Maturing Businesses Strive to “Remake” Themselves--

Essay

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

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 customer’s 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 six-year period ending in 2006, despite a sizeable special dividend and periodic share buybacks during this period. 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 be more a product follower than a leader.
-In your opinion, what are the primary challenges for each of these firms with respect to their employees, customers,
suppliers, and shareholders? Be specific.