Bill Casey had a suspicion the sporting goods chain he managed was losing sales because of inconsistent customer service. To quantify customer engagement issues, Casey decided to work with a start-up that analyzed interactions between customers and employees based on security video footage. While Casey realized that statistical process control is used in manufacturing and engineering to identify variation in a process, he wondered if the method would work for a retail business. In this case students learn how statistical process control studies are built and applied, and consider Casey's analysis to determine how his business might improve its customer engagement, as well as the risks in implementing the methodology.
PunchTab was a Silicon Valley startup founded in 2011 that was developing an Internet-based turnkey customer loyalty program for website owners, mobile applications developers, and brands. Founder/CEO Ranjith Kumaran must make strategic decisions about how to fund PunchTab's early operations and growth given the many options available: individual angel investors, super angel funds, incubators, and seed funds inside traditional venture capital firms.
Healthpoint Services sought to address rural India's shortage of quality and affordable healthcare with a multi-service platform that comprised telemedical health clinics called eHealthpoints, clean drinking water, a diagnostic lab, and a pharmacy. Could they convince rural Indians to leapfrog from local healers to telemedicine? And could they convince Investors that their capital Intensive, bundled offering was a high-growth, self-sustaining venture? Healthpoint Services grappled with multiple challenges: changing mind-sets of patients and investors, generating traffic at their eHealthpoints, expanding their product portfolio, and growing within and outside India.
David Swensen and the Investments Office staff must decide whether to continue to allocate the bulk of the university's endowment to illiquid investments-hedge funds, private equity, real estate-given the impact of the recent market turmoil. The case explores the risks and benefits of a different asset allocation strategy and also considers how to classify some of the different assets. It highlights the issues around allocations across different subclasses, e.g., between venture capital, hedge funds, and real assets.
The purpose of this case is to help students critically evaluate the market value of LinkedIn's stock following its recent IPO. In the context of strong investor appetite for social media companies, LinkedIn is the lamp bearer among U.S. companies in that industry that are considering tapping into public markets. The case can serve to illustrate the challenges of valuing an early-stage high-growth company with a great deal of uncertainty about fundamental value and how quoted prices might reflect expectations that are hard to justify. Regardless of which valuation method is employed (e.g., residual income, discounted cash flow, multiples), the case provides a platform (i) to map the firm's key success and risk factors into forecasts and estimates for its future performance and cost of capital, and (ii) to critically assess the implied assumptions underlying the market's expectations. The case is best suited for a course on business valuation at all levels (undergraduate, MBA, executive programs).
Mike Mayo takes on Citigroup (B) is a supplementary exercise to go along with Mike Mayo takes on Citigroup (A) case and is designed to give students an opportunity to understand the creation of deferred tax liabilities (DTLs) and the life cycle of a DTL using an example based on the difference between Modified Accelerated Cost Recovery System (MACRS) depreciation which is allowed for tax purposes, and straight line depreciation which is typically the method used for financial statements.
Turbine, Inc., is releasing a massively multiplayer online (MMO) game, The Lord of the Rings Online, based on the popular film trilogy. The firm's CEO needs to consider market conditions and game characteristics to build a business model for the game, decide which type of consumers to target-the hardcore gamers or the casual gamers-and form the optimal pricing scheme. One particular challenge he needs to face is that there is a dominant incumbent in the MMO market that Turbine enters, World of Warcraft. The case encourages students to explore the nature of the competition in the MMO market and to define characteristics of a successful business model.
On the night of April 20, 2010, a series of explosions rocked the Deepwater Horizon oil rig in the Gulf of Mexico. Gas in the Macondo well had surged upward unexpectedly, causing a mix of drilling mud and seawater to spew uncontrollably into the air much like a volcanic eruption. Eleven crew members died during the explosion. The nation mourned their loss, and people watched as BP struggled to contain the environmental damage. Millions of barrels of oil spilled into the Gulf of Mexico in the weeks that followed. The federal government relied on BP to manage the accident's aftermath, in part because government officials lacked the expertise required to stop the spill. Meanwhile, BP downplayed their responsibility for the failure. As the firm failed repeatedly to stop the spill, the public became angry. This industrial disaster became the largest offshore oil spill in U.S. history. Drawing on the Presidential Commission's investigation, as well as numerous journalistic accounts, the case provides a detailed description of the events leading up to this catastrophic accident. Readers examine the key decisions that BP and its partners made as they drilled this well. They discover the alternative choices that could have been made and learn about the disagreements that took place (as well as those that failed to surface). Moreover, the case provides an opportunity to examine how BP's history and organizational culture shaped the way those decisions were made. The case describes how Tony Hayward and his predecessor, John Browne, led the firm and shaped the culture during the past two decades. In addition, the case explains how the regulatory environment and political forces shaped decision-making in the oil industry. The case concludes by examining the aftermath of the accident, particularly the public relations miscues that BP experienced as it tried to manage the crisis.
On the night of April 20, 2010, a series of explosions rocked the Deepwater Horizon oil rig in the Gulf of Mexico. Gas in the Macondo well had surged upward unexpectedly, causing a mix of drilling mud and seawater to spew uncontrollably into the air, much like a volcanic eruption. Eleven crew members died during the explosion. The nation mourned their loss, and people watched as BP struggled to contain the environmental damage. Millions of barrels of oil spilled into the Gulf of Mexico in the weeks that followed. The federal government relied on BP to manage the accident’s aftermath, in part because government officials lacked the expertise required to stop the spill. Meanwhile, BP downplayed its responsibility for the failure. As the firm failed repeatedly to stop the spill, the public became angry. This industrial disaster became the largest offshore oil spill in U.S. history.<br><br>The case provides a detailed description of the events leading up to this catastrophe. Readers examine the key decisions that BP and its partners made as they drilled this well. They discover the alternative choices that could have been made and learn about the disagreements that took place (as well as those that failed to surface). Moreover, the case provides an opportunity to examine how BP’s history and organizational culture shaped the way those decisions were made. The case describes how Tony Hayward and his predecessor, John Browne, led the firm and shaped the culture during the past two decades. In addition, the case explains how the regulatory environment and political forces shaped decision-making in the oil industry. The case concludes by examining the aftermath of the accident, particularly BP’s public relations miscues as it tried to manage the crisis.
This case describes how Cold Stone Creamery created a business model for a premium customized ice cream experience. It describes the company’s value proposition, growth strategy, and competitors, and poses the question of whether the company could continue to attract new franchisees.
On July 6, 2011, the communication director for the Canadian Cancer Society (CCS) in Toronto, Ontario, was faced with a challenging situation. The Canadian Broadcasting Corporation (CBC) had just released an online article that focused on the 2011 CCS budget and how the CCS allocated millions of dollars each year. The article provided details on how the proportion of donation money that the CCS spent on cancer research each year had decreased from 40 per cent in 2000 to under 22 per cent in 2011. With the CBC report circulating in both television and online media, public speculation into the CCS’s financial management of public donations was starting to grow. It was clear that the CCS communication team would need to respond. A communication strategy would need to be developed for the CCS to follow, along with a press release to be posted the next day on the CCS website.
This note discusses the appropriate accounting treatment for stock-based compensation under International Financial Reporting Standards and briefly examines the differences relative to Accounting Standards for Private Enterprises. Stock options and restricted stock are discussed specifically, with an example of each provided. The impact of vesting conditions is detailed, including service conditions, market performance conditions, and non-market performance conditions. Further, the note addresses the accounting significance of cash-settled versus share-settled stock-based compensation. A brief discussion of disclosure requirements and income tax considerations is also provided. Finally, the note gives background on the recent developments of stock option backdating and say-on-pay requirements.
This note is an introduction to simulation in Excel and VBA. The note uses examples to demonstrate different methods of doing simulation in Excel and VBA (Visual Basic for Applications). Concepts explained in this note include random number generation, probability distributions, data tables, loops and arrays, histograms, and descriptive statistics.
The founder of Sushilicious, a new sushi restaurant in California, is wondering how to make his second year in the business even more successful. His objective is to grow the current base for his restaurant with a limited marketing budget. The founder has had success building his first restaurant using a combination of social media tools and now wonders how he can build upon his current marketing strategy. Furthermore, should he franchise the Sushilicious concept, open a second restaurant, or focus entirely on the first location?
Since 1988, Nouveau Event Planning has been operating the largest wedding expo in Windsor, Canada, an event called the Wedding Extravaganza. In 2001, the Wedding Odyssey became the second wedding expo in Windsor, and started to pose a significant threat to the Wedding Extravaganza. Now in 2011, the owner of Nouveau Event Planning must make strategic decisions involving pricing, customer retention, and selection of an appropriate target market. She must also determine the best course of action for the exhibition through analysis of the competitive landscape and future potential of the wedding industry.
Moda Operandi is a startup in the fashion industry. The firm organizes online trunk shows of designers' collections, allowing its members to directly order clothes from the collections shown in Fashion Weeks all over the world. Moda Operandi conveys the preorders to the designers and the members receive their clothes six months later. The founders of Moda Operandi - Aslaug Magnusdottir and Lauren Santo Domingo - believe that the firm has the potential to address and eliminate inefficiencies in the fashion industry. While the founders plan to include editorial content on the site, the question is - can Moda Operandi succeed despite removing an essential piece of the fashion industry?
The case is useful for teaching students the structure of creative industries and the issues to consider when attempting disruptive innovation and entrepreneurship in these industries.