ACING THE CASE

Winning a case competition is a quite difficult task. The line between success and failure is often thin. In this article we bring the views of Shahzeb Irshad, a freelance writer on acing the case.

Acing the case: how to be successful in case competitions

You’ll be surprised by what you hear when I say that “anyone can ace a business case competition”. Its no wonder why business case competitions are becoming popular by the day. Apart from the monetary motive amassing $50000 to $100,000 per competition, participants gain experience and a chance to meet successful entrepreneurs.

When you talk about “acing” a case competition, you’re not talking about the winner’s business acumen, you’re talking about their ability to grasp the core of the problem and present a viable solution to it while being creative. The one thing you need to know about running a successful business or presenting an idea is the selfish nature of human beings. People won’t come to you or spend money on your business unless you provide them with value for their money. This value can either be in the form of intangible or tangible articles. Keeping this idea in mind, whenever you are presented with a case problem, write the problem on a piece of paper and brainstorm ten different solutions (no matter how they crazy seem at first). It doesn’t matter if you found the optimum solution in the first try. Then list the merits and demerits of each solution and you might be surprised of the outcome. Suddenly an answer might seem more appealing which at first sounded crazy. This is one of the many mistakes students make during these competitions.

Whenever you are stuck with an idea that you can’t grasp for a case, stop thinking of yourself as a vendor and start thinking as a customer. This technique would be sure to bring you a LOT of ideas keeping in mind the selfish nature of human beings. When you are done with your idea and have finalized it, its time to elaborate each part of the plan in the initial report so as to make a clean first impression. The last stage is presenting the idea. It has to be presented in such a way that the audience may feel acquainted with the idea before the presentation is over.

In a business case, much time and effort is often spent on designing a sustainable business model. From my experience, the most crucial catch in a case competition is the value of return on capital. This figure is there for you to know the level of competition that you’re up against. Generally there is an easy solution for all cases like this, called the “linkage” model. It states that ideas in case competitions are more effective if you link them between various projects in a single case. Quite simply put, different entrepreneurial projects in a case may be started by using the profits from a single venture simultaneously e.g. a chain of small restaurants which only require capital from the revenue generated by the first restaurant. This practice entails a prosperous trade environment as there is never a shortage for capital or investment for the projects.

I hope these tips help you to ace case competitions as they have helped me.

From Zero to Six figures in 2 years ...

Hey friends,

Here's an interesting entrepreneurial story.Its a story of Nirav Mehta, founder of AppsMagnet, a Mumbai based startup. Nirav has been through a typical ups and down of entrepreneurial life – he was asked to resign from a company he started 11 years ago, scratched his own itch, launched couple of products, a lot of them failed and here he is – a six figure $$ revenue in 2 years. Here his success story through his own lips...

Happy watching !

Cheers !

The Mystery Of Pricing ...

* This article was taken from pluggd.in

What is Price? How is it determined?

Solve the mystery if you can, with the following clues:

P = Perception

When the ‘Zodiac Grill’ – a very sophisticated restaurant launched at the Taj Mahal Hotel in Mumbai, the menu did not have prices. Guests were free to order what they wanted, and then leave behind a price for the meal as they deemed fit. There were no eyebrows raised if guests left behind $1 as long as they thought that was the value of the meal they had enjoyed.

As it turned out, The Zodiac Grill received more revenue for meals served than they had estimated. Guests had enjoyed the ambience, the food and the service and had rewarded the restaurant with a price based on their ‘perception’ rather than what would have been printed on the menu.

The Zodiac Grill today has a fully priced menu and the launch experiment helped the hotel management tremendously to ‘price’ the service appropriately.

I see an interesting pricing model being followed by the digital enthusiasts who make free ‘plug-ins’ for large publishing platforms like WordPress.org. Subscribers of the wordpress.org platform are free to download all these fantastic plug-ins and then are prompted to ‘donate’ a few dollars to the developers if they feel like it. I am sure that the sum of donations received, generates more money for the developers than they would have earned if they were to price each plug in.

If you are a new start up or a business entrepreneur, try and gauge the prices of your product and services based on what your customers perceive it to be worth. It may be the best way to discover your true value.

R – Revenue Build

Many businesses I know have certain revenue targets in their business plans. They aspire to be say a $10 million Topline Company by the 3^rd year of starting up. Pricing then begins to work backwards and they price their products and services accordingly.

Is this the way to build and price your services? I have a contrarian point of view. This approach may damage the value creation.

For the sake of giving an example, let’s assume that you have a Magical Goose that will start laying eggs very soon.

• If you decide to sell the eggs even before they are laid to discover later that your Goose is slower than normal in laying eggs, you may land up killing the Goose while trying to force it to lay eggs. To illustrate, MySpace was spoilt early on by Google when they received guaranteed revenue commitments from Google who exclusively took over selling ads on MySpace. Past the first year, Google figured that this was a loss making deal for them (they made less revenue from MySpace ads than what they had guaranteed to pay MySpace) and did not renew their agreement. But by then, MySpace had got addicted to ‘revenue’ toplines and went ahead and ruined their site by spraying ugly ads all over the site and aggressively selling them. MySpace, as I remember looked like a website that had only ugly ad hoardings all over and this quickly drove away lots of their users. The lure of only generating revenue ruined MySpace forever.
• On the other hand, if you determine the price of eggs before they are laid, you may land up selling ‘golden’ eggs at the price of ‘normal’ eggs. Facebook managed this beautifully – they took their own sweet time to just to understand their ‘Magical Goose’ and what it was really going to be valuable for. It’s amazing to see how slowly and elegantly they have sold ads (so they priced their golden eggs appropriately) and more so, introduced non obtrusive revenue streams like ‘facebook credits’ – a la creating value from the feathers of the Magical goose in addition to the eggs it lays!

Revenues are important but should not become the death noose of your business as it begins to rev up.

I – Insights

What do people pay for? If you can really examine the finer detail of what consumers really want to reward you for, then pricing can really be made to work for you in a far more profitable way than you could imagine.

Examples are aplenty. It’s well known that kids buy McDonalds ‘happy’ meals for the toys, and more often then not, their parents then eat the ‘happy’ meals. In India, brands splurge on MTV just for the association with an iconic youth channel more than the actual media reach it delivers. Chinese customers are happy to pay much more for a Gucci bag made in Italy than an identical Gucci bag made in Korea. So, in the case of McDonalds, MTV & Gucci, beyond their core offering, it’s intangible value drivers based on their consumer insights that is also being aggressively priced.

When we sell ‘Advergames’ (branded games), we calculate the time spent by consumers playing the game and hence interacting with the brand. So assume that 200,000 unique players play a brand game for 3 minutes, we have delivered 600,000 minutes of engagement to the brand. Next, we compare how expensive buying 600,000 advertising minutes would be on television and then price our offering very competitively. In this case we have an insight about how our customers (brand owners) VALUE media – not by impressions but by engagement.

Insight – ‘Advergames’ deliver engagement not impressions

When I made socks in my father’s Company, I began walking around in European Clothing stores to discover what kind of socks I should be selling to them. During this process, I stumbled upon an amazing insight – the price of Baby Socks for new borns (as young as 3 months) were the same as the price of Men’s socks as large as shoe size 12! When I dived deeper, I realized that it was mothers who buy socks and they were equally attached emotionally to their newborn child as they were to their husbands and hence didn’t differentiate the price of baby socks vs. men’s socks. Now, baby socks weigh 10% of Men’s socks and hence are 90% more profitable to make. We started our export business making Baby Socks!

Try and go beyond the obvious reasons why consumers are buying your products and services. The real price you can charge them may be hidden in that insight.

C – Costs

You cannot escape measuring costs and then making sure that it’s more than covered for when you start pricing your goods and services. But wouldn’t that make a business just another usual small time business?

If Zynga – the Company behind Cityville and Farmville would have added its costs of servers and salaries and then divided it by the number of players it served, it would have logically priced the game service as a monthly subscription. Instead, they offered all their games as free to play and sold only in-game virtual items. In the a few months, millions of gamers bought virtual gifts for their friends (beer on Poker tables) and pink tractors for their farms! They compensated Zynga multiple times over to what they could have otherwise paid for as a monthly service.

To drive home this point – when you buy seeds in Farmville, you pay for a virtual item that is nothing but an image on your screen. You pay for the electricity to fire up that image on your screen and even for your Internet broadband connection to play Farmville. For Zynga, the money of the Pink Tractor has almost no cost and is an almost hundred percent profit!

So understand costs, but don’t adopt ‘only’ the costs plus formulae to make money. You may well be missing the Pink Tractor hidden in the mud.

E – Endearment

I think this is the most amazing dimension of Pricing. Apple for instance has mastered ‘endearment’ pricing. Consumers like me just have to buy Apple products the moment they become available because I simply LOVE Apple. When my Macbook costs 100% more than a similar laptop, I don’t even think twice before buying it. If an iPad costs $499, it costs $499. I don’t go out and look for comparisons and then decide to buy it or not. The same applies to Fashion brands and the likes. For example, why do you pay $1499 for a black Armani Jacket when you could buy a very similar looking Jacket from Gap at $199?

I don’t think consumers compare prices of brands they are attached to and just pay what they are asked to. As we all know, when you are in love, ‘price’ comes second.

If you can make your consumers fall head over heels and blindly in love with you then you can charge them anything. That’s the ultimate nirvana of Pricing.

A puzzle to give you a heads up!

There is a table on which a number of coins are placed. You also know that there are as many coins with Head up as many coins with Tail up. Now you have to divide the coins (number of coins is even) into two equal piles such that number of coins with Heads up and Tails up in either piles be the same. The catch is you are blind folded and you cannot determine the sides (for sure) if you are blinded.

Blue Eyed Boys

The Problem Statement for the Blue Eyed Boys Problem goes as follows :

There are 1000 people on an island. They have either a pair of blue eyes or black eyes. There is atleast one blue eyed and one black eyed person on the island. They have no way of seeing their own eyes, but can see everyone else’s eyes. No one can communicate with anyone else. Anyone who comes to know that they have blue eyes commits suicide.

One day a blue-eyed stranger comes to the island and unknowingly says that “ I’m glad that atleast someone else has blue eyes “. After some days, all the blue eyed persons commit suicide (not necessarily together). Can you explain how ???

Mail your solutions to : harshgupta1987@gmail.com

Please do not post solutions on the blog as comments. Allow the others to try as well.

Happy solving !

Cheers !

Bitzua and Chutzpah

Wonder what the weird title of this post is about? Is it some kind of Hebrew stuff no one is supposed to have a clue about?

Well it is Hebrew. LITERALLY. I found these words when one of my friends shared this Economic Times article by R. Gopalakrishnan at our GDS Group. I was too "busy" to read the article the first time I came across it.(I did read it later on.) But I liked the way the words looked or rather sounded. After searching on the net I found out 'Chutzpah' is pronounced like "Hootzpah". And I hope "bitzua" should be pronounced somewhat like "bitzooah". I would like to pronounce it that way because I like the sound of it. I have this romance with the way some words sound to my ears. But that is not the only reason I am writing this post. These words are nowhere near romanticism.

I went out to look for their meanings. When I looked for "Chutzpah" I found something like "gall, brazen nerve, effrontery, incredible 'guts,'......" in some source. But I found this example on the right which really made the meaning crystal clear to me. Imagine some man killing his parents and demanding mercy from the court because he is an orphan! This word is used both positively and negatively. But more importantly somebody with chutzpah is a person who does not give a damn about existing norms and takes up challenges however darn difficult they possibly might be. Somebody who can go against the tide and have the audacity to challenge a GOLIATH. Israelis have this habit of praising daring people because I believe such arrogance, aggression and daring attitude has helped the country survive amidst hostile neighbors. Words conveying the same sense in other languages are difficult to find.

Bitzua is a much simpler yet a very important word. It signifies implementation or putting into effect. I was reading this book by Barry J. Moltz "You need to be a little crazy", which talks about implementation in the light of starting and growing a business. He calls people who start businesses crazy because they have a statistically very low probability of surviving. I definitely think it requires chutzpah to survive the debacles a business throws at you. Starting a business can be very different from ensuring its survival and implementing all its plans. That might require the CEO of the company to clean his own toilets or carry his own mail sometimes. And sometimes businesses fail because of trivial defects in implementation. The cashflow in your business might dry up just because your customers are taking more time to pay you!! Or what if you do not have any customers who trust you? Would any amount of strategic thinking or path breaking ideas help? Barry emphasizes on bringing the right people inside your business, which is far more important than the idea that started the business. Because they are the people who can implement your ideas and strategies and mold them according to the scenarios your business is exposed to. "Bitzua" sounded like "business" to me even before I came to know about its meaning. Now I am not surprised.

GDS is organizing a workshop at V4, Vikramshila, IIT Kharagpur for enthusiasts in finance, game theory, business strategies and consulting on 4th February,2011 at 6 pm. Hope we come across more people who have the bitzua and chutzpah to help GDS grow, challenge existing notions and deliver a strong impact. People who are not afraid to ask questions and look at threats as opportunities. We would love to bring them within the folds of our organization.