HULU

Hulu is very customer oriented.

Services are made user friendly: elderly should be at using it at ease. Kilar insisted
that Hulu needs to be obsessed with its customers.
Easy navigation and low amount of adds for a more user friendly
interface
Free service
Hulus customers : Content owners, content distributors, users and advertisers
Content acquisition: 170 partners (2009, ABC, NBC, FOX and associated cable
networks)
Equity partners received around 70% of advertising revenues
Hulu did not require contracts to be exclusive, owners can make
deals on with others
Challenges: Content owners (FOX) feared that going online would
undercut TV show rating and DVD sales, want their own website
for shows etc.
Cable networks will consider per subscriber fee they receive from
cable operators before putting a program online
Content Distribution: more than 30 affiliated websites, the core idea was to bring
content to the
audience, rather than forcing the audience to come to one site
to watch shows
50% of Hulus traffic came from outside
Distribution partners could interegrate Hulu, while receiving
benefits of users spending time on their website > distribution
partners received up to 10% of the advertising revenues
Challenges: Content partners could ask Hulu to pull its videos from
their website, could be about legal matters (copyright) etc.
Users: Hulu was completely free
Only web browser and no special players were needed to stream
Site is designed to respond to popularity and allow uses to express
their views on content, they could write reviews
self service content distribution: embed Hulo on their blogs etc.
By July 2006, 6 million players were embedded on 123k websites
Challenges: not all of the requested tv shows/movies were readily
available to stream
Advertising strategy: Three formats (standard, premium and exclusive), less is
more approach
Strong advertising Targeting Capabilities

Reduced ad time: 1 Hour = 16 Min of ads, Hulu 25% of that

Viewer could choose which ad to watch
CPM (Cost Per Thousand Viewers Reached) = $40 and $50
60% of ad space was filled
Challenges: TV everywhere, slow adoption ( 10 minute per day
online vs. 300 minutes a day TV) and TV ads still dominate, CPM 50100% higher than TV

IBM
Founded in 1911, was for many years worlds dominant computer company.

Company was growing until 1991, and in 1992 a $5 billion loss was
seen
Gerstner was hired to turn things around, he found IBM to be an
insular, inward looking organization with a powerful bureaucracy
and inflexible hierarchy. No funding, no long term vision more
emphasis on short term goals
Interdivisional rivalry was higher than ambition for company
success
Initial Gerstner approach was to cut expenses, reorganize the
company, articulate new principles and stabilizing new core
businesses problems could be traced to matrix structure
(company divided into 7 groups and 39 business units, and each
unit has its own profit and loss statement. No control of
manufacturing or sales however.
Sales and distribution were organized geographically and by
industry sector
SIX ROOT CAUSES SLOWING COMPANY GROWTH:
Management system rewards execution directed at short term
results and does not place enough value on strategic business
building
Preoccupied with current markets and existing offerings
Business model emphasizes sustained profit and earning per
share improvement rather than actions to drive higher P/E.
Approach to gathering and using market insight inadequate
Lack established disciplines for selecting, funding and
terminating new growth businesses
Once selected, many IBM ventures fail in execution because too
many people were involved to make a decision
SOLUTION: Implementation of Three Horizons of Growth
H1: business mature and well established
H2: businesses were on the rise and were experiencing rapid
growth
H3: business were less developed, emerging and needed visionaries

During Thompson Era, John Thompson started communication worldwide and new
review processes were developed for the 7 EBOs
Focus shifted from financial performance to developmental issues (entrepreneurial
activities)
The shift to corporate strategy formalized the process and strengthened reforms
even further.
Leadership, strategy development, resources and tracking and
monitoring changes were made
More focus on H3, made sure they are adequately funded and
operations were overseen by senior executives
Project based milestones were new basis for evaluating EBO
leaders. Categories that were looked at were: marketplace
acceptance, external perception, ecosystem development, internal
execution and resource building.
RED, YELLOW, GREEN scoring system was implemented to see how
EBOs were progressing
Transition from H3 to H2 became a problem, people in H3 feared that their products
wouldnt sell well because they wouldnt be understood. People who believed in
their innovation were needed in order to reach H2 level.
Overall the horizon model seems beneficial as long as all three horizons work
together. H1 could for example help the upcoming horizons with any needs (funds,
work force etc.).