What YGCC is Reading

What YGCC is Reading #329

American Airlines is one of the largest airlines in the world. American Airlines is planning to return the Boeing 737 Max, which has been grounded worldwide following two fatal crashes that killed 364 people, to service for passenger flights by the end of the year. The new slate of flights will be available for booking as early as October and customers will be made aware they will be flying on a Boeing 737 Max. The announcement follows American's cut of 9,000 jobs and $5 billion loss of the company. The EU Aviation Safety Agency confirmed it is also getting close to giving the all-clear, but it will still take more than a month to complete that final approval for airlines to fly the plane again.

  • Analyze the potential reasons why American Airlines plans to return the Boeing 737 Max to service

  • How would it change customers’ behavior and further influence American Airlines’ revenue?

  • Advise the top management of American Airlines on the priority of the next steps given the impact of the pandemic on the airline industry.

 

Read more: 

American Airlines plans to return the 737 Max to service in December (CNN

What YGCC is Reading #328

PepsiCo, a food and beverage company on Monday unveiled a new drink named Driftwell. Driftwell contains L-theanine, an amino acid commonly found in tea leaves that has gained popularity in wellness circles as a supplement to help promote calmness, improve focus and aid in sleep. The company plans to launch Driftwell in 7.5-ounce mini cans online later this year and in stores early next year. Functional drinks, which feature vitamins, herbs, plants and minerals associated with a potential health or performance benefit, are a small but growing category of the overall beverage industry. Sales of functional beverages totaled nearly $31.7 billion in 2019, an increase of 6.9% from the year before. In recent years, PepsiCo has acquired companies such as the kombucha beverage maker KeVita in 2016 and the plant-based energy bar company Health Warrior in 2018 to compete and maintain its position in the health and wellness sector.

  • What key factors should PepsiCo consider in deciding whether or not to launch Driftwell?

  • The company aims at a $1 billion over-the-counter sleep aid industry and a relaxation aid market. What would PepsiCo need to do to gain the required market share for Driftwell following its launch?

 

Read more: 

PepsiCo is launching a drink to get a piece of the $1 billion sleep aid industry (CNN)

What YGCC is Reading #327

AstraZeneca, Pfizer and Moderna are the three companies that are currently testing their candidates of coronavirus vaccines in late-stage clinical trials in the United States. All three have also reached deals with the United States government worth billions of dollars, either for support of their research or to provide a supply of their vaccines should they prove safe and effective. The pharmaceutical company AstraZeneca suspended its trial after a participant in Britain became seriously ill last Sunday. However, the company said tests of its vaccine would start up again in Britain while remaining suspended in the U.S. and other countries. Pfizer, a competitor, announced an expansion of the trials of its coronavirus vaccine to 44,000 people to recruit a more diverse group of participants and potentially cut down the time needed to get results from the trial. Both companies’ announcements lacked crucial details, prompting criticism that they were not being open enough about the data they’re collecting. On Tuesday, Pfizer and eight other companies that are developing coronavirus vaccines signed a pledge that they would wait to put forward a vaccine until the evidence for safety and efficacy was clear.

  • What factors that these companies should consider when pricing coronavirus vaccines? 

  • Given that the vaccine requires two doses separated by three weeks, estimate the potential market size of the vaccine in the United States.

  • If the vaccine could be approved by the FDA, how would you help the company commercialize the product?

 

Read more: 

AstraZeneca Partly Resumes Coronavirus Vaccine Trial After Halting It for Safety (NYT)

What YGCC is Reading #326

As a lot of schools have changed to an all-outdoor curriculum to guard against the spread of the coronavirus among its students and staff, some outdoor-oriented companies are starting new product lines or repurposing existing ones to capitalize on the trends. Demand for Oaki’s rainsuits and related gear has increased 60 percent this year, but a major challenge is that the company is experiencing pandemic-related delays with its manufacturers in India and Mexico. As a result, the company needs to prioritize individual schools or parents’ orders over warehouse and retail orders and has rushed to market a line of fleece and wool socks that don’t need to be washed every day. Bienenstock Natural Playgrounds, a Canadian business that designs and builds school playgrounds, has also shifted its focus. Bienenstock has begun creating log-based outdoor classrooms, called OutClass, that schools can set up in less than a day and the classrooms can be converted into play structures whenever schools return to traditional indoor instruction. The year-over-year inquiries for its products from school administrators are up about 600 percent. Some parents are also trying to add an outdoor component to the remote learning experience and the household clients almost doubled compared to the same period last year.

  • What are the main factors that Bienenstock should consider when evaluating whether they should create OutClass?

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    Based on how the pandemic has changed the normal educational experience, if your client were a company that sells waterproof products including notebooks and printer paper for the government and going to target schools, how would you advise to help them develop a growth strategy?

 

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With Some Schools Moving Outdoors, Retailers Follow (NYT)

What YGCC is Reading #325

Uber, which started as a ride-hailing service, has long dabbled in other categories, including meal deliveries with its Uber Eats service. Uber's delivery service took on new importance and became Uber's biggest source of revenue. The company reported that revenue from Eats reached $1.2 billion in the second quarter, double a year earlier. However, Uber's Rides business revenue plummeted 67%, to $790 million. Overall, Uber lost $1.8 billion during the second quarter. Contributing to the loss was nearly $400 million in restructuring costs as the company cut roughly 25% of its workforce. In July, Uber announced a deal to buy the on-demand delivery startup, and former Eats competitor, Postmates for $2.65 billion.

  • Brainstorm potential reasons why Uber would like to acquire Postmates. 

  • Uber has hired your team to help it reverse the trends of declined revenue. What factors you would like your team to look at when approaching this problem?

 

Read more: 

Uber's delivery service is now bigger than its rides business (CNN)

What YGCC is Reading #324

Disney's "Mulan" has been delayed multiple times since the coronavirus pandemic began earlier this year. People may be curious why they cannot put "Mulan" on digital platforms even with a captive audience stuck at home, clamoring for content. There are several financial and symbolic reasons. Financially, Disney invested a lot of time and money ($200 million on production only) to make sure the film would be a hit in the US and China — the No. 2 movie market in the world. However, since there is no Disney+ in China, putting "Mulan" on digital would be wasting the potential to gain more profits globally. Beyond the money, it’s very important to maintain the exclusive, event-like feel of going to the movies. Studios may balk at releasing big films at home because that would train audiences to expect it going forward.

  • Estimate the market size of Mulan in the US and China

  • If your client was a movie producer who produced a movie targeting the US market only, how would you advise the client on whether or not to release it on a digital platform?

 

Read more: 

Here's why you can't watch 'Mulan' on Disney+ right now (CNN)

What YGCC is Reading #323

Doctor On Demand, a venture-backed telemedicine company, raised $75 million in series D financing as the demand for virtual visits surged during the COVID-19 pandemic. The company will use the funds to build out its technology and invest in its virtual primary care and behavioral health platform. Doctor On Demand doubled its covered lives in the past six months and has more than 98 million members now. Last year, the company teamed up with Humana to launch a new virtual primary care model, which gives patients access to both medical and behavioral health through video visits with lower monthly premiums. While COVID-19 has driven a sharp increase in the utilization of Doctor On Demand’s urgent care and behavioral health services, more than half of the company’s 2020 future growth is focused on the continued expansion of its virtual primary care offering. Not only are patient appointments up, but provider interest has grown as well. The company has 1,000 providers in the pipeline who want to join its virtual services. As virtual care increases, the company sees opportunities to integrate telehealth with remote monitoring devices to improve healthcare services to patients.

  • Estimate market size for remote monitoring devices using reasonable assumptions.

  • Conduct Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis on remote monitoring service and conclude whether Doctor On Demand should invest in it.

 

Read more: 

Doctor on Demand lands $75M to invest in virtual primary care, behavioral health (Fierce Healthcare)

What YGCC is Reading #322

Like companies in all industry sectors, many biotechnology and pharmaceutical companies are struggling to understand and find strategies to address the challenges presented by the COVID-19 outbreak. For many companies, the impact of the pandemic on the conduct of clinical trials has forced both smaller biotechs and Big Pharma to make tough decisions to pause ongoing trials and reconsider timelines for data readouts, regulatory reviews, and product launches. For example, Provention Bio recently paused a Phase 3 trial in type 1 diabetes and Iveric Bio temporarily stopped a pivotal trial in geographic atrophy. These decisions are not limited to smaller companies. Eli Lilly, Bristol-Myers Squibb, and Pfizer have announced pauses or delays in multiple development programs. In the longer term, delays in clinical trials may lead smaller companies to need additional funding at a time when their stock values have likely dropped and market conditions are not optimal. Many companies may be forced to make difficult cuts or prioritize development opportunities. Delays in clinical trials are also likely to cause delays in projected launch timelines.

  • What kind of projects (clinical trials) are most affected by COVID-19 in the short term? 

  • Brainstorm the potential impact of delays in the projected launch timeline of a drug.

 

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COVID-19 & Clinical Trials: Understanding The Long-Term Impact (Clinical Leader)

What YGCC is Reading #321

Opportunistic investors have been on the hunt for cheap companies to take over since coronavirus roiled financial markets. US investment groups have made a $7bn bid to acquire CoreLogic, which is the first large unsolicited takeover attempt for a real estate data analytics company since pandemic hit. Despite CoreLogic having a strong market position as a provider of data and analytics for the real estate and mortgage industries, the investors believe the company’s management strategy failed to help its growth and bolster its value. They would like to find new ways to reignite growth at CoreLogic, increase operating efficiency and improve the overall allocation of scarce capital resources.

  • What factors would you consider in order to evaluate whether US investment groups’ acquisition of CoreLogic was worth the price?

  • How would you help CoreLogic drive their revenue growth? 

 

Read more: 

US investors launch $7bn hostile bid for CoreLogic (FT)

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