Case Rip Cord: Disney Remembers Crashing the 80s World
A number of EC classes these days have been quite memorable. Memorable in that they’ve been asking students to recall significant events from their pasts. For example, in Managing Service Operations, “Where were you when you first got MTV?” In Supply Chain, it was, “Tell us about buying your first sofa purchase.” The request that brought the most vivid memories floating back for Uncle Jordy came in Investment Management: “What were you doing the week of the Stock Market Crash in October, 1987?” Well, suffice it to say that Uncle Jordy, then a young Stanford sophomore, had quite a week:
WEDNESDAY, OCTOBER 14. In New York, the Dow opens just over 2500. In Washington, the government announces the trade deficit is higher than expected, causing a dramatic sale of the US dollar. Congress announces a change in tax laws, causing risk arbitrageurs to sell their equity in potential takeover candidates.
In Palo Alto, seven Stanford sophomores lounge around the living room of their spacious Jenkins suite, just killing time. The group is discussing two topics: the road trip they have planned to Matt’s house in La Jolla over the weekend to watch the Stanford/San Diego State football game, and Renee and Jill, the two women Mike and Jordy have been dating since the start of the school year. The big question this evening is “How serious are these relationships?” The group decides the answer to this question lies in whether or not Mike and Jordy will have to communicate with the women while they’re in San Diego. Jordy seems fairly certain that Jill and he won’t last out the month, and that no phone calls will be made. Mike, known for his serial monogamy, is worried that he and Renee are getting too serious too quickly. He hopes he can get away with no phone calls, but isn’t sure.
THURSDAY, OCTOBER 15. The slide of the Dow continues, as portfolio insurers sell index futures in Chicago as fast as they can. The Dow closes at 2350.
As is usual on a Thursday with the seven suitemates, they hold a small party. OK, a drink fest. This week’s theme is sunglasses, and the main attraction is an hour in which they do a shot of liquor every ten minutes. Mike informs the group that he has spoken to Renee, and that they have agreed not to communicate over the weekend. His coast is clear.
FRIDAY, OCTOBER 16. Fueled by massive sales from portfolio insurers and index arbitrageurs, the Dow sets a new one-day drop record of 108 points.
After struggling hung over through classes, the sophomores take off in two separate vehicles headed South. Mike leads in his brown 1977 Ford Thunderbird, which is affectionately known as the MDL 1000 after Mike’s personalized Illinois license plate. In the other car, Matt informs the riders that he has set Mike up for a practical joke. Upon Mike’s arrival, Matt’s mother tells him that Renee had called to make sure he arrived OK. The group all hoots and hollers. Mike glares at them.
SATURDAY, OCTOBER 17. Institutional investors prepare to sell on Monday after a substantial amount of customers request redemption of their mutual funds.
Mike awakes still furious. He and Matt go in the MDL 1000 to rent a U-Haul trailer, as Matt is bringing some of his stuff back to Palo Alto. Mike is so irate about Renee’s call that Matt decides to tell him it was just a joke. Mike gets even madder, and takes a corner way too fast, squealing his tires.
Everyone apologizes to Mike, which settles him down a bit. The group joins other Stanford fans and tailgates all afternoon for the evening game. San Diego State senior quarterback Todd Santos is bidding to finish the season as the all-time leading passer in NCAA history, and Stanford is 1-4 and embroiled in a quarterback controversy. It doesn’t look good for the Cardinal. During the game, Santos completes 40 of 60 passes for 520 yards. Unfortunately for the home Aztecs fans, Stanford has the ball last, and the Cardinal prevails 44-40 in one of the most exciting contests in NCAA history. Jenkins residents Jon Volpe and Ed McCaffrey have big games.
After the game, the reveling Stanford fans all head off to party in Tijuana, where events on la Avenida de la Revolucion become quite hazy. Something about tequila and cat tacos. Somewhere around 3 am, while crossing the border back into the US, the group decides to buy blankets from some sidewalk vendors. Jordy’s Spanish fluency–greased by a lot of tequila–garners him the best price of the bunch, $5, which is $2 better than the next best negotiator. The thrill of the game and the night in Tijuana have made Mike forget his earlier rage.
SUNDAY, OCTOBER 18.
The group is heading back North through the desert on the Grapevine. The four in Mike’s car are discussing manly things–their first sexual encounters. Just as George is coming to the climax of his story, everyone is distracted by a loud thwapping noise. Mike yells loudly, as something black is attacking the windshield. He pulls over into the median, and the four riders all jump out of the MDL 1000.
The right front tire is in shreds. The tread has separated from the inner tube, and while trying to escape the tire altogether, has destroyed the fender of the massive gas guzzling American auto. Unpacking the bags in the trunk reveals that the spare tire is flat. Luckily, the other car of suitemates stops by shortly, and they agree to take the spare and get some air in it. While the travelers wait by their injured vehicle, Mike is convinced he is living out the Beach Boys song “Fun, Fun, Fun until Daddy Took the T-Bird Away.” He starts raising his hands above his head and shouting, “I’m a dead man!” Other cars full of Stanford faithful stop by to help, including seniors Patrick McEnroe and Peter Shaper (HBS ’94G). The MDL 1000 and its crew look pitiful. The other suitemates finally return after an hour journey to find a gas station in the desert whose service bays are open on Sunday. The MDL 100 and its escort then limp back to Palo Alto with their tails tucked between their legs.
MONDAY, OCTOBER 19. Black Monday. The Dow Jones Industrial Average loses 508 points, or 23%, to close at 1738. The Stanford sophomores are back to school, recovering from their weekend road trip, totally unaware.
TUESDAY, OCTOBER 20. Option and futures trading halts for a period in Chicago. Newly appointed Chairman of the Federal Reserve Bank, Alan Greenspan, affirms the Fed will back the liquidity of the banking system to ensure continued operations of the markets.
Jenkins neighbors Jennifer Azzi, Dafna Ciechanover (Sister of Isaac, OA), and Kathy Morris come visit the travelers’ suite before dinner, to find out about the trip. After hearing the tales, Kathy mentions that she’s very concerned about the stock market crash, stating that the university endowment lost over $100 million. Their concern landed them at HBS, Ciechanover graduating in 1995, and Morris in 2000. The rest of the diners are more concerned about the upcoming home game against the Oregon Ducks.
This column now returns to normal Case Ripping:
World Co., Ltd.: World is a Japanese clothing manufacturer, and its founders created it after leaving another clothing company named “Empire.” They picked the name “World” because they dreamed of being bigger than Empire. Very logical. This sentence, however, is not: “The SPARCS system became the basis for promoting World’s SPA business, beginning with the OZOC and Untitled brands.” Unfortunately this sentence doesn’t make any better sense in the context of the case. But it does turn out that “Untitled” is a brand of fine ladies’ wear in Japan, and that World’s President devised the SPARCS system after reading a book entitled Intuition and Reflection in Self-Consciousness. So they got that going for them. Which is nice.
EuroDisney; The First 100 Days: The opening quote of French critic Jean Cau sets the tone: “A horror made of cardboard, plastic, and appalling colors; a construction of hardened chewing gum and idiotic folklore taken straight out of comic books written for obese Americans.” Thank goodness Cau clarifies the audience at the end here–for a second he could have been referring to the road art along Autoroute A4 through Champagne, just one short hour’s drive East of EuroDisney. The case describes how Disney altered the park to European tastes, “invok[ing] the imagination of famous European adventure tales such as Sinbad the Sailor, Arabian Nights, and the Thief of Baghdad.” Hunh–when did those tales become European? Maybe they should have stuck to Hans Christian Andersen and the Brothers Grimm? Regardless, the class decided Disney should have kept the attractions at the park more American, like Disneyland. But didn’t Walt Disney base that park on Copenhagen’s Tivoli Gardens, and wasn’t the central castle modeled after Neuschwanstein, the wet dream of lunatic Bavarian King Ludwig? Talk about a confusing chicken and egg problem. And one more thing: five pages of footnotes?!?
And from the old to the new: Why is it the oldest cases are often the hardest to read? Tyler Abrasives is from 1973, but it appears to have been redone by editors so often, errors have been introduced all over the place, and the writing is incredibly choppy. On the other end of the spectrum, Norwalk Furniture is an online case. What is the point of these experiments gone awry? You still have to print them out–web page by web page–to mark them up while reading them, and they’re awfully hard to take to class online. Why not just make them hard copy cases? Sure the videos are nice, especially when they show a cow-shaped piece of leather being made into a couch, but students can still watch the videos while they read the hard copy, no?
Please send comments on your cases to Uncle.Jordy@mba2002.hbs.edu.