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Coworking in Scott's Addition: Capacity ...

Yildiz, Ozlem, Pop...

Case

Coworking in Scott's Addition: Capacity and Pricing Strategy (A)

Yildiz, Ozlem; Popescu, Dana; Goldberg, Rebecca

OM-1694 | Published September 28, 2020 | 10 pages Case

Collection: Darden School of Business

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These cases follow Emilia Nguyen—newly-appointed CEO of her family’s third-generation real estate business in the historic district of Scott’s Addition in Richmond, Virginia—as she prepares her proposal to renovate her family’s 8,000 sq. ft., three-story Art Deco building. She plans to convert the building from traditional annual-lease office suites into a coworking space with five separate options, each with its own price point. Four of these options are available as a month-to-month rental, and one option will be offered to walk-in customers in a café. In the A case, Nguyen examines survey data from 50 respondents that captures willingness-to-pay (WTP) price points for each of the four monthly rental options. She must set prices and allocate the available space between these options to optimize revenue. Students are provided with a spreadsheet of survey results and asked to calculate the optimal price point for one of the four monthly rental options, ignoring capacity constraints. Then students must recalculate their answers while considering all four options and capacity constraints. Thus students must solve a problem that incorporates both pricing and capacity allocation decisions.