- Risk to a company isn’t always from external sources, it may come from actions in the company, such as attempts at business expansion or diversification such as in the example below:
SMALL CUSTOMERS, BIG PROFITS
Big business is attractive, with huge profits for some. But there’s something to be said about small business as well, with lower risk and the potential for creativity. Darren Robbins of Big D Custom Screen Printing in Austin, TX found success in his business by pursuing customers with orders both large and small. Although Big D started out catering only to large orders, the shop sat idle in between orders, and through effective scheduling and transparent pricing, was able to fill in dead times with smaller orders. Big D found a profit in a market segment that other local screen printers weren’t clamoring to fill. Experts believe this was a smart strategy, allowing Big D to spread out risk in their business and offer customized products. But at least one person is critical of the offering, pointing out that the niche has little upside potential, and may hurt the company’s efficiency.
Reviewing chapters 6 and 11 in the textbook, what are risks you see in Big D’s move, and how would you place them in the risk and impact assessment matrix?
Case Study Source: http://www.onlinecollege.org/2011/10/03/20-classic-case-studies-every-business-student-should-know/
- Chapter 5 in the textbook discusses brand value’s importance as an asset. Fortune magazine rates j&j th in the top ten health-care brands. TYLENOL’S 1982 SCANDA In 1982, seven people in Chicago died after taking Tylenol due to an unknown suspect lacing the capsules with cyanide after the products reached the shelves. In the immediate aftermath, Tylenol’s commanding 37% market share dropped to just 7% nationwide, despite the problem being contained to the Chicago area. Tylenol was not responsible for the tampering of the product, but to maintain the product’s reputation, Johnson & Johnson pulled all of the Tylenol from the shelves, absorbing a loss of more than $100 million dollars. Tylenol was successfully reintroduced with tamper resistant packaging, discounts, and sales presentations to the medical community. The brand survived due to swift action and effective public relations from Johnson & Johnson. Compare and contrast ]&J’s handling of the Tylenol scandal with the earlier case we studied regarding Beechnut and the baby apple juice scandal, regarding protection of brand and its long-term impact. (Link to Beechnut article for review if necessary: http://www.fundinguniverse.com/company-hi stories/beech-nut-nutrition-corporation-histony/) Case Study Source: Ittp://www.onlinecollege.org/2011/10/03/20-classic-case-studies-every-business-student-should-know/
- We have seen supply-chain turn up time and again during our BC studies. Consider the following case study: SUPPLY CHAIN DISRUPTIOn In 2000, a fire at the Philips microchip plant affected phone manufacturers Nokia And Ericsson. The companies reacted in different ways, and ultimately, Ericsson did not do well, quitting the mobile phone business and allowing Nokia to win over the European market. While Ericsson had tied up all of its key components in a single source and planned to wait out the problem with the fire, Nokia worked to snatch up spare chips from other plants and suppliers, as well as re-engineered some of their phones to adapt to different chips from new suppliers. It’s not hard to imagine what happened after that. Nokia kept trucking along, while Ericsson suffered from months of lost production and sales, allowing the market to be dominated by Nokia. This incident and fallout is a classic lesson in supply chain risk management. Reviewing section 14.3 in the textbook, what steps might you have recommended if you were evaluating Ericsson’s supply-chain management Case Study Source: http://www.onlinecollege.org/2011/10/03/20-classic-case-studies-every-business-student-should-know/
- One might not consider employee retirement in the context of BC; perhaps because no-one considers a new or small business in the long term. Consider the following case study: RETIRING EMPLOYEES, LOST KNOWLEDGE Another important retirement issue is one of lost knowledge. What happens when retirees leave the office, taking years of experience and know-how right along with them? Businesses lose all of that knowledge, but according to American Express, it doesn’t have to be that way. Through a pilot program, AMEX created a workforce transformation group that would allow retiring participants to gradually give up some of their day to day responsibilities. In return, the employees would spend some of this time mentoring and teaching classes to successors. This resulted in a phased retirement, allowing employees to leave gradually and enjoy more time while still enjoying a portion of their previous salary, and regular benefits. This also meant that some employees stayed a year or more past traditional retirement age. AMEX believes this program is a success, allowing senior employees to enjoy their last years of work in a reduced capacity, as well as educating the existing workforce for future success. Consultant David DeLong agrees, citing this program as an example of how job handoffs should really work. What are some ways other you might address by eventual retirements in a BCP Case Study Source: http://www.onlinecollege.org/2011/10/03/20-classic-case-studies-every-business-student-should-know/
- The following case is both bizarre and obscure. While this seems more likely a case study in brand value, here it is associated with supply-chain management. Event: Social media attack on Kit Kat, 2010 Description of event: On 17 March 2010, the environmental group Greenpeace launched a social media attack on Nestlé’s Kit Kat brand. Greenpeace had found that Nestlé was sourcing palm oil from Sinar Mas, an Indonesian supplier that Greenpeace claimed was engaged in unsustainable forest clearing. Greenpeace posted a video on YouTube parodying the “Have a break: have a Kit Kat” slogan; in the video, a bored office worker bites off a finger of a Kit Kat that turns out to be the bloody finger of an orangutan, one of the many species threatened by unsustainable forest clearing for palm oil production. Main consequences: Nestlé’s initial response was to make a statement that it only used 0.7% of global palm oil production and to force YouTube to take down the video, citing copyright. However, this lead to an outbreak of criticism on social media (such as Facebook) and prompted Greenpeace to just post the video on Vimeo, another social media site, and then on 21 March 2010, it reappeared on YouTube. So Nestlé suspended palm oil purchases from Sinar Mas and entered dialogue with Greenpeace. Nestlé also chose Forest Trust, a non-profit organization, to help it liaise with Greenpeace and audit its suppliers. Then in May 2010, Nestle joined the Roundtable for Sustainable Palm Oil, a partnership of companies and other parties aimed at eliminating unsustainable production. Nestle now has a goal of using only palm oil certified as sustainable by 2015. In a broad sense, what steps would you recommend in assessing your company’s up-stream supply-chain; ie. Characteristics and qualities would you look for in a supplier? Case Study Source: https://www.riskmethods.net/resources/research/supply chain failures 2013 finalweb.odf
Link to the Textbook:
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