In less than a decade, Korea's Samsung has transformed itself from a maker of low-end consumer electronics into a legitimate rival to Japanese industry giants such as Sony and Panasonic. Success has been due largely to efforts to reposition Samsung as a provider of stylish, leading-edge digital technology. But shadows of the old brand image remain, spurred on by the continued availability of several of the company's traditional products. The president of Samsung Electronics Canada has been directed to solve this problem, prompting difficult choices regarding product, pricing, distribution, and promotion that threaten to hurt sales and short-run profits.
The Rainforest Action Network (RAN) worked "to protect the Earth's rainforests and support the rights of their inhabitants through education, grassroots organizing, and nonviolent direct action." RAN accomplished its mission by organizing campaigns to redirect corporations away from the destruction and exploitation of nonsustainable forest resources. RAN worked with other nongovernmental organizations, student groups, and indigenous forest communities. Founded in 1985, RAN had 10,000 members and an annual budget of $2 million in 2003. Over time, the scope of RAN's campaigns had broadened. RAN sought to stop the logging of old growth forests, protect fragile ecosystems, and reduce the threat to forests and the environment due to climate change. RAN's three campaigns in 2004--the Old Growth Campaign, the Global Finance Campaign, and Jumpstart Ford--focused on these objectives. In April 2003, RAN's board of directors appointed as executive director Michael Brune, the former campaigns director for the organization. Brune and the board of directors began a review of RAN's strategy and mission in light of the expanded scope of RAN's campaigns. RAN had limited resources and was stretched to conduct three campaigns. What changes to RAN's strategy, structure, and resource base would be required if it were to expand its mission, for example, to include natural systems such as clean air, clean water, and the climate?
In 2003 The Boeing Company announced plans to build a new "super-efficient" commercial jet called the "7E7" or "Dreamliner." This was a "bet the farm" gamble by Boeing, similar in magnitude to its earlier introductions of the 747 and 777 airliners. The technological superiority of the new airframe and the fact that it would penetrate a rapidly growing market segment argued for approval of the project. On the other hand, the current market for commercial airplanes was depressed, reflecting terrorism risk, war, and SARS, a contagious illness resulting in global travel warnings. Boeing's board of directors would need to weigh these considerations in granting final approval to proceed with the project The task for students is to evaluate the 7E7 project against a financial standard, the investors' required returns. The case gives internal rates of return (IRR) for the 7E7 project under base case and alternative forecasts. The students must estimate a weighted-average cost of capital (WACC) for Boeing's commercial-aircraft business segment in order to evaluate these IRRs. As a result of this analysis the students identify the "key value drivers" and distinguish, on a qualitative basis, the key gambles Boeing is making. The general objective of this case is to exercise students' skills in estimating a weighted average cost of capital and cost of equity. The need for students to estimate a segment WACC draws out their abilities to critique different estimates of beta and to manipulate the levered-beta formulas. Boeing competes in both the commercial aircraft and defense business; thus, deriving the appropriate benchmark WACC for the 7E7 project requires isolating the commercial aircraft component from Boeing's overall corporate WACC. In doing so, students engage the concept of value additivity.
In early 2004, less than a year after its launch, Sony's EyeToy, a unique video gaming concept, had become a tremendous success across Europe. Developed for use with Sony's PlayStation 2 console, the revolutionary technology allowed users standing in front of a small camera to interact with game objects appearing on a television screen just by moving their bodies. Sales for the first EyeToy product ("Play"), a bundle of the camera and software, exceeded all expectations. However, sales for the second product ("Groove") were disappointing. Was it time for the EyeToy team to rethink its product development and marketing strategy? How could the team sustain EyeToy's initial success and prove that the concept was not a fad?
In September 2001, Armando Codina, the CEO and chairman of Codina Group, is facing the decision of whether to go ahead as planned with its $220 million Beacon Lakes project, a 6.6-million-square-foot warehouse and office park in Miami's Airport West submarket. Although his firm has already spent more than two years and almost $2 million to get the project underway, the various obstacles ahead make him ponder whether to continue. Codina feels that an unsuccessful project could hurt his otherwise untainted career. Among the issues facing him: the uncertainty regarding the expansion of the Urban Development Boundary line to the west to include the site of the project, which is currently zoned to prohibit any type of development, and the heated environmental debate regarding the site's proximity to the Northwest Wellfield Protection Area and the Everglades National Park. Codina needs to analyze fully the economics of the deal, taking into account market conditions as well as the ultimate profitability of the project given the concessions that he is willing to make.
Raises issues about how the nature and function of a board changes as its company moves from ownership by its employees (including the founder) to ownership by a private equity firm, Hellman & Friedman, to public ownership. Teaching Purpose: To consider changes in board membership, board duties, and board responsibilities. A rewritten version of an earlier case.
This teaching case discusses the challenges facing Sears, Reobeck and Co., a leading retailer in United States, in its efforts to transform itself into an effective brick-and-click organization. In face of intense competition from other retailers and online e-tailers, Sears has continually expanded its online efforts in e-business transformation. This case traces the key e-business initiatives taken by Sears and highlights significant managerial challenges that were encountered during the formulation and execution of an effective e-business transformation strategy. The case presents the issues faced by a new CIO who had taken over the technology and e-business affairs at Sears at the end of 2002.
Sometimes, friendly acquisitions feel more like friendly fire. After all, a job lost is a job lost. Such was Lek Pharmaceuticals' concern over its recent sale to a larger interest. Based in Slovenia, the home-grown industry feared losses of employment, identity, and creative freedom. Lek employed people in 20 countries, so even the slightest change would have loud repercussions. But Lek's strategic planning director was charged with just that: change. How was he to conduct this transition? And wasn't there a pill for this?
On December 2, 2001, Enron Corporation filed for bankruptcy protection under Chapter 11. One of the most highly publicized business debacles in history-its settlements, criminal charges, civil charges, and workouts will continue for years. But outside of the courts and sensational press, what really happened? What caused the collapse of what at one time was the sixth largest company in the United States? The case explores the Enron story-in an attempt to not only answer the question of what happened, but what may be learned from this failure.
Two managers discuss the benefits, costs, opportunities, and headaches of corporate computing. Topics include security, training, the Internet and Web, collaboration, productivity, Moore's Law, computer crashes, upgrades, open source software, network effects, enterprise computing, and competitive differentiation via IT.
Antidilution provisions are an important element of most financings offered to entrepreneurs by venture capitalists and business angels. Yet few entrepreneurs are familiar with the different types of antidilution provisions and their mechanics. Compares the three most common scenarios for a financing round: no antidilution protection, weighted-average antidilution protection, and full-ratchet antidilution protection. Discusses the nature of antidilution provisions and provides a numerical example.
Gives an account of how a ship management company was able to set itself apart from competitors and from its clients' own in-house technical and crew management capabilities by embracing a culture of continuous improvement and implementing Total Quality Management systems. The shipping industry was not alone in being regulated, but its distinctly international nature made ship managers, as cost-cutting practitioners, particularly open to criticism. A ship management company's very existence hinged upon its ability to convince ship owners that it would preserve their valuable assets and maximize revenue-earning potential--demonstrating that its collective skills were superior and more cost effective. As a result, an effective quality assurance system that continuously improved the organization's human and business systems could enhance efficiency and have a significant marketing impact.
The Becca Brothers series of cases is part of the "Da Click" collection of short cases written for use with high-school students. Da Click is a successful local rap band that has attracted the attention of the national record company Becca Brothers. The situation is a multi-issue negotiation over the group's first recording contract. There are issues that are congruent, distributive, and integrative, thus presenting the opportunity for creating and claiming value.
Delta Air Lines has decided to consolidate its reservations centers in Latin America into one regional office. This new consolidated office will be Delta's Latin America Contact Center, handling reservations for the entire Latin American region. The executives on Delta's site selection team have narrowed down the company's choices of a location for this Center to three options: Mexico City, Mexico; Buenos Aires, Argentina; and Santiago, Chile. Mary Smith will be helping to make the recommendation as to the country where Delta should choose.
This disguised case provides a strategic plan devised and used on a military base. Senior officers clarified their strategy, outlined capabilities needed, and designed measures to assess. The organization's mission statement/charter, goals, and metrics are available for evaluation. Is the vision clear and could the goals be successfully translated into action? Does the plan lend itself to become part of the culture and daily business life on the base?
The newly appointed dean of a South American business school is eager to transform the learning process from the traditional lecture method to one that actively engages students and contributes to the development of critical managerial skills, attitudes, and world view. To be successful, a number of organizational processes must be changed, and strong alliances must be created with key members of the faculty, administrative staff, alumni, and students.
A major enterprise software company must select which technologies to support, based on their long-term and short-term viability and benefits. The protagonist is involved in the release of the B2B integration component of major enterprise software whose purpose is to facilitate communication between users and their business partners. To enable standardized, automated data exchange between business partners, the e-business component release must provide support for one or more e-business standards. Time and resource constraints, however, demand that the company support only one e-business standard in the first release. The protagonist must decide which e-business standard to support: ebXML or RosettaNet.