Equate Petrochemical Co. (Equate) is a joint venture between Union Carbide Corp. and Petrochemical Industries Co. (PIC) for the construction of a $2 billion petrochemical plant in Kuwait. The sponsors began construction in August 1994, using a bridge loan, and are in search of permanent, nonrecourse finance. As part of the permanent financing, the sponsors want to use a tranche of Islamic finance--funds that are invested in accordance with Islamic religious principles known as Sharia. The sponsors hired Kuwait Finance House which, in turn, approached The International Investor (TII is a Kuwaiti investment bank) to assist in structuring and underwriting the Islamic tranche. The case is set in early December 1995, as members of The Institutional Investor's Structured Finance Group are deciding which Islamic structure to use, how to resolve various conflicts between the Islamic and conventional tranches, and how large a commitment to make on behalf of their investors.
Introduces students to the challenging negotiations between venture capitalists and entrepreneurs. Explores interests, sources of negotiating power, barriers to reaching agreement, and common contractual terms. Describes how the parties try to reduce information asymmetries, align incentives, control decision making, and protect financial downside.
Describes the evolution of Women's World Banking, an international microfinance nonprofit promoting financial access for poor women. Explores the organization's development of different types of networks to achieve its mission.
This case examines the capital budgeting framework used in a large specialty chemical company. It presents the reader with issues related to using multiple discount rates to examine projects and how compensation policies can impact on managerial actions. A second use of the case is to introduce project-related real options.
Wit Capital brings democracy to the IPO process via the World Wide Web. This case encourages debate about the role service will play in this technology-intermediated investment bank and the sources and sustainability of its competitive advantage.
VITAS, a for-profit hospice, has grown through acquisitions and start-ups. The company considers a rollup strategy, and Deirdre Lawe must decide whether to make a particular acquisition.
Intel deployed a creative business model to commercialize its EUV technology in photolithography. This model assigned intellectual property and machine priority in an industry consortium.
In spring 1998, Pradeep Jotwani, vice president and general manager of the Consumer Products Business Organization of the Hewlett-Packard Co. (HP), was contemplating the increasing success of e-commerce and its implications for his division. The consumer products group had started selling refurbished printers through an Internet outlet center in December 1997, but Jotwani was now considering a move to sell new printers directly to consumers via this new channel. If he were to make such a move, he wondered which products to sell online at what prices, and how to communicate this strategy to the channel partners without damaging the existing distribution structure.
It is 1995 and Steinway & Sons has just been purchased by two young entrepreneurs. For 140 years, Steinway has held the reputation for making the finest quality grand pianos in the world. The past 25 years have proven to be a challenge, however. First, the company has changed hands several times and product quality has become a concern. Second, the worldwide market for pianos has been in a steady decline, and competition for high-end grand pianos has increased. Finally in 1992, Steinway took the questionable steps of introducing a mid-priced line of grand pianos under the brand name "Boston." Designed by Steinway, but manufactured by a Japanese piano maker, the Boston line represented a major shift in strategy for the company. Within this context, what do two young entrepreneurs (with little or no experience in the piano industry) hope to accomplish in buying Steinway? In particular, what value do they bring to the company and what decisions should they make?
Eddie Bauer has decided to coordinate its merchandising strategy (price, selection) across its stores and catalog. But with e-commerce, is this still sensible?
Alaska Airlines grapples with the issue of whether or not advanced use of technology to enable its customers to serve themselves (self-service) in certain airport functions will help it to achieve competitive advantage.