Andy Khubani, the CEO of Idea Village, a company that markets to consumers via direct-response TV ads, must decide whether to launch a campaign touting a hair removal product for women. Explains the direct-response industry and contrasts its methodology with traditional consumer goods marketing.
Investors and policymakers throughout the world were confronted with the risk of painful economic consequences arising from the large U.S. current account deficit. In 2007, the U.S. current account deficit was $731 billion, equivalent to 5.3% of GDP. The implications of the deficit were debated with intensity. At one extreme, it was argued that large deficits would eventually resolve themselves smoothly, even if they persisted for many more years. Former Federal Reserve Chairman Alan Greenspan was among those expecting a "benign resolution to the U.S. current account imbalance." Other analysts, such as economists at the World Bank, believed the large deficits raised the risk of a sharp and disorderly fall of the dollar and that necessary macroeconomic adjustment could be painful, for the United States as well as for the rest of the world. The Financial Times asked: "How long will foreigners be prepared to make such generous 'gifts' to the US?" In this environment, Berkshire Hathaway, run by legendary investor Warren Buffett, postulated that current account imbalances would lead to "some chaotic markets in which currency adjustments play a part" and announced to shareholders a plan to increase investment in overseas companies to protect against this risk. It remained to be seen what the short- and long-term implications of the current account deficit would ultimately yield.
In 2003 a BCG survey found Rothschild Bank AG to be one of the most profitable private banks in the world. The bank's future, however, was surrounded by uncertainties related to new international regulations, increased competition as well as volatile financial markets. Rothschild bank's management was concerned to master these challenges and to assure that banks successful past will continue into the future. The task for students is to identify the key success drivers for Rothschild in the future.
The case is built on a unique and extensive dataset collected during many months of direct observation and interviews. The depth of this dataset allows the reader to analyze the myriad of perceptual factors on which collaboration and teamwork hinge.
There are two key principles in human capital strategy. One is that people are assets whose value can be enhanced through investment. The other is that an organization's human capital policies must be aligned to support the organization's shared vision. Excerpts from two GAO reports provide an excellent summary of the topic.
In June 2003, General Motors Corp. (GM) successfully marketed the largest corporate debt offering in U.S. history, worth $17.6 billion. The offering included $13.6 billion worth of debt denominated in dollars, euros, and pounds and $4 billion dollars denominated in convertibles. GM announced that it would use the majority of these proceeds to shore up its heavily underfunded U.S.-defined pension plans. GM considered investing the entire contribution to its U.S. pension funds coming from the debt offering not in traditional investment grade bonds or stocks, but in a broad category GM called "alpha." GMAM believed this would help meet its new target annual return of 9%, reduce the probability of a negative return in any given year from 20% to 10%, and reduce the volatility of plan assets by 40%.
The proprietor of a day spa must decide whether to purchase a microdermabrasion machine. This differential analysis case will test students' abilities to identify those costs that are recurring cash flows and those costs that are investments; give practice calculating working capital investments; differentiate between relevant and non-relevant costs for a differential analysis and test students on their ability to conduct a sensitivity analysis.
The president and chief executive officer of Info-Tech Research Group must determine the pricing and promotional strategies for the company's newest product offering. This case allows students to use differential analysis as a tool to aid in their decision. Students are expected to perform a qualitative analysis based on the fit of Info-Tech's new product offering within the competitive marketplace and its potential customers; identify those items relevant to the decision and categorize them as either recurring cash flows or one-time cash flows; understand that the recurring cash flows consist of both variable costs and fixed costs and to recognize the difference; identify those items which are investments, including working capital accounts; apply exchange rates so that all figures in the analysis are in the same currency; calculate return on investment and payback ratios; recognize the need for and perform a sensitivity analysis on the projected sales levels; and make a decision based on both qualitative and quantitative analysis.
The president of Jackson Limited's sawmill division was reviewing proposals to upgrade and modernize the sawmill at the New Denmark site in New Bruswick. He was faced with different alternatives ranging from a capital requirement of $6 million to as high as $14 million. The president must make a capital budget decision that will take into account several uncertainties.
Job Offer Negotiation is a role play between a job applicant who is graduating from an MBA program and a recruiter from a global consulting firm. It is intended to illustrate the importance of preparation and planning; integrative negotiation in the context of job offers, and specific behaviors that contribute to effective negotiation. To be used with 9B05C012.
The general manager of BookMart, a major online book, movie and CD store was struggling to manage a serious breach of the company's information systems, which jeopardized both the company's reputation and its ability to provide service to its customers. He must develop an immediate plan to address the security breach internally; how to communicate the situation to customers and the media and develop a long term plan that will minimize the risk against possible future attacks. The supplement A Hacker Attack: An e-Commerce Nightmare, product 9B05E003 looks at the general manager's short and long term plans.
BookMart has a breach in the company's information systems. In this supplement to A Hacker Attack: An e-Commerce Nightmare, product 9B05E002, the general manager has to develop immediate and long term plans to deal with the situation.
Ganong Bros. Limited is a fifth generation family chocolate company in New Brunswick that is facing financial difficulties. The firm has been spreading its resources too thinly and needs to develop a plan to not only return to profitability but also to grow the business while upholding its responsibility to the local community. This case helps students to develop an understanding of cutting costs in a turnaround situation and seeking out alternative lines of business for strategic growth.
The Canadian Imperial Bank of Commerce (CIBC) and Barclays Bank PLC have signed an agreement to combine their retail, corporate and offshore banking operations in the Caribbean to create FirstCaribbean International Bank. In principle, it appeared that both parties were agreeing to a combination of their assets to form a new entity, in which case a new holding company could be constituted to absorb the assets being merged. Alternately, as Barclays interest in the merger was substantially greater than that of CIBC, the transaction could be construed as an outright purchase of the CIBC interests by Barclays. The problem with this second approach, however, was that Barclays Caribbean presently had no separate legal form in the region. This case illustrates the procedures for accounting for mergers and acquisition, and lends itself to discussion on a myriad of issues and concepts. This case may be taught on a stand alone basis or in combination with any of the four additional cases which deal with various functional issues regarding the actual merger/integration which occurred. The four additional cases are Harmonization of Compensation and Benefits for FirstCaribbean Bank, product 9B04C053; Information Systems at FirstCaribbean: Choosing a Standard Operating Environment, product 9B04E032; CIBC-Barclays: Should Their Caribbean Operations be Merged?, product 9B04M067; and Note on Banking in the Caribbean, product 9B05M015.
A business consultant at a large bank must determine if a report indicating that more than half the bank's credit card holders are unprofitable is true. This case contains a dataset that enables students to utilize some of the built in data functions in Excel and provides a basis for discussion of data-mining tools, products 7B04E017A and 7B04E017B.