Explores the numerous initiatives Children's Hospital and Clinics has undertaken to improve patient safety since the late 1990s--from the perspective of 2007. The case thus updates the A case by revisiting the hospital to find out what happened as a result of the ambitious change program launched over eight years earlier. It elaborates the ways in which Children's COO Julie Morath seeks to continue to improve hospital operations by involving nurses, physicians and even patients' families in an ongoing organizational learning process. The 2-case series is particularly distinctive in tracking an organizational change initiative for almost a decade and, as such, uncovers and promotes discussion of the important, granular details of change leadership in a messy, knowledge-based organization.
Describes the economics, technology, and politics of the oil sands industry, focusing on one of the industry's leading firms. Oil sands deposits in Alberta represent a potentially vast reserve of hydrocarbons, but the extraction, refining, and transportation challenges are formidable, and the environmental consequences of large-scare oil sands development potentially severe. Encourages students to examine Suncor's strategic positioning and cost structure, and the challenges that the firm's leaders confront as of 2007.
Compass Box Whisky Company is facing a changing supply situation and is evaluating switching to a business model with high inventory and long lead times. The company must consider what the change will mean for operations, risk, and measuring profitability.
This case will lead students to a discussion of the causes and effects of hyperinflation. The link with fiscal deficits is explored, and so is the link with societal changes. The particular focus is on the hyperinflation in Zimbabwe under President Robert Mugabe whose government implemented a controversial land redistribution program. The case can be taught with a class experiment-see teaching note UV2706.
This case features a prominent antidumping case in the United States against six of its major foreign shrimp suppliers. The case fits well in a discussion and analysis of the (welfare) consequences of protectionism, the basic case for free trade, and the political economy of protectionism.
Supplement to Air Deccan (A): Changing the Face of Indian Aviation, product #907A01. By November 2005 Air Deccan, India's first low cost airline, had been in business for two years. During this time, the airline had grown rapidly, adding both planes and passengers at breakneck speed. Using low fares as its central strength, it had caused huge, unconventional changes in the Indian domestic airline industry. Not satisfied, however, the founder and chief executive officer wondered how to adapt to the future and sustain Air Deccan's tremendous initial success. The case can be used to engage students in the following issues: the entry and positioning of a new brand in a somewhat oligopolistic industry; targeting low income and under-served segments; low-cost, low-price strategies; entrepreneurial start-ups in emerging markets and marketing strategy in high growth SMEs.
This case asks the student to decide whether Aurora Textile Company can create value by upgrading its spinning machine to produce higher-quality yarn that sells for a higher margin. Cost information allows the student to produce cash-flow projections for both the existing spinning machine and the new machine. The cash flows have many different cost components, including depreciation, the number of days of cotton inventory, and the liability costs associated with returns from retailers. The cost of capital is specified in order to simplify the analysis. The analysis has added complexity, however, owing to the troubled financial condition of both the company and the U.S. textile industry, which is in decline as manufacturers migrate to Asia to benefit from lower manufacturing costs. This begs the question whether management should invest in a declining business or harvest the company by paying out all profits as a dividend to the owners. The case is suitable for students just beginning to learn finance principles, but is also rich enough to use with experienced students and executives. The primary learning points are as follows: • The basics of incremental-cash-flow analysis: identifying the cash flows relevant to a capital-investment decision • The construction of a side-by-side discounted-cash-flow analysis for a replacement decision • How to adapt the NPV decision rule to a troubled or dying industry • The effect of financial distress on the NPV calculation • The importance of sensitivity analysis to a capital-investment decision
The organizers of a music festival may use video from the Friday concert to create a DVD to sell to those who come to the Saturday concert. Attendance on Saturday is uncertain, as is the percentage of those who attend on Saturday who will buy the DVD. Is this a good project? If so, what number of DVDs should be burned early Saturday morning and offered for sale at that evening's performance? By that time, Friday attendance is known, as well as whether it rained on Friday, and there is a forecast for whether it will rain on Saturday. Historical information on these variables may help us predict Saturday attendance using multiple regression; together with the results of a marketing survey, such analysis will help us make better purchasing decisions. This case series (see also the B case, UV0841) can be used to illuminate a multitude of concepts that are covered in basic decision-analysis courses. The series starts by examining the role of uncertainty in decision making, proceeds through the estimation of probability distributions from sample data with multiple regression, culminates in the development of a full decision model, and ends with a qualitative and quantitative analysis (with a tornado diagram) of how to add value and reduce risk. Key pitfalls for students are failing to recognize both limits on sales (supply and demand), incomplete reasoning in the determination of the attendance probability distribution, and oversimplifying the full forecast model (i.e., averaging the Saturday rain/no Saturday rain outcomes, rather than incorporating the uncertainty explicitly into the simulation).
The organizers of a music festival may use video from the Friday concert to create a DVD to sell to those who come to the Saturday concert. Attendance on Saturday is uncertain, as is the percentage of those who attend on Saturday who will buy the DVD. Is this a good project? If so, what number of DVDs should be burned early Saturday morning and offered for sale at that evening's performance? By that time, Friday attendance is known, as well as whether it rained on Friday, and there is a forecast for whether it will rain on Saturday. Historical information on these variables may help us predict Saturday attendance using multiple regression; together with the results of a marketing survey, such analysis will help us make better purchasing decisions. This case series (see also the A case, UV0840) can be used to illuminate a multitude of concepts that are covered in basic decision-analysis courses. The series starts by examining the role of uncertainty in decision making, proceeds through the estimation of probability distributions from sample data with multiple regression, culminates in the development of a full decision model, and ends with a qualitative and quantitative analysis (with a tornado diagram) of how to add value and reduce risk. Key pitfalls for students are failing to recognize both limits on sales (supply and demand), incomplete reasoning in the determination of the attendance probability distribution, and oversimplifying the full forecast model (i.e., averaging the Saturday rain/no Saturday rain outcomes, rather than incorporating the uncertainty explicitly into the simulation).
This technical note provides an overview of a valuation network: multiples, options pricing, specific-asset valuation, and present value. The strengths and philosophies of each approach are discussed in the context of valuing companies. Variations of present-value approaches are also discussed. The purpose of the note is to furnish a conceptual overview rather than to go through the mechanics.
This supplement to Employee Engagement at Modern Appliances Inc. (A), product # 907C35 features the chief executive officer talking about the need for engagement and the process that Modern Appliances used.
The senior portfolio manager at National Securities Inc. (National) is concerned about the recent decline in shares of Agnico-Eagle Mines Ltd (AEM), a Canadian gold producer with several years of precious metals mining experience that was considered one of the portfolio's strongest performers. The senior portfolio manager and his team recently spent time at one of AEM's mines and believed in the operational potential of the company. National's research department had prepared free cash flow forecasts for AEM, which the senior portfolio manager reviewed and modified, following their visit with the company. He knew that despite his team's belief in the future prospects of AEM, the stock may have become overvalued from a fundamental view point. The senior portfolio manager asked his team to perform a fundamental valuation of the equity of AEM. As normally, this meant the team would use the discounted cash flow (DCF) methodology, with financial assumptions that had been carefully examined. However, he knew that DCF valuation would likely undervalue resource companies, such as AEM, as the DCF valuation tended to overlook the flexibility provided at decision nodes during the life of the company with regards to extracting commodities from the ground. As a result, the senior portfolio manager reminded the team that the DCF method, when applied to a mining company, had to be expanded to explicitly include the value of the unmined metals. The underground unmined gold would need to be valued as a real option, using an adjusted Black-Scholes model.
Gokhan Hotamisligil is a star researcher at Harvard School of Public Health who has made groundbreaking discoveries linking fat cells, inflammation, and diabetes. He now wants to form a company to commercialize these discoveries. At the same time, Isaac Kohlberg, the head of Harvard's Office of Technology Development (OTD) is eager to improve Harvard's record in commercializing science. Describes the negotiations between Hotamisligil, OTD, the new company, and the School of Public Health to establish appropriate licensing and sponsored research agreements.
Madison Memorial Hospital is deciding between a variety of quality improvement strategies. Highlights quality improvement collaboratives--organized programs popularized by the Institute for Healthcare Improvement in which teams from multiple institutions work together to improve care in a specified topic area (e.g., infection rates)--as a potential strategy. Allows debate around the criteria for selection of quality improvement strategies. Also motivates the discussion of the effectiveness of collaboratives and more broadly, the effectiveness of intra-organizational versus inter-organizational approaches to improvement.
Supplement to Air Deccan (A): Changing the Face of Indian Aviation, product #9B07A001. By November 2005 Air Deccan, India's first low cost airline, had been in business for two years. During this time, the airline had grown rapidly, adding both planes and passengers at breakneck speed. Using low fares as its central strength, it had caused huge, unconventional changes in the Indian domestic airline industry. Not satisfied, however, the founder and chief executive officer wondered how to adapt to the future and sustain Air Deccan's tremendous initial success.
Tamago-ya is a family-owned business located in Tokyo, Japan. The company has captured a unique position in the market of selling pre-packaged lunch boxes to business professionals by maintaining high quality and reliable delivery. In order for Tamago-ya to guarantee such a high level of customer service, it has created an operational culture wherein those who deliver orders also engage in judging customer demand and feedback, those who supply food materials must be able to respond to variation in demand on a daily basis, and those who plan the production and distribution schedule must forecast and adjust on a real-time basis. Tamago-ya competes with convenience stores, which offer less variety in their menu options throughout the month, can stock-out on popular choices, and tend to have long lines during the lunchtime rush. However, Tamago-ya is faced with many challenges--including demand forecasting, supply planning, and long-term strategic planning.