An analyst for a private equity firm has been asked to design a capital structure for the leveraged buyout of a security alarm company. Students are provided with an extensive financial model, which facilitates the analysis. Key issues in the case involve the design of covenants for the debt instruments and determining which alternative financing arrangement leads to the best rate of return while managing the level of risk.
An analyst at a New York based investment bank has been given the task of suggesting the offering price for a forthcoming initial public offering. The analyst must also summarize the risks and opportunities associated with an investment in the stock for use by the investment bank's sales force. The case is heavily focused on the comparable method of valuing a stock.
ITG CEO Robert Gasser wondered if the financial crisis had permanently affected the firm's business model. A leader in trade analytics and execution for institutional equity investors, ITG had grown since its establishment in 1987 in step with the dramatic rise in equity trading volumes. During 2009, however, investors curbed their equities trading, depressing ITG's heavily commission-based revenues, and earnings plunged by 63%, resulting in ITG's first unprofitable quarter since 1988. Gasser was convinced that ITG's challenges were not simply a function of shrinking trading volumes; 2009's downturn revealed limits of client willingness to pay for the value ITG delivered, and the infrastructure ITG had constructed to support clients with customized software tools and technical support had grown well beyond sustainable levels. With his management team, Gasser had developed a two part response to the challenge: a reduction in staff and a focus on clients that most valued what ITG offered. While significant cost savings goals would be realized in part through employee layoffs, he wondered about ITG's ability to deal with these changes. Adjusting its customer portfolio meant that ITG would be pulling back products from some clients while reaching out to others in new ways, and he was unsure how clients would respond.
MusicJuice.net is a new website designed to bring together musicians and a fan-base in order to raise finance for new bands. It enables musicians to bypass the large established record companies and their high royalty takes, while giving fans direct contact and involvement with exciting new acts. It is an example of a venture idea transported from one country (the Netherlands) and applied in a new and larger geographical setting (North America). The case illustrates the novel "crowd-sourcing" business model, which is designed to raise finance from customers rather than the entrepreneur. Most importantly, the case illustrates the challenges of starting new Internet ventures and the early stage founding issues that are involved. After a long and costly delay in establishing their website, the two founders of MusicJuice.net have struggled to generate any interest or even awareness amongst online musicians and fans, despite only limited competition from other players in the marketplace - a situation, which is already beginning to change. Students are asked what the entrepreneurs behind MusicJuice.net can do to raise awareness of their service and to generate enough customers to survive.
An analyst at a New York based investment bank has been given the task of suggesting the offering price for a forthcoming initial public offering. The analyst must also summarize the risks and opportunities associated with an investment in the stock for use by the investment bank's sales force. The case is heavily focused on the "comparable" method of valuing a stock.
The president of production at Hanson Productions, an off-Broadway production company, was faced with the same situation for every Broadway production: where to locate, how many seats, what to charge and how to promote and market the production. There are three separate venues, with three separate value propositions to the studio, case and audience. While bigger means more seats and more revenue for each show, there is a capacity percentage that must be factored in to the decision due to the increased rental costs. Smaller venues may lead to higher capacity percentages, but ultimately leave money on the table. The ticket prices must be set for advance sales; any change in price after this period will effectively hurt future sales - more so if the price is discounted. Determining a promotion partner may lessen the risk of a potential failure, yet cost more profit and affect the recoup schedule.
By 2010, China's economy faced a series of challenges that could threaten its growth and trade balance. This case presents a structure for students to discuss China's economy in the context of these threats. Prior to this time, there had been general feeling that China could continue indefinitely with its exceptionally high growth rate of approximately 10 per cent annually. The substantial gap between wages in economically advanced nations and China might continue to attract huge volumes of foreign investment indefinitely. This optimism was being questioned by 2010.
The development of the smart grid--the integration of traditional elements of energy transmission and delivery with information technology--heralds a new era in the power industry. Many new business opportunities will be created as the smart grid gets developed. What strategies should Cisco employ to become a leader in this industry? What obstacles and challenges must Cisco overcome to compete successfully in this new industry?
In 2006, the country manager for Alpen Bank in Romania, Gregory Carle, considers whether to recommend the launch of a credit card business. The firm rejected the idea several years earlier because of poor economic conditions in Romania. However, Romania is experiencing a period of economic growth after joining the European Union and Carle believes it is time to reconsider the opportunity despite continued skepticism within the company. Carle faces several important decisions before he can present his plan to the head of International Consumer Businesses. He must decide whether to launch a credit card business in Romania, how to position the credit card, and how to acquire new customers most effectively. This case is appropriate for use in the product policy module of a general marketing course, in a new product course, or in a services management course. Students are required to complete a quantitative assignment as part of case analysis.
After an incredibly volatile six months since Lehman Brothers declared bankruptcy, Finbar McCall contemplated his options. As the investment manager of RPG Prime Reserve Fund, Inc. (RPGXX), McCall had just heard the news that the U.S. Treasury was extending the availability of insurance for eligible money market funds. When the insurance was first offered in September of 2008, RPGXX immediately applied for coverage. McCall's dilemma in February of 2009, when an extension of the Treasury insurance was offered, involved weighing the cost of the insurance against the comfort it might provide to skittish RPGXX shareholders and the increased flexibility it would allow in investing RPGXX's assets. This case provides a brief history and explanation of money market funds, the phenomenon known as "breaking the buck," and how the government's assistance changed the landscape of money market funds in the last months of 2008 and into 2009.
In 2009, just 15 years after it was founded, the China Europe International Business School (CEIBS) has achieved the remarkable 8th position in the Financial Times Global MBA rankings. The case describes the short history of the school and the reasons for its success. It also describes the difficult challenges the school faces to maintain its position of leadership in Asia: stiff competition from schools in Greater China, South East Asia and South Asia; recruitment of high-quality faculty members; generating new knowledge that contributes to management practice not just in China but globally; and maintaining a robust economic model to ensure long term financial sustainability.
This case looks at the Ultimate Fighting Championships (UFC) and its parent company, Zuffa LLC (Zuffa), through the role of the recently hired chief marketing officer (CMO). As the CMO of the largest organization in the world's fastest growing sport, mixed martial arts, he faces many decisions about the future of the organization. The CMO must determine the best way to both manage the organization's ambitious international expansion initiatives and protect the UFC brand in new markets, while also preserving the experience for the league's core North American fan base. The CMO must evaluate the company's sponsorship relationships and develop a strategy to cope with increasing competition in both domestic and international markets.
It was June 5, 2008 and the senior promotions coordinator was beginning to feel the pressure of managing a major sponsorship event for the Toronto Sun, a daily newspaper publication in Ontario, Canada. She had recently been hired and had received the responsibility of organizing the Toronto Sun's presence in the city's annual Caribana Parade after her colleague failed to make any progress following months of handling the assignment. With only eight weeks until parade day (August 2), she felt challenged to make the company's float a success. The Toronto Sun earned its place in the parade as the primary print media sponsor for the event. Pulling the company's float from the biggest parade event in the city would mean forfeiting valuable marketing exposure. This case was designed for use in an undergraduate or MBA operations management or introductory project management course. Developed to aid instructors in facilitating discussions of key project management concepts, the case content allows for an analytical approach to covering the basic skills in planning a project, including precedence relationships, critical path, due dates, uncertainty (PERT tasks), crashing, etc. It can be used to teach students MS Project or other project management software. It can also be used for a less analytic, more managerial discussion of project management.
The case is a true story with disguised names, and was developed with the help of the protagonist, "Philip Chase," who runs a "successful" executive placement agency, Retail Personnel Flow (RPF). However, the case reveals that it is perhaps not as "successful" as he seemed to think. Philip has just learned from an employee that his company's biggest client, Winterplain, is about to offer the important Kash-n-Karry contract to RPF's main competitor, NY-Lon. At first, Philip thinks it is just a rumor, but later that day discovers that a prospective candidate has already been through several rounds of interviews with NY-Lon. The HR director at Winterplain confirms that there are service quality issues. She agrees to meet Philip the next day and sends a memo listing Winterplain's concerns with RPF for him to go through before the meeting; some of the points are valid but Philip is furious about the others! It was a happy ending: RPF won back the Winterplain account, including Kash-n-Karry. NY-Lon's foray into retail placements was short-lived since it could not cope with the complexity of the retail labor market. Learning objectives: The case provides participants with an understanding of the political dynamics of the relationship between professional firms and their clients. Participants get to appreciate the role of networks in improving one's social power and influence ability. The case can also be used in role-playing how difficult political situations can be resolved.
This case looks at the Ultimate Fighting Championships (UFC) and its parent company, Zuffa LLC (Zuffa), through the role of the recently hired chief marketing officer (CMO). As the CMO of the largest organization in the world's fastest growing sport, mixed martial arts, he faces many decisions about the future of the organization. The CMO must determine the best way to both manage the organization's ambitious international expansion initiatives and protect the UFC brand in new markets, while also preserving the experience for the league's core North American fan base. The CMO must evaluate the company's sponsorship relationships and develop a strategy to cope with increasing competition in both domestic and international markets.
Clayton Industries, a sixty-year-old U.S.-based firm in the HVAC (heating, ventilation, and air conditioning) industry, with nearly $1 billion in revenues, has gradually built a presence in a number of countries, including several in Europe. Peter Arnell, previously Clayton's successful country manager for the U.K., has been asked to take over the Italian subsidiary, which has recently been struggling on several fronts. Arnell must juggle the strategic objectives of his manager (the head of Clayton Europe) and of the firm's Wisconsin-based CEO while overseeing the day-to-day activities of the business in this new setting. Many of Arnell's challenges derive from his dual responsibilities of handling manufacturing as well as sales of Clayton products in his new home country.
In tough times, charities are often called upon to provide help and services that are normally rendered by governments or private entities. And we have been living in tough times. So, this seems to be a good year to investigate the research being conducted on altruism; specifically, charitable giving. Though this research does not focus solely on the antecedents or outcomes of altruistic behavior, it does help us to better understand how and why people respond to charitable requests.
In this article, we focus primarily on operational capabilities, developing the concept in a way that is easy to understand and visualize. We then briefly differentiate between operational capabilities and other closely related concepts, focusing on implications for managers.