The owner of Windhorse Farm (WHF), a sustainably run woodlot and woodshop in Nova Scotia that produces building products as well as tonewood (wood used for guitar, mandolin, violin tops), is reaching retirement age. Since there is no heir apparent to run the businesses, he needs to determine whether he should stay in or exit the building products business and/or the tonewood business. The decision must conform to the criteria set out by the four pillars (economic, social, environmental and spiritual), which guide the mission and strategy of WHF. The case objectives are: 1) To provide a rich opportunity for students to examine how a small business uses a triple (in this case, quadruple) bottom line approach to corporate mission definition and strategy formulation. 2) To demonstrate how product extension decisions need to be integrated into the dynamics of the overall company, especially in terms of the relationship between existing product lines and new marketing, production and personnel requirements. 3) To expose students to business and community-based strategies that can enhance the sustainability of the forest industry. 4) To present students with a decision-making opportunity in a market such as tonewood where market knowledge and available data are highly impressionistic and informal. 5) To highlight how personal priorities, such as retirement and succession, may override other concerns.
The chief executive officer of an oil and gas company must decide whether he wants to invest heavily in reducing greenhouse gases. Specifically, Suncor Energy must evaluate whether it should invest $425 million in carbon capture and storage or wait until there is greater certainty in the political, social and business environment. The case will help students develop skills of analyzing business decisions under higher environmental uncertainty, especially when the outcome is a long-term goal. Further, the issues presented in the case open up discussions about climate change and the interaction between business actions and societal expectations. There is also an opportunity to speak about the interaction between business and public policy.
The chief executive officer of an oil and gas company must decide whether he wants to invest heavily in reducing greenhouse gases. Specifically, Suncor Energy must evaluate whether it should invest $425 million in carbon capture and storage or wait until there is greater certainty in the political, social and business environment. The case will help students develop skills of analyzing business decisions under higher environmental uncertainty, especially when the outcome is a long-term goal. Further, the issues presented in the case open up discussions about climate change and the interaction between business actions and societal expectations. There is also an opportunity to speak about the interaction between business and public policy.
Jennifer Parks, a newly appointed business development officer at PillarPoint Home Loans, is given a mandate to identify and develop a new-growth initiative for her company, a small mortgage division of one of the largest U.S. credit card issuers. The company has more than 60 million accounts worldwide and a reputation as a leader in direct marketing and online services. After studying the industry, Parks identifies what she believes is a high-potential growth opportunity: a home mortgage product aimed at high-net-worth customers of the parent company. As she gets ready to present her idea to PillarPoint's executives, what should she propose as the next steps for moving the initiative forward?
In November 2003, John Fruehwirth, a principal at Allied Capital, was considering a $20 million mezzanine investment in growth capital for Elephant Bar, a California restaurant chain. Elephant Bar had had some initial success in California but now Allied's investment committee had to wrestle with the question of whether the restaurant concept was strong enough to travel and become a national brand or whether it was mainly a "California Concept." And if the concept was strong enough to travel, would Allied Capital be able to meet its underwriting standards? Because Elephant Bar is a company with aggressive growth plans, it is significantly riskier than traditional mezzanine investments. The case can be used in courses on venture investing to illustrate another funding source available to young companies. Traditional mezzanine financing is often used to provide a portion of the funding for late-stage investments, such as leveraged buyouts. The case can also be used in courses on private equity to illustrate the perspective, risk mitigation strategies, and return expectations of mezzanine investors. This case has a teaching note and a spreadsheet, which are available to registered faculty members.
This case presents an interesting acquisition opportunity that SunTrust considered in 2004: National Commerce Financial, a large commercial bank, based in Memphis, Tennessee, with a strong footprint in North and South Carolina. The case shows how capital ratios are often a key component in the bank-merger process, and it allows for the evaluation of whether Phil Humann (SunTrust's CEO) could justify a multi-billion-dollar acquisition that had the potential to deplete capital, even if the deal were accretive to earnings.
The "TRX, Inc.: Initial Public Offering" case provides comprehensive coverage of a firm's decision to undertake an initial public offering (IPO) and the process of going public. The case follows the sequence of events from the company's incorporation in 1999 through the completion of an IPO in September 2005. In addition to raising capital, the TRX IPO case also includes consideration of another motivation for going public. At the time of its incorporation in November 1999, TRX attempted to go public but in the ensuing dot-com collapse, the IPO was never completed. In response to the failed IPO, TRX president and CEO, Trip Davis, turned to strategic investors to raise $20 million in a note convertible into equity at $11 per share. Although Davis had hoped the strategic investors would provide guidance and business opportunities for TRX, they never materialized. By 2004, he had come to believe that the largest strategic investor, Sabre, Inc. was not working in TRX's best interest. Thus, the IPO is motivated by a twofold purpose: to raise money and to provide for a strategic reorganization of the firm's ownership structure.
This case concerns Gene Cattie Enterprises (GCE), a manufacturer of a variety of fabricated metal house accessories, including mailboxes and window boxes. Founded in 2001 by Gene Cattie, a former HR professional for a large diversified financial-services company, GCE manufactures window boxes in five basic colors in a small plant in central Virginia. Historically, GCE has competed by providing a low-cost, high-quality product, sold mostly to specialty stores and catalog retailers. Competitive pressures have recently made delivery lead time an issue. Cattie believes that if he can significantly reduce the manufacturing lead time, he will be able to respond to market fluctuations as well as provide a line of custom-made window boxes. He wonders whether he can improve the effectiveness of his window-box production operation. As a former HR professional, he is unsure what his choices are. He is even unsure of the measures he should use to evaluate his decisions. He is, however, sure of one thing: his goal is to make money. His gut tells him that he is not making as much as he could.
The "TRX, Inc.: Initial Public Offering" case provides comprehensive coverage of a firm's decision to undertake an initial public offering (IPO) and the process of going public. The case follows the sequence of events from the company's incorporation in 1999 through the completion of an IPO in September 2005. In addition to raising capital, the TRX IPO case also includes consideration of another motivation for going public. At the time of its incorporation in November 1999, TRX attempted to go public but in the ensuing dot-com collapse, the IPO was never completed. In response to the failed IPO, TRX president and CEO, Trip Davis, turned to strategic investors to raise $20 million in a note convertible into equity at $11 per share. Although Davis had hoped the strategic investors would provide guidance and business opportunities for TRX, they never materialized. By 2004, he had come to believe that the largest strategic investor, Sabre, Inc. was not working in TRX's best interest. Thus, the IPO is motivated by a twofold purpose: to raise money and to provide for a strategic reorganization of the firm's ownership structure.
UPS had become a global public company, with a market cap of $74 billion, more than 428,000 employees, $47 billion in revenue, and operations in more than 200 countries. A recognized leader among package-delivery companies, its growth had been above industry averages and had historically been through geographical expansion. In 1998, UPS changed its business model to Synchronized Commerce and adopted a new growth strategy called the Four Quadrant Model, hoping to expand its market space by transforming itself into a logistics-solutions company. But eight years after these changes, UPS was generating only 17% of its revenue from its nonpackage deliveries, with only $2 million of its operating profit coming from the new businesses. In the company's 2006 Annual Report, the UPS chairman and CEO acknowledged the disappointing results and realized that these results required a response to the public market.
Technical stock analysis uses past prices and trading volume or both to predict future prices. A broad range of techniques such as chart analysis, moving averages, and other filters and oscillators can be used to identify predictable patterns in stock prices. The conventional wisdom is that stock-price patterns emerge from systematic psychological behavior of market participants. This note provides an overview of some common analytical tools for identifying trading opportunities.
This note provides a brief overview of the consumer benefit ladder (CBL) technique, a tool used to uncover why consumers buy particular products or services. CBLs are similar to means-end chains, hierarchical value maps, and so forth.
The president of Industrial Accessories Ltd. (IAL) was preparing for a meeting to consider a management buyout of IAL. IAL was a privately owned maker of attachments for construction vehicles based in British Columbia, Canada. IAL was founded in 1970 by Gerald Stone, now chairman and CEO of IAL. Stone had decided to sell IAL because of health problems. Because he had no suitable heirs to take on leadership of the company, the president and three other senior managers were considering a buyout strategy. Students must size up the acquisition, a place value on the company and propose a financing plan for the acquisition.
Senior executives at American Express are reviewing the company's marketing strategy for charge and credit cards in the United States. A variety of growth options exists for students to consider including further penetration of existing markets and the opening of new markets. Historical background information in the case enables instructors to analyze the phases of American Express's card strategy over the past fifty years.
Paul Maritz took the helm of VMware in July 2008, just as the company confronted a radically new competitive environment. Since its founding in 1998, VMware had been the leading provider of virtualization software. Now it faced the kind of threat that every software company dreaded most: Microsoft, the world's largest software maker, was taking direct aim at its core market. As of June 2008, buyers of Microsoft's Windows Server 2008 operating system received a free, bundled version of Hyper-V, an advanced virtualization platform product. Looming over the impending competition between these two companies was the story of the "browser wars," in which Microsoft overwhelmed browser maker Netscape Communications by bundling the Internet Explorer browser with the Windows operating system. Did a similar fate await VMware? Maritz moved quickly and boldly to respond to the Microsoft threat--by deciding to offer a version of VMware's own virtualization platform product for free. But he still had to determine whether VMware's overall strategy was the right one. The case offers an overview of virtualization technology, a brief history of VMware, including descriptions of its acquisition by computer storage giant EMC, its August 2007 IPO, and Maritz's arrival as CEO; a summary of its product lines; a discussion of the ecosystem in which the company operates; and a survey of key competitors, including not only Microsoft, but also Citrix Systems and other providers that use the Xen virtualization platform. Finally, the case offers a description and analysis of several strategic options available to VMware.
Through stalled joint venture talks between Pennsylvania-based Wyoff Corp. and Jinan-based China-LuQuan, strategic and cross-cultural negotiation challenges are explored both from American and Chinese perspectives. Wyoff, a leading US chemical company, has been seeking ways to secure the company's foothold in China's emerging market since the late 90s. When approached by China-LuQuan in 2000, a major Chinese state-owned chemical producer, for a joint-venture opportunity to make a popular chemical catalyst in China, Wyoff, leveraging its superior technology, demanded one-sided terms and played hardball, ruining both the deal and the relationship with China-LuQuan. Seven years later in 2007, Wyoff faced market pressure to again seek a joint venture with China-LuQuan on two other types of products. Both parties had to overcome past distrust to work things out on a series of strategic issues: investment, product slate, marketing, technology, management organization, staffing, etc. In the negotiations, cross-cultural themes (e.g., trust, relationships, communication, time, face, etc.) and different negotiation styles created challenges along with the business and strategic issues. The (A) case sets up the negotiations, highlights issue impasses, explores cross-cultural frictions, and poses tactical challenges. The (B) case describes the strategies, tactics, and results of these negotiations.
Dr. Reddy's Laboratories (Dr. Reddy's), a large pharmaceutical company in India, is trying to acquire the fourth largest generics manufacturer in Germany. Dr. Reddy's quoted $570 million in a competitive bidding situation. The company's chief negotiator is getting ready to close the deal if selected. Students will examine the issues for the chief negotiator, such as: is the price right, is the fit strategic, will the acquisition add value, how can the synergies be fully exploited and how should management proceed with the integration. The (A) case is positioned just before the acquisition and hints at the possible risks. The supplement case, Dr. Reddy's Laboratories (B), product #908M65, is positioned two years post-acquisition and examines a major risk which, as it unfolded, brought the viability of the business model into question.
This supplement to Dr. Reddy's Laboratories (A), product # 908M64, looks at the two years post-acquisition and examines a major risk which, as it unfolded, brought the viability of the business model into question.
In January 2001, Dick Burnham, CEO of Odyssey Healthcare, and Odyssey's Board of Directors were considering selling the hospice care company to a larger provider or making an initial public offering (IPO). With 38 hospice locations in 21 states, Odyssey had been providing care to the terminally ill since its first location opened in 1996. Since then, the company had grown rapidly through a series of acquisitions, development of new hospice locations, and organic growth. Odyssey had just realized its first profitable year in 2000-recording a net income of $3.1 million - and was still a relatively young company. In addition, the hospice industry was subject to extensive federal, state and local regulations relating to payment for hospice services and conduct of operations. Burnham was unsure how the market would react to a company with such government-dependent revenue streams. Additionally, the recent collapse of the "dot-com" boom in 2000 might make it impossible to float an IPO at all given the prevailing market conditions. On a positive note, however, healthcare companies were commonly thought to be recession-proof and thus might be a sound investment in the event of a down-turning economy. Burnham had to decide if this was the right time for an exit, and if so, what the best exit would be.