In early 2013 the leaders of McKinsey & Co., were reflecting, as they did periodically, on the path forward for their firm. Founded in Chicago in 1926 by "James O. "Mac" McKinsey," with only a small staff in one office, the firm had grown to be a global company with more than 17,000 firm members, including more than 9,000 consultants. It was arguably the world's preeminent management consulting firm. This case describes the history of events and decisions which have led to this enviable record of success, and poses the questions before the firm's senior leaders in 2013. What should be their path forward? Could the firm continue to grow successfully with its current strategy, organization, and culture?
Emily Wang, an analyst with Future Securities, a Shanghai-based investment firm, is given the task of making stock purchase recommendations to her supervisor from a number of Chinese common stocks. One stock in particular, Hubei Lantian Co., Ltd. (Hubei Lantian), caught Emily's attention as a likely purchase recommendation. Before making her recommendation decision, Emily felt she needed to look deeper into the company's operating performance and financial condition. To this end, Emily performed a financial ratio analysis comparison of Hubei Lantian's financial ratios to those of selected peer companies. Hubei Lantian's major revenue sources were aquatic products (fish, ducks) and beverages (lotus root juice, mineral water). Guided by these revenue sources, Emily selected the financial statements of four companies in the fishery industry and three companies in the food and beverage industry to perform a peer company comparative financial ratio analysis. The case reproduces the individual company financial ratios Emily computed for her comparative ratio analysis. The student's task is to use these ratios and whatever insights they can develop from the case data to assess Hubei Lantian's individual and comparative performance, financial condition, and quality of earnings. In addition, the case assignment asks students to suggest possible lines of inquiry Emily might pursue if given the opportunity to conduct field research. At the end of the class, students are asked to make a stock recommendation.
Darden Business Publishing provides its own field case as a consultant is enlisted to help it streamline production using Lean principles. The case provides an overview of continuous improvement concepts applied in a service setting.
A consultant is enlisted to help an educational publisher streamline production using Lean principles. In the B case, the group prioritizes the problems it will address and identifies how success will be measured.
This third part of a three-part case provides an epilogue to the CPI initiative. One year later, the editorial office continues to see positive results.
Anna Chu, an MBA from Singapore Management University, and new-hire to Temasek Holdings Pte. Ltd., was excited by ANB-AMRO's assessment of ABC Learning Centres Limited (ABC), an Australian company operating childcare centres. Chu had been hired to analyze companies in which Temasek acquired shares and to report regularly to the fund's service sector portfolio manager. In May 2007, Temasek, Singapore's sovereign-wealth fund, acquired 12% of ABC Learning Centre's equity for $A7.30 per share, or a total purchase price of A$400 million. If ANB-AMRO's assessment of the intrinsic value of ABC's shares proved correct, Temasek's investment would be very profitable. But some observers questioned aspects of ABC's business model, particularly its contracting process for raising capital and outsourcing services for the learning centres. By January 2008, ABC Learning Centres Limited had become the largest operator of private childcare centres in the world, with more than 2,200 centres in Australia, the U.S., U.K., and New Zealand. ABC's growth strategy of cobbling together a global empire of daycare centres had been financed with short-term debt. In January 2008, the company announced semi-annual earnings that were lower than analysts' forecasts, sending the company's stock price into a tailspin.
On November 2012, a fire in a garment factory near the Bangladesh capital of Dhaka killed 112 people and injured several hundred. The factory was owned by Tazreen Fashions Ltd., a subsidiary of The Tuba Group, a large Bangladeshi garment exporter whose clients included Wal-Mart, Carrefour, C&A, Kmart, and Li & Fung. The factory opened in May 2010, employed about 1,500 workers, and had sales of $35 million a year from the production of clothing such as T-shirts, polo shirts, and fleece jackets. In the aftermath of the fire, questions were raised about accountability. Some people argued that the factory owners and the regulators who establish Bangladesh fire safety standards were responsible. Others said that Western clothing companies and retailers who rely on low-cost clothing manufacturing in Bangladesh should ensure that their suppliers have safe factories or take their business elsewhere. Some assigned the blame to Western consumers' desire for cheap clothing that forced retailers to constantly look for low-cost manufacturing locations.
The case discusses LinkedIn's corporate culture in 2012-2103 and the importance the professional networking company put on maintaining that culture as it dramatically expanded in headcount domestically and internationally. LinkedIn's leadership believed its culture was its competitive advantage. The company fostered creativity, innovation, and a collaborative and open working environment, embraced humor, and was results oriented. LinkedIn sought to hire staff who wanted to make a positive lasting impact in the world and who valued integrity. To build and grow the corporate culture, two programs were designed to inspire creativity and collaboration: 1) Hackdays, in which teams of engineers worked to find solutions to problems they found personally engaging; and 2) Incubator, in which a team could pitch a product to the executive staff and potentially get time to turn the idea into a reality. Maintaining the culture also meant that employees were given a day off every month for personal development. LinkedIn Analytics data was used to measure overall strategy and results as well as employee satisfaction; "All Hands Meetings" twice a month included fun activities and some tiebacks to the company's culture along with reviewing the company's operating priorities and progress; and social impact programs were given a high priority. LinkedIn aimed to hire and promote from within, and when hiring externally looked for evidence of collaboration, humor, and passion. New employees were assigned a personal mentor, and all employees were part of initiatives to help colleagues learn new skills. The company's leadership had to figure out how it could maintain or modify these activities as it quickly grew.
A sophisticated technology company located in Mississauga, Ontario, began operations on February 1, 2011. Initially, the company raised funds through the issuance of common stock. In mid-2011, new software development was put on hold due to increased concerns over patent protections. In June 2011, the company sought appropriate investment vehicles for its excess cash, which would provide investment income over a set period of time.
The sole shareholder of a national supplier of evergreen trees is expanding its product line. This expansion requires a $6.5 million investment. The company decides to finance this expansion through the issuance of bonds and must record the accounting entries involved with this issuance, along with the related interest payments and amortization of the bonds.
Over the years, Zingerman's Community of Businesses (ZCoB) has regularly won accolades and awards - including being named "the coolest small company in America" by Inc. in 2003 - for its food, service, mail order catalog, training, and overall success. This case shows how Zingerman's went from a single delicatessen in 1982 to nine unique but complementary companies with combined revenues of $45 million in 2012. It details the novel methods ZCoB employs to create "a great place to eat and work" and touches on the challenges it faces moving forward. This case can be used in conjunction with Zingerman's: New Business Development and Zingerman's: Broad-Based Ownership, Governance, & Sustainability.
Amid worldwide market and economic uncertainty, Tesla debuted its stock in June 2010 on the NASDAQ Stock Market (Ticker Symbol: TSLA). The stock price jumped over 40 percent in its first day of trading to close at $23.89 in an upsized deal that valued the company at $2 billion and raised over $226 million. It was the first initial public offering by an American automaker since Ford's debut in 1956. While the primary market showed strong enthusiasm for the stock, the secondary market was much less convinced. Concerns were raised about the long-term viability of the company stemming from a limited operating history, a long history of losses, liquidity issues, unreliable consumer demand, expensive battery technology and competition from traditional automakers. As a result, the stock was frequently the subject of high short interest, a predictor of lower investment performance. The question plaguing investors was: were the short-sellers correct in their bearish sentiment, or was a short squeeze imminent? This case describes Tesla's road from founding to outsourced manufacturing of the Roadster, the first fully electric sports car, to in-house capacity production of the Model S, its highly regarded fully electric luxury sedan. Specifically, it focuses on the long-term viability of the growth company along with questions related to quality of earnings.
In early 2010, Robert Griffiths, Counselor for Economic Affairs at the U.S. Embassy in Bangkok, braced himself for the possibility of serious diplomatic fallout with Thailand's government. Griffiths was in charge of providing the analysis on human trafficking in Thailand for the U.S. State Department's annual Trafficking in Persons report, but with a steady rise in victims of trafficking, Thailand was at risk of being put on the State Department's "watchlist" of countries making inadequate progress. For the Thai government, which took pride in its counter-trafficking efforts, being placed on the U.S. watchlist would constitute humiliation by a longtime friend. And for Griffiths, a senior representative of the U.S. Foreign Service in Thailand, provoking the host government's ire could imperil not only future collaboration against human trafficking, but also important engagements on trade, intellectual property and security. The case traces the hard realities of fighting human trafficking even when close allies, like the U.S. and Thailand, share similar aspirations. With an in-depth profile of the U.S. legislation against global human trafficking, the case offers an insider's view of the charged diplomatic engagement between the two countries in 2010. Case number 1991.0
When Solyndra, a California-based solar panel maker, filed for bankruptcy in 2011, the U.S. government was left with more than half a billion dollars in unpaid debt. The bankruptcy was a major embarrassment for the Obama administration which had touted renewable energy companies like Solyndra as the wave of the future, and had invested billions of dollars in government loan guarantees to promote them. The Chinese government, however, had outpaced the U.S. in providing loan guarantees and subsidies to solar manufacturers and helped transform the country's nascent solar manufacturing industry into a world leader. Chinese dominance in the solar market ultimately triggered a high-stakes trade war between the United States and China but neither country could contain the massive downturn in the solar market that began in 2012. The case provides an in-depth account of the complex and often competing agendas on climate change, industrial policy and free trade which fueled the politically charged trade battles between the U.S. and China. Against the backdrop of the global environmental challenge, the case includes details on the Obama administration's signature energy subsidy program and the factors that led to Solyndra's collapse. It also traces the rise of China's solar industry as well as the trade complaints made by the U.S. against China at the World Trade Organization and the subsequent Department of Commerce decision to impose penalties against Chinese solar panel makers.
This technical note explores open innovation--initiatives that are executed with organizations or individuals outside the typical boundaries of the R&D organization. Through a broadening of the interpretation of open innovation, the note aims to help managers who are trying to be more open with their innovation initiatives. Understanding what works or what doesn't work in different settings helps answer questions such as these: What types of projects are good candidates for open innovation? What should an open innovation portfolio look like? Or, more generally, how should firms manage open innovation initiatives?