C-level Team,
About a week ago we met with a consulting firm to figure out how we are going to move forward. We have heard some very interesting ideas and now are faced with some tough choices.We are facing the idea of being conservative and wait to be acquired, or move aggressively in all areas to attract and IPO.
When we were sitting and listening to the consultants they proposed two ideas that sparked an interest of mine. I liked the idea of an "Open Mic" channel that would generate revenue from independent artists that are not signed by major recording labels. The other idea is the "Sharing Community" where users can interact with Pandora and share with friends what they are listening to. This is a great way to keep the Pandora brand alive, however, this also seems short lived if not partnered with another online community that blogs.
I feel the consultants did a great job at allowing me to see additional value in Pandora. Providing new ideas that will enhance our brand as well as provide a revenue stream will keep the company moving forward with the times. With the implementation of the "Open Mic" and "Sharing Community" would be free advice and marketing from current users.
Let me know your thoughts!
Regards,
Tim Booker
Monday, June 24, 2013
Tuesday, June 18, 2013
Pandora Case Prep
Pandora Case Preparation
Problem
It all began in 1999 when Tim Westergren launched his
company, then titled Savage Beast, as a music discovery engine to connect
listeners with artists. The engine was dubbed as the Music Genome Project where
it required that each song placed in the library be dissected, first, by
analysts who spent approximately 20-30 minutes codifying as many as 400
different attributes to determine a song’s “musical DNA.” The DNA was used to
match a song to its “musical neighbor”, where users could find similar songs
that could create a particular mood. Initially this concept was sold to online
and offline music stores. The Music Genome served as the back-end to online
music experiences offered by America Online (AOL) and Barnes & Noble, in
addition to powering kiosks in offline record stores like Tower Records, Best
Buy, and Borders.
Due to the company’s economic situation, Westergren was
forced to devise a plan to keep the company afloat and complete the music
library to increase its value. In March 2004, Westergren was able to raise a
Series B round, second round financing for a business by private equity
investors or venture capitalists, led by Walden Venture Capital in San
Francisco. During this process, Westergren and the board decided that it would
be best to hire a new CEO. The new CEO, Joe Kennedy, proposed that that the
company change its strategy to become a direct-to-consumer Internet radio
service. It was then that Pandora.com was born. This provided a free, highly
customized online radio station powered by the Music Genome.
In December of 2007 found himself facing a similar issue
that he faced in 2004. Pandora.com user base has grown to 8 million, online
hours were growing 50% year on year, and although cash-flow has not reached a
positive level, trajectory reports indicate that it could reach a positive
cash-flow in two years. Westergren was grappling with satisfying the interest
of the investors while staying true to his own dreams for the company. The
choices he is faced with are: 1) Taking a more conservative path by reducing
the growth levers on SEM and general market spend, slow headcount growth, and
raise minimal amount of new investment to reach an exit through possible
acquisition? 2) Or, take an aggressive approach by topping out the SEM, hire
aggressively, and take advantage of the first-mover advantage? This would lead
to the company having the ability to raise a large round of financing to
command a heavy valuation to lead to a prospective IPO.
Situation Assessment
When Pandora was founded, the company used its capability to
provide back-end music recommendations to other companies. Shortly after the
Series B closing, the company also shifted its strategy to focus its efforts on
being a customizable Internet radio service. The service would give users the
ability to make preferential choices on types of music or artist and then match
those selections to songs in Pandora’s library and stream them to the user’s
PC.
In September 2005 launched its highly-customizable online
radio station and the following May Pandora had a user base of 6.5 million
registered users. In March 2007, the Copyright Royalty Board increased royalty
rates for Internet radio stations from $0.0117/hour to $.03/hour. Westegren
believe that rates like this would “kill” Internet radio sites including
Pandora.
Alternatives
Westergren was faced with two choices to decide from. His
choices are:
1) Taking a more conservative path by reducing the growth
levers on SEM and general market spend, slow headcount growth, and raise
minimal amount of new investment to reach an exit through possible acquisition?
2) Or, take an aggressive approach by topping out the SEM,
hire aggressively, and take advantage of the first-mover advantage? This would
lead to the company having the ability to raise a large round of financing to
command a heavy valuation to lead to a prospective IPO.
Recommendation
As the C-Level, I would consider option one as the path for
Pandora. As we see, technology is beginning to grow as the years progress. With
the music industry suffering from CD sales, having digital music will become
more common than going to purchase a CD. Shifting towards the ability to offer
users a download option would go completely against the business model that
Pandora has established. I would not discount radio, although it is becoming a
dying breed and listeners want more music versus talk radio. We need to be conservative
with our decisions that would keep us afloat until we can potential sell to a
reputable company that will utilize the music genome project in a capacity that
Pandora may never reach. Taking an aggressive stance would move Westergren away
from what he loves to do thus ultimately leading to a change in the business
model to compete with competitors. Granted this could lead to an IPO, but this
isn’t certain given how music is played and the source that it comes from.
Therefore, a conservative stance would drive Pandora to a possible acquisition
by another company to provide users a greater music experience.
Saturday, June 8, 2013
Bombardier Reflection
Executive Team,
I understand about a week ago you met with some consultants
about the third phase of the ERP. I also emailed over some suggestions of my
own but after reading the minutes from the meeting I found some points about
the presentation that I did not consider.
From the beginning I felt as though the presenting of a
phased roll-out would suit the company a great deal. The suggestions provided
by the consultants on focusing the attention to the core business functions
first would be best while giving them the ability to access legacy systems for
a limited period of time. Also making sure that the system is acceptable to end
users is key where we would not spend a lot of time figuring out a workaround.
Another point from their presentation that I agree with is
the training provided to the employees and how it is delivered. I believe that
job specific training will help in the development of the employee over time
with the new system. This would mean a total revamp of our training program for
the employees that will benefit us in the end.
Lastly is the tone from the top. Obviously here we are doing
well and should continue on our path. We need to let everyone know to accept
the new system and we are here to answer questions and make sure that everyone
is provided adequate training.
I hope we will use these best practices suggested by the
consultants as this would help us maximize the benefit of implementing this
ERP.
Regards,
TB
Bombardier Case
Bombardier Case
Preparation
Problem
After implementing
two installments of ERP previously, management is looking to improve the system
and learn from prior mistakes in order to have a more successful third ERP
implementation.
Following the
first ERP implementation, the outcome was lower than expected, so management
hired consultants for the second ERP implementation to explain best practices.
Although the results were better than following the first implementation, they
were not as successful as Bombardier had expected.
At this point,
problems have been identified by management that they are attempting to address
in order to maximize benefits of the ERP system. The limited success they have
had in the past is costing the company in resources. Ultimately Bombardier
would like to see its information sharing and data maintenance are kept in view
so the information flow is according to the company’s expectations.
Situation Assessment
According to
Frantz, Southerland and Johnson they compiled 16 best practices in which
companies should use a guide in implementing the best practices for ERP
systems. These are used to measure effectiveness and success of ERP
implementation.
The context of
this problem is that Bombardier Limited is a leading international manufacturer
of aerospace and transportation products with its aerospace division reporting
48.2 billion 2007. In an increasingly competitive aerospace manufacturing
industry, Bombardier recognized that it needed to transition its legacy
information systems towards an ERP system. Although technically a success
according to management due to its ability to reduce inventory by $1.2 billion
without jeopardizing operations or productions, the first rollout of ERP at the
Mirabel plant was extremely frustrating to users due to a large communication
gap between the project team and employees and the mismanagement of user input
and expectations by executives and the employees and the mismanagement of user
input and expectations by executives and the project team. The second rollout
was much smoother transition wise and employees were trained more adequately as
a result of a clear vision and unified message from senior management as to
what employee involvement and the priority placed on a company wide support of
the new system’s implementation. This third foray into ERP deployment should
build on the successes of Saint Laurent and improve on its failings by adhering
to ERP best practices.
Plausible
Alternatives
The alternative course of action would be to adopt the
best-of-best practices that lead to a positive ERP implementation. I would recommend
that Bombardier employ these best-of-best practices:
·
Executive management should endorse the ERP and
remain active throughout implementation. The importance and relevance of the
project will be reflected to employees as long as the “tone from the top” shows
acceptance. Support from the employees is critical for the success of the ERP
for all.
·
Assign a full-time Project Manager. With this
practice you can ensure that focus and attention is given at a high priority.
The dedicated employee would focus on the success of the rollout, gather
feedback, and work to resolve issues.
·
Training for employees before and after
implementation. The use of training throughout the implementation will ensure
that the system is understood and business needs are met. This would mean an
introduction to the new system and once implemented a more rigorous training
class on the new system. This allows the users to become familiar with the
system prior to classroom training. This was one of the major issues with the Mirabel
plant. Employees at the plant felt a disconnect with the implementation process
due to the training occurring at times prior to the event occurring. The result
showed that the employees could not recall training exercises which caused the
employees to feel “behind the pack” when the new system was launched. I would recommend
that Bombardier keep 1 or 2 people to stay on for an extended period of time to
provide additional support if need be.
·
Communication is key. Here Bombardier needs to
be transparent with the flow of information to the users. This will establish a
sense of trust between the business community and the project team.
Recommendation
I would suggest using all of these best practices listed in
combination. Being mindful of the prior phases, Bombardier should reflect on
those lessons. Bombardier should be able to establish a new foundation and
strive for on-going communication and involvement to gain maximization of
benefits.
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