Final Week - no Google Flashcards
of businesses in USA
28M
% of households that are homeowners in USA
66%
Canada’s population
36M
India’s population
1.4B (same as China)
If we lower prices by 10%, how much does quantity have to increase for us to break even?
11.11% (1/9)
Ways to expand internationally
- Exporting
- Licensing
- Franchising
- Joint Venture
- Foreign direct investment (acquisition or startup)
If we lower prices by 50%, how much does quantity have to increase for us to break even?
100%
If we lower prices by 25%, how much does quantity have to increase for us to break even?
33.3%
An investment project requires an initial investment of $1M and will result in a profit of $10M in 8 years. The discount rate is 9%. What’s the NPV?
NPV = PV of profits - PV of Investment+costs
With discount rate of 9%, using “Rule of 69-72”, the investment will double in 8 years.
So the $10M profit 8 years from now is worth half today, or $5M.
So the NPV = 5M - 1M = 4M
EU’s population
500M
If we increase prices by 25%, how much does quantity have to decrease for us to break even?
20%
China’s population
1.4B (same as India)
If the prompt involves “green” or something non-profit, need to…
incorporate non-financial factors as well
What is NPV?
PV of cash inflows MINUS PV of cash outflows (investments)
How to measure whether your retail company’s growth is from opening new stores or from improved performance?
Same Store Sales
If we lower prices by 33.3%, how much does quantity have to increase for us to break even?
50%
Inverse proportions - give examples of formulas and the general rule
If we increase prices by 10%, how much does quantity have to decrease for us to break even?
9.09% (1/11)
Challenges and Benefits of Creating a Diverse Workforce
Benefits:
Organizations do their best work when their teams reflect the constituencies they are serving, which in Google’s case, is the entire world. Diverse teams solve problems more effectively because they have insight from more unique perspectives and are less likely to make mistakes due to avoidable blind spots.
Google is competing for the world’s top talent, and this talent is wildly diverse. However, people from underrepresented backgrounds face unique challenges in the work place that often cause them to fail to meet their potential or make them not want to work in a particular organization. For many people, it’s important for to have friends, mentors, and colleagues at work who are similar to them for them to feel included and appreciated.
Challenges
Need to eliminate as much bias as possible in human capital systems, from hiring, to training, to pay, to promotion. It’s great that Google takes this so seriously:
–> The vast majority of Googler’s have done unconscious bias training
–> That Google has eliminated statistically significant pay gaps by gender or race.
–> Hiring decisions are made on rubrics and by a committee to reduce bias
–> 20% time for diversity efforts: Diversity Core is a formal program in which Google employees contribute one-fifth of their time to initiatives aimed at attracting more women and minorities and creating a more welcoming culture for them — both at Google and in the tech industry.
It’s challenging to create an inclusive work environment that will make people from underrepresented backgrounds want to join and stay on the team. People have deeply ingrained conscious and unconscious biases that affect the way they interact with their colleagues, often creating a toxic environment.
Disagreement within our society about how much of a role identity-based bias plays in outcomes, and whether or not as a society we should even strive for equity in outcomes. This makes it hard for some companies to focus on diversity because their shareholders are not uniform in their beliefs and demand immediate returns, and it’s not always easy to quantify the profit benefit in the short term of promoting diversity in your workplace. Especially, since research shows that in certain circumstances, diverse teams are less productive.
–> My experience:
I’ve spent my entire career in some of the more progressive organizations in the country. I’ve only worked in schools that serve low-income brown and black children and most of my managers have been people of color. In each organization, we did dozens of hours of diversity and inclusion work each year, which I fully supported and contributed to. As a result, I’ve been a bit shocked at business school to realize what the rest of the world is like - I have a lot of classmates who think that D&I work is a waste of time and is a threat to them, people have walked out of our D&I workshops midway, visibly annoyed. It’s really awoken me to the challenge that we face across corporate America. As a result, I’ve been trying to contribute to making Columbia a more inclusive space: 1. I took on a leadership role in a men’s ally group for women in business, and I joined the campus’ diversity and inclusion club to try. We have a ton of work to do.
Most common way of measuring efficiency in retail?
Sales per square foot, compare to competitors
If we increase prices by 50%, how much does quantity have to decrease for us to break even?
33.3%
Y1: -25%
Y2: -16%
Overall Change?
-41 + 4 = -37%
If we increase prices by 20%, how much does quantity have to decrease for us to break even?
16.6% (1/6)
What is contribution margin?
Same as marginal profit = sale price minus variable cost per unit
Mexico’s population
130M
Percentage change of revenue when adjusting price, quantity
% change = price change 1 + price change 2 + (price change 1 * price change 2) example: A company has $300m in revenue which grows by 20% and then shrinks by 10%. What’s the net change in revenue? 1 + 20% - 10% + (-10%*20%) –> 120% - 10% + -2% = 108%, so 8% change. example: How much will revenue change if a company increases prices by 20% which leads to a 20% decrease in sales? –> 1 + 20% + -20% + -4% = 96% –> change of -4%
3 ways to price differentiate/discriminate in order to improve revenue and profitabality
Different prices for different WTP
Different prices for different segments (attributes - i.e. students, seniors, local citizens)
Different prices for different quantities (i.e. bulk discounts)
Avg size of household in USA
2.5 people (there are 120m households with 300m/2.5-=120)
Estimate Baseline: 900,000 CAGR: 40% Years: 1
1,260,000
$400M growing at 10% for 5 years will be worth?
600M
If we lower prices by 20%, how much does quantity have to increase for us to break even?
25%
of households in the USA
120m (300m population divided by 2.5 people per household)
