What accounts for the dollar's late-2008 surge against the euro after a multiyear decline? In this case, students consider whether the late-2008 dollar appreciation was an aberration, and what may have caused it. Would this trend reverse, or would global currency market trends continue to propel the dollar? Suitable for both core and elective MBA courses in global financial markets, this case explores factors pointing to further euro appreciation and to others favoring the dollar. Sorting through mounds of evidence is necessary before forecasting the exchange rate's likely path. Filtering that evidence requires both relatively standard thinking about FX markets and an analysis of past and prospective international capital flows.
This is the third case in a series that is appropriate for courses in entreneurship and small-business managment. It presents common issues that often arise in situations regarding the choice of a successor to run the family business, including the founder's reluctance to "let go," sibling rivalry, gender discrimination, and the eldest son's feeling of entitlement. In this case, the particular issue is whether the family should compromise in picking the CEO and chairman of the board. Follows UV2037, and UV2038, and precedes UV3938.
This is the last case in a series that is appropriate for entrepreneurship and small-business management courses. At issue is how to balance personal financial needs of stockholders in a family business with the business's need for capital. The problems of how to include family shareholders who do not work in the business in financial distributions and whether families should create different classes of stock to pay different dividends to different classes of family shareholders are also part of the mix. Follows UV2037, UV2038, and UV3937.
This case could be used in entrepreneurship, strategy, and small-business courses. It presents such classic issues regarding successful start-ups as: how to choose from a multitude of growth opportunities; how to pace growth so as not to dilute quality control and financial risk tolerance; and how to choose a strategic focus.
This case could be used in entrepreneurship and managing a small business courses. It describes how an entrepreneur grows her innovative idea into a successful business while managing the risks, the pace, the financing, the channels of distribution, the quality of manufacturing, and the customer concentration associated with it. The case shows how a business grown at a slower-than-usual pace was able to survive the risks.
This case illustrates the problems of a small hydroponic produce company trying to achieve breadth and depth of distribution for its product. The company is considering going around traditional channels and selling directly to stores and restaurants. The economics of the proposition are central to the case.
A finance manager at a large pharmaceutical company is on loan to a new new subsidiary, leading to an ambiguous reporting structure. When an executive three levels above him wants information his temporary supervisor has deemed confidential, his career appears to hang on what he does next. Developed for use in an MBA organizational behavior course, this case would work well in an executive education class on organizational design, career development, or leadership. While the events and people are real, the names of participants and the company are fictional.
Adam Root, for as long as he could remember, wanted to be a doctor like his father. As a single parent, his father raised four children. Root idolized his father. Root was an outstanding student in high school and in medical school. After completing his residency, he joined a small private primary care practice in the Boston area. The practice grew because of Root's significant contribution. After a 10-year period, the practice had grown in excess of 40 practitioners. But Root was spending almost every waking hour devoted to the practice. He finally reached the point of "burnout." He was spending little if any time with his family and was exhausted. He realized he had to do something and yet wasn't quite sure what to do. This is the A case in a series of three cases (B case: UV3948 and C case: UV3949).
With a change in management in 2005 came a radical reorganization and the announcement of several new strategic initiatives. Among the initiatives was the establishment of the Vestas Technology research and development (R&D) business unit with an aim of achieving global leadership in all core technology areas and, consequently, strengthening the core competence for the company. By 2008, Vestas had succeeded in setting up a global R&D network with R&D centres in Denmark, the United Kingdom, Singapore and India, and, in early 2009, a centre was opened in the United States. This transformed Vestas into a high-tech company and put a greater emphasis on its technological innovations.
A fourth year business student prepares for an interview as an assistant marketing manager with one of the world's largest electronic conglomerates. To help secure the position, he develops a marketing plan for the Canadian launch of a new product. This case serves as an introduction to marketing management at the undergraduate level. Students can properly analyze this case after having been introduced to the 4 Ps (product, placement, price, promotion) and or a marketing framework. Students are required to complete the following: 1) an industry analysis, 2) a corporate size-up, 3) a consumer analysis, 4) a competitive analysis, and 5) a marketing plan design.
At what point in a recession should the Fed institute an arguably risky expansionary monetary policy-namely, aggressive Fed purchasing of long-term Treasury bonds? Federal Reserve Board Chairman Ben Bernanke faced this question in 2009. Suitable for both core and elective MBA courses in global financial markets, this case examines the risks associated with a policy so perilously close to monetizing the budget deficit. Students consider the factors behind the current and prospective levels of U.S. long-term interest rates from Bernanke's perspective. Already, the Federal Open Market Committee had lowered the federal funds rate from 5.25% in 2007 to roughly 0%; it had also begun an almost unfathomable effort to free up frozen credit markets and easing credit to loosen monetary conditions even further.
A freelance geologist was asked for advice regarding two mining claims to property on Sturgeon Lake, near Thunder Bay, Ontario. Specifically, he was asked if there was enough gold on the property to pursue an economically feasible mining opportunity. The geologist determined that an analytical approach would best aid the analysis of the multiple factors he would need to consider in arriving at a decision about whether or not to proceed with the mining operation. The first stage in ore extraction involved building an access road, and the second stage was to implement a drilling program. There was considerable uncertainty surrounding the costs and actual feasibility of completion of these stages; yet only when these stages were completed could actual mining of the property begin. If mining proceeded, it was assumed it would take 10 years to extract all the gold from the site, and the total amount of gold in the mine would be extracted at an even rate over the 10-year period. Mining costs were assumed to be $30 an ounce, and the geologist used a discount rate of 20 per cent before taxes when evaluating projects.
The head of the Green IT team at Wipro Ltd, a leading IT services company headquartered in Bangalore, India, is facing dilemmas with regard to the company's goal of becoming carbon neutral by 2014. The green computing program has been in operation for over a year at Wipro, but the strategy remains inadequate. On the positive side, a strategy is in place, an organizational structure has been put together and virtual staff members have been enlisted. However, the company has not yet developed a core set of skills in green computing. A shared belief is not resonating across the organization, there are no systems with which to measure and monitor the progress of green computing, and execution is falling short. This case provides background for understanding the inception and implementation of Wipro's green strategy and enables students to analyze the situation from the perspective of a team leader who is expected to deliver results.
Venture capitalist William Doyle must raise $35 million for a portfolio company with a promising, novel cancer therapy, just as global capital markets are imploding in the fall of 2008. NovoCure, Ltd., has developed an electrical-field-based therapy, called Tumor Treating fields, for the treatment of cancerous tumors. The therapy has shown significant efficacy with no side effects after five years of testing in human patients. Doyle believes NovoCure has the potential to become an important company with a major new cancer therapy platform, but must complete pivotal (Phase III) clinical trials and receive FDA approval. Doyle's venture capital firm, WFD Ventures, has invested $25 million in three rounds to fund pilot clinical trials for glioblastoma and other non-small cell lung cancer, and the first pivotal clinical trial for glioblastoma. Additional financing is needed to proceed with the strategically important second pivotal trial. In the fall of 2008 Doyle was negotiating the final terms of an investment by two prominent hedge funds when the liquidity crisis caused the hedge funds to withdraw from the transaction. Doyle must now reevaluate his options for securing the needed financing for this promising young company.
As NBA Commissioner David Stern approached the podium, silent anticipation gripped the four thousand Houston Rockets fans gathered at the Rockets Draft Party. "With the 8th pick in the 2006 NBA draft," Stern began, "the Houston Rockets select Rudy Gay from the University of Connecticut." The four thousand Rockets faithfully erupted into euphoric cheers. Rudy Gay was a highly touted college prospect who some analysts projected could have been one of the top three selections in the draft. To be able to select him in the eighth spot seemed like a steal for the Rockets and their newly hired Assistant General Manager, Daryl Morey. Moments later, the assembled crowd's jubilation turned to horror as television analysts covering the draft announced breaking news. The Rockets traded the rights to Rudy Gay along with another Rockets fan favorite, Stromile Swift, to the Memphis Grizzlies for Shane Battier. Jeers of frustration rang from the Rockets fans. How could the Rockets trade Rudy Gay and Stromile Swift for Shane Battier?
Pablo Isla, the CEO of Zara, wanted to improve operational efficiencies in managing its store network. In particular, he wanted to improve labor productivity at the stores. He considered outsourcing certain store operations to third parties, changing the way store managers were compensated, and creating formal operating procedures for store operations. But he knew he had to be careful. Could an emphasis on improving labor productivity hurt other aspects of store operations?
Provides a brief overview of the standards battle between HD-DVD and Blu-ray, focusing on the events which precipitated the Blu-ray victory in early 2008.
This note is an introduction to the cost of capital as used in discounted cash flow valuation analyses. The note covers basic financial economic principles and practical problems encountered in calculating the cost of capital, especially WACC. It concludes with cautionary advice about computing and applying WACC. The note is suitable for undergraduates, MBAs and executives studying basic cases on business valuation and capital budgeting.
Test marketing is an important aspect of market research. This technical note deals with why test marketing is undertaken and how to do it. Topics include test market design, selection of test markets, length of test and interpretation of results.