Two new product launch decisions face Christopher Carson, managing director of BRL Hardy, Europe. Responsible for the European operations of a major Australian wine company, Carson has begun to globalize his strategy beyond selling the parent company's wines. After a difficult joint venture with a Chilean wine source, he is proposing to launch an Italian line of wines. His local team has also developed a new Australian brand that would compete directly with a parent company's global brand rollout.
Describes the business model for online market makers, firms that use the Internet to organize a marketplace, providing participants with a virtual "place" to trade, rules to govern their exchanges, and infrastructure to support trading. First it proposes a definition of market making and presents different ways to categorize online market makers. Next it describes how online market makers create value for market participants. Then it examines the economics of market making, focusing on revenue and cost drivers, using both online and offline examples. Building on that analysis, the final section examines the risks and potential payoffs to online market makers from pursuing aggressive growth strategies. Explores the value proposition offered by these companies and the economic imperatives they face. Finally, seeks to provide a framework for evaluating whether the adoption of aggressive growth strategies is prudent for online market makers.
Enables a condensed analysis of Ventro (formerly known as Chemdex), which builds and operates multiple B2B marketplace companies. Part of the Building-E-Business Online series.
The manufacturer of TotalMint mouthwash graded its television commercials internally to judge their potential effectiveness in the marketplace. New television commercials were shown to planned audiences and diagnostic data points were used to judge the commercial based on several criteria. TotalMint was able to assess the extent that a particular commercial was likely to drive sales by comparing the results of the test against a historical database of television commercials. The product manager for TotalMint received the raw data from the advertising effectiveness tests of the latest commercial and was ready to start the evaluation by categorizing the verbatim comments and the overall recall responses. Once tallied, she needed to compare the results to the two previous TotalMint commercials.
This case provides a technical overview of different valuation techniques for use in valuing companies in corporate restructuring. Techniques covered include adjusted present value, WACC, capital cash flow, and discounted cash flow valuation. Specific numerical examples are provided.
Describes Promise, the third-largest consumer finance company in Japan. Promise was created in 1963 by an entrepreneur and has grown rapidly, especially in the 1990s when commercial banks struggled. Promise's core business consists of providing unsecured loans of up to about $10,000 to individuals. The company has maintained an entrepreneurial culture despite its growth. At the time of the case (July 2000), Promise has around 2.2 million customers and is faced with increasing competition and several regulatory changes. Management must make a number of decisions going forward, including new sources of growth and financing, as well as a potential listing on a foreign stock exchange.
Describes the online portal business model. Analyzes the model, focusing on the tactics used to acquire new users, turn new users into repeat visitors, and monetize user traffic. Explains portals' revenue and cost drivers and their implications for pursuing aggressive growth strategies. Finally, explores the challenges facing companies that aspire to develop portals for new online access technologies, such as wireless data and interactive television. To accompany teaching cases on online portals in courses on Internet strategies and e-commerce. Provides background on the online portal business model, and explains how it differs from other Internet business models. Examines the strategic choices that portals typically face. Also describes how portals can add value as consumers adopt emerging technologies, such as wireless data and interactive television.
John Couch, CEO of DoubleTwist, has transformed a software products company into an Internet application service provider, racing to provide databases and tools for those working to explore the human genome. Crafting strategy and building organizational capability are challenges in this fast-moving field.
It's August 2000, and Maitri AIDS Hospice in San Francisco is reevaluating its approach to fundraising. In recent years, Maitri has been relying increasingly on government, corporate, and foundation grants. Yet Don Spradlin, Maitri's associate director for individual gifts who was hired in early 1999 to focus on individual donations and special events, has made some progress in increasing the number of individual donors over the past year and a half. He inaugurated two new earned income strategies, both of which have attracted new donors and positive publicity for Maitri. Nonetheless, individual donations still account for only 8% of annual operating expenses, and Spradlin is struggling with defining his purpose and that of individual donors within the traditionally grass-roots organization.
This leadership exercise asks students to reflect on their family values and to begin to write them down. The exercise is useful in a leadership or career-management course when students need to consider their own values, assumptions, beliefs, and expectations about the way the world should be and then reexamine them. The exercise builds on the work of Mihalyi Csikszentmihalyi and his notion of transcender (the Evolving Self) and Richard Dawkins's concept of memes. The results of the exercise can be used as a springboard to discuss students' becoming transcenders as opposed to those who simply live out the values imprinted on them early in life. The exercise includes a table with examples to help students get started.
This technical note introduces students to the use of earnouts and other forms of incentive payments in the context of mergers and acquisitions. The note describes the use of incentive payments in M&A, recent deals in which earnouts were used, the trend and volume of earnout deals, the benefits and disadvantages of earnout structures. The large concept in the evaluation of earnouts is their similarity to call options. This conceptual approach provides the foundation for considering how an earnout might best be structured, and how its value might be estimated. The note concludes with a generic valuation example and refers the reader to a spreadsheet model that might serve as a template for future assessments of earnouts.
Describes online retailers, companies that use the Internet to sell physical goods. Defines online retailers and describes different ways to categorize them. Explores their economic model and value proposition for consumers in comparison with offline retailers. Next, explores the payoff to online retailers from pursuing a "Get Big Fast" strategy--i.e., investing aggressively in customer acquisition and brand building--and identifies best practices that online retailers might employ to maximize their chances of success. Lastly, discusses implications of shopping "bots," and the prospects for disintermediation by retailers by manufacturers.