166 Part 2 Planning Winwood Performance Plus To: Hannah Paul, Human Resources Ma

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166 Part 2 Planning Winwood Performance Plus To: Hannah Paul, Human Resources Manager From: Eric Winwood, CEO Subject: Environmental Issues Experiential Exercise as you know our entertainment consulting business has paper waste. I would like you to create a company-wide pro- be possible without the hard work our associates do, involved, I'd like you to set some goals and develop some plans a remarkable couple of years. The success we've achieved gram for controlling paper waste. Before we get our associates and I'm honored to be surrounded by such committed and tal- for this program. Get me your report (keep it to one page, please eed individuals. I feel that our next push as a company should outlining these goals and plans as soon as you can. to become more environmentally responsible. All of us (me This fictionalized company and message were created for tonal purposes only, and not meant to relect postively or negatlvely on management practices by any company that may educa- generate a lot of paper as we do our work, so I think our first step (and main focus right now) should be on controling CASE APPLICATION #1 ou've probably seen them at weddings or graduations, and maybe even at parties. No, they're not "crashers" Customers loved that it was pocketable, inexpensive, and easy they're the handheld Flip video camcorder. Flip was to use. Flip's name came from the arm that flips out of the The Flip camera broke new ground when it was introduced. the brainchild of some San Francisco entrepreneurs whose camera body and lets the user connect it directly to a computer idea was to create a pocket-size, inexpensive, and easy-to-use The camera also had video-editing software that opened when video camera. Considering that most video cameras were big. it was connected to the computer. Although the actual video bulky, complicated, and expensive, that idea seemed right on camera seemed tiny, it recorded remarkably good footage for a target. And it was! When Flip went on sale in 2007, it quickly camera of its size. In addition, unlike other video cameras, the dominated the camcorder market as some 2 million were sold Flip could be held comfortably in front of you so you didn't in the first two years. "Then, in 2009, the founders cashed feel "removed" from the event being recorded. The product out and sold to Cisco Systems the computer networking gi ant, for $590 million." Not a Cisco+ Flip-Flawed Strateqy ers envisioned-a practical bad payday, huh! For Cisco, the acquisition was a key to its strategy of expanding in the When Cisco Systems dec was exactly what the found- pocket-sized, inexpensive, and ided to acquire Flip, one of the easy-to-use video camera. consumer market, especially as homes became more media- hottest consumer enabled. However, two y nounced it was "killing" Flip and laying off 550 empl As one analyst said, "It's a testament to the pace of innovation terprise networking services. The in consumer electronics and smartphone technology. More and consumer product under the Cisco umbre more functionality is being integrated into smartphones."3 cts to hit store shelves in a while, many ears later, in April 2011, Cisco an- industry analysts questioned that decision, believing it was an loyees. "odd fit" for the company that's best known for its business en- Flip camera was the first true Cisco said that the acquisition was a key to its strategy to expand home. There was no doub that Four years. That's all it took for the Flip video camera, the momentum in the media-enabled most popular video camera in the United States, to go from hot Cisco was start-up to obsolete. But even in the life cycle of tech products from technical where things happen fast, this flipflop seemed to be in the blink there was of an eye-unusually fast, as one analyst said, especially for a of Pure Digital hot" product. What happened? serious about the company's desire to expand its market components into true consumer electronics. And another variable at work here, as well. The acquisition Technologies (the actual company behind the Flip camera) was another sign that Cisco was making a statement by

Explanation / Answer

Answer 5-25

Cisco is in the business of networking technologies and products. This is their core strength and they operate in B2B space. To enter media business they will have to develop a marketing distribution network for consumer retail right from scratch. This is why Cisco watchers and analysts had no great expectations from Flip buyout by Cisco.

Answer 5-26

Cisco tried to build up Flip branding by celebrity endorsements but it lost focus on two things:

Answer 5-27

Cisco faced competition from an unexpected quarter, smartphones were smaller, had multiple uses, and almost everybody could buy them. In case of Flip it could have added more features such as sharing and access to the internet, and provide highly advanced lens technology at low cost so that Flip could be a video camera with the functionality of a professional video camera but with the added ease of use.

Flip was pocket size, inexpensive and easy to use for a layman.

Smartphones with the highly advanced camera that had a multitude of apps to edit videos, to share, and to access the internet were the existential threat to the Flip video camera.

Answer 5-28

The business and the product had become obsolete for the current market, and it would be hard for Cisco to find a willing buyer.

Answer 5-29

Blue Ocean strategy, where there was no market for handheld consumer video cameras, a market was created by introducing a new product that could allow common people to shoot videos.

Disruptive strategy, a new product was launched that disrupted professional videography market

Market Entry Strategy, Acquire a niche player with a unique product to enter a new segment of a business.

Consumer Branding strategy by Celebrity endorsements for retail markets.

Answer 5-30

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