In September 2003, Jeffrey Immelt, CEO of General Electric, must evaluate a final proposal for GE to acquire Amersham plc, the leading producer of contrast agents used in medical diagnostics. The case permits the valuation of Amersham based on peer firms, comparable transactions, and recent trading history. But the focus of analysis is on the robustness of Amersham's intellectual property (IP). On close examination, the company's IP position is weaker than it appears, given recent patents filed by competitors. The economic impact of these IP challenges may be tested in the case of the company's leading product, Visipaque, for which the case gives cash flows. Discounted cash flow analysis reveals great sensitivity to the remaining years of effective patent life. A key lesson underscores the importance of due-diligence research on a firm's IP position.
In September 2003, Jeffrey Immelt, CEO of General Electric, must evaluate a final proposal for GE to acquire Amersham plc, the leading producer of contrast agents used in medical diagnostics. The case permits the valuation of Amersham based on peer firms, comparable transactions, and recent trading history. But the focus of analysis is on the robustness of Amersham's intellectual property (IP). On close examination, the company's IP position is weaker than it appears, given recent patents filed by competitors. The economic impact of these IP challenges may be tested in the case of the company's leading product, Visipaque, for which the case gives cash flows. Discounted cash flow analysis reveals great sensitivity to the remaining years of effective patent life. A key lesson underscores the importance of due-diligence research on a firm's IP position.
In the summer of 2002, Brad and Brent Handler established Exclusive Resorts, a luxury vacation residence venture, to meet the demand for luxury vacation residences that avoided the hassles of owning a second home and being tied to a single location. The challenge was to position the venture in both the market and nonmarket environments. The positioning in the market environment was successful, and Exclusive Resorts was an instant success. In the nonmarket environment, Exclusive Resorts was organized like a country club, allowing it to avoid state time-share regulations. The success of Exclusive Resorts soon spurred others to enter the luxury vacation residence club industry and, at the same time, nonmarket threats began to grow. The American Resort Development Association (ARDA) had many concerns: Were luxury vacation residence clubs operating outside the law (consumers were not protected by state time-share law)? Were contractual arrangements transparent to consumers? Could possible fraud or failures among the clubs tarnish the entire resort development industry, including its members? ARDA sought to have luxury vacation residence clubs registered in the states in which they held properties and in which they sold memberships. If state registration were required, Exclusive Resorts would be subject to costly and burdensome regulations. Indeed, a core component of the Exclusive Resorts business model, inventory replacement via the sale of residences, would be prohibited.
The PELP Coherence Framework is designed to help district school leaders identify the key elements that support a district-wide improvement strategy, bring those elements into a coherent relationship with the strategy and each other, and guide the actions of people throughout the district in the pursuit of high levels of achievement for all students. The Framework is intended to help school district leaders effectively implement their strategy by strengthening coherence among actions at the district, school and classroom level, and ultimately, improve student performance at scale. Achieving high-performance at scale--in every school, for every student in a district-- is an imperative for school systems given today's heightened accountability environment. The framework emerged out of interactions with hundreds of U.S. public school leaders eager to identify ways to better organize and manage their complex organizations. Although it resembles models used in the business and nonprofit sectors, the framework was designed to fit the unique context and challenges of managing in public education.
Focusing on one entrepreneur, Jerry Rao, this case examines the international career paths of Indian business professionals and engineers since the development of public policies beginning in the 1960s to attract them to developed countries like the United States. Explores why these professionals often chose to leave India in pursuit of economic opportunities abroad in the 1960s through 1980s and why many seem now to be returning to their homeland to start or run businesses. Also, considers the role of Diaspora of Indian professionals in contributing to the development of the export-oriented Indian IT sector.
All complex systems have four distinct hierarchical design levels: system objectives, architecture, interfaces, and components. Each level has a distinct design question associated with it. Distinguishing among these levels and understanding the questions associated with each offers insight into the evolution of products and markets as well as the principles by which organizations should be structured to accomplish each task. The first section of the note contains examples that illustrate the four levels of complex-product design and how each level cascades naturally to the next. The second section discusses the implications of the hierarchy in terms of project management, product evolution, and market evolution. The third section introduces the idea that a similar framework of hierarchical design levels can be used when thinking about the design of complex processes.
Florentino Perez, the president of Real Madrid, a leading European soccer team, is preparing for a press conference in which he will be asked about his plans for the coming season. Economic success and some sports mishaps during the prior season represent the scenario in which planning decisions are made.
In 2003, Steve Hash, research director at Lehman Brothers, prepared to initiate the firm's "Ten Uncommon Values" stock-picking process for the year. An investment committee had to pick the 10 best stocks from about 100 stock ideas presented by the firm's analysts. The performance of the stocks selected for the Ten Uncommon Values had historically been strong--an investment strategy to acquire the recommended stocks and hold them for one year would have outperformed the S&P 500 for 39 of the last 54 years. However, during the latest three years--2000 to 2002--the recommendations had performed poorly, generating an average return of -22.5% vs. -11.7% for the S&P 500. Hash pondered several questions: What was the importance of the Ten Uncommon Values for Lehman Brothers and its clients? How much time and effort should the firm put into the process of selecting stocks for the report? How many members should be on the Investment Policy Committee, and who should be selected? What should the process for selection be? Should analysts whose stocks were selected be compensated for their picks? Finally, should they continue the process? Teaching Purpose: Using both qualitative and quantitative data, to allow students to discuss a range of issues: the optimal process of selecting stocks, the optimal size of the committee, how much time to spend with each analyst, private or public voting on stocks by the committee members, the right decision-making process, and whether incentives play a role in the process.
While reading the Wall Street Journal, Edward Rogers notices an advertisement for a knowledge management architect at the Goddard Space Flight Center in Greenbelt, Maryland. Rogers is an academic whose scholarship centers on developing models of how and why people cooperate intellectually. After submitting his resume and completing the interview process, Rogers is offered the position for a term appointment of three years. After one month on the job, Rogers wonders how he should proceed in helping the Goddard Space Flight Center become a learning organization. It is, in fact, the kind of opportunity Rogers has looked forward to for many years, but what will his plan of attack look like? How can he help this collection of rocket scientists work better together? In the B case, Rogers's action plan is presented, together with input from NASA engineers, scientists and other key players. See also the A case (UV3262).
Examines the early-stage venture capital industry in India in 2004. Focuses on technology-based, early-stage venture capital, as opposed to private equity-type investments. Using the past success of Draper International Fund as background, briefly visits the history and evolution of venture capital in India and current market opportunities. Next, presents a basic framework for examining a venture capital ecosystem, and analyzes the promise of the Indian venture capital market in its context. The emergence of a strong Indo-U.S. corridor is also highlighted, and comparisons are made with Silicon Valley, California, and Israel.
By allowing consumers to control data about their purchases and preferences, says business and technology professor Richard T. Watson, companies can get a better sense of what their customers want to buy.
We can't observe how leaders make decisions, so we judge--and often misjudge--those decisions by appearances, explains business professor Michael Useem.