The vice-president of marketing and communications at Mountain Equipment Co-op, a retailer of outdoor sporting goods, is examining its marketing strategy following the decision to stop producing its physical catalogue. The 40-year-old retailer wants to broaden its reach beyond its hard-core group of customers. Although it currently has an online presence, it needs to further develop its online sales and outreach programs.
A large, international benevolent association operating 22 children’s hospitals and four research centres in three countries has been negatively impacted by a number of external factors. The effect of the 2008 global financial crisis on its endowment funds coupled with rising health care costs and flat donations, have resulted in the hospitals running at a loss. To ensure the long-term viability of their not-for-profit hospital system, management feels it must present drastic options to delegates at its annual general meeting, including reconsidering the policy of providing free medical care to children regardless of their ability to pay, shutting down research facilities and closing over a quarter of their hospitals. While management is confident that the quality of care for pediatric patients will not be compromised, all of the options being considered will significantly impact hospital operations and the organization’s culture. For the first time in the 87 years of the organization’s existence, some very difficult options are on the table.
A large, international benevolent association operating 22 children's hospitals and four research centres in three countries has been negatively impacted by a number of external factors. The effect of the 2008 global financial crisis on its endowment funds coupled with rising health care costs and flat donations, have resulted in the hospitals running at a loss. To ensure the long-term viability of their not-for-profit hospital system, management feels it must present drastic options to delegates at its annual general meeting, including reconsidering the policy of providing free medical care to children regardless of their ability to pay, shutting down research facilities and closing over a quarter of their hospitals. While management is confident that the quality of care for pediatric patients will not be compromised, all of the options being considered will significantly impact hospital operations and the organization's culture. For the first time in the 87 years of the organization's existence, some very difficult options are on the table.
The vice-president of marketing and communications at Mountain Equipment Co-op, a retailer of outdoor sporting goods, is examining its marketing strategy following the decision to stop producing its physical catalogue. The 40-year-old retailer wants to broaden its reach beyond its hard-core group of customers. Although it currently has an online presence, it needs to further develop its online sales and outreach programs.
What is the value of Bluefin Labs's social listening data to Twitter? Acquired by Twitter in 2013, Bluefin had built a system that gathered millions of online comments in an effort to develop new metrics for TV programs and brand advertising. With data from Twitter and other social sites, expressions, not just impressions, could now be aggregated, measured, and used to calibrate brand performance and to sell media time. A second objective of the case is to understand the implications of social TV viewing, the audience engagement that results when people watch television with a smartphone or tablet in hand, participating in a virtual community of real-time TV watchers.
The Global Networks Company (GNC), headquartered in Boston, Massachusetts, made its global footprint in India in 1994 by establishing a presence in Bangalore. Although mainly a sales support office, GNC grew name recognition from its contracts with India's government to help build nationwide networks. Not quite 20 years later, GNC decided to further invest in India and tapped a manager from the Boston office, Jim Notrika, to establish and then manage GNC's first global software center in Mumbai. Split between Mumbai and Boston, the project team successfully completed several minor projects, but only months into its first major project, the team was struggling to meet deadlines. Blame was being passed in both directions, and when three talented engineers in Mumbai quit, Notrika makes an emergency trip to Mumbai to better understand the problem. This case describes three common cross-cultural communication obstacles in teams: a preference for direct versus indirect confrontation of problems; a clash of collectivist versus individualistic cultural values related to reporting bad news or giving negative feedback; and different expectations of team leaders based on power-distance values.
The Delhi Metro Rail Corporation (DMRC) suggested the construction of a dedicated express metro line from the city centre to the airport, which had just been handed over to a private party for development. Among the options available to the DMRC was private participation in the project. The structuring had to be such that the project would be completed by the Commonwealth Games deadline of September 2010. The case provides an opportunity to discuss the various structuring options for a public-private-partnership (PPP), the criteria for assessment, and financial analysis in the context of a large infrastructure project.
Jose Angel Medina, had previously been involved in many turnarounds; this one was different. Comprosa, a Spanish manufacturer of packaging films, had a long history of success but had recently fallen on tough times due to decisions made by the CEO in his attempt to find a buyer for the company coupled with the financial crises in Europe in 2008. Medina, a turnaround professional, had been brought in to save it. In March, 2009, eight months after taking charge, the situation had stabilized but the company had not shown profits. As Comprosa reached breakeven, Medina reflected on how to continue to drive up the company profits. Their markets were mature and powerful Indian and Chinese competitors had achieved economies of scale that Comprosa could never reach. Tired and exhausted he needed to implement with urgency a plan to finalize the turnaround. After determining that the business was worth saving and stablizing the cash situation, Medina takes a number of steps to bring the company quickly back to break even. Now he is faced with determining what steps to take to get the company back to solid profitability.
China, an internet walled garden, has offered opportunities to its home-bred companies to thrive. These local internet companies, which earned their initial success mostly by cloning their Western counterparts in fulfilling the needs of the country's demanding internet users, are insulated from the rest of the virtual world. Among these local internet companies, Tencent is the most successful one. A listed company on the Hong Kong Stock Exchange since 2004, Tencent's 2011 annual report recorded revenue of RMB25.8 billion with an almost 40% profit margin. Its 845 million active user accounts have wide penetration to the 538 million internet users and 1.05 billion mobile users. After achieving sustainable success in China's internet market, Tencent has its eyes on the world. But as a company nurtured by the walled-garden environment, how can it make its way outside of its comfort zone? What does it have to offer to the global market, with its pockets of look-alike internet services, that the rest of the world is not deprived of? Will Tencent be able to globalise?
At the start of 2012, Helena Morales, an equity analyst, was examining the jet fuel hedging strategy of JetBlue Airways for the coming year. Airlines cross-hedged their jet fuel price risk using derivatives contracts on other oil products such as WTI and Brent crude oil. Consequently, an airline was exposed to basis risk. In 2011, dislocations in the oil market led to a Brent-WTI premium wherein jet fuel started to move with Brent instead of WTI, as it traditionally did. Faced with hedging losses, several U.S. airlines started to change their hedging strategies, moving away from WTI. But others worried that the Brent-WTI premium might be a temporary phenomenon. For 2012, would JetBlue continue using WTI for its hedges, or would it switch to an alternative such as Brent?
In early January 2008, a senior VP with LAAMCO, a fund of hedge funds known for alternative investments, was conducting due diligence on an equity market-neutral hedge fund. The hedge fund used an option strategy known as a collar (also known as a bull spread or split-strike conversion). The track record of the hedge fund had been stellar. The fund's performance had not only beaten that of the S&P 500 Index over the same period but had done so with much lower monthly return volatility. As part of the due diligence, it was necessary to backtest the collar strategy and try to quantify how much value the manager, BLM Investment Securities, LLC, (BLM) had added. The case is a disguised representation of an actual hedge fund-the true identity of BLM is revealed to students at the end of the case discussion.
A young entrepreneur is considering options for starting an art dealership. Everyone has some commonsense knowledge of what an art gallery is, yet very few have realized how competitive the art market is and what it takes to succeed in that industry. The price of a painting can be anywhere between $50 and $500,000, and that price typically does not depend on the objective properties of the artwork itself. This is where the art dealer plays an important role. The budding entrepreneur has to make strategic decisions regarding which segment of the art market to serve (high or low brow?), where to start his business (mid-size hometown or large city?), how to deliver the art to market (by opening a traditional art gallery, by partnering with retail locations such as restaurants to put the artworks on display or by organizing temporary exhibitions in rented spaces) and whether he should ally with a local arts collective.
A young entrepreneur is considering options for starting an art dealership. Everyone has some commonsense knowledge of what an art gallery is, yet very few have realized how competitive the art market is and what it takes to succeed in that industry. The price of a painting can be anywhere between $50 and $500,000, and that price typically does not depend on the objective properties of the artwork itself. This is where the art dealer plays an important role. The budding entrepreneur has to make strategic decisions regarding which segment of the art market to serve (high or low brow?), where to start his business (mid-size hometown or large city?), how to deliver the art to market (by opening a traditional art gallery, by partnering with retail locations such as restaurants to put the artworks on display or by organizing temporary exhibitions in rented spaces) and whether he should ally with a local arts collective.
On May 12, 2012, BH Media Group, a subsidiary of Warren Buffett's Berkshire Hathaway, announced an offer to buy Media General's (MEG) newspaper division for $142 million in cash and provide debt financing to the struggling firm. Reactions from investors and industry analysts varied greatly: one called it a "great surprise", another wondered if Buffett was investing with his heart rather than his head (he was a paperboy as a child), and a third said it was a "feat of financial engineering." Virtually all of them wondered what the "Oracle of Omaha" saw in the declining U.S. newspaper industry that others did not. The question facing Media General's CEO Marshall Morton was whether to accept the offer or not. As the head of a highly leveraged company whose revenues had fallen 31% in the past four years, whose stock price was down more than 90% off its high, and whose falling profitability left it perilously close to violating key debt covenants, he had to move quickly.
Valero Energy, an incredibly successful US refiner, needs to make some decisions about tight oil. As production of light tight oil increases-from Eagle Ford, Bakken and elsewhere-Valero considers whether to add topping capacity to handle it, on top of its recent investments for heavy oil. Political decisions, however, are pending on Keystone XL, on crude oil exports, and on LNG exports. Prices, therefore, are up in the air, especially as global capacity increases. Petrochemical companies and oil producers have conflicting views on the appropriate policy. Bill Klesse, the CEO, can either sit back and wait, or move to capture greater market share.
Château Margaux, one of only five prestigious estates in the Bordeaux Medoc wine region to have been classified as a "first-growth", is facing a host of strategic decisions in early 2013. Up until this point the estate had been selling two red wines, a first wine whose retail price often exceeded $1000 a bottle, and a second wine whose retail price often exceeded $200 a bottle. Owner Corinne Mentzelopoulos and her management team were now preparing to launch a new third wine made from the estate's production not used to make the first two. They have to decide whether the best go-to-market strategy is to sell the third wine to the local Bordeaux merchants and relinquish commercialization to them or to devise a complete marketing plan for the new wine that includes: target market selection, positioning, quantity to release, pricing, channel structure and brand name. Mentzelopoulos was considering the optimal marketing for the third wine in light of bold moves by other first-growths, such as the purchase of vineyards in the Bordeaux region, global expansion, and deviation from the centuries-old tradition of selling wine in the futures market.
In June 2012, ITC Limited, an Indian conglomerate recognized globally for its sustainability initiatives, was deliberating on how to apply its model of inclusive growth to a new initiative in dairy farming. Known for its expertise in creating innovative business models, ITC had created shared value for societies, businesses and shareholders by leveraging synergies across businesses. However, the expertise required in dairy farming was unexplored, logistical issues loomed large and a lack of clarity surrounded the dairy development's integration with existing ITC businesses. Because of the complexities involved in diversifying and expanding to a new sector, ITC's chairman and his leadership team wondered whether they could once again create shared value.
The owner of a maple sugar farm and tourist facility must prepare the company books for the fiscal year according to International Financial Reporting Standards (IFRS) rules. The owner must decide how to account for operating and finance leases.