Rawhide Brewery (Rawhide), a small Canadian brewery, is considering an opportunity to share its excess production capacity with another brewery, Tabby Cat Beer (Tabby). Three proposals are under consideration, each requiring a different accounting treatment by Rawhide. The first option is an arrangement under which Tabby would outsource its production to Rawhide. The second is a more complex arrangement under which both parties would invest in the common shares of a newly formed entity into which Rawhide would transfer its existing brewery operations and related debt. Because Rawhide would guarantee the debt of the new entity, it would make all key decisions. Under the third alternative, Rawhide would own 60 per cent of the common shares and Tabby would own the remaining 40 per cent, and all key decisions would be made jointly by both parties. The CFO of Rawhide has been asked to assess the accounting implications, advantages and disadvantages of the various options, taking into account the impact on Rawhide’s debt-to-equity ratio.
The president of a Chinese auto parts manufacturer is facing a crisis. For nearly 10 years the company's production lines have not been able to keep up with the orders. Deliveries are due, but the in-house stock is in short supply despite the production lines operating under extended hours. Quality issues have resulted in recent recalls in the United States, making the company's prospects worrisome. Faced with worsening international trade conditions and mounting problems, the chair and president decide to expedite the initiative of transforming their company into a lean manufacturer based on the Toyota Production System. However, the company has no in-house expertise or experience in lean production. The case presents a challenging situation faced by many companies as they move up the ladder of production competence and operational excellence. The major learning focuses on the adoption of Japanese production practices in an emerging Chinese company as it implements lean production.
The chief executive officer (CEO) of a large consumer health conglomerate faces a controversial situation. Loyal consumers of a feminine hygiene product are outraged when they learn that a highly coveted product has been permanently discontinued. Unable to find their favourite brand in stock, consumers create a website and post online petitions to boycott, or rather “girlcott,” all products made by the company. The company has already suffered serious consumer, investor and government scrutiny after having experienced more than a dozen product recalls in recent years. The CEO needs to develop a strategy to deal with the mounting consumer anger and public speculation, or risk the negative consequences of a militant, brand savvy, population of female consumers.
This exercise is one in a series intended to help students learn how to perform financial calculations in marketing contexts. Helmut Schmidt, product manager for Hohner Musikinstrumente GmbH & Co. KG, the world's foremost manufacturer of harmonicas, accordions, melodicas, and ukuleles, was sitting at his desk reviewing his first assignment from the company's senior executive team. Schmidt had been asked to calculate the break-even point for the company's flagship product, the Marine Band harmonica, under a number of different scenarios.
This exercise is one in a series intended to help students learn how to perform financial calculations in marketing contexts. Maru Keitou, a decorated former collegiate softball player with a PhD from Oxford University, ran Maru Batting Center in the Roppongi district of Tokyo's Minato ward. She had a deep knowledge of the game and of her customers, but she lacked a marketing background. She had recently signed up for a hosted customer relationship management service that would allow her to track the cost of acquiring and serving each of her four main customer segments. Using this data, she could determine which segments to target in the upcoming year. The exercise describes the use of calculations of customer acquisition cost, retention rates, and customer lifetime value in picking between market segments and various options for activities to acquire customers.
This exercise is one in a series intended to help students learn how to perform financial calculations in marketing contexts. Carolina Araujo had recently taken control of her family's business, Pepita Disco PPM, Uruguay's second-largest producer of beef-based dog food, treats, and toys. While she respected the company's nearly eighty-year history, Carolina felt that Pepita Disco had grown complacent with its market share and was basically preserving the status quo. Her plan was to re-energize the employee base and grow Pepita Disco's business faster than the overall market. This exercise poses a fictional problem about a company's efforts to predict the impacts of price, product cost, and spending moves on profitability.
This technical note provides an update on the use of customer data in marketing organizations and discusses how calculations of customer acquisition costs are made. It introduces the concept of customer lifetime value and provides examples of how it is calculated and how it is used. If desired, this reading is good preparation for students completing the Kellogg exercise "Maru Batting Center: Customer Lifetime Value," Case #3-112-003.
This technical note discusses learnings from organizations facing the challenges of managing brands across global geography. It talks about best practices for balancing the competing needs for local relevance and global consistency and scales.
This case is set in September 2007, and revolves around the Head of Sales & Marketing at Tata Chemicals Limited wondering how he could boost the market share of Tata Salt, one of the flagship products of the company. The dilemma is particularly interesting as Tata Salt had been ranked as the 'Most Trusted Food Brand in India' for the fourth year in a row and had very high brand equity - and yet its market share of 46% in the national branded segment and 18% in the total packaged iodised salt market, did not appear to grow in reflection of that high brand equity. Some of the key factors that the protagonist had to consider while devising a strategy was the complexity of the different markets within India across geographical areas, as well as the intensifying competition from other brands and types of salt.
This case study discusses the causes, consequences and implications of the nuclear disaster at Tokyo Electric Power Company's (TEPCO's) Fukushima Dai-ichi nuclear power plant that was triggered by a massive 9.0 magnitude earthquake and subsequent tsunami waves on March 11, 2011. There are two essential questions: First, "How could it have come so far?" Japan is rightfully considered a technologically advanced nation and is known for its diligence and high-quality products. While the combined earthquake/tsunami triggered the catastrophe, there are a number of deeper underlying causes that are described in the first section of the case. Second, "What next?" While the plant technically achieved cold shutdown with all damaged reactors reaching temperatures below 100°C, this did not mean that the Fukushima disaster was over. Instead, numerous consequences and implications extend into the future.
The case presents the opposition by a leading institutional investor in Goldman Sachs to the re-election of Jim Johnson to the board of directors of the company. The investor, Sequoia Fund, opposes the re-election citing Jim Johnson's prior track record as the CEO of Fannie Mae, which has been criticized for its role in the financial crisis and for serving on the compensation committees of two companies that experienced option backdating scandals. The case allows students to discuss issues surrounding director performance assessment, director elections, investor engagement with companies, and director reputation.
The president of a Chinese auto parts manufacturer is facing a crisis. For nearly 10 years the company's production lines have not been able to keep up with the orders. Deliveries are due, but the in-house stock is in short supply despite the production lines operating under extended hours. Quality issues have resulted in recent recalls in the United States, making the company's prospects worrisome. Faced with worsening international trade conditions and mounting problems, the chair and president decide to expedite the initiative of transforming their company into a lean manufacturer based on the Toyota Production System. However, the company has no in-house expertise or experience in lean production. The case presents a challenging situation faced by many companies as they move up the ladder of production competence and operational excellence. The major learning focuses on the adoption of Japanese production practices in an emerging Chinese company as it implements lean production.
Monsanto CEO Hugh Grant must guide his global agribusiness technology company into an uncertain future where food security, food safety, sustainability, and climate change will all impact the global food system.
For decades, management consultants and the popular business press have urged large firms to flatten their hierarchies. Flattening (or delayering) typically refers to the elimination of layers in a firm's hierarchy and the broadening of managers' spans of control. The alleged benefits flow primarily from pushing decisions downward to enhance market responsiveness and improve accountability and morale. Has flattening delivered on its promise? This article demonstrates that flattening management layers can have the opposite effect from their intention. In fact, flattened firms typically exhibit more control and decision making at the top.
Primary co-operative banks in India located in semi-urban and urban areas, known as Urban Co-operative Banks (UCBs), were traditionally centered around communities and work place groups. The main business of these banks was lending to small borrowers and business houses but the scope of their operations had increased greatly. The case describes Shamrao Vithal Co-operative (SVC) Bank’s inorganic growth strategy through acquisition of weaker/loss-making UCBS, and the problems and challenges faced by the bank. <br><br>It also examines the alternative of organic growth towards its objective of achieving a pan-India presence. One of the fastest growing Urban Co-operative Banks (UCBs) in India, SVC Bank was moving towards this objective. From a total of 38 branches in 2005, with a deposit base of Rs24 billion, the bank had grown to more than 100 branches with a total business of Rs100 billion by 2011. This growth had come in three phases. During 2005-2008, when government policy did not permit opening of new branches, SVC Bank had grown by acquiring three weak UCBs with 24 branches. When the curbs on organic growth were lifted in 2009, the bank aggressively added 26 new branches in two years. During 2010-11, it added 16 new branches and also acquired one UCB with one branch.<br><br>Since the vice-chairman of the bank had experienced the advantages and disadvantages of both organic and inorganic growth, he wondered which route made better sense and whether the bank should continue with the kind of aggressive expansion of the past six years.
HDFC Life Insurance (HDFC Life) was competing in a changing environment as established banks began entering the insurance business. Even though several brands in the category advertised with different positioning strategies, consumers were not receptive. HDFC Life commissioned a survey that seemed to lead the senior manager of digital marketing to a dead end. The challenge was to introduce a differentiation that could be associated with the HDFC brand despite the limitations of the category and the unreceptive mindset of the target segment. The case also takes into consideration the changing lifestyles of potential insurance buyers in India, their new interest in purchasing insurance online and the complexities of developing a services brand in an emerging market.
In 2010, approximately 20,000 barrels of oil being shipped south by Enbridge spilled into Michigan’s Talmadge Creek, contaminating wetlands around Battle Creek and the nearby county seat of Marshall, including a stretch of the Kalamazoo River. The timing of the incident could not have been worse. The pipeline had been carrying controversial tar sands oil at a time when Enbridge and its competitors were seeking to greatly expand their pipeline networks across North America. Moreover, the pipeline failure came on the heels of BP's much larger oil spill in the Gulf of Mexico, amid a period of heightened public intolerance toward oil spills. As a result, Enbridge faced massive public relations (PR) and regulatory challenges. Enbridge's reputation was clearly at risk since the company had promoted itself as a true believer in corporate social responsibility, which had raised the stakes when dealing with the industrial accident. The CEO of Enbridge faced an almost impossible challenge. He needed to prove to American citizens — and to industry regulators, market watchers, company shareholders and Enbridge employees — that his company deserved to be judged on its own merits, not as a Canadian version of BP. To meet this challenge, he needed to demonstrate that Enbridge was run by people who not only wanted to make amends but could be trusted to do so.