Maturing Businesses Strive to “Remake” Themselves: UPS, Boise Cascade, and Microsoft UPS, Boise…

Maturing Businesses Strive to “Remake” Themselves: UPS,
Boise Cascade, and Microsoft

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 UPS, Boise Cascade, and Microsoft are examples of firms
that are seeking to redefine their business models due to a maturing of their
core businesses. With its U.S. delivery business maturing, UPS has been
feverishly trying to transform itself into a logistics expert. By the end of
2003, logistics services supplied to its customers accounted for $2.1 billion
in revenue, about 6% of the firm’s total sales. UPS is trying to leverage
decades of experience managing its own global delivery network to manage its
customers’ distribution centers and warehouses. After having acquired the
OfficeMax superstore chain in 2003, Boise Cascade announced the sale of its
core paper and timber products operations in late 2004 to reduce its dependence
on this highly cyclical business. Reflecting its new emphasis on distribution,
the company changed its name to OfficeMax, Inc. Microsoft, after meteoric
growth in its share price throughout the 1980s and 1990s, experienced little
appreciation during the 5-year period ending in 2004, despite its announced
distribution in mid-2004 of a sizeable share of its huge cash hoard to
shareholders through increased dividends and stock buybacks. Microsoft is
seeking a vision of itself that motivates employees and excites shareholders.
Steve Ballmer, Microsoft’s CEO, sees innovation as the key. However, in spite
of spending more than $4 billion annually on research and development,
Microsoft seems to remain a product follower rather than a leader.

 Case Study Discussion Questions

 1. In your opinion, what are the primary challenges for
each of these firms with respect to their employees, customers, suppliers, and
shareholders? Be specific.

 2. Comment on the likely success of each of these intended
transformations.

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