What YGCC is Reading

What YGCC is Reading #308

Coronavirus has drastically shifted the world's buying habits and deeply affected the restaurant industry because of the sudden closures and lack of clarity about the time to reopen. As restaurants are forced to close to decrease the spread of the virus, which leads to significantly reduced revenue, the Cheesecake Factory won't be able to pay its April rent at its nearly 300 locations. Many Cheesecake Factory restaurants are located in or near shopping malls, which are also forced to close in several states. The Cheesecake Factory needs to quickly figure out ways to increase their revenue during the current crisis.

  • What should Cheesecake Factory do to increase their revenue and off-site orders?

  • Pizza Hut is recruiting more than 30,000 employees across the nation and says its new drivers can start working in as little as five hours upon hiring. Compare the revenue and cost structures of Pizza Hut and the Cheesecake Factory to find out the reasons why the two restaurants take different actions.


Read more: 

Cheesecake Factory tells its landlords it won't be able to pay April rent (CNN)

What YGCC is Reading #307

More and more companies are trying to get into the mask-manufacturing market as demand surges. The Department of Health and Human Services has planned to buy 500 million more face masks over the next 18 months, part of an effort to spur companies to make more masks domestically. Established mask makers like 3M Co. have increased production of face masks and new entrants like Alhambra are buying machines or retooling production lines to make medical-grade face masks. However, they are all facing the same problem: shortages of key supplies and equipment. The mask-making machines are on back-order for at least six months and the price of a machine has increased by 2 fold. Although some companies have machines, the mask-making machines sit idle because of a lack of raw materials.

  • Outline fixed and variable costs associated with producing masks. 

  • Conduct Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis on the new entrants and conclude whether your client should get into the mask-making business or not.


Read more: 

New Manufacturers Jump Into Mask Making as Coronavirus Spreads (WSJ)

What YGCC is Reading #306

Walmart, the largest retail store in the United States, is changing store hours during the coronavirus outbreak. Other US grocery stores, including Publix, Giant, Stop & Shop and H-E-B have also modified their hours in recent days. They say the reduced hours will give employees more time to clean stores, restock produce, sanitize shelves and keep workers healthy. However, some grocery chains, including the country's largest, Kroger, as well as Albertsons, Trader Joe's, Walmart, Target, BJ's and Whole Foods have not announced any changes to their hours. Some stores like Urban Outfitters, Patagonia (HGLD), Glossier and Neighborhood Goods, will temporarily close.

  • What is the impact of reducing store hours and temporarily closing stores on retailers, suppliers and customers, respectively? 

  • If the CEO of a small retailer comes to you asking whether they should temporarily shut the door, what would you advise him?


Read more: 

Walmart shortens its hours and stores across America close their doors (CNN)

Publix, Giant and other grocery stores are changing hours to cope with shopping frenzies. Here's what you need to know (CNN)

What YGCC is Reading #305

Costco, the membership-only wholesale corporation, reported a 12.4% sales growth in February compared with the same period last year. Costco attributed around 3% of that to increased customer demands and fears of the novel coronavirus outbreak. Customers raced to stockpile a variety of items associated with preparing for and dealing with a virus, such as cleaning products, household essentials, sanitizing wipes, disinfectants and food. Cleaning product manufacturers and consumer goods' companies have also experienced a huge surge in sales in recent weeks.

  • Identify the benefits and risks of this uptick in sales in Costco.

  • A partner in Bain stated that “the crisis underscored a need for some traditional retailers to rethink how they source and provide goods in the long term”. What recommendations would you provide for retailers like Costco in terms of logistical bottleneck and supply shortages?


Read more: 

Costco says it's getting a lift from coronavirus panic shopping (CNN)

What YGCC is Reading #304

A lot of China’s start-ups have been hit by the “capital winter” and economic stagnation caused by the coronavirus outbreak. Many loss-making start-ups need to raise capital for cash flow and growth. However, most face-to-face meetings between start-ups and investors are put on hold because of the risk of coronavirus contagion. At the same time, investors have become conservative. To ease the cash crunch, many companies have to slash jobs, cut pay, lay off workers and look for government bailouts. China’s government has agreed to defer tax collection to help small and medium-sized companies get through this hard period. 

  • What recommendations would you provide for struggling start-ups to reduce their cost? 

  • What factors would you consider in evaluating a start-up during the disaster or post the disaster? 


Read more: 

China’s start-ups struggle as coronavirus fear hits funding (FT)

What YGCC is Reading #303

T-Mobile US Inc. and Sprint Corp. have agreed on new terms for their merger, paving the way for the combination of the third- and fourth-largest U.S. wireless carriers and the creation of a company closer in size to Verizon and AT&T. Deutsche Telekom, the parent of T-Mobile US, will have 43 percent ownership of the merged business and retain the T-Mobile name. SoftBank, the parent company of Sprint, will own 24 percent, down from the 27 percent it had earlier accepted, in order to quickly offload the Sprint debt. The new T-Mobile will have more than 90 million U.S. customers and aims to nab more subscribers from Verizon and AT&T. 

  • What are the advantages and risks of the merger between T-Mobile and Sprint? 

  • If your client was a newcomer in US telecommunications, how would you help them to increase profit and market share?


Read more: 

T-Mobile and Sprint agree new deal terms (FT)

Sprint, T-Mobile Revise Merger Terms (WSJ)

What YGCC is Reading #302

Convenience stores like Wawa, Kwik Trip, and Sheetz initially drew in customers by soft drinks, tobacco and fuel. Now, they are trying to attract customers by introducing a dinner service that they previously tried but had failed. In the past, convenience stores had trouble attracting customers with dinner service because the segmentation was mostly covered by GasBuddy, a navigation app, and American customers preferred formal dinners. However, nowadays, as people smoke less, drink less soda and cook less dinner at home, it is a good opportunity to re-offer dinner services at convenience stores.

  • Imagine your client is a traditional convenience store considering the option to provide dinner services. What factors would you weigh in determining whether or not they should? 

  • Estimate the annual profit by introducing dinner using reasonable assumptions. 


Read more: 

Wawa goes after the dinner crowd with burgers and chicken sandwiches.

What YGCC is Reading #301

C&S Paper is a Chinese tissue manufacturer. It has agreed to produce 350,000 surgical face masks per day to help combat the spread of coronavirus in China. There is currently a shortage of masks, and the company has said that they are prepared to increase production to 2M pieces per day to meet demand if needed. 


  • What factors should C&S Paper consider in pricing the masks? Identify pros and cons of a high price. 

  • Outline fixed and variable costs associated with producing surgical masks. 


Read more: 

C&S Paper to Produce Surgical Masks for Coronavirus Containment (WSJ)

What YGCC is Reading #300

Casper is a mattress startup that filed to go public earlier this month. It initially captured customers’ attention with mini-sized mattresses and then expanded its portfolio to include products like pet beds. Casper recently reported a 23% increase in its sales but an overall loss of $94 million in the past quarter, due to increased salesforce, marketing, and product development costs associated with moving beyond the saturated mattress market. They hope to increase profits through a multi-faceted approach called “sleep economy,” targeted at increasing customers' purchases of multiple products to improve their night.


  • What are some risks should Casper consider as it thinks through its “sleep economy” options?

  • What other recommendations would you provide for Casper in order to increase profitability?


Read more: 

Casper's sales are surging but it can't stop losing money (CNN)

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