Harriett Green, the newly appointed CEO of Thomas Cook Group, faces a daunting set of business and financial challenges at the 171-year old UK travel services company. The company has lost almost £600 million in the last three-quarters; has seen its stock price fall from 230 pence to a low of 8.8p in the past two years; and had seen its bonds trade down to as little as 40% of face value. In just a few weeks the company's license to operate is to be reviewed by the United Kingdom's Civil Aviation Authority, competitors are publicly questioning the company's viability, and seasonal working capital needs are about to peak. With the company's very survival at stake, Green must devise a turnaround plan that will return the company to financial health. Any plan must address the company's high-cost structure, raise substantial new capital, fix the balance sheet, create a profitable growth strategy, and build a more effective organization and culture. But achieving all of these objectives within the short time available will be a major challenge.
Transfer pricing used by multinational corporations to lower its tax burden, thereby increasing its consolidated income, can have far-reaching implications for the stakeholders, as a fund manager for Saskhedge fund found out the hard way. A stock investment the manager had made in Cameco Corporation has dropped its value by 20 per cent. In addition, Canada Revenue Agency has initiated a law suit against the firm for alleged tax avoidance in relation to the company's transfer pricing practices with its Swiss subsidiary. The suit could result in an additional tax liability of $800 million to $850 million. The manager needs to explain to the investment board the implications of the lawsuit on the stock price and advise the board on whether the projected $800 to $850 million is a fair estimate.
The national head of sales for consumer business for one of India's largest paint companies was anxious and concerned about the plummeting levels of employee engagement at his company. He was also aware of an increasing number of complaints about employee's attitudes and their approach towards both work and the organization from people in senior management. As a seasoned business manager, he knew that he needed to understand and address the gaps between the employee's expectations and the needs of the organization.
At the beginning of 2012, Nespresso, a manufacturer and distributor of home-brewed, single-serve coffee machines and capsules, is considering how best to increase its share of the U.S. market. It had always relied on organic growth through its own retail stores and a few premium department store chains. However, between 2005 and 2011, the demand for capsule coffee boomed, and this attracted a number of new competitors, including Starbucks, while existing competitors increased their marketing expenditures. At the same time, Nespresso's patents were expiring, and some supermarkets started selling generic capsules for Nespresso machines. How should Nespresso change its strategy to ensure future growth? Should it relinquish its tightly controlled distribution system in order to offer increased convenience to consumers? Should it alter its product to better match the U.S. taste for milk-based coffee? Or might an increase in advertising spur demand?
At the beginning of 2012, Nespresso, a manufacturer and distributor of home-brewed, single-serve coffee machines and capsules, is considering how best to increase its share of the U.S. market. It had always relied on organic growth through its own retail stores and a few premium department store chains. However, between 2005 and 2011, the demand for capsule coffee boomed, and this attracted a number of new competitors, including Starbucks, while existing competitors increased their marketing expenditures. At the same time, Nespresso’s patents were expiring, and some supermarkets started selling generic capsules for Nespresso machines. How should Nespresso change its strategy to ensure future growth? Should it relinquish its tightly controlled distribution system in order to offer increased convenience to consumers? Should it alter its product to better match the U.S. taste for milk-based coffee? Or might an increase in advertising spur demand?
The national head of sales for consumer business for one of India’s largest paint companies was anxious and concerned about the plummeting levels of employee engagement at his company. He was also aware of an increasing number of complaints about employee’s attitudes and their approach towards both work and the organization from people in senior management. As a seasoned business manager, he knew that he needed to understand and address the gaps between the employee’s expectations and the needs of the organization.
ShopRunner considers adjustments to improve its online shopping service which offers no-charge two-day shipping as well as easy returns and other conveniences. Competitors' diverse pricing models and ancillary benefits raise questions about how to structure and price ShopRunner's offering. Meanwhile, an investment from Alibaba presents new opportunities in China but risks distraction from the core business.
Well-known film producer Peter Guber must decide whether to commit to a time-consuming personal project. He is about to sign a contract for a business book in which he will share what he has learned in his long career. At the same time, he is keenly aware of problems and uncertainties affecting Mandalay Entertainment, a privately-owned company in which he is principal. Mandalay produces movies and television content, owns minor league baseball teams, and is pushing into digital content. Mandalay is trying to reinvigorate its core movie and television businesses, maintain growth in the sports business, and be prepared for the opportunity to buy a major league professional sports franchise. Does Guber eliminate all personal projects and stay tightly focused on guiding his company? On the other hand, there may never be a good time to write a book. He also has to consider the potential impact of a book project on his personal brand and the Mandalay company brand.
The managing director, founder and promoter of Manjushree Technopak Limited, based in Bangalore, India, had exploited various market opportunities to establish his third venture, which over 20 years had become the largest manufacturer of polyethylene terephthalate bottles and preforms in Southeast Asia. His brother and sons had also joined the company, which was listed on the Bombay Stock Exchange, and were now co-directors under his leadership. By 2013, the company was ready to expand to meet the growing demand for plastic containers in the food, beverage, health care and pharmaceutical industries and to counter its competition. It needed to convey a clear vision to all its stakeholders. Growth also meant the need for clarity in leadership roles and a sound internal governance structure. The managing director had three choices: 1) continue the status quo with himself as head of the company; 2) step aside and allow his professionally qualified sons to step up to the company leadership; or, 3) hire a professional from the corporate world as a new chief executive officer.
Kellogg's is exploring the possibility of launching gluten-free Corn Flakes in India. The company must examine the gluten-free market in India and explore strategies for entering this market. Kellogg's must assess its competitors in India's growing breakfast cereal market, where a growing economy and increasing health awareness is pushing Indian consumers to look for healthier options. Questions remain whether Kellogg's should enter the promising gluten-free segment to take advantage of this potential opportunity in India, consumers' evolving preferences and the current industry trends.
In July 2001, the newly elected president of the board of directors at Dovercourt Recreation Centre in Ottawa, Ontario, faces a dilemma. The facility's executive director has suggested that in light of a poor performance review, his only option might be to resign. He is revered by his staff and the community for his passionate advocacy of outreach to disadvantaged and marginalized populations and has a successful track record in running the organization and popularizing its programs throughout the city. However, he is under great stress because his informal management style does not fit well with the board's need for specific monthly accounting. The new president was recruited to improve unproductive board meetings, but he has quickly realized the root issue is the escalating tension between the executive director and the board. Confident that he can use his consulting background to deliver a solution to the conflict that threatens to undermine the centre's strong reputation, he needs a plan and must act on it decisively and immediately.
In August 2011, Morgan Brothers Bank was issuing a $2.5 million reverse convertible note with payoffs linked to the price of Molycorp's common stock. These financially engineered securities were just one of many kinds of structured notes available in the retail market. Investors must decide whether the notes were fairly priced and whether they offered a favorable risk-return trade-off.
This technical note provides an overview of the senior housing industry in the United States. There were 40 million seniors in America in 2010, and that number was expected to double by 2050. Seniors would make up 1 in every five Americans. This note explores the living options available to this important and fast-growing demographic.
In 2014, Rick is serving as a trustee for a large family trust whose principle asset is a plot of prime real estate in the Upper East Side of Manhattan. The land is currently subject to a ground lease which pays $4.6 million annually, with resets every 20 years at 4.5% of the appraised value of the land. The next reset is in 2022, and in the meantime Rick must make a decision on whether it might be better for the trust's beneficiaries to sell the land early. If so, what price should he seek?
Molycorp, the Western hemisphere's only producer of rare earth minerals, was in the middle of a $1 billion capital expansion in its effort to become a vertically integrated supplier of rare earth minerals, oxides, and metals. After reporting lower than expected revenues and earnings for the second quarter of 2012, management needed to design a new funding strategy for the firm. In August 2012, Molycorp announced it would issue $120 million of equity and $360 million of convertible debt. To facilitate the issuance of convertible debt, the firm entered a ''share lending agreement'' with Morgan Stanley whereby Morgan Stanley would borrow shares from Molycorp in a transaction referred to as a ''Happy Meal''. The goal was to help convertible debt investors ''hedge their respective investments through short sales.'' The challenge of the case is to understand why Molycorp used this financing strategy and what impact it would likely have on the firm, its prospects, and its stock price.
This 2014 case discusses the U.S. nonprofit organization B Lab and its mission to support and help drive investment capital toward private enterprises that 1) aim to provide social and environmental benefits, and 2) are accountable to stakeholders (such as employees and their community) in addition to their equity investors. B Lab created robust tools for assessing the impact of these enterprises so that the social and environmental Return on Investment could be measured and evaluated in a consistent, comparable and transparent fashion. The tools were based on a 200-point assessment scheme called the B Impact Assessment. In addition, B Lab created a certification called "B Corp," which identified companies that considered diverse stakeholder interest in its definition of corporate and fiduciary responsibility. B Lab also created and championed a new legal form, the Benefit organization, which supported those organizations. Through these activities, B Lab played an important role in the relatively new practice of impact investing, which seeks to generate positive social or environmental value alongside financial returns. In 2014 the eight-year-old company was at a strategic crossroads. Many organizations found the B Lab assessment process to be burdensome, and the investment markets were showing a lack of interest, if not resistance to, using B Lab's measurement systems. Many market participants wanted to focus only on specific parts of B Lab's assessment, or wanted more customized tools to suit data collection for their own existing metrics. However, enabling investors to do that would make it harder for B Lab to create common standards - a key part of the organization's mission. B Lab's leaders were grappling with the issue of how far to go to meet the market with highly customized products and services that investors were demanding, versus how much B Lab should lead the market to a higher bar for measuring impact.
Yamato Transport Co., Ltd. innovatively used the field cast model of housewives as part-time employees to meet the increasing delivery demands of morning peak-load hours. The housewives provided Yamato with a cost-efficient source of human resources and the nimbleness to adjust its staff deployment to respond reliably and quickly to customers’ needs. A series of recruitment, training, and compensation and appraisal processes was designed for the field cast model.<br><br>The case outlines the challenges with the implementation of the field cast model and the decision facing Yamato’s managers of whether to expand it throughout the company’s Japanese operations. Yamato’s managers were largely satisfied with the progress of the field cast model; although field casts made up less than 2 per cent of the delivery manpower at Yamato, they played a crucial role in improving customer satisfaction levels and lowering parcel delivery costs. However, the implications of the expansion plan were multi-dimensional. At an operational level, the inconsistency in the field casts’ performance could be magnified as the number of field casts continued to increase over the coming months. As well, the sales drivers might struggle to cope with the additional responsibility to train and supervise field casts. More broadly, the sustainability of the field cast model was unknown because of Japan’s changing social structure. In addition, with the improvement of the global economy since 2010, the supply of part-time employees was threatened by competition from alternative employment opportunities.
Since 2005, the chief executive officer of Kering, a conglomerate headquartered in Paris, has successfully streamlined the company’s business strategy to concentrate on luxury goods and sporting and lifestyle brands —including Gucci, Yves St-Laurent, Stella McCartney, Alexander McQueen and Balenciaga, among others — through selling off non-related businesses. By 2012, the company was more focused than ever before but was sluggish in one key aspect — its online presence. Like most competitors within the luxury industry, it was struggling with how it should capitalize on the benefits of a web presence, trying not to stray away from the luxury strategy of its brands. Kering recognized the importance of growing online, but needed to come up with an ideal approach to successfully grow the digital presence of its luxury brands.
Kundanmal Mukanmal Trans Logistics Pvt. Ltd. (KM) is a well-known road transportation company in Western India, operating out of its headquarters as a family business in Jaipur. It functions as a logistics provider for flatbed steel and finished automobiles (primarily four-wheeler passenger cars and light to medium cargo vehicles). The co-executive directors are grappling with large delays with the workshop repairs that are hurting the timely truck availability and causing immense customer dissatisfaction (with about 14 per cent of the trucks taking more than one day to complete their repair). The co-executive directors believe that staffing the workshop with the right number of labourers may address the issue of long repair delays — but is the issue just with the labour availability? Is the number of bays available for repair sufficient for the volume of truck repairs? What is causing the trucks to pile up at the workshop?