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Curriculum Center Browse Bibliography Build EPacket Pricing Structure Distribution Process Management Control in Nonprofit Organizations
Consumers Union
Young, David W.
Noble, David
Functional Area(s):
   General Management
Difficulty Level: Advanced
Pages: 19
Teaching Note: Available. 
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First Page and the Assignment Questions:
It used to be that if you had a college education and an above average income, you fit the profile of a consumer researcher. Now we have another way to identify a consumer researcher—people who get on the Internet. There used to be all sorts of obstacles—you had to go to the public library and you had to know what kind of information sources existed. Now, you just pop a question into Google, and you get an immediate answer. Our challenge is to get in the way of that process and be a compelling alternative that shows people that there is a difference in the quality of information. There’s value in being properly informed, not just informed. Informed can mean having watched television and seen advertising. By being properly informed, people can really change the marketplace and do better for themselves.

The speaker was Elena Falcone, Senior Director of Strategic Planning for Consumers Union (CU). In June 2003, Ms. Falcone was preparing for a meeting with Jim Guest, CU’s President and CEO. At the meeting, the two would discuss several strategic initiatives and would make some decisions that would guide CU’s efforts over the next several years. The eventual outcome was to be a 5-Year Strategic Plan that would be presented at the annual board meeting in October.


During the 1920s, many changes occurred in America. Homes were wired for appliances and mass production became commonplace in industry. In their quest to fulfill demand, companies rapidly produced products without concern for safety, reliability or performance. This created the need for product guidelines and safety procedures, which were largely unavailable at the time.

Founded in 1936 during the lingering effects of The Great Depression, Consumers Union was established as a nonprofit organization with the mission “to work for a fair, just, and safe marketplace for all consumers. . ..” CU set forth the basic goal of providing consumers with information and counsel on goods and services. It established laboratories to supervise and conduct research, and it tested and continuously reported on the relative quality and value of the different offerings in the pages of its flagship publication, Consumer Reports (CR). A timeline chronicling significant internal and external events related to the organizations growth is shown in Exhibit 1.

Over its history, Consumers Union garnered both industry and public recognition by focusing i on a number of initiatives that served to build the circulation and influence of CR. These initiatives had been designed not only to increase CR’s revenues and build name and brand recognition, but also to simultaneously educate and empower individuals from all backgrounds and age groups.


1.    How would you characterize the five forces for CU before and after the arrival of the Internet?

2.      How would you characterize CU’s strategy?  What does its activity set look like?  What does it have to do well?  Can its strategy survive Internet competition?

3.      What grade would you give CU for its Internet efforts to date?

4.    What are the most important issues for Elena Falcone to discuss with Jim Guest?  What recommendations should she make on each of these?