CASE STUDY #37 IRIDIUM

READERS THOUGHTS:
Which characteristics of iridiums product do you think were most important to potential customers?
Global reach? Sound quality? Size and weight of phone? Price? Others?
- The most important characteristics to the potential customers of Iridium is the PRICE of
the product. The service was quite expensive for customers and the cellular phone
business had already booming in developed countries. So instead of subscribing to
Iridium, customers preferred Cellular services.
Where would you have positioned the product?
- I would have position the product based on marketing strategy of choosing the
individuals or group of people needs it (target market), affordable prices and quality
services.
Through lowering the cost of expenses, finding ways to minimize establishing
infrastructure satellites, advertising how the product can connect people worldwide and
extensive contract between customers, investors and company.
3. Do you think different product positioning would have saved iridium from bankruptcy?
- I think so. If Iridium services was initially offered to specific target market.
They should offer products to companies like shipping, airlines, travel, and government
offices- such as military and navy that often go in different places around the world
rather than individual that needs global connectivity. The product is much fitted and
useful to these market.

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Case Study no. 9
The Oresund Bridge
1.Explain why the demand for the bridge is likely to be price-elastic.
-We know that Price elasticity means that there is a percentage change in quantity demanded due to
percentage change in price. Here the demand for the bridge is likely a price elastic. So we can
conclude that the bridge have a substitute. That is a ferry or even working from home available. That
means they use more ferry than bridge. Suppose the tarrif of ferry in decreased they can use
more bridge instead of more ferry.

2. If the Swedish government estimates that the price elasticity is 1.4, calculate the
effect on traffic using the bridge, stating any assumptions.
-This has several implications for the traffic on the bridge. The Swedish government
knows that first of all, an inverse relationship exists. This means that a decrease in price
will definitely increase the demand, that could create heavy traffic, and this can help
the government in properly pricing it. The second implication is that any change in price
will have 1.4 times the change on the demand. This means that for the government, it is
beneficial to decrease the price to increase the demand. For example, if the government
reduces the price by 10%, then it will result in a 14% increase in demand.
3.Why is the calculation above not likely to give an accurate forecast for the long term?
-For one thing, the price elasticity of any newly introduced good or service is bound to
be low; after all, most people lived without the said good or serve all this time. In the
same way as start-ups aim to build brand loyalty by making the new consumer wonder
how it was that he ever lived without the services offered by the start-up, the same
should be the case with respect to the bridge for it to eventually become less priceelastic. The aim of the bridge however, is chiefly for the sake of tourism, which is not a
necessity, rather, it is a luxury. The price elasticities of luxuries is always greater
than that of necessities; the car industry would most definitely lose many more
customers by raising its price than would, say, the wheat industry. However we have to
be careful to remember that price elasticity of demand depends to a large extent on the
availability of substitutes. Although at first sight it seems that there is no substitute to
the bridge (and its price elasticity of demand should therefore be high), which is true,
the fact that the bridge is mostly used to travel to another city to visit cafes, we see
that although each countrymans own cafes are not perfect substitutes for their
neighbours cafes, they are still quite close. If, on the other hand, the bridge were used
more for the reason that people needed to travel to their jobs in the other city, then we
can be sure that price elasticity of demand would be low.

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CASE STUDY #35
Readers Thoughts:
1. How should small minority shareholders of Hanshin Electric Railway respond to Hankyus cash
offer?
2. Was is reasonable to M&A Consulting to accept the Hankyu cash offer?
3. What was the advantage to Hankyu of structuring the takeover to two-tier bid?
Answer:
1. Small minority shareholders still disagreed by about 100 on the price. Also standard and poor
analyst Katsuyuki Nakai, questioned the synergies between Hankyu and Hanshin. There are no
apparent advantages in the railway business given small complementary effects from their railway
routes unclear how much synergy can be achieved in the real estate development and retailing
businesses. Initially, Mr. Murakami opposed the Hankyu offer as being too low. Nevertheless, just a

week later, on June 5, 2006, he agreed to Hankyus bid. He remarked, I hope the new company will
be managed with shareholders in mind."
2. It is reasonable for M&A Consulting to accept the Hankyu cash offer because M&A Consulting,
started to use its newly acquired stake to Hanshin to make radical demands on the management.
Hanshin, worried to the proposals from M&A Consulting that included the majority representation on
the board, responded by discussing a merger with Hankyu. The planned deal has to be approved by
Mr. Murakami, whose M&A Consulting would have to sell its 47 percent stake.
3. The move paves the way for the first major takeover among Japans private railways since the
second world war. A Hankyu-Hanshin combination would create Japans third-largest railway in terms
of revenue. The shareholder activist, who gained a reputation for making stringent demands on the
companies in which he invested, was speaking a few hours before being arrested by prosecutors on
insider trading charges.
Hankyu launched a tender offer last week for 45 per cent of Hanshin at Y930 a share, valuing
Hanshin at about $3.5bn. The offer will expire on June 19. If the tender bid is successful, Hankyu will
acquire the rest of Hanshin through a share swap exchanging 1.4 of its own shares for one share
in Hanshin.
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CASE STUDY #48
"ATTRACTING GEN.Y TO A RETAIL CAREER"
1.) How can Diva demystify what happens behind the scenes and make potential Generation Y
employees aware of the oppurtunities available to the beyond the shop floor?
Answer : Diva can advertise the fact that there are many different ways to get to the top
of the company in higher upper level management at the appropriate channeling of the
move. Also the great bottom line is that workers can either benefit the company well
beyond the cost of their operation on the distinct opportunities and keep again the
production process going.
2.) Diva has implemented a learning organizational culture in an attempt to attract and
retain staff. Discuss the possibly pros and cons of this strategy for Generation Y.
Answer:
Pros:
~> Gen. Y are inherently social demographic who find it easier to communicate
effectively through their increased connectivity via social media and
telecommunications.

~> The naturally inquisitive nature of Gen. Y can also bring positive change into a
business.
Cons:
~> Gen. Y are generally seen as fickle in terms of longetivity of their role at a company.
~> Gen. Y can also cause negative disruption in the workplace as the "old guard" of
senior management struggle to adapt.
3.) Give examples of how other organization (perhaps even non-retailers) attract a Gen.
Y workforce. What could Diva learn from other organization?
Answer:
*Make them an offer they cant refuse and provide security
*Show them how the company is adopting
*Show them how they can groW
*Offer work life balance
*Stay up to date with technology
*Challenge them with meaningful work.

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Case Study 40
:The Petroleum Market: 1970-2001
1. Why the price of oil rose sharply in 1973, 1979, and 1990. 1973?
- The price of oil rose sharply in 1973 when the Organization of Petroleum Exporting
Countries proclaimed an oil embargo against the United States, Portugal, Rhodesia, and
South Africa as their response to the Yom Kippur war, a war between the Arabs and
Israelis. In November, OPEC announced a 25% cut in production which increase the
prices of oil from $5.12 to $11.65 per barrel. 1979 - It was considered as the 2nd oil
shock because it led to a second drop in supply which drove the price above $30 per
barrel. This drastic production cut caused by the trouble in Iran led to a massive oil
shortages whuch drove the oil price to $24 per barrel. 1990 - In this year, crude oil
prices increased to $32 per barrel because of the invasion of the Iraqi troops to Kuwait.
It created a decline of 4 million barrels per day in world oil production.
2. Why the price fell between 1980 and 1982, and again between 1982 and 1985?
- The year of 1980s was considered as the "1980s oil glut" It was a serious surplus of
crude oil caused by falling demand. In the United States, Europe, and Japan, oil
consumption had fallen 13% by 1980s. Reduced demand and inreased production
produced a glut in the world market. The result has a six year decline in the prices of oil
from the year of 1980 and was culminated by plunging more than half in 1986 alone