Chuck Feeney's Business Model

Chuck Feeney, who was well known as cofounder of the world’s largest duty-free retail chain, has began his work by selling tax-free booze to sailors in the U.S. Navy’s Atlantic fleet. It was this initiating that made him ranked by Forbes as the twenty-third richest American alive in 1998. In order to gain deeply insight this success, it would be clarified to consider actions taken by Feeney to form and exploit opportunities. By looking at the context of duty free business as Feeney has operated, discovery theory would be best explanation of how his opportunity was formed and created. To be illustrated, we first look at the nature of opportunities. According to Alvarez and Barney, 2007, in discovery theory, opportunities exist, independent of

While Japanese economic explosion stimulated Feeney to come up with aggressive growth strategy and adopt Japanese strategy with 200% markups, many retailers remain ignorant of these opportunities. Turning to nature of decision making context, business of duty free would be considered as risky than uncertainty. To illustrate, when Feeney perceive Japanese as lucrative customers while other remain ignorant, he hired an analyst to predict the market which refer to risky decision making context. In addition, O’clery also stated in his biography that the key success of Feeney’s business has relied a lot on accounts and predictions from financial staff concerning forecasts of Japanese travel, spending patterns and exchange rates. According to Alvarez and Barney, 2007, the decision making context in discovery is risky because entrepreneurs can use a variety of data collection and analysis techniques to understand possible outcome associated with opportunities. This could be observed in Feeney’s

Japanese tourists have high demand for luxury products. However, because of high prices, many people could not afford it making Supply of the products more than demand. Disequilibrium exists in the market. Feeney aware that he could contact suppliers of luxury products to supply him with numerous amount at low costs and he could sell it to tourists at price lower than the shop but still able to gain mark up at least one hundred percent. The result from this arbitrage caused increased demand and brought economy toward equilibrium. The arbitrage opportunities occurred independently to be discovered without requiring any new information. Feeney could gather information that already exits in the market and use existing resources to gain potential profits. For Chuck Feeney, his social networks and his experience from travelling were major sources of his contribution. He usually contacted people from Cornell University to help him in his business and went abroad to explore market in many countries hoping to find profitable