Joe Pompei, a graduate student at the MIT Media Lab, has invented a breakthrough audio invention. The invention is an "Audio Spotlight" that projects a narrow beam of sound in the same way a laser beam projects a narrow beam of light. He must now decide how to commercialize the technology. He has narrowed down the commercial possibilities to four markets: the autosound market, the professional audio market, the interactive kiosk market, and the home audio market.

Supplement to case A00014. This case describes the experience of Kanpur Confectioneries Private Limited (KCPL), a family managed company, in being a contract manufacturer for A-One Confectioneries Private Limited. The alliance had worked to the advantage of KCPL. It had prospered as a profitable contract manufacturer. It had used the surplus to diversify into unrelated businesses. The family members, however had doubts regarding the employment opportunities provided by the move. They were not sure whether the progress was sustainable. Alok Kumar Gupta, Chairman and Managing Director of KCPL, along with his brothers and son, is required to review the strategy and performance of his company and develop a course of action for the future.

Electronic Communications Ltd. (ECL) had decided to make China its second home and to seek common prosperity with Chinese people. The company knew that there were major gains to be made, but there were also risks and challenges. One of these was the management of cultural differences. An essential question facing the management was whether it should adapt ECL's management practice to the Chinese culture or instead implement ECL's global management policies in China.

Discusses the plans of the Hong Kong government to seek approval of its proposal to replace the current Hong Kong ID card with a smart ID card. The approval in question is sought from the Hong Kong legislature. Supplies material for an in-class debate on the government's proposal to replace the current ID card with a smart ID card. The government's proposal calls for a multiapplication smart ID card. This is one of three options recommended in a consultant report. Students are invited to play the role of legislators and defend their preferred option.

Discusses how Grey Worldwide Hong Kong and China (Grey WW-HK/China) is repositioning itself through defined e-marketing and CRM strategies for the Asian market. Examines how integral its customer relationship group is in building a CRM strategy to deliver client value proposition. Grey WW-HK/China has very strong umbrella brand equity, but the brand capital has to be invigorated through a renewed e-marketing focus. Constrained by changing market conditions, particularly industry pressure on commission margins, Grey WW-HK/China needs to differentiate itself and is assessing CRM's value in developing loyal and lifetime customers. However, in a growing Asian market, Grey WW-HK/China is in heated competition with other players, including management consultants, traditional agencies, and pure on-line players who are actively pursuing a CRM business focus. Grey WW-HK/China's CRM team is in the process of developing an Asia-specific CRM blueprint for its internal management, something that is transferable to Grey's clients. Grey WW-HK/China is considering merging technology with traditional marketing philosophy, and the team is expected to deliver a proposal that outlines the CRM tools that Grey WW-HK/China should use to reposition its brand and build customer loyalty.

New World Development Co. Ltd. (NWD) was a leading conglomerate based in Hong Kong. After more than 20 years of operations, the group had expanded its core businesses to include property, infrastructure, services, and telecommunications. From late 1997 to June 2001, the stock price performance of the company had been abysmal. Its efforts at asset disposals to reduce gearing, while making additional investments in new businesses, confused investors. Security analysts also blamed the company for not keeping its promise to focus on its core business of property.

In January 1998, Peregrine Investments Holdings Ltd., once billed as "Asia's only indigenous investment bank," was forced into liquidation after the revelation of huge losses in its fixed-income business and the withdrawal of potential investors from Europe and the United States. Peregrine became the highest profile corporate failure in the Asian financial crisis to date. A firm that seemed to be on top of its world in early 1997 had collapsed under a pile of bad debts less than a year later. Peregrine's demise raised questions about how the firm might have avoided the debacle. This case can be used to teach corporate governance and strategy development in volatile environments.

Although mortgage securitization was old hat in the United States and Europe, it had not really caught on in Asia. Past experience in Hong Kong suggested that efforts by individual institutions to securitize mortgages had not been entirely successful. In spite of this, the Hong Kong government placed high hopes in Hong Kong Mortgage Corp. (HKMC) to develop the mortgage-backed securities (MBS) market. However, some banks wondered whether it was timely for them to get into the MBS business in Asia. In particular, the banks and the HKMC had very different risks and concerns regarding the development of MBS. Teaching Purpose:

In July 2001, Acer, Taiwan's best-known company, was in the midst of an ambitious reorganization. The goal was to reverse flagging sales in Acer's branded computer and peripherals businesses and to address the concerns of major clients of its contract manufacturing business. The reorganization would involve splitting the company into three parts, massive layoffs, a shift in geographic focus, and a complete change in business philosophy. Acer's chairman and cofounder Stan Shih had personally taken charge of the reorganization, signaling the seriousness of Acer's position and his commitment. However, questions remained as to whether the reorganization would be effective in meeting Acer's challenges and turning the company's fortunes around. This case can be used to teach strategy development in volatile environments, the challenges of creating a successful brand, and the links between company strategy and location advantages and disadvantages.

French utility, Vivendi, purchased the United States-based entertainment giant Universal in late 2000. In so doing, the rechristened Vivendi Universal became a major force in music, films, and television production, adding to its European-based cable television and telecommunications assets. By the end of 2001, Vivendi Universal was betting on continued convergence of distribution channels to knit together an international entertainment conglomerate. Its plans would put Vivendi Universal in direct competition with established entertainment giants such as Disney, Viacom, and the merged AOL Time Warner.

Digital Angel is considering the appropriate marketing plan for the launch of its new locator device. The device, a watch and pager worn in combination, provides GPS location information and monitors heart rate and body temperature via body sensors. Parents of young children and caregivers of Alzheimer's patients are the initial target markets for the device, but at least 26 potential markets have been identified for the product. Building a brand and generating positive word of mouth are central to the marketing plan decision. But the technology also raises concerns over privacy issues, and the benefits of the product are complex and challenging to communicate.

Scientific knowledge surrounding diabetes mellitus has grown over the last century to include its cause, treatment, and prevention strategies. However, the type and level of care that patients receive is suboptional. This case examines the forces in industry, knowledge, education, public policy, and reimbursement that drive the management of this disease and the potential for innovation in the management of other chronic diseases.

"If you try to use money to motivate behavior, you are in a powerful and dangerous place, especially with engineers and scientists," remarked Tom Furman, CEO of Camp Dresser & McKee, Inc. (CDM), a consulting environmental engineering firm. Historically, CDM had followed an "egalitarian" management bonus program based on qualitative measures. As industry growth decelerated and competition intensified since 1991, management changed the incentive plan to tie it closer to the achievement of business objectives. This case describes the bonus and incentive compensation system and the evaluation process. It ends with Furman reflecting on how to interpret the CDM system to reward four CDM executives suitably.

Sailing Voyages, Inc. is a tour boat company offering day cruises on a sailing schooner. In this exercise, the owner of the company needs to determine the amount and nature of costs and revenues with varying number of sailing voyages and a limited season of operation.

Blue Titanium is a strategy boutique that provides consulting to senior management and specializes in competitive intelligence. The founder of the company is fine-tuning his strategic plan and has to decide whether the selection of the company's Web server software and hardware should be decided as part of the company's strategy or to leave the selection to the chief technology officer.

NRG Investments is a venture capital group whose current area of investment interest lies in Internet startups that specialize in information personalization software and infrastructure software. The director of NRG Investments is in the process of researching two very similar business plans in an effort to determine which idea, if either, merits NRG's $500,000 venture capital financing package. Management representatives from each of the two companies, ConciergeConnectInc. and Hotel Services Online, have already met with NRG Investments to provide the details of their Internet business plans. Both companies provide software packages that would interconnect concierges in high-traffic hotels, condominiums and offices with a wide variety of service providers (e.g., travel services, restaurants, ticket purchases, etc.). Both sets of entrepreneurs have been identified by NRG as being capable managers. The director's decision will therefore be based on her assessment of the products, market attractiveness, technology, revenue models, potential partnerships, possible exit strategies and company values.

The partners of CompleteScript.com, an Internet-based automated prescription filling service, have to decide whether to continue developing their innovative service themselves, to escalate the project with the help of venture capital or to sell the business. One of the partners knew they would need to create a solid plan with a clear strategy and cost structure to prepare for any of the options.

The Ontario Teachers' Pension Board is a nine member board appointed to administer the well-established Ontario Teachers' pension plan. At one time, there were concerns that the plans value of liabilities was exceeding the value of assets. Through the board's investment strategy, the plan turn itself around and now had a surplus. The board needed to consider the best investment options for this surplus to reduce the risk of surplus loss. One option is investment in timberland - land with the potential to grow commercial tree crops. The board's director of research and economics is preparing an analysis of the pros and cons of investing in timberland and must recommend whether the board should consider such an investment.

This note focuses on some of the methods used in the valuation of private companies. It looks at the differences between private and public companies for valuation purposes and the importance of making a reliable estimate. Also discussed are discounted cash flows, comparable valuation techniques and the limitations and challenges presented by a private company valuation.

This case presents an ethical choice: How should a prospective buyer respond when a homeowner quotes a price that the buyer knows is significantly below market value? The case describes a private transaction in which the prospective seller is fully competent mentally but is apparently uninformed about current market prices. The buyer could agree to the asking price (or even counter with a lower figure) without taking any financial risk, because he or she could obtain appropriate guarantees of good title, absence of environmental problems, and so forth.