The Academy for Professional Development (APD) was launched in 1993, shortly after Perestroika and the turbulent time of Soviet disintegration. With the support of the Soros Foundation and a local Ministry of Privatization, APD became the most prestigious professional business education and consulting firm in the country. Assembling and training a "team of talents" is always difficult, more so in this case because of the nature of local business practices, the proliferation of professional service firms competing for business and state-director clientele, and the lure of opportunities in more stable environments. As APD gained experience in business education and consulting, different directors implemented new programs and brought different styles of management. As the organization experiences turnover of its professional staff, its founder and Chairman of the Board is concerned about the role he should take as the organization matures.
David Hartstein founded KaBloom in 1998 with the financial backing and encouragement of his partner, Thomas Stemberg, chairman and CEO of Staples, Inc. They wanted to increase flower purchases in the U.S. by changing the way Americans thought about buying flowers, and they sought to encourage U.S. shoppers to buy flowers not only on special occasions but as often as they bought bread and milk. In 1999 Inc Magazine named KaBloom a "Hot Start-Up." However, nearly three years and one recession later, KaBloom failed to live up to its forecast of grossing $15 million in 2000. KaBloom's early growth came to an end in 2001, with 34 shops. A dozen of the company-owned stores were not performing well, and their failure was eating into the profits of the other 22 stores. Hartstein chose franchising to better connect the stores to their respective neighborhoods and to reduce the high turnover of personnel at the store level, but new problems arose. He had to make a series of operational and structural decisions in 2005 after facing additional business challenges.
This case describes the crisis of a small deteriorating zoo located in a small community in an economically depressed region. The key decision point is defined at the beginning as the newly hired zoo director is preparing a turnaround plan. The students need to come up with a vision, a strategy and a concrete plan taking into consideration of the park's limited resources and the environment within which it operates. The case outlines the history of the fifth oldest zoo in the U.S. and its gradual deterioration in parallel with the local and regional economy. In the three years prior to the appointment of the new director, the decline had accelerated, mainly due to weak management and turmoil at the top. The facility had lost its accreditation by the Association of Zoos and Aquariums, and permanent closure was a realistic possibility although the board was resolved to keep the park afloat. Many shortcomings listed in the case had caused the zoo to lose its accredited status and they needed to be addressed as part of a turnaround plan towards reaccreditation. Also, the public needed to be assured of the zoo's viability. The start of the new season was only a few months away and the new zoo director had to sort through a multitude of problems and decide what to do, to develop a budget for the upcoming season and present a convincing strategy to the board. Most critical was to increase funding, yet the city and the county were unlikely sources given the poor state of the local economy.
This case highlights the dilemma of Nicholas, an accounting executive, who must decide whether to promote a disabled employee, Paul, to a management role. Paul is a strong performer; however he is frequently required to work at home on a laptop in order to manage the symptoms of Crohn's disease. Nicholas needs to decide whether this presents a barrier to Paul's ability to take on greater degrees of responsibility. He struggles with the legal and ethical implications of his decision. The impact of his decision on the rest of his team is also considered.
This case discussed an innovative for-profit social venture that connects talented artisans in developing nations with customers worldwide. Though raised in the US, co-founders and lifelong friends Roberto Milk, Andy Milk, and Charles Hachtmann have always been exposed to global influences. All three grew up with family from other countries. All three traveled a great deal in their youth. All three were multilingual. Similarly, all three were surrounded by people whose life mission was to make a positive social contribution. When Roberto meets his future mother-in-law, Armenia Nercessian de Oliveira, a professor and UN employee who has dedicated her life to helping others across the globe, the stage is set to launch NOVICA. While Roberto has an entrepreneurial vision about which he is passionate, he is also a thoughtful and patient leader. With NOVICA, he first builds, over the course of a decade, an executive team composed of his family and friends; then develops the most critical operational components of the organization; and finally scales the business to profit. The case ends with Roberto and his team facing a critical decision about how at last to propel the company from slow to rapid and substantial growth. By 2009, NOVICA has reached $15 million in annual revenue, helped better the lives of more than 75,000 artisans and their dependents worldwide, and retained the tight-knit founding team of its earliest days. The founders, however, want NOVICA to be a truly global presence, offering help in new parts of the world, in new ways - bringing in $100 million annually and benefiting at least 1,000,000 people. The case allows students to explore the role of profit and the centrality of sound business fundamentals in the context of doing good. It also motivates consideration of the prerequisites for and possible paths to organizational growth - asking what criteria should be considered in making growth decisions and what sorts of growth strategies are appropriate.
This case depicts the current and future challenges faced by The Tantramarsh Club, more commonly referred to as The Pub, Mount Allison University's (MTA) non-profit club. The case is set in April 2008 as the winter semester was finishing up in the small town of Sackville, New Brunswick, located on the southeast coast of Canada. The Pub had experienced several years of financial difficulties, however, the 2007 / 08 year was expected to be a financially sound year. The primary protagonist, Manager, Jonathan "Scooter" Clark, was worried about the organization's ability to sustain financial stability once The Pub moved to its new location, planned for August 2008. Members of the board, who were involved in discussions around the future of The Pub, were secondary protagonists in the case. The board and Scooter had to determine the most appropriate business model for The Pub as it moved to its new location. The case draws attention to a changing external environment and the impact this had upon The Pub. Competition in Sackville was friendly, but relatively fierce. The most significant consumer group for The Pub, students, were price sensitive, fickle and quick to move onto a different bar if a competitor offered something more appealing. National trends indicated less spending on alcoholic beverages and increased spending on food. Moreover, campus pubs across the country were changing their business models, moving from a focus on alcohol to food and diversified entertainment options.
A utility company must replace an aging coal-fired power plant. Accordingly, management must develop an Integrated Resource Plan that carefully explores all reasonable options considering the varied interests of many stakeholders, including electricity users, regulators, environmentalists, and the community in which a new power plant will be built. State regulators require that the utility company minimize the costs to ratepayers, but costs are difficult to determine given the potential for high taxes on carbon emissions as well as volatile fuel costs during the multi-decade lifetime of the replacement. The analysis is further complicated by the differences in project risk associated with the different technologies. The senior vice-president must choose carefully, because he will be required to defend that choice to many varied and passionate stakeholders. A capital budget analysis should be conducted that takes into consideration the many uncertainties associated with this problem.
Bill Young, president and CEO of MTI was in Victoria, BC at the time of the terrorist attacks on the World Trade Center on September 11, 2001. Bill knew that his Seattle, Washington-based market research firm faced numerous challenges in the aftermath of the attacks. The economic turmoil which was certain to follow a national disaster of this magnitude would have a serious impact on the business. This was particularly true since reliable market research depended heavily on consumer confidence and perceptions about the future. Young was unsure how to respond to the challenges he faced. Bill Young is attempting to develop revised cash projections and to determine whether staffing cuts and other cost-saving measures will be needed in order to maintain the financial health of the firm.
The A case describes the decision the BurMills textile company will make regarding whether to change from producing their own steam to outsourcing their steam production to Intrinergy. BurMills can calculate the present value of cost flows for three alternatives: producing their own steam from burning natural gas, outsourcing to Intrinergy with either a fixed price contract, or with a price contract that floats with the natural gas price at Henry Hub. In addition to the standard costs associated with steam production the case adds depth by providing the possibility of revenue from carbon credits. These credits are earned because the energy in the Intrinergy plant is created from biomass. A proper analysis will include a Monte Carlo simulation based on an arithmetic random walk for carbon credit pricing, a mean-reverting arithmetic random walk for Henry Hub natural gas spot prices, and other distributions. (A student spreadsheet is available to accompany this case.)
The B case brings Intrinergy's point of view into play. Intrinergy has two options for obtaining the biomass to produce steam for the industrial plant. They can use wood chips or sawdust. The wood chips are available at woodlands, essentially for free, although a capital investment in trucks is needed to bring the chips to the plant, and there is variable cost to chip the waste wood and transporting it to the steam plant. Sawdust is delivered to the plant at a price that follows a random walk. Once again a Monte Carlo simulation is needed to compare the alternatives. How Intrinergy fuels the steam plant does not matter to BurMills and will not change BurMills decision. On the other hand, it will matter to Intrinergy which option BurMills takes, since it affects the level and risk of the revenue to Intrinergy from the project. (A student spreadsheet is available for use with the case.
In early 2010, e-readers like Amazon's Kindle, and Apple's impending iPad, threatened to disrupt the book publishing industry. The case provides an overview of the industry, describes the broader trends regarding e-readers, and asks: how should major publishers like Random House respond to these trends?
The president of a small Toronto, Ontario consulting firm specializing in sponsorship and experimental marketing looks at adding a public relations division to the firm. Students are required to analyze the external environment, identify corporate strengths and weaknesses, identify qualitative pros and cons, prepare projected statements, look at the timeliness of the option, and evaluate the business plan before arriving at a final decision.
Hong Kong Disneyland has been struggling with lower-than-expected attendance rates for almost three years since its opening. Factors such as small size, inconvenient location, lack of unique features, insufficient appeal to adults and missing Chinese elements have been cited as possible causes. The Walt Disney Company and its joint-venture partner, the Hong Kong government, are negotiating about injecting extra capital to expand the park in order to attract more visitors. For a successful turnaround, the management has to figure out what went wrong in the first place. This case explores the possible reasons for the park's lackluster performance. It also covers the park's positioning and product offerings, the remedial actions taken by the company, an analysis of the market dynamics for both local and overseas visitors, and the competition faced by the park. The launch strategies and performance of Tokyo Disneyland and Disneyland Park in Paris are included in the case for comparison. This case was used in the 2nd McKinsey/HSBC Business Case Competition.
For several months, things had been spiraling downwards at Savage Beast, the music-recommendation company started three years before by Tim Westergren. The company's founder-CEO recently left due to pressures both at home and within the venture. Dozens of investors turned thumbs-down on the venture; salaries had been cut, and tensions had risen within the founding team. Now Westergren, the founder who has taken over as CEO, is facing even deeper pressures as he finds out about a lawsuit filed by former employees, and he is wondering if it is time to give up on ever achieving his vision. Note: The content of this version is the same as the content in the Savage Beast (A) case (809-069) but includes two directives in the text to students. At the end of page 8, the student is asked to pause and complete a one-question poll. The "page-8" poll asks, "At this point, should Tim persist in trying to build Savage Beast?" Yes or No, and why. At the end of the case, the student is asked to complete a second poll. The "end-of-case" poll asks, "Should Tim persist in trying to build Savage Beast?" Yes or No, and why. If you do not have polling capabilities, you should use the Savage Beast (A) case.
"Safety net" providers play an essential role in delivering health care to underserved populations in states such as California. As the prominence of the safety net increases, medtech innovators seeking to make a difference have begun to design and develop new technologies to help these providers improve the quality and cost effectiveness of their care. This note introduces practical considerations that should be taken into account when developing technologies targeted at the safety net. Specifically, by looking downstream in the biodesign innovation process to anticipate issues related to safety net economics, reimbursement, technology assessment, and purchasing behavior, innovators can begin to understand how to adapt their approach and create new technologies that are not just meaningful, but feasible for adoption in the complex safety net system.
The last year's rather adventurous journey from 2004 to 2009 had taught the fifth-largest toy-maker in the world - the LEGO Group - the importance of managing the global supply chain effectively. In order to survive the largest internal financial crisis in its roughly 70 years of existence, the management had, among many initiatives, decided to offshore and outsource a major chunk of its production to Flextronics. In this pursuit of rapid cost-cutting sourcing advantages, the LEGO Group planned to license out as much as 80 per cent of its production besides closing down major parts of the production in high cost countries. Confident with the prospects of the new partnership, the company signed a long-term contract with Flextronics. This decision eventually proved itself to have been too hasty, however. Merely three years after the contracts were signed, LEGO management announced that it would phase out the entire sourcing collaboration with Flextronics. This sudden change in its sourcing strategy posed LEGO management with a number of caveats. Despite the bright forecasts, the collaboration did not fulfill the initial expectations, and the company needed to understand why this had happened. Secondly, what could LEGO management have done differently?
The president and chief executive officer (CEO) of Goodwill Industries of Greater Grand Rapids Inc. (Goodwill) was analyzing a staff proposal to begin selling donated books online. Her initial response to the proposal had been to approve the idea without any reservation; however, some pointed questions raised during discussion at a recent board meeting caused her to revisit her support for the project. The CEO determined that to make a thoughtful recommendation about the proposal, she needed to evaluate three main criteria: 1) The strategic and financial fit of the proposal in relation to the current salvage buyers of Goodwill's books; 2) The operating and revenue needs of Goodwill's retail stores, and; 3) Alignment of the proposal with Goodwill's mission statement.
This case traces the attempt by the Liberal Government of Ontario, Canada, to introduce recycling fees on a large range of household products as part of the government's larger provincial waste management program. The Ministry of the Environment created an industry-funded, non-profit organization called Stewardship Ontario to oversee the regulation and collection of recycling fees in the province. In 2008, Stewardship Ontario began to levy recycling fees on a limited number of household products, fees that producers and retailers passed on to the consumers at the point of transaction. Ontario's consumers seemed to accept these fees as part of the cost of doing business in a province that was attempting to become a greener and less wasteful place to live. However, in 2010, Stewardship Ontario changed the fee structure on household products from a product-based to a material-based structure: products were now assessed a fee according to the kind and degree of material (chemical, metal, plastic) in the product. This change greatly expanded the number of products on which a recycling fee could be assessed, and it greatly complicated the fee structure for both producer and consumer. Consumers this time took notice of the new fees, and, objecting vociferously to the number of new fees and to the fee structure's lack of transparency, they called on the Minister of the Environment to scrap the program or at least to explain it clearly.