At the cross-section of capital markets and the catastrophe insurance space stands the hedge fund Nephila. Nephila must decide how best to take advantage of the newly presented market opportunities post hurricanes Katrina, Wilma, and Rita. Nephila has a plethora of options as it brings capital markets understanding to the insurance space. Nephila can easily trade in and out of insurance products and is not subject to regulatory restrictions. Yet, Nephila only capitalizes 1% of the entire catastrophe reinsurance market. What is the best way to grow?
In 2004, Mark Lundstrom must decide on a funding method and strategic approach for BioScale, a biotechnology company that he founded. BioScale has developed a microchip-based bioanalytical platform that can be used to detect very small concentrations of cells, viruses, proteins, or small molecules. The company has several multibillion dollar markets in its sights. Up to this point, Lundstrom has used a combination of individual and angel equity funding and government grants to meet the company's capital needs. Now he must decide whether to continue on his current "go slow to go fast strategy" or, alternatively, raise a substantial round of capital or find a strategic partner. Also explores Lundstrom's career as an entrepreneur in science-based businesses.
When appointed CEO of Novo Nordisk Engineering, Hans Ole Voigt created a vision for the company: Within five years NNE should be able to build a pharmaceutical plant in less than a year. The first reactions were quite negative, most of the employees thought such a goal was totally unrealistic. Processes were reengineered, people were coached and step by step NNE got closer to the objective. Employees became more and more energized and felt the 12 months goal was reachable. From a 30 to 36 months industry average construction time, NNE first came down to 24 then 18 and finally 11 months. By 2005 the goal was reached and the company had earned a standing reputation thanks to its accomplishments. Learning objectives: This case provides a good opportunity to learn about speed in project management. From a supply chain perspective it shows the importance of involving external partners from clients to suppliers in successful project execution. It also helps understand that even in highly regulated industries (here pharmaceutical industry) processes can be changed and improved. From a human resourced management it shows the importance both of creating energy driving employees to overcome extremely challenging projects and investing in project management training.
The owner of a restaurant serving Middle Eastern cuisine realizes the need for a bigger location due to extreme customer congestion. He is contemplating moving the restaurant to a new location that would require $255,000 of renovations in order to keep pace with his growing consumer base. Students are asked to: 1) identify those items relevant to the decision and categorize them as either recurring or one-time flows; 2) understand that recurring flows consist of both fixed and variable costs; 3) identify investments, including working capital accounts; 4) calculate return on investment and 5) make a decision based on both qualitative and quantitative analysis.
A polymer chemist initiated a lawsuit against a national research institute for having failed to pursue a patent on his behalf, while he was employed as a post-doctoral research fellow. The chemist must now decide whether to accept a pre-judgement cash settlement of less than one sixth what his lawyer claims he is entitled to. Among the questions raised in this case are: Should the research institute have pursued a patent for an invention it did not own? In letting the institute file the patent application on his behalf, did the chemist not tacitly agree to assign his invention to the institute? The case outlines the importance of human resource policies stipulating the ownership of inventions made by scientists employed by an agency or others working onsite. It also shows how problems of assignment of intellectual property rights, if not resolved, can lead to failed technology transfer. The case also provides a detailed look at how a scientist would report an invention to its technology transfer office in order that a patent might be applied for.
A research institute has a concern with the reliability requirements of a military vehicle. Reliability is the probability that a system will accomplish its designated mission in a satisfactory manner or in more specific terms, the probability that it will perform in a satisfactory manner for a given period when used under specified operating conditions. Reliability of a weapon system is often expressed in terms of mean time between failure (MTBF). Two military vehicles were tested to obtain reliability life data for reliability evaluation. The objective of this case is to introduce reliability concept, MTBF, life data analysis and objective procedure for a decision making.
A business school is contemplating a major shift in strategy. The case examines the critical structural performance management, cultural and organizational issues associated with the change. Students will understand the difficulties of change with multiple stakeholders and constraints.
Asian Paints, recognized as one of the best managed companies in India, has recently embarked on a significant push to internationalize its activities. The president of the international division is faced with the challenge of simultaneously meeting sales volumes expected, and to contribute to the company's goal of becoming one of the top five decorative paint companies in the world.
The founder of Skadurz Pro, a skateboard, snowboard and clothing store has a tough decision to make regarding the future of his business and its two retail stores. His mother is ready to retire from her position as his business partner, and a large national competitor is about to open a franchise in direct competition with one of his outlets. It appears that the new competition will have severe impact on the company, and he must decide how he will face the challenge. Should he turn his attention to other ventures that spur his imagination, or try to maintain the unique position his business has carved for itself.
An entrepreneur must decide if he should bid to acquire a commercial bakery, Cake Masters, given his objectives in his search and his investors' expected returns of 20-30 per cent. If he bids, he must decide how much to bid and in what form of consideration. Students are introduced to valuation methodologies and will evaluate an acquisition or opportunity, understand the process of acquiring a small company, learn how preceding transactions are considered and learn about discounted cash flow analysis.
When Hurricane Katrina slammed into the Gulf Coast on Monday morning, August 29, it cut a wide swath of destruction in the area; but despite inflicting enormous damage, it initially appeared that the storm had spared low-lying New Orleans the worst of its wrath. But as Katrina moved on, it soon became clear to those who had not evacuated the city that something was going very wrong: almost every part of New Orleans began to flood, and by the next day roughly 80 percent of it would be under water. The rapidly rising floodwaters, the result of three major breaches in the levees protecting the city, created a massive humanitarian crisis. Tens of thousands of residents escaped to rooftops or attics, where they waited anxiously for rescue, or waded in waist-deep water to find shelter; many went to the Superdome, which was already packed with people who had waited out the storm there, or to other improvised shelters in the city. As the days dragged on, it would become increasingly apparent that almost every aspect of the response from state, local, and federal government was falling far short of what was needed: evacuees languished in squalid shelters or on highway overpasses waiting for buses that did not come; looting and more serious crimes were reported to be rampant; food, water, and medical care were in short supply. As public outrage grew, fed by TV footage of distraught storm victims, emergency response officials and political leaders, all the way up to President George W. Bush, found themselves scrambling to cope with the "ultra-catastrophe" that Katrina had visited on New Orleans. HKS Case Number 1844.0
When Hurricane Katrina slammed into the Gulf Coast on Monday morning, August 29, it cut a wide swath of destruction in the area; but despite inflicting enormous damage, it initially appeared that the storm had spared low-lying New Orleans the worst of its wrath. But as Katrina moved on, it soon became clear to those who had not evacuated the city that something was going very wrong: almost every part of New Orleans began to flood, and by the next day roughly 80 percent of it would be under water. The rapidly rising floodwaters, the result of three major breaches in the levees protecting the city, created a massive humanitarian crisis. Tens of thousands of residents escaped to rooftops or attics, where they waited anxiously for rescue, or waded in waist-deep water to find shelter; many went to the Superdome, which was already packed with people who had waited out the storm there, or to other improvised shelters in the city. As the days dragged on, it would become increasingly apparent that almost every aspect of the response from state, local, and federal government was falling far short of what was needed: evacuees languished in squalid shelters or on highway overpasses waiting for buses that did not come; looting and more serious crimes were reported to be rampant; food, water, and medical care were in short supply. As public outrage grew, fed by TV footage of distraught storm victims, emergency response officials and political leaders, all the way up to President George W. Bush, found themselves scrambling to cope with the "ultra-catastrophe" that Katrina had visited on New Orleans. HKS Case Number 1844.0
When a public sector agency decides to privatize a large government function (as opposed to a more discreet job), the process of negotiating the service contract becomes a more complex and far-reaching endeavor. This case study describes the dilemmas that surfaced when a government agency in British Columbia-the Ministry of Provincial Revenue-negotiated a 10-year, $750 million contract for non-tax revenue collection to EDS Canada, a subsidiary of the Texas-based Electronic Data Systems corporation. The appeal of the deal, from the public sector perspective, was that it transferred the risk of upgrading an outmoded, under-resourced system to the private sector. The appeal to the private sector was that it allowed the company to recover costs and make a profit by taking a share of the financial benefits that resulted from the upgrade. But negotiating the ins and outs of the contract for this ambitious project was to prove a formidable-nearly an insurmountable-hurdle for two organizations that inhabited different cultures, held different assumptions, and pursued different mandates. For example, what profit level was reasonable? Should the company be required to reveal its costs to the government? To what extent should the details of the contract be public, if at all? In what areas-if any-should public officials be able to regulate the firm's business practices? And how should either party be held accountable for its contractual promises? The case was developed for a Kennedy School course on public-private partnerships. It affords students a balanced, inside look at the nitty-gritty dilemmas of both the public and private sector negotiators. HKS Case Number 1835.0
Dana Hall is a private all-girls school in New England facing a crisis in its mission. As social norms shift away from single-sex education, the school's enrollment is falling and deficits are becoming the norm. At the same time, the modern vision for girls' education requires an even greater investment in science and sports--at a time when Dana Hall's resources are lower than ever before. Can the school stay true to its mission? How will it find the funding? Through the story of Blair Jenkins, head of school, this case examines the difficult mission and funding decisions facing many nonprofit organizations.
In this case students must ascertain what financial ratios they recommend the company focus on and they must also decide how best to communicate, explain, and bring to life those metrics so that the company's cadre of non-financial middle managers can most easily understand the significance of, and internalize the insights from, those ratios. Embedded in this task, students must: (1) understand the nature of the company insights afforded by each of the potential financial metrics presented; (2) make a judgment as to which subset of financial metrics is (a) most applicable to a group of non- financial middle managers and (b) most representative of bankers' and shareholders' interests; and (3) develop a plan for communicating to a group of non-financial, middle managers the subset of financial metrics they have selected.