A regional director of a consulting firm must decide how to compete for a major consulting contract. Appshop can take a level payment contract, a lower level payment with a prospective bonus given high performance, or bid on an RFP where a significant reward is given contingent on the client's savings. The case can be used to introduce Monte Carlo simulation modeling and to build skills in structuring a decision tree in a spreadsheet. It affords an opportunity to simulate alternative risk profiles and to discuss their comparative advantages.
This case provides students the opportunity to practice variance analysis for an annual operating plan using flexible budgeting skills. First, a static budget is flexed to account for changes in product volume. Then, actual results are compared to the flexed budget and analyzed for product price, efficiency, and other variances. In addition, the case allows for discussion as to how flexible budgets can be used for management decision making, and how various compensation structures can affect financial results.
The Wahaha Hangzhou Group Co. Ltd. is one of China's largest soft drink producers. One of the company's products, Future Cola, was launched a few years ago to compete with Coca Cola and PepsiCo and has made significant progress in the soft drink markets that were developed by these cola giants. The issue now is to maintain the momentum of growth in the face of major competition from the giant multinationals and to achieve its goal of dominant market share.
In January 2003, Mr. Ho Kwok Ping ("KP"), the cofounder and chairman of Singapore-based Banyan Tree Hotels & Resorts, was debating whether to take his privately held company public. The company developed and operated several boutique resorts and spas around Asia. What set the company apart in the marketplace, and was an integral part of the Banyan Tree brand, was its strong commitment to protecting the environment, both physical and human, driven by its leaders' passionate belief in behaving ethically and responsibly. The company had major plans for expansion in Asia and around the world. These expansion plans required financing, and one obvious option was to take the company public through an IPO. But KP had his doubts about an IPO. Would investors feel as passionately as he did about the company's pro-environment values and initiatives? Or would he and his managers have to compromise their values to deliver acceptable returns to the company's shareholders? In the current economic climate in Asia and globally, was it the right time to go public?
This case examines the April 2002 decision of JetBlue management to price the initial public offering of JetBlue stock during one of the worst periods in airline history. The case outlines JetBlue's innovative strategy and the associated strong financial performance over its initial two years. Students are invited to value the stock and take a position on whether the current $22-$24 per share filing range is appropriate. The case is designed to showcase corporate valuation using discounted cash flow and peer-company market multiples. The epilogue details the 67% first-day rise in JetBlue stock from the $27 offer price. With such a backdrop, students are exposed to one of the well-known finance anomalies--the IPO underpricing phenomenon--and are invited to critically discuss various proposed explanations.
Equips managers with a basic understanding of how to use contracts to define, formalize, and strengthen business relationships. Explains how managers can use properly structured contracts to increase predictability; to create or preserve valuable legal, financial, and operating options; to enable parties to work cooperatively to increase the total value created; and to allocate the risks and rewards of business relationships.
Describes the intricate parts of an early real estate deal from the standpoint of the developer including feasibility analysis, market choice, acquisition of land, project development, design and construction issues, investment returns, and equity financing issues. Thirty-two-year-old Dr. Philipp von Wilmowsky is director of Hungarian operations for ECE Projektmanagement, a German real estate development conglomerate. He has been working for two years on the development of a 30,300 square-meter (m2), 75 million Eurodollar shopping project located in the city of Gyor, Hungary. Allows students to analyze the viability and attractiveness of the project and perform calculations on project returns (including co-investor returns), cost analysis, sensitivity analysis, composition of leasing revenues, and loan structuring.
Examines the dynamic relationship between two complementors: Intel and Microsoft. Set in 1995, the case asks how Intel and Microsoft should solve a serious division between the two companies that threatens the health of the PC industry.
Describes the U.S. Securities and Exchange Commission's 2003 proposal to allow shareholders to nominate a "short slate" of directors for the board of listed companies. Includes comment letters for and against the proposal.
Salco (China) is a global manufacturer of burners for hot-water boilers and industrial furnaces and ovens. The company has recently hired a new operations manager for their plant in China whose mandate is to improve the efficiency of the Beijing office, to eliminate Salco's Chinese distributors' poaching behavior and to elevate Salco's brand equity in the Chinese market. After implementation, the initiative to eliminate distributors' poaching had failed and the company's operations manager must determine why this initiative failed and prepare a report for senior management.
Describes the acquisition of Nat West by Royal Bank of Scotland. Describes the strategic rationale for the acquisition and the process by which the integration of the two banks was accomplished. The acquisition is remarkable for how successful it was, given the typical high rate of failure of similar acquisitions. Teaching Purpose: To teach about the general lessons of successfully implementing mergers and acquisitions.
After leading the Peninsula Community Foundation (PCF) through a period of tremendous growth, its president, Sterling Speirn, is facing the prospect of a decline in the foundation's asset base for the first time in the foundation's history. In addition, the fact that financial service companies had made recent inroads in the market for administering donor-advised funds in recent years, an area that had been a key source for growth for community foundations for the last few decades, compelled Speirn to evaluate PCF's positioning in the market and to consider potential collaboration opportunities with these companies.
The head of sales and marketing in a large medical devices firm must decide how to assign his sales force. He compares selling in the pharma, specialty pharma, and device industries and analyzes the reasons for the differences.