for the aggrieved customers to vent their anger. Dell had the first-hand experience of how social media can impact the business and how critical it is to listen to customer complaints and fix them fast.

    In 2006.

    It took one year for Dell to realize the extent of damage caused by the blogs and forced the company to announce a new business plan, called Dell 2.0 in 2006 that included an additional $150m investment in their customer service. The investment included sales channels, both in sales contacts & its online presence, in its website front and back end and expand the scope of Dell Connect, which enables a Dell technician to take control of a customer’s system should they be encountering problems. More Read it, What is Organizational Structure for Corporate Entrepreneurship?

    In March 2006 a community outreach team was forming that including the group of technical support experts with good interpersonal skills that listen, monitors and reaches out to bloggers around the world who have questions or may require assistance. Direct2Dell was launching in July 2006 and in August Dell expand blog outreach to include any conversations about Dell.

    Initially, Direct2Dell blog was receiving with negative skepticism, but chief blogger Lionel Menchaca convince bloggers that Dell was seriously listening to the bloggers and he diligently respond and link to critics. Dell’s team staunched the flow of bad buzz and by Dell’s measure, negative blog posts about it have dropped from 49% to 22%. Dell even engaged an external agency to monitors online conversations about Dell.

    In February 2007.

    Dell launched IdeaStorm that allowed Dell users to provide feedback & valuable insights about the company and its products and vote for those they find most relevant. The Linux community used this platform and suggested Dell brought back XP as an option for customers who wanted it, reduced trialware and listen to customers discuss ideas in real time.

    StudioDell (January 07) is a place where Dell users could share videos about Dell-related topics and videos and podcasts were using to educate users on various emerging technologies and also offers tips, tricks, and support to get the best out of a Dell product.

    Dell operated blogs and forums for dedicated customer engagement topics, joined Twitter (June 07) with a number of ids. Dell set up a centralizing team, appointed a separate leadership and resources were taken from multiple teams (IT, online) to test and launch social engagement tools and websites quickly. This team has developing formal social media strategy and set of social media policies and governance was set in place.

    In 2008.

    Dell social media presence started to yield results in terms of ROI and social media has become part of the business strategy and the various business units were provided specific targets for social media. Employees were trained and encouraged to actively participate in various social media channels, provide customer support through blogs, twitter, etc and community managers who were responsible for listening and resolution, content planning, technology testing, planning, and measurement was the name for various business units.

    Dell even went further with its social media initiatives a blog for the channel community was launching, online communities were launched for Dell’s environmental efforts called Regeneration and technophiles called Digital Nomads and social content appeared on Dell.com (homepage navigation, product pages with ratings & reviews). The Dell outlet, small business, and home offer available on Twitter had $500,000 in revenues. Dell started a page focusing on SMBs and fan pages on Facebook.

    In 2009.

    due to the recession pressure, social media team had to reduce headcount. Which led to the departure of key people in the social media facing teams within the Dell. The departures had an impact on the Dell social media presence had seen consolidation in the number of blogs & twitter accounts, slow down in response and lack of experience had further worsened the situation.

    But Dell managed to keep up and the worldwide community has grown to more than 3.5 million people across the social web, including places like Twitter, Facebook, Direct2Dell, and IdeaStorm. @DellOutlet had close to 1.5 million followers on Twitter with $3 million in revenue and in total Twitter has resulted in more than $6.5 million in revenue. Dell launched the Dell Tech Center in 2009 to revitalize the brand and increase awareness of Dell’s solutions capabilities as customers valued a trusted advisor relationship.

    In 2010.

    Dell consolidated its social media strategy in 2010 with the appointment of new leadership to social media. Division and together with the old members of the Dell social media team, Dell tried to regain its focus. Another effort from Dell to maintain its focus on social media was to open up. A Social Media Listening Command Center in Austin Texas under the leadership of Chief Listening Officer. Where real-time data is collect and visualize by Radian6 and display across rows of monitors. That shows a unique dashboard, offering instant insights into things like customer sentiment, the share of voice and geography.

    Dell also started on Customer Advisory Panel events with a goal to bring key customers and key advocates to Dell HQ in June 2010 to understand their delights and frustrations. Other DellCAP events were held in China in November 2010, in Germany in January 2011 and again in Round Rock in March 2011, focus on Sustainability topics. Think New, Why is Intrapreneurship Better than Entrepreneurship?

    In 2011.

    Now, Dell continued to improve its social media presence in 2011 and the Social Media Listening Command center is playing a critical role in these efforts. Also, Dell is tracking 25,000 online mentions both posts and tweets about Dell every day and understand this information based on topics, sentiment, the share of voice, geography, and trends and use it answer customer questions, address their concerns, build better products, and improve the overall customer experience.

    Dell has around 5000 employees trained as Social Media professionals and turned them. Into frontline social marketers who engage in Twitter, Facebook, LinkedIn, blogs, and more on the company’s behalf. As, Dell views employees’ social media participation as an asset rather than a liability and accordingly doesn’t restrict team members from utilizing mobile devices, apps or social media.

    Dell is using social media as a platform to support various campaigns and using it in the promotion of its first Customer Event. Dell World and launches a website, Techpageone.dell.com (Formerly EnterpriseEfficiency.com). Which is a microsite feature daily, topical blogs written by InformationWeek editors and writers as well as Dell executives to gain insights?

    Now more Opportunity for Dell Social Business Strategy.

    Dell Social Business Strategy; Social media has provided an opportunity for Dell not only to interact with customers. Understand their opinions and needs but also provided a marketing platform wherein. They can advertise their products, improve the brand image and loyalty and improve their revenues with the rise in sales. Dell initially entered into social media not to sell its products but to respond to its customer complaints and feedback but customers wanted to access to special deals from its social feeds that link to products, reviews or discounts.

    Dell is committed to improving the overall level of customer service continuously which is 24×7 “always-on” customer service philosophy. Through social media and has made it a critical part of the business strategy with clearly defined policy and is considering as one of the top companies in the world. That is significantly profiting through the use of Social media.

    Dell Social Business Strategy for Case Study
    Dell Social Business Strategy for Case Study!

  • Tata Motors Acquisition of Jaguar and Land Rover for Case Study!

    Tata Motors Acquisition of Jaguar and Land Rover for Case Study!

    Jaguar and Land Rover; Tata Motors is the largest multi-holding automobile company in India and it is the fourth largest truck producer in the world. In addition, TataMotors.com is also the second largest bus producer in the world. With the revenues of US$ 8.8 billion in the financial year 2008. Since its establishment in 1945, Tata Motors has grown significantly in the past 60years with the strategies of the joint venture.

    Learn, Explaining, Tata Motors Acquisition of Jaguar and Land Rover for Case Study!

    Acquisition and launched new products in different market segments (i.e. passenger cars, commercial vehicles, and utility vehicles). A significant breakthrough for Tata was the development and commercialization of the truly Indian cars and they are Tata Indica (1998) and Tata Indigo (2002). Also learn, What is the Growth Strategy for Case Study Starbucks? Tata Motors Acquisition of Jaguar and Land Rover for Case Study!

    Tata Motors has experienced many joint ventures with Daimler Benz, Cummins Engine Co. Inc., and Fiat. In the year 2008, there were two most significant events which have had a momentous impact on the scale of the Company’s operations and its global image. The launching of Tata Nano, the world cheapest car and the acquisition of Jaguar and Land Rover.

    The two iconic British brands have made Tata Motors well known to the people in the world. Tata Motors has proven excellence over the years through continued strong financial results. Market expansion, acquisition, joint ventures and improvement and introduction of new products, it seems to have a promising future.

    But it failed the expectation as the company was in trouble right after. The acquisition of Jaguar and Land Rover (JLR) in June 2008 due to the arrival of the global financial crisis. The bridge loan of US$ 3 billion which used to fund the acquisition of JLR was due on June 2009 and yet at the end of the year 2008, Tata was only able to repay the US$ 1 billion.

    The declining revenues and tight credit conditions were hurting the company’s cash flow. The questions arise is whether Tata Motors able to repay the bridge loan? Will it be able to build up investors’ confidence and increase sales in the future? Could Tata Motors survive or going into bankruptcy?

    Tata Motors Acquisition of Jaguar and Land Rover!

    On June 02, 2008, India-based Tata Motors completed the acquisition of the Jaguar and Land Rover (JLR) units. From the US-based auto manufacturer Ford Motor Company (Ford) for US$ 2.3 billion, on a cash free debt free basis. JLR was a part of Ford’s Premier Automotive Group (PAG) and were considered to be British icons. Jaguar was involved in the manufacture of high-end luxury cars, while Land Rover manufactured high-end SUVs.

    Forming a part of the purchase consideration were JLR’s manufacturing plants, two advanced design centers in the UK. National sales companies spanning across the world, and also licenses of all necessary intellectual property rights. Tata Motors had several major international acquisitions to its credit. It had acquired Tetley, South Korea-based Daewoo’s commercial vehicle unit, and Anglo-Dutch Steelmaker Corus.

    Tata Motors long-term strategy included consolidating its position in the domestic Indian market and expanding. Its international footprint by leveraging in-house capabilities and products and also through acquisitions and strategic collaborations. Analysts were of the view that the acquisition of Jaguar and Land Rover. Which had a global presence and a repertoire of well-established brands? Would help Tata Motors become one of the major players in the global automobile industry.

    On acquiring JLR, Rattan Tata, Chairman, Tata Group, said, “We are very pleased with the prospect of Jaguar and Land Rover being a significant part of our automotive business. We have enormous respect for the two brands and will endeavor to preserve and build on their heritage and competitiveness, keeping their identities intact. We aim to support their growth while holding true to our principles of allowing the management and employees to bring.

    Their experience and expertise to bear on the growth of the business.” Ford had bought Jaguar for US$ 2.5 billion in 1989 and Land Rover for US$ 2.7 billion in 2000. However, over the years, the company found that it was failing to derive the desired benefits from these acquisitions. Ford Motors Company (Ford) is a leading automaker and the third largest multinational corporation in the automobile industry. The company acquired Jaguar from British Leyland Limited in 1989 for US$ 2.5 billion.

    After Ford acquired Jaguar, adverse economic conditions worldwide in the 1990s led to tough market conditions and a decrease in the demand for luxury cars. The sales of Jaguar in many markets declined, but in some markets like Japan, Germany, and Italy, it still recorded high sales. In March 1999, Ford established the PAG with Aston Martin, Jaguar, and Lincoln. During the year, Volvo was acquired for US$ 6.45 billion, and it also became a part of the PAG.

    Ford Sells Jaguar and Land Rover!

    In September 2006, after Allan Mulally (Mulally) assumed charge as the President and CEO of Ford. He decided to dismantle the PAG, In March 2007. Ford sold the Aston Martin sports car unit for US$ 931 million. In June 2007, Ford announced that it was considering selling JLR. More Read it Case, Case Study of “Starbucks Entry to China” with Marketing Strategy!

    The Deal!

    On March 26, 2008, Tata Motors entered into an agreement with Ford for the purchase of Jaguar and Land Rover. Tata Motors agreed to pay US$ 2.3 billion in cash for a 100% acquisition of the businesses of JLR. As part of the acquisition, Tata Motors did not inherit any of the debt liabilities of JLR – the acquisition was totally debt free.

    The Benefits!

    Tata Motors’ long-term strategy included consolidating its position in the domestic Indian market and expanding. Its international footprint by leveraging in-house capabilities and products and also through acquisitions and strategic collaborations.

    Tata Motors stood to gain on several fronts from the deal. One, the acquisition would help the company acquire a global footprint and enter. The high-end premier segment of the global automobile market. After the acquisition, Tata Motors would own the world’s cheapest car – the US$ 2,500 Nano, and luxury marquees like the Jaguar and Land Rover. Two, Tata also got two advanced design studios and technology as part of the deal.

    This would provide Tata Motors access to the latest technology. Which would also allow Tata to improve. Their core products in India, for eg, Indica and Safari suffered from internal noise and vibration problems. Three, this deal provided Tata an instant recognition and credibility across the globe which would otherwise have taken years. Four, the cost competitive advantage as Corus was the main supplier of automotive. High-grade steel to JLR and other automobile industry in the US and Europe.

    This would have provided a synergy for TATA Group on a whole. The whole cost synergy that can create can see in the following diagram. Five, in the long run, TATA Motors will surely diversify its present dependence on Indian markets (which contributed to 90% of TATA’s revenue). Along with it due to TATA’s footprints in South East Asia will help JLR do diversify. Its geographic dependence on the US (30% of volumes) and Western Europe (55% of volumes).

    The Road Ahead!

    Morgan Stanley reported that JLR’s acquisition appeared negative for Tata Motors. As it had increased the earnings volatility. Given the difficult economic conditions in the key markets of JLR including the US and Europe. Moreover, Tata Motors had to incur a huge capital expenditure as it planned to invest another US$ 1 billion in JLR. This was in addition to the US$ 2.3 billion it had spent on the acquisition.

    Tata Motors had also incurred huge capital expenditure on the development and launch of the small car. Nano and on a joint venture with Fiat to manufacture some of the company’s vehicles in India and Thailand. This, coupled with the downturn in the global automobile industry, was expected to impact the profitability of the company in the near future.

    Worldwide car sales are down 5% as compared to the previous year. The automobile industry the world over is rationalizing production facilities, reducing costs wherever possible, consolidating brands and dropping model lines and deferring R&D projects to conserve funds. The Chinese and Indian domestic markets for cars have been exceptions.

    While China has witnessed a significant reduction in its automotive-related exports and supplies to automobile companies. The Chinese domestic car market has grown by 7%. In India, the passenger car market has remained more or less flat compared to the previous year.

    Since then, its fortunes have been unsure, as the slump in demand for automobiles has depressed. Its revenues at the same time Tata has invested nearly $400 million in the Nano launch and struggled to pay off. The expensive $3 billion loans it racked up for the Jaguar/Land Rover shopping bill. Within the space of a year, Tata Motors has gone from being a developing-world success story to a cautionary tale of bad timing and overly ambitious expansion plans.

    Tata Motors standalone Indian operations profits declined by 51% in 2008-09 over the previous year. All through the fiscal year ended March 2009, the company bled money, losing a record $517 million on $14.7 billion in revenues, just on its India operations. Jaguar and Land Rover lost an additional $510 million in the 10 months Tata-owned it until March 2009. In January 2009, Tata Motors announces that due to lack of funds. It may force to roll over a part of the US$ 3 billion bridge loan after having repaid around US$ 1 billion. The financial burden on Tata Motors was expected to increase. Further with the pension liability of JLR coming up for evaluation in April 2009.

    Tata Motors Acquisition of Jaguar and Land Rover for Case Study
    Tata Motors Acquisition of Jaguar and Land Rover for Case Study!

  • What is the Growth Strategy for Case Study Starbucks?

    What is the Growth Strategy for Case Study Starbucks?

    Case Study Starbucks Growth Strategy; Today, Starbucks coffee shops and Kiosks can found in a variety of shopping centers, office buildings, bookstores, and other outlets. Starbucks is capitalizing on taste changes that predate the company’s founding. In the early 1960s, American adults consumed an average of three cups of coffee each day. Today, consumption has declined to less than two cups, with only half of American adults as coffee drinkers. Also learn, Starbucks’ Entry to China, What is the Growth Strategy for Case Study Starbucks?

    Studies, Learn, The Growth Strategy for Case Study Starbucks!

    During this time, decaffeinated coffee sales soared. In addition, a new category of intensely loyal coffee drinkers was born. This group of adults consumes “specialty” or “premium” coffees, including regular and decaffeinated versions with a variety of origins and flavors. Sales of specialty coffee have climbed from about $45 million annually to more than $2 billion today, accounting, for about 20 percent of all coffee sales.

    Because Starbucks markets whole beans and coffee beverages, its competition comes from two distinct groups of firms. A number of regional coffee manufacturers distribute premium coffees in local markets, while several large national coffee manufacturers such as Nestle, Proctor & Gamble, and Kraft General Foods market and distribution specialty coffees in supermarkets. Coffee beverages are distributing by restaurants, grocery stores, and coffee retailers. Seattle’s Best Coffee is a fierce competitor.

    The case of History!

    In 1971, three academics, English Teacher Jerry Baldwin, History Teacher Zel Siegel, and writer Gordon Bowker opened Starbucks Coffee. Tea and Spice in Touristy Pikes Place Market in Seattle. The three were inspired by entrepreneur Alfred Peet (whom they knew personally) to sell high-quality coffee beans and equipment. The store did not offer freshly brewed coffee by the cup, but tasting samples were sometimes available.

    Siegel will wear a grocers apron, scooped out beans for customers. While the other two kept their day jobs but came by at lunch or after work to help out. The store was an immediate success, with sales exceeding expectations, partly because of interest stirred by the favorable article in Seattle Times.

    Other things:

    Starbucks ordered its coffee-bean from Alfred Peet but later on, the three partners bought their own used roaster setting up roasting operations in a nearby ramshackle building and developed their own blends and flavors. By the year 1980s, the company had four Starbucks Stores in the Seattle area and had been profitable every year. Later on, Siegel left the company and Jerry Baldwin took over day-to-day management of the company. Gordon Bowker remained as an owner but devoted most of his time in his Design Firm.

    In 1981, Howard Schultz, the vice president of U.S operations for Swedish Maker of stylish kitchen equipment and coffeemakers decided to pay Starbucks a visit. He was curious about why Starbucks was selling so many of his company products. He was impressing with the company management and the quality products they make. Schultz asked Baldwin whether there was any way he could fit into Starbucks and it took a long time to decide his request. He tries many times until one day he was given a job of heading marketing and overseeing the retail stores.

    The case of Challenges:

    • What are some of the challenges associated with Starbucks aggressive growth strategy?
    • Could an unanticipated change in coffee consumption patterns disrupt Starbucks in the same way that it paved the way for the company’s growth in the 1980s?
    • What problems might arise from Starbucks’ efforts to expand rapidly into nations such as India?
    • Comment on the pricing strategies of Starbucks.
    • How would you see the competition of Starbucks in India, with players like Costa Coffee, Mc Donalds, Barista and Café Coffee Day? Draw out a competitive strategy for Starbucks.

    Here are Some More Knowledge these Case for better Understand.

    Howard Schultz spent most of his working hours in the four stores learning the retail aspects of the company business; Schultz was overflowing with ideas for the company. His biggest inspiration and vision for Starbucks future came during 1983 when the company sent him for an international housewares show to Milan, Italy. There he spotted an espresso bar and went to take a coffee.

    H. Schultz was impressed with the coffeehouse services and decided to stay at Milan for a week to explore. All coffee bars and learned as much as he could about the Italian passion for coffee drinks. He made a decision to serve fresh brewed coffee, espressos, and cappuccinos in its stores and try to create an American version of Italian coffee bar culture.

    Schultz shared his idea with Baldwin and it took nearly a year to convince Jerry Baldwin to let him test an espresso bar. In April 1984, the first espresso bar was opened and it was a success too. Yet Baldwin felt something is wrong. After Schultz failed to convince Baldwin for the expansion of business, he left Starbucks in 1985. Schultz started the “Il Giornale” coffee bar chain in 1985 and the coffeehouse was very successful.

    In 1987 Starbucks owner Jerry Baldwin and Bowker decide to sell the whole Starbucks chain to Schultz’s Il Giornale. Which rebranded the Il Giornale outlets as Starbucks and quickly began to expand. Starbucks opened its first locations outside Seattle at Waterfront Station in Vancouver, British Columbia, and Chicago, Illinois, that same year. At the time of its initial public offering on the stock market in 1992, Starbucks had grown to 165 outlets.

    The growth of Coffee Stores!

    In 2009 The Company plans to open a net of 900 new stores outside of the United States. Chairman Howard Schultz projects that the Starbucks mobile app will grow from its present 6,000 stores to more than 20,000, 75 percent of which are in the United States. Also, The company added 280 intentional locations in 2001 and is targeting. With an additional 650 stores in Europe by 2004 and 900 locations in Latin America predominantly Mexico by 2005, Starbucks is also moving into China.

    Retail stores account for more than 80 percent of revenues, with specialty operations accounting for the remainder. Starbucks Corporation is an American coffee company and coffeehouse chain. Starbucks was founded in Seattle, Washington in 1971. As of 2017, the company operates 27,339 locations worldwide. Also, Starbucks first became profitable in Seattle in the early 1980s. Despite an initial economic downturn with its expansion into the Midwest and British Columbia in the late 1980s, the company experienced revitalized prosperity with its entry into California in the early 1990s.

    Location:

    The first Starbucks location outside North America opened in Tokyo in 1996; overseas properties now constitute almost one-third of its stores. Also, The company opened an average of two new locations daily between 1987 and 2007. Starbucks considers the main representative of “second wave coffee”, initially distinguishing itself from other coffee-serving venues in the US by taste, quality, and customer experience while popularizing darkly roasted coffee.

    Since the 2000s, third wave coffee makers have targeted quality-minded coffee drinkers with hand-made coffee based on lighter roasts, while Starbucks nowadays uses automated espresso machines for efficiency and safety reasons. On December 1, 2016, Howard Schultz announced he would resign as CEO effective April 2017 and would replace by Kevin Johnson. Johnson assumed the role of CEO on April 3, 2017.

    What is the Growth Strategy for Case Study Starbucks
    What is the Growth Strategy for Case Study Starbucks?

    Reference:

    1. Case Study – //www.mbaknol.com/management-case-studies/case-study-starbucks-growth-strategy/
    2. About Starbucks – //en.wikipedia.org/wiki/Starbucks
    3. Photo Credit URL – //cdn.someecards.com/posts/guy-uses-drone-to-pick-up-starbucks-order-0rb.png

  • Case Study of the MasterCard Credit Cards Business

    Case Study of the MasterCard Credit Cards Business

    MasterCard Credit Cards Business Case Study; Credit (change) cards have been very big business for several decades. In 2001, over $30 trillion in payments for goods and services were charging using credit cards. The cards have made life easier for many people; because, they do not need to carry large amounts of cash for most purchases. Many people also use the cards as a way to borrow money; because, they need only pay a small percentage of the amount they owe each month, although they usually charge very high-interest rates for the unpaid balance.

    Case Study of the MasterCard Credit Cards Business!

    MasterCard More info: “Mastercard Incorporated (stylized as MasterCard) is an American multinational financial services corporation headquartered in the MasterCard International Global Headquarters, Purchase, New York, United States, in Westchester County. The Global Operations Headquarters is located in O’Fallon, Missouri, United States, a suburb of St. Louis, Missouri.

    Throughout the world, its principal business is to process payments between the banks of merchants; and, the card-issuing banks or credit unions of the purchasers who use the “Mastercard” brand debit and credit cards to make purchases, their Case Study. Mastercard Worldwide has been a public trade company since 2006. Before its initial public offering, MasterCard Worldwide was a cooperative own by the more than 25,000 financial institutions that issue its branded cards.”

    The interest goes to the issuing bank, making credit cards a very profitable service for them. However, the credit card industry is intensely competitive, highly fragmented, and growing at a rate of 3 to 4 per year, making those profits difficult to achieve.

    Visa and MasterCard:

    Visa and MasterCard are associations of banks that issue credit cards, you understand their Case Study. They market their cards, often several different cards, and provide support for the transactions; making networks available to collect and use the data. The most popular credit card has been Visa, with 44.5 percent of the business in 2001; while MasterCard is number two with 31.6 percent. Being very much second to Visa, MasterCard is trying to overtake it.

    While it had been number two since the beginning, MasterCard began to emerge from “its doldrums” in 1997, according to Robert Selander, MasterCard’s CEO. It began to realize it might really be able to overtake Visa and become number one. To reach that goal, MasterCard needed to present itself so that the potential user will choose a MasterCard rather than a Visa. It also had to spur the bank issuers to promote MasterCard cards rather than those of their competition.

    In 1998, when MasterCard had only 28.8 percent of the credit card charge volume; while Visa’s was over 50 percent, MasterCard decided it needs a new computer center; partially to handle all the data as the company’s business expanded as a result of its drive to overtake Visa. It also foresaw growth as a result of its change in strategy. The company’s new strategy required a system that would be able to keep a record of every transaction of every customer for three years.

    Strategy:

    The strategy included ways MasterCard and its member banks could use that data to increase their credit card business. MasterCard wanted to increase its daily volume of 30 million transactions in 1977. At the time it had three separate computer centers on four floors in the suburbs of St. Louis, Missouri, and it wants to consolidate the computer centers while enlarging the new center; so, that it would be able to handle both the current volume and the planned volume as it expands.

    At that time it was storing nearly 50 terabytes (50 trillion numbers and letters) of data, including the dollar amount, merchant, location, and card number. MasterCard also planned to add other data fields, such as ZIP codes, to make the data more useful. However, to protect MasterCard users, it did decide not to include demographic data such as incomes and ages.

    Nonetheless, “The credit card business lives and dies by data”, said Ted Iacobuzio, director of consumer credit research for the consulting and research firm, TowerGroup. Top searched case study [Market Research Coffee of “Starbucks” Entry into China].

    Warehousing:

    While both Visa and MasterCard had already been warehousing so much data; they were both moving toward providing reports to their member banks. MasterCard’s goal was to give its members (the banks) direct access to their customers’ data as well as tools to analyze all of this data; all to persuade the banks to choose MasterCard over Visa.

    For example, if banks could use MasterCard tools to improve their analysis of the profitability of the cards in their portfolios or gain more customers and transactions to process; they would be inclined to push MasterCard more often. Such an analysis could help banks determine the types of customers that were most profitable or find ways to appeal to more potential MasterCard customers.

    Many banks issue both Visa Cards and MasterCard cards (sometimes several of each); and, if the banks can use this information from MasterCard while Visa does not have or make available such information; the MasterCard company can gain a strategic advantage.

    For example, in 2001, MasterCard persuaded Citigroup, the largest issuer of credit cards, to push MasterCard over Visa so that 85 percent of its credit cards came from MasterCard versus only 15 percent from Visa. J. P. Morgan Chase likewise was convinced to use MasterCard for 80 percent of the cards it issued.

    What is the Hope?

    MasterCard hoped it could persuade banks to use these data; if they could see the value (increased profit) in the process. Joseph Caro, MasterCard’s vice president of Internet technology services, says that “little percentages” can be very profitable to banks. In one case, a bank was requiring its merchants to verify the whole process by using the telephone to call in one transaction out of 50 for approval (rather than using a telecommunications method); while most banks were requiring only one transaction in 500.

    Because call-ins cost about $3 each, that bank could save $300,000 a year by switching over to the one in 500 methods. Another bank was turning down one transaction out of five because so many call-ins were timing out. The bank was able to discover that most of the customers turn down were actually creditworthy. By changing its set up, the bank would be able to eliminate thousands of unnecessarily lost transactions.

    About 28,000 banks and financial service companies issue MasterCard credit cards. To draw these customers into using its credit card transaction data; MasterCard needed not only to make each bank’s data available to them but also needed to make available appropriate analytic software. MasterCard assigned 35 full-time developers to the task of identifying and creating software tools to accomplish this task.

    Objects:

    Drawing on Business Objects Web Intelligence software in 2001; these developers created and programmed 27 tools for the banks to use. (These tools are not free and they are not available to merchants.) One of MasterCard’s new tools, called the Business Performance Intelligence, is for operational reporting and includes a suite of 70 standard reports that banks can use to analyze their daily, weekly, or monthly transaction.

    The banks can then compare the results from one market (such as a United States state or region, or a single country) with that of another market. MasterCard also works with individual banks to create their own custom reports, enabling them to concentrate on their own issues and concern. Subscribing banks access the MasterCard business intelligence system via a secure extranet.

    The developers also created MarketScope; which are applications that have the goal of helping banks and merchants work together to generate more purchases from the merchants if they pay for by MasterCard. One example they give is to enable Wal-Mart stores to determine how many MasterCard holders spend $25 or more on sporting goods in January and February.

    Systems development:

    Then, MasterCard’s vice president of systems development, Andrew Clyne, suggested that Wal-Mart could send these card-holders the right to obtain tickets to their closest major league baseball team based upon future sporting goods purchase above a certain dollar minimum. Lacobuzio said that such a strategy should appeal to state and regional banks. However, he believes it is likely that national and international banks would have already developed and are using their own analytical software.

    But even they would have a use for MasterCard’s software as a kind of benchmark against; which to measure the effectiveness of their own systems. Moreover, despite the increasing volume, the processing was much faster. As Caro said, “If we can do things faster, little percentages start moving in our direction.”

    Visa, however, is not sitting still and is managing about 100 trillion terabytes of data for its clients. Until recently, it mainly supplied the data online or on disks to its bank customers; who used their own software and computers to analyze the data. Recently, Visa started to run analyses for the banks on its own computers.

    Web service:

    In May 2002, Visa also introduced a Web service called Resolve Online to help banks deal with disputed payments and is working on providing banks with online analytic tools. “If MasterCard is ahead of the game in any of this”, says Iacobuzio, Visa “will have it in six months”.

    MasterCard’s new data storage site, which was opening in May 2002, is also in St. Louis, in a single 525,000-square – foot building. The complex, which was built on open land, cost MasterCard $135 million. The changeover to the new site happened over a weekend with almost no problem; despite the purchases of about $4 billion each day.

    Case Study of the MasterCard Credit Cards Business
    Case Study of the MasterCard Credit Cards Business, MasterCard Logo since July 14, 2016.
  • Case Study Corporate Social Responsibility of Coffee Starbucks

    Case Study Corporate Social Responsibility of Coffee Starbucks

    Starbucks Case Study; It is the world’s largest and most popular coffee company. Case Study; Since the beginning, this premier café has aimed to deliver the world’s finest fresh-roasted coffee. Corporate Social Responsibility of Starbucks Coffee, Case Study; Today the company dominates the industry and has created a brand that is tantamount to loyalty, integrity, and proven longevity. Starbucks is not just a name, but a culture.

    Case Study in Corporate Social Responsibility of Coffee Starbucks!

    It is obvious that Starbucks and its CEO Howard Shultz are aware of the importance of corporate social responsibility. We try to explain the case study of Corporate Social Responsibility of Starbucks Coffee; Every company has problems they can work on and improve in and so does Starbucks. As of recent, Starbucks has done a great job showing their employees how important they are to the company. Along with committing to every employee, they have gone to great lengths to improve the environment for everyone.

    Ethical and unethical behavior is always a hot topic for the media, and Starbucks has to be careful with the decisions they make and how they affect their public persona. The corporate social responsibility of the Starbucks Corporation addresses the following issues: Starbucks’ commitment to the environment, Starbucks’ commitment to the employees, Starbucks’ commitment to consumers, discussions of ethical and unethical business behavior, and Starbucks ‘ commitment and response to shareholders. The following Corporate Social Responsibility of Starbucks Coffee few explain below are;

    Commitment to the Environment.

    The first way Starbucks has shown corporate social responsibility is through its commitment to the environment. To improve the environment, with a little push from the NGO, Starbucks’ first main goal was to provide more Fair Trade Coffee. What this means is that Starbucks will aim to only buy 100 percent responsibly grown and traded coffee. Not only does responsibly grown coffee help the environment, but it also benefits the farmers as well. Responsibly grown coffee means preserving energy and water at the farms.

    In turn, this costs more for the company overall, but the environmental improvements are worth it. Starbucks and the environment benefit from this decision because it helps continue to portray a clean image. Another way to improve the environment directly through their stores is by “going green”. Their first attempt to produce a green store was in Manhattan. Starbucks made that decision to renovate a 15-year-old store. This renovation included replacing old equipment with more energy-efficient ones.

    To educate the community, they placed plaques throughout the store explaining their new green elements and how they work. This new Manhattan store now conserves energy, water, materials, and uses recycled/recyclable products. Twelve stores total plan to be renovated and Starbucks has promised to make each new store LEED, meaning a Leader in Energy and Environmental Design.

    LEED improves performance regarding energy savings, water efficiency, and emission reduction. Many people don’t look into environmentally friendly appliances because the upfront cost is always more. According to Starbucks, going green over time outweighs the upfront cost by a long shot. Hopefully, these new design elements will help the environment and get Starbucks ahead of their market.

    Commitment to Consumers.

    The second way Starbucks has shown corporate social responsibility is through their commitment to consumers. The best way to get the customers what they want is to understand their demographic groups. By doing research on Starbucks’ consumer demographics, they realized that people with disabilities are very important. The company is trying to turn stores into a more adequate environment for customers with disabilities.

    A few changes include: lowering counter height to improve ease of ordering for people in wheelchairs, adding at least one handicap accessible entrance, adding disability etiquette to employee handbooks, training employees to educate them on disabilities, and by joining the National Business Disability Council. By joining the National Business Disability Council, Starbucks gains access to resumes of people with disabilities.

    Another way Starbucks has shown a commitment to the consumers is by cutting costs and retaining loyal customers. For frequent, loyal customers, Starbucks decided to provide a loyalty card. Once a customer has obtained this card, they are given incentives and promotions for continuing to frequent their stores. Promotions include discounted drinks and free flavor shots to repeat visitors.

    Economy talk:

    Also, with the economy being at an all-time low, Starbucks realized that cheaper prices were a necessity. By simplifying their business practices, they were able to provide lower prices for their customers. For example, they use only one recipe for banana bread, rather than eleven!

    It doesn’t end there either! Starbucks recognized that health is part of social responsibility. To promote healthier living, they introduced “skinny” versions of most drinks, while keeping the delicious flavor. For example, the skinny vanilla latte has 90 calories compared to the original with 190 calories. Since Starbucks doesn’t just sell beverages now, they introduced low-calorie snacks. Along with the snacks and beverages, nutrition facts were available for each item.

    Also, one big way to cut costs was outsourcing payroll and Human Resources administration. By creating a global platform for its administration system, Starbucks is able to provide more employees with benefits. Plus, they are able to spend more money on pleasing customers, rather than on a benefits system.

    Commitment and Response to Shareholders.

    One way Starbucks has demonstrated its commitment and response to shareholder needs is by giving them large portions. By large portions, Starbucks is implying that they plan to pay dividends equal to 35% or higher of net income. For the shareholders, paying high dividends means certainty about the company’s financial well-being. Along with that, they plan to purchase 15 million more shares of stock, and hopefully, this will attract investors who focus on stocks with good results.

    Starbucks made its commitment to shareholders obvious by speaking directly to the media about it. In 2004, Starbucks won a great tax break, but unfortunately, the media saw them as “money-grubbing”. Their CEO, Howard Shultz, made the decision to get into politics and speak to Washington about expanding health care and the importance of this to the company. Not only does he want his shareholders to see his commitment, but he wants all of America to be able to reap these benefits.

    In order to compete with McDonald’s and keeping payout to its shareholders high, Starbucks needed a serious turnaround. They did decide to halt growth in North America but not in Japan. Shultz found that drinking coffee is becoming extremely popular for the Japanese. To show shareholders there is a silver lining, he announced they plan to open “thousands of stores” in Japan and Vietnamese markets.

    Commitment to Employees.

    The first and biggest way Starbucks shows their commitment to employees is by just taking care of their workers. For example, they know how important health care, stock options, and compensation are to people in this economy. The Starbucks policy states that as long as you work 20 hours a week you get benefits and stock options. These benefits include health insurance and contributions to the employee’s 401k plan.

    Starbucks doesn’t exclude part-time workers, because they feel they are just as valuable as full-time workers. Since Starbucks doesn’t have typical business hours like an office job, the part-time workers help to work the odd shifts. Another way Starbucks shows its commitment to employees is by treating them like individuals, not just number 500 out of 26,000 employees. Howard Shultz, a CEO, always tries to keep humanity and compassion in mind.

    When he first started at Starbucks, he remembered how much he liked it that people cared about him, so he decided to continue this consideration for employees. Shultz feels that the first impression is very important. On an employee’s first day, he lets each new employee know how happy he is to have them as part of their business, whether it is in person or through a video.

    His theory is that making a good first impression on a new hire is similar to teaching a child good values. Through their growth, he feels each employee will keep in mind that the company does care about them. Shultz wants people to know what he and the company stand for, and what they are trying to accomplish.

    Ethical/Unethical Business Behavior.

    The last way Starbucks demonstrates corporate social responsibility is through ethical behavior and occasional unethical behavior. The first ethically positive thing Starbucks involves itself in is the NGO and Fair Trade coffee. Even though purchasing mostly Fair Trade coffee seriously affected their profits, Starbucks knew it was the right thing to do. They also knew that if they did it the right way, everyone would benefit, from farmers to the environment, to their public image.

    In the fall of 2010, Starbucks chose to team up with Jumpstart, a program that gives children a head start on their education. By donating to literacy organizations and volunteering with Jumpstart, Starbucks has made an impact on the children in America, in a very positive way.

    Of course, some negatives come along with the positives. Starbucks isn’t the “perfect” company like it may seem. In 2008, the Starbucks mobile app decided to close 616 stores because they were not performing very well. For Starbucks to close this many stores in one year, they had to battle many landlords due to the chain breaking lease agreements. Starbucks tried pushing for rent cuts but some stores did have to break their agreements.

    Other thing:

    On top of breaching lease agreements, Starbucks was not able to grow as much as planned, resulting in their future landlords were hurting as well. To fix these problems, tenants typically will offer a buyout or find a replacement tenant, but landlords are in no way forced to go with any of these options. These efforts became extremely time-consuming and costly, causing Starbucks to give up on many lease agreements.

    As for Starbucks ethical behavior is a different story when forced into the media light. In 2008, a big media uproar arose due to them wanting to re-release their old logo for their 35th anniversary. The old coffee cup logo was basically a topless mermaid, which is Starbucks’ opinion is just a mythological creature, not a sex symbol.

    Media critics fought that someone needed to protect the creature’s modesty. Starbucks found this outrageous. To end the drama and please the critics, they chose to make the image more modest by lengthening her hair to cover her body and soften her facial expression. Rather than ignoring the media concerns, Starbucks met in the middle to celebrate its 35th anniversary. Maybe you definitely understand above the information and case study of Corporate Social Responsibility of Starbucks Coffee.

    Case Study in Corporate Social Responsibility of Coffee Starbucks
    Case Study in Corporate Social Responsibility of Coffee Starbucks!