Fanatically focusing on execution and brand. That’s how analysts describe the strategic approach of Warby Parker, a New York City eyewear startup that’s quickly disrupting the old-fashioned eyewear business. Co-founded in 2010 by David Gilboa and Neil Blumenthal (who are also now co-CEOs), Warby Parker has shown itself to be a fierce and successful competitor. Why? “One word, deliberate.” They are disciplined about their brand, but embrace and exploit technology in disrupting the staid and conservative way eyewear has traditionally been sold. So what does Warby Parker do?

To appreciate what Warby Parker is doing, we need to look back at how the idea for the company came about. After leaving a $700 pair of Prada frames in a seat-back pocket on a flight while backpacking in Southeast Asia, Gilboa began questioning why he had a $200 iPhone in his pocket that had the technology to do a number of really cool things and yet replacing that pair of glasses—a technology that’s hundreds of years old—would cost way more than that $200 iPhone.^{57 (Links to an external site.)} Like many other entrepreneurs, he believed there had to be a better way. His research exposed an industry that was a virtual monopoly with a very powerful eyewear supplier, thus the reason for the high-priced eyewear. Gilboa and a friend, who were both in Wharton’s MBA program, weren’t even sure they could take on such a powerful competitor until they teamed up with Blumenthal (also at Wharton). Blumenthal was rumored to know “more than pretty much anyone else in the world about how to work outside of the traditional eyeglass-supply chains.” Well, it didn’t take long for the crew to start selling eyewear online from a Philadelphia apartment.

Future Vision

Today, Warby Parker designs and manufactures its own trendy, stylish frames and sells them directly to consumers over the Internet for an affordable $95 a pair. That price also includes prescription lenses, shipping, and a donation to VisionSpring, a not-for-profit where Blumenthal served as a director. The company has begun opening brick-and-mortar stores, with 11 open currently. Other growth plans include expanding their product mix, diversifying their frame selection into areas such as kids’ frames and glasses with progressive lenses, and exploring revolutionary technologies that would do eye exams online. Warby Parker was named Fast Company’s Most Innovative Company of 2015 and was honored as a finalist in the 2014 USA Today Entrepreneur of the Year. Another thing Warby Parker does is its “Buy a Pair, Give a Pair” program, which benefits visually-impaired individuals in developing countries. Meanwhile, to carry on the company’s success, Gilboa and Blumenthal will continue being disciplined in all they do, fanatically focusing attention on execution and brand. That future vision should help Warby Parker continue on its successful journey.

1. What role do you think goals might play in planning for Warby Parker’s future? List some goals you think might be important. (Make sure these goals have the characteristics of well-written goals.)

2. What types of plans would be needed in an industry such as this one? (For instance, long-term or short-term, or both?)Explain why you think these plans would be important.

3. What contingency factors might affect the planning efforts of Warby Parker executives? How might those contingency factors affect the planning?

An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $42per share. With 850k shares outstanding, EPS were $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50k shares of ABC stock. However, when the purchasing firm bought another 50k shares, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC.

The entrepreneur was reminded by the legal staff that ABC had a poison pill provision that took effect when any outside investor accumulated 23% or more of the shares outstanding. Current stockholders, excluding the potential takeover company, were given the privilege of buying up to 500k shares of ABC at 84.04% of current market value. Thus, new shares would be restricted to friendly interests. The legal staff also found that the entrepreneur and “friendly” members of the board currently owned 175k shares of ABC.

In view of the above information, ABC company is in the process of determining the costs described by the following scenarios:

Scenario #1: Takeover firm makes a move

Gets 50% (plus 1 share) of ABC stock at the current market price level, in addition to shares previously accumulated.

Scenario #2: “Friendly” shareholders come to the rescue

Takeover firm exceeds the number of shares determined in the previous scenario, and gets all the way up to 625,000 shares of ABC. Under the poison pill provision, friendly shareholders purchase to prevent a takeover attempt by the acquiring firm, next to what they already own.

Required: In percentage terms, by how much would the poison pill strategy make the purchase more expensive for the takeover firm?

Answer
% Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places (for example: 28.31%).

An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $43per share. With 850k shares outstanding, EPS were $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50k shares of ABC stock. However, when the purchasing firm bought another 50k shares, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC.

The entrepreneur was reminded by the legal staff that ABC had a poison pill provision that took effect when any outside investor accumulated 30% or more of the shares outstanding. Current stockholders, excluding the potential takeover company, were given the privilege of buying up to 500k shares of ABC at 82.17% of current market value. Thus, new shares would be restricted to friendly interests. The legal staff also found that the entrepreneur and “friendly” members of the board currently owned 175k shares of ABC.

In view of the above information, ABC company is in the process of determining the costs described by the following scenarios:

Scenario #1: Takeover firm makes a move

Gets 50% (plus 1 share) of ABC stock at the current market price level, in addition to shares previously accumulated.

Scenario #2: “Friendly” shareholders come to the rescue

Takeover firm exceeds the number of shares determined in the previous scenario, and gets all the way up to 625,000 shares of ABC. Under the poison pill provision, friendly shareholders purchase to prevent a takeover attempt by the acquiring firm, next to what they already own.

Required: In percentage terms, by how much would the poison pill strategy make the purchase more expensive for the takeover firm?

An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $45per share. With 850k shares outstanding, EPS were $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50k shares of ABC stock. However, when the purchasing firm bought another 50k shares, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC. The entrepreneur was reminded by the legal staff that ABC had a poison pill provision that took effect when any outside investor accumulated 24% or more of the shares outstanding. Current stockholders, excluding the potential takeover company, were given the privilege of buying up to 500k shares of ABC at 77.91% of current market value. Thus, new shares would be restricted to friendly interests. The legal staff also found that the entrepreneur and “friendly” members of the board currently owned 175k shares of ABC. In view of the above information, ABC company is in the process of determining the costs described by the following scenarios: Scenario #1: Takeover firm makes a move Gets 50% (plus 1 share) of ABC stock at the current market price level, in addition to shares previously accumulated. Scenario #2: “Friendly” shareholders come to the rescue Takeover firm exceeds the number of shares determined in the previous scenario, and gets all the way up to 625,000 shares of ABC. Under the poison pill provision, friendly shareholders purchase to prevent a takeover attempt by the acquiring firm, next to what they already own. Required: In percentage terms, by how much would the poison pill strategy make the purchase more expensive for the takeover firm?

An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $41per share. With 850k shares outstanding, EPS were $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50k shares of ABC stock. However, when the purchasing firm bought another 50k shares, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC. The entrepreneur was reminded by the legal staff that ABC had a poison pill provision that took effect when any outside investor accumulated 27% or more of the shares outstanding. Current stockholders, excluding the potential takeover company, were given the privilege of buying up to 500k shares of ABC at 76.44% of current market value. Thus, new shares would be restricted to friendly interests. The legal staff also found that the entrepreneur and “friendly” members of the board currently owned 175k shares of ABC. In view of the above information, ABC company is in the process of determining the costs described by the following scenarios: Scenario #1: Takeover firm makes a move Gets 50% (plus 1 share) of ABC stock at the current market price level, in addition to shares previously accumulated. Scenario #2: “Friendly” shareholders come to the rescue Takeover firm exceeds the number of shares determined in the previous scenario, and gets all the way up to 625,000 shares of ABC. Under the poison pill provision, friendly shareholders purchase to prevent a takeover attempt by the acquiring firm, next to what they already own. Required: In percentage terms, by how much would the poison pill strategy make the purchase more expensive for the takeover firm? Answer % Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places (for example: 28.31%).

An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $41per share. With 850k shares outstanding, EPS were $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50k shares of ABC stock. However, when the purchasing firm bought another 50k shares, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC.

The entrepreneur was reminded by the legal staff that ABC had a poison pill provision that took effect when any outside investor accumulated 24% or more of the shares outstanding. Current stockholders, excluding the potential takeover company, were given the privilege of buying up to 500k shares of ABC at 83.49% of current market value. Thus, new shares would be restricted to friendly interests. The legal staff also found that the entrepreneur and “friendly” members of the board currently owned 175k shares of ABC.

In view of the above information, ABC company is in the process of determining the costs described by the following scenarios:

Scenario #1: Takeover firm makes a move

Gets 50% (plus 1 share) of ABC stock at the current market price level, in addition to shares previously accumulated.

Scenario #2: “Friendly” shareholders come to the rescue

Takeover firm exceeds the number of shares determined in the previous scenario, and gets all the way up to 625,000 shares of ABC. Under the poison pill provision, friendly shareholders purchase to prevent a takeover attempt by the acquiring firm, next to what they already own.

Required: In percentage terms, by how much would the poison pill strategy make the purchase more expensive for the takeover firm?

Answer% Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places (for example: 28.31%).

An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $42per share. With 850k shares outstanding, EPS were $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50k shares of ABC stock. However, when the purchasing firm bought another 50k shares, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC.

The entrepreneur was reminded by the legal staff that ABC had a poison pill provision that took effect when any outside investor accumulated 30% or more of the shares outstanding. Current stockholders, excluding the potential takeover company, were given the privilege of buying up to 500k shares of ABC at 81.81% of current market value. Thus, new shares would be restricted to friendly interests. The legal staff also found that the entrepreneur and “friendly” members of the board currently owned 175k shares of ABC.

In view of the above information, ABC company is in the process of determining the costs described by the following scenarios:

Scenario #1: Takeover firm makes a move

Gets 50% (plus 1 share) of ABC stock at the current market price level, in addition to shares previously accumulated.

Scenario #2: “Friendly” shareholders come to the rescue

Takeover firm exceeds the number of shares determined in the previous scenario, and gets all the way up to 625,000 shares of ABC. Under the poison pill provision, friendly shareholders purchase to prevent a takeover attempt by the acquiring firm, next to what they already own.

Required: In percentage terms, by how much would the poison pill strategy make the purchase more expensive for the takeover firm?

An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $43per share. With 850k shares outstanding, EPS was $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50kshares of ABC stock. However, when the purchasing firm bought another 50k share, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC.

The entrepreneur was reminded by the legal staff that ABC had a poison pill provision that took effect when any outside investor accumulated 30% or more of the shares outstanding. Current stockholders, excluding the potential takeover company, were given the privilege of buying up to 500k shares of ABC at 82.17% of current market value. Thus, new shares would be restricted to friendly interests. The legal staff also found that the entrepreneur and “friendly” members of the board currently owned 175k shares of ABC.

In view of the above information, ABC company is in the process of determining the costs described by the following scenarios:

Scenario #1: Takeover firm makes a move

Gets 50% (plus 1 share) of ABC stock at the current market price level, in addition to shares previously accumulated.

Scenario #2: “Friendly” shareholders come to the rescue

Takeover firm exceeds the number of shares determined in the previous scenario and gets all the way up to 625,000 shares of ABC. Under the poison pill provision, friendly shareholders purchase to prevent a takeover attempt by the acquiring firm, next to what they already own.

Required: In percentage terms, by how much would the poison pill strategy make the purchase more expensive for the takeover firm?

An entrepreneur founded a company (ABC) in 2001. Recently, the stock was trading at $42per share. With 850k shares outstanding, EPS were $1.41. The entrepreneur and the members of the board of directors were initially pleased when another firm purchased 50k shares of ABC stock. However, when the purchasing firm bought another 50k shares, the entrepreneur and members of the board became concerned that the purchasing firm might be trying to take over ABC.

The entrepreneur was reminded by the legal staff that ABC had a poison pill provision that took effect when any outside investor accumulated 23% or more of the shares outstanding. Current stockholders, excluding the potential takeover company, were given the privilege of buying up to 500k shares of ABC at 84.04% of current market value. Thus, new shares would be restricted to friendly interests. The legal staff also found that the entrepreneur and “friendly” members of the board currently owned 175k shares of ABC.

In view of the above information, ABC company is in the process of determining the costs described by the following scenarios:

Scenario #1: Takeover firm makes a move

Gets 50% (plus 1 share) of ABC stock at the current market price level, in addition to shares previously accumulated.

Scenario #2: “Friendly” shareholders come to the rescue

Takeover firm exceeds the number of shares determined in the previous scenario, and gets all the way up to 625,000 shares of ABC. Under the poison pill provision, friendly shareholders purchase to prevent a takeover attempt by the acquiring firm, next to what they already own.

Required: In percentage terms, by how much would the poison pill strategy make the purchase more expensive for the takeover firm?

Answer% Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places (for example: 28.31%).