Case. Introduction (10 marks); Analysis (20 marks); Recommendations (10 marks); Conclusion (10 marks). Total 50 marks
Posted: Wed Apr 27, 2022 1:30 pm
Case. Introduction (10
marks); Analysis (20 marks); Recommendations (10 marks); Conclusion
(10 marks). Total 50 marks. Please use
headings.
London-based Reuters is a respected company. Established
in 1850 and devoted to delivering information around the world by
the fastest means available – which in 1850 meant a fleet of 45
carrier pigeons – by the late 1990s the company had developed into
one of the largest providers of information in the world.
Although Reuters is know best to the public for its independent,
unbiased news reporting, 90 percent of Reuters’ revenues are
generated by providing information to traders in financial
markets. In the 1990s the company used a proprietary computer
system and a dedicated telecommunications network to deliver
real-time quotes and financial information to Reuter’s terminals –
devices that any self-respecting financial trader could not
function without. When Reuters entered the financial data
business in the early 1970s, it had 2,400 employees, most of them
journalists. By the late 1990s its employee base had swelled
to 19,000, most of whom were on the financial and technical
side. During this period of heady growth Reuters amassed some
1,000 products, often through acquisitions such as foreign-language
data services, many of which used diverse and sometimes
incompatible computer delivery systems.
The late 1990s were the high point for Reuters. Two shocks
to Reuters’ business put the company in a tailspin. First
came the internet, which allowed newer companies, such as Thomson
Financial Services and Bloomberg, to provide real-time financial
information to any computer with an internet connection.
Suddenly Reuters was losing customers to a cheaper and increasingly
abundant alternative. The Internet was commoditizing the
asset on which Reuters had built its business:
information. Then in 2001, the stock market bubble of the
1990s finally broke; thousands of people in financial services lost
their jobs; and Reuters lost 18 percent of its contracts for
terminals in a single year. Suddenly a company that always
been profitable was losing money.
In 2001, Reuters appointed Tom Glocer as CEO. The first
non-journalist CEO in the company’s history, Glocer, an American in
a British-dominated firm, was described as “not part of the old
boys” network. Glocer had advocated that Reuters move to an
internet-based delivery system. In 2000, he was put in charge
of rolling out such a system across Reuters but met significant
resistance. The old proprietary system had worked well, and
until 2001 it had been extremely profitable. Many managers
were therefore reluctant to move toward a web-based system that
commoditized information and had lower profit margins. They
were worried about product cannibalization. Glocer’s message
was that if the company didn’t roll out a web based system,
Reuters’ customers would defect in droves. In 2001, his
prediction seemed to be coming true.
Once in charge, Glocer again pushed an internet based system,
but he quickly recognized that Reuters’ problems ran deeper.
In 2002, the company registered its first annual loss in history,
480 million, and Glocer described the business as “fighting for
survival.” Realizing that dramatic action was needed, in
February 2003, Glocer launched a three-year strategic and
organizational transformation program called Fast Forward.
It was designed to return Reuters to profitability by
streamlining its product offering, prioritizing what the company
focused on, and changing its culture. The first part of the
program was an announcement that 3,000 employees (nearly 20 percent
of the workforce) would be laid off.
To change its culture Reuters added an element to its Fast
Forward program known as “Living Fast,” which defined key values
such as passion and urgency, accountability and commitment to
customer service and team. A two-day conference of 140
managers, selected for their positions of influence and business
understanding rather than their seniority, launched the
program. At the end of the two days the managers collectively
pledged to buy half a million shares in the company, which at the
time were trading at an all-time low.
After the conference, the managers were fired up; but going back
to their regular jobs they found it difficult to convey that sense
of urgency, confidence and passion to their employees. This
led to the development of a follow-up conference: a one-day
event that included all company employees. Following a video
message from Glocer and a brief summary of the goals of the
program, employees spent the rest of the day in 1,300
cross-functional groups addressing challenges outlined by Glocer
and proposing concrete solutions. Each group chose one of
“Tom’s challenges” to address. Many employee groups came up
with ideas that could be rapidly implemented – and were. More
generally, the employees asked for greater clarity in product
offerings, less bureaucracy, and more accountability. With
this mandate managers launched a program to rationalize the product
line and streamline the company’s management structure. In
2003, the company had 1,300 products. By 2005, Reuters was
focusing on 50 key strategic products, all delivered over the
web. The early results of these changes were
encouraging. By the end of 2004, the company recorded a 380
million profit, and the stock price had more than doubled.
THIS CASE INCORPORATES MULTIPLE CHAPTERS TO
ANALYZE
USE SUB-HEADINGS
INTRODUCTION/PROBLEM (10 MARKS)
ANALYSIS (20 MARKS)
RECOMMENDATIONS (10 MARKS)
CONCLUSION (10 MARKS)
TOTAL
50 MARKS
UNDERLINE EACH SUB-HEADING
marks); Analysis (20 marks); Recommendations (10 marks); Conclusion
(10 marks). Total 50 marks. Please use
headings.
London-based Reuters is a respected company. Established
in 1850 and devoted to delivering information around the world by
the fastest means available – which in 1850 meant a fleet of 45
carrier pigeons – by the late 1990s the company had developed into
one of the largest providers of information in the world.
Although Reuters is know best to the public for its independent,
unbiased news reporting, 90 percent of Reuters’ revenues are
generated by providing information to traders in financial
markets. In the 1990s the company used a proprietary computer
system and a dedicated telecommunications network to deliver
real-time quotes and financial information to Reuter’s terminals –
devices that any self-respecting financial trader could not
function without. When Reuters entered the financial data
business in the early 1970s, it had 2,400 employees, most of them
journalists. By the late 1990s its employee base had swelled
to 19,000, most of whom were on the financial and technical
side. During this period of heady growth Reuters amassed some
1,000 products, often through acquisitions such as foreign-language
data services, many of which used diverse and sometimes
incompatible computer delivery systems.
The late 1990s were the high point for Reuters. Two shocks
to Reuters’ business put the company in a tailspin. First
came the internet, which allowed newer companies, such as Thomson
Financial Services and Bloomberg, to provide real-time financial
information to any computer with an internet connection.
Suddenly Reuters was losing customers to a cheaper and increasingly
abundant alternative. The Internet was commoditizing the
asset on which Reuters had built its business:
information. Then in 2001, the stock market bubble of the
1990s finally broke; thousands of people in financial services lost
their jobs; and Reuters lost 18 percent of its contracts for
terminals in a single year. Suddenly a company that always
been profitable was losing money.
In 2001, Reuters appointed Tom Glocer as CEO. The first
non-journalist CEO in the company’s history, Glocer, an American in
a British-dominated firm, was described as “not part of the old
boys” network. Glocer had advocated that Reuters move to an
internet-based delivery system. In 2000, he was put in charge
of rolling out such a system across Reuters but met significant
resistance. The old proprietary system had worked well, and
until 2001 it had been extremely profitable. Many managers
were therefore reluctant to move toward a web-based system that
commoditized information and had lower profit margins. They
were worried about product cannibalization. Glocer’s message
was that if the company didn’t roll out a web based system,
Reuters’ customers would defect in droves. In 2001, his
prediction seemed to be coming true.
Once in charge, Glocer again pushed an internet based system,
but he quickly recognized that Reuters’ problems ran deeper.
In 2002, the company registered its first annual loss in history,
480 million, and Glocer described the business as “fighting for
survival.” Realizing that dramatic action was needed, in
February 2003, Glocer launched a three-year strategic and
organizational transformation program called Fast Forward.
It was designed to return Reuters to profitability by
streamlining its product offering, prioritizing what the company
focused on, and changing its culture. The first part of the
program was an announcement that 3,000 employees (nearly 20 percent
of the workforce) would be laid off.
To change its culture Reuters added an element to its Fast
Forward program known as “Living Fast,” which defined key values
such as passion and urgency, accountability and commitment to
customer service and team. A two-day conference of 140
managers, selected for their positions of influence and business
understanding rather than their seniority, launched the
program. At the end of the two days the managers collectively
pledged to buy half a million shares in the company, which at the
time were trading at an all-time low.
After the conference, the managers were fired up; but going back
to their regular jobs they found it difficult to convey that sense
of urgency, confidence and passion to their employees. This
led to the development of a follow-up conference: a one-day
event that included all company employees. Following a video
message from Glocer and a brief summary of the goals of the
program, employees spent the rest of the day in 1,300
cross-functional groups addressing challenges outlined by Glocer
and proposing concrete solutions. Each group chose one of
“Tom’s challenges” to address. Many employee groups came up
with ideas that could be rapidly implemented – and were. More
generally, the employees asked for greater clarity in product
offerings, less bureaucracy, and more accountability. With
this mandate managers launched a program to rationalize the product
line and streamline the company’s management structure. In
2003, the company had 1,300 products. By 2005, Reuters was
focusing on 50 key strategic products, all delivered over the
web. The early results of these changes were
encouraging. By the end of 2004, the company recorded a 380
million profit, and the stock price had more than doubled.
THIS CASE INCORPORATES MULTIPLE CHAPTERS TO
ANALYZE
USE SUB-HEADINGS
INTRODUCTION/PROBLEM (10 MARKS)
ANALYSIS (20 MARKS)
RECOMMENDATIONS (10 MARKS)
CONCLUSION (10 MARKS)
TOTAL
50 MARKS
UNDERLINE EACH SUB-HEADING