Swiss Milk is a dairy company. Its new manager is trying to explore ways to increase profitability and decides to use optimization tools (i.e. linear programming) in order to answer some of the questions he has about the company. Learning objectives: The minicase puts emphasis on interpreting linear programming spreadsheet solutions. The focus is on getting insights from sensitivity analysis and on looking beyond the "optimal solution".
Marianne, an analyst for Geneva Bank, has been asked by her boss, Laura, to look into the returns from loan interests. She uses linear programming to get more insights about the issue and she walks into Laura's office with nothing else but a printout of the Solver sensitivity report. Learning objectives: The minicase puts emphasis on going beyond the optimal solution and tries to help students understand how to use the sensitivity report provided by Solver in order to discuss different scenarios.
Founded in 2007, Kunwu Jiuding Capital Co., Ltd (hereinafter referred to as Jiuding) is a Chinese private equity (PE) firm that specializes in equity investments in late-stage, pre-IPO companies. Despite its brief history, the firm had secured a strong foothold in China's PE industry with its tremendous growth and dazzling investment returns. As of 2011, Jiuding had 260 employees and 6 RMB-denominated funds with 6 million RMB under management. While investors showed strong enthusiasm for the firm, Jiuding nevertheless had generated much debate in the PE community about its pioneering investment practice - known as the "PE factory" model where investment activities were carried out in a way similar to large-scale industrial production. This model has subverted the traditional PE business practice in many ways. Concerns were raised about whether or not Jiuding's business model was sustainable in the next ten years, given the fast-changing landscape of China's PE industry.
Xinxing Dutile Iron Pipes Co. is a Chinese state-owned enterprise (SOE) that manufactures cast pipe products and steel products. The company had grown to become a dominant player in the ductile iron pipe industry, holding more than 40% domestic market share and nearly 20% global market share. Historically, Xinxing Pipes' management control system was based on standard costs. This system worked well until the global financial crisis in 2008 where market demand for steel declined rapidly, resulting in intense price fluctuations in both upstream and downstream. The existing management control system failed to respond in a rapid and efficient manner. As a result, Xinxing Pipes reformed its management control system. The reform was based upon two core ideas: (1) keep close watch on the market, increase communication among departments, take coordinated actions, and respond quickly to external market changes; (2) transform the production divisions' cost-centered model into a profit-centered model." These two guiding ideas gave birth to the "Production-Supply-Sales Rapid Linkage" and the "Simulated Legal Entities".
Jack Goodwin had recently read an article on using futures contracts on individual stocks for hedging purposes. He held about 500 shares of Abbott Laboratories in his trading portfolio. While he was concerned about the share price falling in the short run, he was bullish over the long run. Of course, he could sell now and buy later, but that would mean he would have a taxable capital gain, which he wanted to avoid. He thought the single-stock-futures contracts offered on the OneChicago Exchange might present the opportunity to hedge the price risk.
Frank Johnson was contemplating his alternatives for the upcoming year. On the following day, January 12, the U.S. Department of Agriculture (USDA) World Agricultural Supply and Demand Estimates report was scheduled to be released. From Johnson's point of view, the biggest issue was the projected corn carryover from 2010. In November, the USDA predicted that for the first time in recent years the projected carryover would be about 827 million bushels, which would be the lowest since 1996. The low carryover boded well for corn prices. At that time, the USDA estimated a U.S. average cash corn price for 2010-11 of $5.20. With current spot prices at about $5.83 per bushel, he expected the outlook to actually improve but was concerned about the overall price uncertainty. The uncertainties related to the use of corn in ethanol production and demand for corn from China loomed large in his thinking. He needed to consider whether he should hedge all or some part of the following year's crop.
Charles Fogler was reviewing some analysts' reports on Whole Foods Market, Inc., that had been released earlier that day. It was September 21, 2010, and Whole Foods had closed at a price of $38.17. Two reports caught his attention.
Curtis "Hank" Barnette exited Bethlehem Steel's boardroom with a sense of calm and purpose. He loved Bethlehem Steel. He had seen it prosper and decline over the previous 30 years, and he had given most of his life to shepherding it through change. Barnette was a soft-spoken man with graying hair and a serene countenance. He paused at the plate-glass window and looked toward the massive blast furnaces and the miles of steelwork structures on the south side of town. This was American history. So much had happened here: so many lives, families, innovations, and purposeful interactions. And now a special division of the corporation would come to an end on his watch as chairman and CEO: The doors were closing on Bethlehem Steel's Structural Products Division located in the heart of the city of Bethlehem. Or were they? When one door closed, somewhere else a window opened-didn't it? The current business structure would end, but he had assets to work with: the land, historical artifacts, town, buildings, goodwill he'd spent a good part of his life creating, and the people.
The case highlights the impact of recent collective bargaining changes on the implementation of performance-based pay in a Canadian business school currently going through the AACSB accreditation process, the Edwards School of Business at the University of Saskatchewan. It is written from the perspective of a new faculty member who is engaged in a decision-making process surrounding the development of a points-based system designed to allocate merit pay. The process is forcing her to evaluate how she is structuring the allocation of her work, which is directly affecting her motivation toward coaching a student case competition team. Edwards historically used a judgment-based approach to the allocation of merit. The case outlines the rationale used in the design of the new points-based system, discusses the potential advantages and disadvantages, and highlights the perspectives of different stakeholders throughout the process, including the union, the faculty and senior administration at the university, college and department levels. The union is opposed to merit, so has outlined fairly stringent criteria for the awarding of merit in the new collective agreement. Faculty opinion is mixed surrounding merit more generally, and the implementation of a points-based system versus a judgment-based system in particular. Senior university administration is committed to the continuation of the merit system at the university as a tool to reward outstanding performance and to retain star faculty. The individual departments at Edwards are in the midst of finalizing the standards and procedures for allocation of merit-based pay. The protagonist is uncertain about how her department will proceed in the design and allocation of points, and how it will result in her re-allocating her work tasks.
This case provides readers with the opportunity to examine three different leadership styles. Amundsen picked his crew of only 19 men based on both proven skills, including skiing and cold-weather endurance, and his assessment of how the candidates would work together as a team. Amundsen also planned meticulously. He learned from the units and translated this learning into detailed preparations for the food and supplies, and worked with his team to develop new ways of doing things. His expedition was clearly much more focused on the singular goal of reaching the South Pole. Scott, by contrast, selected a crew of 65 men and hired a professional skier to train the crew. However, he failed to make the skiing lessons mandatory. Additionally, he grossly understocked his supply depots, which were also much more distant from one another than Amundsen's depots. Shackleton held in middle position in which he engaged in participative and inclusive leadership, but still failed to plan as well as Amundsen.
In 2011, Fonterra, the world's largest processor and exporter of dairy products, needed to reposition its business to take advantage of rising demand in emerging markets in Asia.
In 2009, Paul Sagan, CEO of Akamai, the leading online content delivery network with a 60% market share, needs to decide how to respond to aggressive entry in its market, whether and how to pursue the explosive growth in online video, and whether to stay with its distributed network model or move towards its competitors' more centralized design.
In 2009, Paul Sagan, CEO of Akamai, the leading online content delivery network with a 60% market share, needs to decide how to respond to aggressive market entry, whether and how to pursue the explosive growth in online video, and whether to stay with Akamai's distributed network model or move towards its competitors' more centralized design.
Red Bull spends an estimated 40% of sales on marketing, largely on sponsored events related to extreme sports. This brief case serves to frame an evaluation of Red Bull's marketing strategy in the increasingly populated energy drink market.
The case describes and discusses the organizational and strategic challenges of outsourcing research and development (R&D) activities from Denmark to China. Nokia Denmark was founded in 1996 as a subsidiary of the Nokia Corporation and contained the largest Nokia R&D unit, concentrating on the development of mobile telephones, outside Finland. In 2007, Nokia Denmark received instructions from corporate headquarters to drastically increase the number of mobile phones developed. Motivated by the need to release pressure on its in-house capacity, Nokia Denmark decided to outsource certain product development projects to the Taiwanese company Foxconn in a joint R&D (JRD) setup. Foxconn, one of the world's largest electronic component manufacturers, which was also developing products for many of Nokia's competitors, was given the responsibility of developing and testing selected standardized and less complex mobile phones, while more complex and sophisticated technology projects were retained in-house. However, by 2010, Foxconn had become a central figure in Nokia Denmark's product development process with responsibility for increasingly complex projects. Given the increasing importance of Foxconn for Nokia Denmark, the rising pressure from the corporate headquarters and the competitive market environment on products and costs, Nokia Demark thus faced a central question on how to proceed with the JRD. Three alternatives were outlined for the future of Nokia Denmark's JRD with Foxconn: the management could decide on scaling up, phasing out or continuing the status quo.
The case presents a review of the main facts related to the merger process experienced by three companies, Bancolombia, Conavi and Corfinsura, in the Colombian financial market during 2005 and 2006. The merger decision emerges from directors and senior executives visualizing an incoming significant market transformation - adjustment in industry regulation, improvement in international competence and consolidation of main players - and their further response in order to adapt to the new economic conditions. Considering the fact that the success rate of merger processes is not above 30 per cent, the sustained financial results achieved by Bancolombia from the very beginning of the integration process are robust indicators that invite exploration into what was done and how it was done.
This case study on India's wireless giant Bharti Airtel (Airtel) is the second of two cases on the company that show how the firm exemplifies many of the tenets set forth in the book The New Age of Innovation by CK Prahalad and MS Krishnan. Case B presents the students with the varied strategies that Airtel has pursued to become one of the most profitable wireless telecommunications companies in the world, despite the fact that it operates in one of the poorest countries on Earth. Airtel changed the industry by moving away from such standard metrics as Average Revenue Per User (ARPU) and has employed alternative measurements for success. It has also relied heavily on outsourcing non-core functions and designed unique Value-Added Services (VAS) for its varied customer base. The case asks students how Airtel can maintain its culture of innovation while growing quickly. How will it be able to remain agile, entrepreneurial, and flexible in the face of the necessary standardization that accompanies global expansion?
In mid-2011, the management of Brasil Foods, a leading Brazilian branded foods producer and protein exporter, is evaluating strategies for international and domestic growth. The team has just received approval from Brazil's antitrust authorities to complete the merger of Perdigao and Sadia, the two massive food producers that had combined to form Brasil Foods in 2009. Now, the team is free to focus on their ambitious plan to double revenues by 2015. Domestically, the plan calls for Brasil Foods to maintain its allowed retail market share and expand its presence in the fast-growing food service sector. Internationally, the plan sets out a vision of Brasil Foods evolving from an exporter to a true multinational. The team believes their operational expertise and scale combined with Brazil's booming economy and vast agricultural resources form the ideal platform for achieving their vision. Yet, amid a wealth of possibilities, they face tough choices, such as which emerging markets to pursue first. They also face serious personnel issues, including integrating employees from Perdigao and Sadia-longtime industry rivals-and developing an international team that understands foreign markets.