Suitable for MBA, Executive MBA, GEMBA, and executive education programs, this case uses CEMEX, a global cement producer based in Mexico, to set the stage for unfolding an analysis of a growth through acquisition strategy. It offers a discussion about the firm's overall strategy to acquire on a global scale instead of growing organically and provides an opportunity to introduce basic financial, marketing, and operational terms that can be explored in following classes. The material includes a PMI process that further allows discussion on that technique. The case opens with a conference call and another barrage of questions for CEO Lorenzo Zambrano about his bid to buy Australia-based Rinker Group in October 2006. Until this point, CEMEX has had a long-standing habit of buying businesses in emerging markets; this acquisition would be a departure from that strategy. If the deal goes through, it would be the single largest acquisition in CEMEX's history, and it would be among its few forays into a developed market other than in the neighboring United States. The company has grown exponentially and successfully. Why would this effort be any different? Was the acquisition a good idea or not? And if it was, how would Zambrano and his leadership team convince Wall Street and others of that?
As owner and CEO, Wim Van der Borght had grown Bananas in 8 years from a 4.5 million euro company into a 40 million euro group of companies with a range of field marketing activities in Belgium and the Netherlands. The core of the group consisted of two companies - Bananas and Demonstrate - which were operationally completely independent and acted as competitors in the market. The two companies had different strengths and different cultures. In August 2008, Wim needed to decide on the right degree of interaction or integration of Bananas and Demonstrate. He also wanted to expand the companies' activities to a more comprehensive marketing offering and needed to consider international expansion opportunities.
Roger Caracappa must negotiate a cost-saving, innovative proposal from a potential French supplier that could displace the otherwise satisfactory, long-time incumbent supplier. Shortly after being promoted to executive vice president of the Estee Lauder Companies with global packaging as a key responsibility, Caracappa had to assess a recent proposal he had received from a small French company that had patented a packaging innovation. The innovation could save the Estee Lauder Companies some $4-$5 million per year if Caracappa championed it, negotiated a deal to use it, and if it were adopted by Lauder's key brands. If the new packaging functioned as promised, the consumer would not perceive any change in the high quality, stylish packaging that was essential to the luxury image of the firm's brands. But if the new packaging caused production, delivery, or quality problems, the supposed savings would be quickly forgotten and Caracappa would bear a heavy responsibility both for the problems and for disrupting an otherwise satisfactory relationship with the long-time incumbent supplier.
After widely-publicized complaints of destructive guests and unreliable hosts, online apartment rental site Airbnb explores mechanisms to facilitate trust between guests and hosts. Flexible online reputation systems can collect and share information with ease, but Airbnb must decide which information guests and hosts should have to provide and how much flexibility each should have in selecting whom to do business with. A full-featured system could provide all the information users have been requesting, but would it be too complicated for routine use?
In 2010, Recreational Equipment, Inc. (REI) considered adding photovoltaic solar panels to the roofs of some of its facilities. This was driven by both financial and environmental considerations. In 2008, the company had added solar panels to 11 buildings in a project ("Phase 1") that was justified largely as a learning exercise. The new project ("Phase 2") would have to meet both financial and environmental objectives. The case describes the company's experience with solar power generation as well as providing representative assumptions for parameters in the financial analysis. An Excel spreadsheet is available for students, incorporating the basic analytical methodology used by REI.
A young and upcoming French executive in a global technology company is sent to Moscow as deputy managing director to turn around the Russia subsidiary. He must report to the subsidiary's managing director (a large reason for the organization's underperformance) and to corporate. In his first three months, he took steps to prepare the organization for change. Yet the lack of more tangible actions and results leaves him open to criticism from subsidiary employees and pressure from corporate executives. How can the young executive unfreeze the situation and get movement?
After several months into his turnaround of a global technology company's Russia subsidiary, a young and upcoming French executive reflected on how to institutionalize the subsidiary's transformation by further driving cultural change and breaking down internal silos. He realized that to complete the change he may need to continue into a second year. Yet the physical separation from his family had begun to take a toll. Had the executive done enough to institutionalize change or was it still too dependent on his personal relationships and the ability to build an internal coalition and exchange favors?
After 18 months as the deputy managing director of a global technology company's Russia subsidiary, a young and upcoming French executive prepared to hand over leadership. The executive reflected on what he had achieved and how as he considered next steps. He wanted to return to his native France, but the company requested that he go turn around another emerging market subsidiary. Should he go to India, ask for another assignment, or look at other opportunities outside the company?
The chairman and CEO of the Genzyme Corporation, one the country's top five biotechnology firms, has received a phone call requesting a meeting with the cofounder and principal of a large hedge fund that now has a 2.6% stake in his company. Before meeting with him, the CEO is aware that he needs a strategy for dealing with this "activist" investor with a track record of forcing out CEOs.
This case provides an historical description of the differences between the Apollo Space Program era and the Space Shuttle Program as a backdrop for the teleconference that occurred the night before the Challenger shuttle disaster. Roger Boisjoly (Morton Thiokol engineer and central character) tries to persuade NASA to postpone the Challenger launch that included Christa McAuliffe, the teacher participating in the Teacher in Space program. He is rebuffed by NASA management since the condition of gas blow-by existed on several successful launches. The priorities and constraints facing NASA led a culture of "fix and fly" that blinded them to the need for a major redesign of the solid rocket booster.
Toto Ltd. was a global manufacturer of kitchen and bathroom equipment, fixtures, and other related products. Headquartered in Tokyo, Japan, with a global presence, the company was a leader in product innovation in the kitchen, bathroom and plumbing categories. One such example was a product called "Washlet," an electronic toilet seat with multiple functions: heating, showering, drying, and deodorizing. The case asks the students to conduct research on their own to estimate a potential market size of the Washlet product line in both Egypt and the United States. The students are also required to present the findings to the class.
Novartis's investment in the start-up Proteus Biomedical gave the pharmaceuticals giant access to a technology allowing for the implantation of ingestible sensors in medicinal pills and, with the help of the sensors, the collection and wireless transmission of drug-compliance data to healthcare providers for the review of pre-determined health vitals. One application of the technology was the improvement of drug compliance: if, for some reason, such "smart pills" were not taken as prescribed, patients could be reminded to comply with the recommended medication regime. The case, which is brief and based on public information, summarizes the nature and magnitude of the drug noncompliance problem, describes some of the competing solutions to address the problem, outlines Proteus's technology in this context, profiles the Proteus and Novartis enterprises, and concludes by characterizing the challenge in front of Novartis as it decides which pill(s) to make smart and how best to market the smart pill(s). The proposed thrust
This case is intended to highlight entrepreneurial thought and action - a specific style of entrepreneurial leadership - inside the context of a large enterprise. Based on both primary and secondary research, the case protagonist is Mike Fisher, Sr., Director of Lean and Six Sigma at Best Buy. The protagonist as well as his direct reports were interviewed for the case, and articles were accessed to support the general environment around which the case was developed. The setting is the HQ of Best Buy, a large U.S. based electronics and appliance retailer. The case spans the years 2005 to 2011.
Matt Bruno, founder and general manager of ReSource Pro, left his job working for a New York City-based insurance program shortly after the World Trade Center bombing and arrived in China. Initially he planned to teach English, but soon the entrepreneurial spirit of the country caused him to begin exploring opportunities. He returned to New York and talked his former boss into allowing him to start a back-office services firm for their insurance company clients, which grew into ReSource Pro. By year-end 2007, ReSource Pro employed 250 people, of whom only 4 were U.S.-based. With aggressive growth plans, Bruno began examining potential cities in China for expansion. After narrowing his list of potential expansion sites to the five Chinese cities of Chengdu (the capital of Sichuan Province), Jinan (capital of Shandong Province), Nanjing (capital of Jiangsu Province), Suzhou (Jiangsu), and Wuhan (capital of Hubei Province), he now had to make a final choice.
It's a dynamic that plays out in industry after industry: One company makes a big acquisition, and rivals feel pressured to respond with deals of their own. But the authors' research in the tech industry suggests that alternative strategies often make more sense. They advise managers to consider three less direct responses and provide guidance on determining the best strategy.
Quick-and-dirty prototypes can help move projects forward. But many companies rapidly follow them with polished prototypes--and everyone focuses on the prototype, not on the remaining ambiguities about the problem the product is meant to solve or the obstacles in the way. This "innovation blindness" can delay a project or sink it altogether.