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Vol 2, Issue 01, Feb 2020
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Business Strategy
Google acquired Fitbit to scale up faster in the healthcare wearables market and accelerate innovation in it. Google wanted to be on a par with competitors such as Apple, Samsung, Huawei, and Xiaomi and also be ready for any future competition from Amazon. The acquisition of Fitbit by Google created a ripple in the market and analysts opined that it had been done to allow Google to compete effectively with Apple in the wearables market. The acquisition also brought to the fore the issue of data privacy and Google had to deal with the Government and Federal agencies in the US on anti-competitive practices.
Google Steps up its Game in Healthcare Wearables – Acquires Fitbit
In April 2018, Tesla, founded by Elon Musk (Musk), began to show signs of a downward turn. Musk had failed to deliver on his target production of the Model 3 and was spending cash rapidly, investing in ambitious expansion plans. Analysts even predicted bankruptcy for Tesla by the end of 2018. Though Tesla hit the desired production rate of Model 3 sedans and closed 2018 with two profitable quarters, it was unable to maintain its momentum. The gradual phase-out of the federal EV credit, high executive turnover, and the company’s inability to curb production costs while continuing to boost output led to two successive quarters of losses in 2019. In May 2019, Tesla’s stock plunged by a staggering 27% amid investor concerns. As Tesla was at a critical stage of business, analysts wondered whether Musk could resolve Tesla’s operational and financial issues and bring the company back on track. Could he revive the fortunes of Tesla? If so, how?
Can Elon Musk Turn Tesla Around?
In 2015, Kraft and Heinz merged to form The Kraft Heinz Company (Kraft Heinz). The case starts out by mentioning the reasons that led to the merger’s orchestrators, Warren Edward Buffett’s (Buffet) Berkshire Hathaway Inc. (BH) and private equity firm 3G Capital (3G), going in for the merger. The case then documents the expectations of the stakeholders from the merger. Later, the case describes in detail the actions taken by Kraft Heinz following the merger such as brutal cost cutting measures and laying off of employees, which led to a crisis. The case then takes a brief look into the measures taken by the newly appointed Chief Executive Officer (CEO) Miguel Patricio (Patricio) to revive the sinking profits of Kraft Heinz given his previous successful track record. It remains to be seen whether Patricio can successfully pull Kraft Heinz, the world’s fifth-largest food and Beverage Company, out of the quagmire.
The Kraft Heinz Company: A Merger Gone Wrong?
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