Case_In_Point_7th_Edition_Page001_183_2

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are people willing to pay? And is it enough to cover our costs and give us a nice profit?The other main issue is that the more successful we are, the less successful we’ll be in thefuture. For every eternal light bulb we sell, that’s 50 or 75 conventional bulbs we won’t sell inthe future. In a sense, we’re cannibalizing our future markets. So, we have to make sure thatthere is enough of a margin or profit to cover us way into the future.– Good point.I’ll tell you, I have reservations about selling to the consumer market. I just don’t think theopportunity for pricing is there.– So, what do we do, scrap the project? We’ve already spent over $20 million in R&D.Not at all. We turn to the industrial market. For example, the City of Cambridge probably has2,000 street lamps. Those bulbs cost maybe $20 and have to be changed twice a year. The realexpense there isn’t the cost of the bulb; it’s the labor. It might take two union workers. Inaddition, you have to send out a truck. It probably costs the city $150 in labor costs just tochange the light bulb. Now, if we were to sell them this ever-lasting bulb for $400, they wouldmake that money back in less than two years and we would make a handsome profit.– Not bad.Type of case: PricingComments: First, the candidate looked at cost-based pricing and realized that the pricewas too high and that the typical consumer would not shell out $75 for a light bulb. Then helooked at price-based costing and concluded there wasn’t enough of a margin built in to makeit profitable. Thinking outside the outline given in the pricing case scenario, the student alsorealized that he would be cannibalizing his future markets. Thus, he decided that neitherpricing strategy made sense for the retail market. So, instead of suggesting that GE just cut itslosses and walk away from the project, he went looking for alternative markets and concludedthat there was great potential in the industrial market.Because this product has yet to be released, and is without competition, the supply anddemand theory doesn’t work in this case.
+ Getting into Dia1e3 :T ase h i Duf onto intentei ras just a ligrtp eigrtT : 1e3 n Aapso3 uentT uioieg3aiap e l l ate3ialouji trat p ue 1e3 Ue.t Uo3 wis1osap e l iia1e3 : b at srouji d r trey io p itr itFDuf ietejo1ei ont ras a nep late3ial ouji trat p ue g3eat Uo3 wis1osap e l ani iia1e3 : treyp ant to -nop rop uest to taye aitantage oU tris 1 2oiu.tb– Yes.L ne ou e.tite m is to Uigu3e out prat to io p itrtris l ate3ial. gny otre3 ou e.titesF m– Yes, make a handsome profit. But first, I’d like you to figure out the size of the disposable diapermarket.L -ay . ? going ’ d to l aye sol e assul 1tionsb N assul c k k e trat tre 1o1 nation l oU tre ( ) is , $ani l ijjion trat tre jiUe ex1e.tan. v oU an ate3age Al e3i.an is ’ g ea3 v : b Nalso c l going toassul e trat tre3e a3e eten nul ue3 : oU 1eo1 e lin eavr age g3ou1 b oT ) trat l eans trat tre3ea3e tre exavt sad e nul ue3 oU tr 3eeA vea3 Aojis as j , ea3 A v Aojisb )o you iitiie , $ g ijjion l u v ’get Y lijjion 1eo1 e l1e3age g3ou1 b Oiji3en r p ea3 wia1e3 : ol U 3age ?e3o to tr 3eeT :o tratc ani :H $ ijjion l . riji3enb N cgoing l to assul e trat ’ g % oU tre . riji3en p ea3 wis1osap e l iia1e3 : T otratc : 2 b ijjion $ l -iis til es Uite iia1e3 : a iay a3ouni e9 naling 0 g ijjion l iia1e3 : a iay .M ujti1 ltrat v u v , hays ani 0 w you get H ’ b ijjion $ u iia1e3 : til esT N on’t w -nop T ay : w $ iia1e3 1 a b) o tre l a3 -et is AH ’ b ijjion $ u a yea3 b– So, now we know the market size. What’s next?d e joo- at tre l ani a3 -et see p ro tre l ajo3 1 aye3 l : a3eT p -ini at r oU la3 -et sra3e eavr rasp rat tre 1 i.ing 2 iiU Ue3entials a3eb N nop - f 5G h as a la3ge 1a3t oU trat l a3 ani -et N ani -noptrat tre3e a3e a nul ue3 oU gene3i. uanis 3 as p ejjb j e r.ol 1etition is tougr T ut N n.an’t trin- oUany ua3 ie3 3 : ouji trat p 3eally sto1 n : bneei as-eisaii.oujiani.ouji anianioujiani ani ani– So, you think we should get into the diaper business?YesT u t np e to Uigu3e p rat 1a3t oU tre u n inessb : d en r I you iU tre3e p e3e any otre3ou e.tites m o3 goalsT vou 1 2oUitb d at r you iiin’t say p as to ue.ol e a d ajo3 1 aye3 l in tre.onsul e3 wia1e3 : la3 -etb j at rl eans trat tre3e a3e sete3al p ays p e ente3 b Ni-e c w to kjisttrel tren T joo- at tre aitantages iisaitantages oU eavr bd e sta3t u1 ou3 op n iia1e3 .ol 1anyT Uo3 l a joint tentu3eT u na v sl alle3 1 aye3 lsuu :titute ou3 1 2oiu.t Uo3 trei3 : o3 lanuUavtu3e tre iia1e3 : ji.ense trel to a nul ue3 oU.ol 1aniesbFi3 :tT etc k : oo- k at sta3ting ou3 op n .ol 1anyb de rate nad e 3e.ognitionT u t nnot in tratiniust3 v b e dp rate to set u1 a d anuUavtu3ing 1 antT l ri3e a d anagel ent tead w d3 -eting atead sales Uo3 .e estap isr l wist3iu ntion . rannejsb jil eA .onsul ing ex1ensiteT u t nioAap eb l
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AMAZON REVlEWSSecret to success —
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CQ INTERACTIVEThe most advanced onl
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AckndwIebgmentsSpecial thanks are d
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DedicationTo my closest friends: Er
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Five C’s and Four P’sBCG Matrix
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2 : The InterviewRelax, it’s wors
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+ Questions About YouThe first part
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Interviewers remember stories and a
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9. You’ll work on multiple projec
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+ Possiole Math QuestionThey may as
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+ Your QuestionsThe last part of th
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+ The Grand Finale: Why Should I Hi
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First Rouno TeIephone InterviewsThe
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+ Stress lnterviewsWell, they’re
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+ A¡vice for lnternational Stuoent
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3 : Case QuestionsA case question i
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+ Case PreparatibnCase questions ca
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[ 1. Listen to the Question ]Listen
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[ 3. Summarize the Question ]After
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[ 5. Ask Clarifying Questions ]You
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[ 7. Hold That Thought for “One A
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[ 9. Work the Numbers ]If possiqle,
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[ 11. Be Creative and Brainstorm ]S
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[ 13. Bring p r tre w and o S u mri
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The Bags ¦f p ¦§¨There are thre
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U S.If you tried to answer this que
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A PIs called “widgets,” which o
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N C aseei se nu m er b Aases:E very
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DuPont has just invented a lightwei
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problem with each 5uestion.Students
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Trends over time are generally show
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Wrona: What has been going on with
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+ The Trou!"e p rh tMathDo you have
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+ The Summary and The Final SlideIn
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4 : The #vy Case System©
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You may want to read through the fo
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[ 1. Summarize the Question ]This s
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[ 3. Ask Clarifying Questions ]As w
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+ The 12 CaTe Scena: OTh
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[ 2. %n&ustr1 2nao1st s Pw uestt An
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[ 3. Mergers an1 2 : sP O hw nsA Pi
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[ 4. Developing a New Product ]Ques
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[ 5. Pricing Strategies ]Question:
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[ 6I Growth Strategies ]Question: X
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P ustomersWho are our customers?How
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[ 9. ,ncreasin2 :aoes tP weskiAnS C
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[ 11I .mproving the Bottom Line: Pr
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To learn more about a typical Profi
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N t w =uc P roPP rw c t H ow ay? P
Page 103 and 104: 5 : ADDitiEnal anD Tools : Oat P Er
Page 105 and 106: [ Five C’s TCF1 2 : OWhat h ido y
Page 107 and 108: + BCG MatrixIn 1998, Wiley Press pu
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Page 112 and 113: + The Value ChainIn his 1985 book C
Page 114 and 115: + An Aristoteli1n 2r1 :eo ortAristo
Page 116 and 117: + “Pf” Scenarios to RememberSal
Page 118 and 119: + Business Case pi1 s• If you eve
Page 120 and 121: 6 : Practice Cases
Page 122 and 123: + HarRey-Davidson®Interviewer: Our
Page 124 and 125: Interviewer: Yes, garb is merchandi
Page 126 and 127: based. Harley can raise the prices
Page 128 and 129: + Case StartsMany people struggle w
Page 130 and 131: CasesCS1: Palm Tree Plantation Expo
Page 132 and 133: CS2 Hong Kong Video Games NotesSumm
Page 134 and 135: CS4 XCV TechnologySummarize the cas
Page 136 and 137: CS6 GIoYaI MZtor CarsSummarize the
Page 138 and 139: CS8 ltalian C\1 2 tT:hian]TtSummari
Page 140 and 141: + Case ^n_eTpevel :1. T eT ian c n
Page 142 and 143: That’s a very interesting graphI
Page 144 and 145: One example might be to look to see
Page 146 and 147: co: n i f efinition o ’ r T of hi
Page 148 and 149: F : T rtrute t k fi1 re ort : lat I
Page 150 and 151: + Coke ®Case 4: Coca-Cola® is try
Page 152 and 153: - Interesting. Thanks.Type of case:
Page 156 and 157: ) e.onkT .oulk pe Uo3 l a joint ten
Page 158 and 159: p te lrsm o m t owould r u c do is
Page 160 and 161: p tew lour T am m toAer ore- mrT t
Page 162 and 163: I’m going to do part of this thro
Page 164 and 165: + Cow Brothers Premium Ice CreamCas
Page 166 and 167: - The supermarkets carry five at a
Page 168 and 169: - Can be used for thinning hair as
Page 170 and 171: /et.s talk au w i o st-based n w pr
Page 172 and 173: + Wireless WorriesCase 1 1 2 : O h
Page 174 and 175: tt tells m e toat ueoule T ito Aedi
Page 176 and 177: + Cowwege MaiwCase 1 2 : O xient h
Page 178 and 179: - How else can students get the wor
Page 180 and 181: w h i c h es gm e ia vl ie tless t
Page 182 and 183: Well, first we have the membership
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