Arriving in greater numbers to poverty-ridden cities throughout Latin America, international executives, by their increased visibility, become targets. Newspapers have been filled with stories of kidnappings, abduction and robbery of foreign business people. However, in many respects, Latin America posed no greater danger than the United States, and with proper preparation, risks can be managed. This note briefly presents the current security risks, and actions that can be taken by international firms and individuals to reduce these risks. Comparative statistics are also provided.
An investment advisor for National Securities Inc. had just met with a high-net-worth client to discuss equity investment opportunities in various industries or sectors. Her task was to help the client understand the importance of industry analysis as part of the stock selection process. In particular, she wanted to demonstrate how various industries were related to overall economic performance, as well as various industry life cycle stages. This case allows students to assess a particular industry, the auto parts industry, in order to categorize both the type and life cycle stage. This case is the first in a series of three cases that focus on a variety of stock investment decisions. (See 9A99N007 and 9A99N009.)
In 1999, an investment advisor for National Securities Inc. had just met with a client who was looking for some interesting stocks to add to his portfolio of investments. He wanted to understand how to analyze a particular company's financial statements and project earnings, and a target share price. This case allows students to assess a particular company's financial statements in order to determine, based on the Dupont method, the drivers behind internal growth. The price-earnings valuation method is also presented. This case is the second in a series of three cases that focus on a variety of stock investment decisions. (See 9A99N006 and 9A99N009.)
An investment advisor for National Securities Inc. was preparing to meet with a client. Based on the advisor's recommendation, the client had previously added an auto parts company to his portfolio of stock investments. Now, as he became more sophisticated, the client wanted to understand the potential benefits and risks of trading call options and put options. This case is the third in a series of three cases that focus on a variety of stock investment decisions. (See 9A99N006 AND 9A99N007.)
Describes a methodology for identifying markets for new technologies and for defining the highest value attributes of new products or services. It helps innovators escape the trap of incremental improvements to established product concepts by asking a straightforward question: What job did my customer expect this product to do for him or her?
In March 1997, an executive vice president of Genzyme Corporation must develop the terms by which the $518 billion (revenue) firm will form a joint venture with a small biotechnology firm to make and market a new drug. The tasks for the decision-maker are to estimate the enterprise value of the new joint venture and to recommend how large an interest to acquire in the venture, and to determine what price to pay for that interest, and when. The case may be used to pursue some or all of the following objectives: (1) exercising analytical techniques, (2) introducing a framework for creating value and reducing risk, (3) exploring the impact on value of a hidden option (staged investing), and (4) visualizing risk and its implications.
Gerald Weiss left Wall Street for the promise of a CFO position at a well-established corporation. He was given a 10-year options package with a guaranteed floor of $12 million and unlimited upside. To ensure the entire package would be worth at least $12 million after 10 years, Gerald negotiated a special provision, which gave him the ability to "gross-up" his options twice over those ten years. If the stock price fell substantially, Gerald would be awarded more options (at-the-money) to bring the entire Black-Scholes value of his package back up to $12 million. Because of the company's culture of informality, the deal was agreed to with a handshake from the CEO, witnessed by the current CFO and the VP of human resources, but not written down. When the stock price actually fell, and Gerald asked to revalue his options package, the company reneged on the deal. Teaching Objective: To generate discussion about the benefits and pitfalls of mega-option grants, the issue of revaluing options, and the conflict between adhering to company culture and protecting the financial interests of the employee.
The dynamics of a linked series of internal and external negotiations involved in launching, growing, and selling a high-tech, Internet start-up are explored. Steve Perlman unfurled an impressive new technology, recruited a top technical and management team, secured seed capital, laid the groundwork for later stages of financing, initiated alliances with content and Internet service providers, maneuvered into negotiation with major consumer electronics players Sony and Philips (for manufacturing and distribution), and ultimately had to decide on his strategy for possibly selling the firm. WebTV provided a low-cost, easy-to-use set-top box that linked televisions to the Internet, allowing users instant web access.
The dynamics of a linked series of internal and external negotiations involved in launching, growing, and selling a high-tech, Internet start-up are explored. Steve Perlman unfurled an impressive new technology, recruited a top technical and management team, secured seed capital, laid the groundwork for later stages of financing, initiated alliances with content and Internet service providers, maneuvered into negotiation with major consumer electronics players Sony and Philips (for manufacturing and distribution), and ultimately had to decide on his strategy for possibly selling the firm. WebTV provided a low-cost, easy-to-use set-top box that linked televisions to the Internet, allowing users instant web access.
A successful entrepreneur is considering his need for growth financing and his desire to achieve some personal liquidity. He has arguably the most successful sportfishing boat made, but sees the need both to grow further and to reduce his personal exposure to a cyclical business.
The Caspian region may become one of the world's next major energy producers. Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan-all former Soviet republics--hold vast and largely undeveloped reserves of oil and gas, but the region's export infrastructure is nearly nonexistent. The Note provides background on Azerbaijan and Kazakhstan-the region's major oil producers-including economic and oil sector data. Also in A, it discusses major options to the surrounding region; B. Covering the advantages and weaknesses of each of the options.
David Thomas takes his first sales management assignment and is faced with a sales rep revolt because of a possible territory reorganization. In addition, his sales division is performing well below the national average. Rewritten version of an earlier case.
A money manager is assessing the long-term historical performance of three active acquirers: Symantec, Republic, and U.S. Office Products. The task for the student is to determine why rapid growth by acquisition might not always be good for investors.
Presents the background for a video of a focus group on Compaq Computer's new consumer notebook. Engineers, manufacturers, and retailers had collaborated on the product design, which has been approved by the executive committee. A launch is scheduled for nine months later. Does the focus group support the decision? Is it reliable? Any changes mean going against conventional wisdom and possible failure in a new market. Must be used with the video.
Presents the results of quantitative and qualitative market research on the possible acceptance of a non-Intel processor in Compaq Computer's consumer notebook line. If the low-priced, non-Intel notebook is a success, the company will maintain or increase its 45% share of the market. If not, it could cease to be a player in the market it has created and filled. Students must evaluate the reliability of the research and decide which of three products to produce.
Gives the final report, both results and methodology, of the focus group on Compaq Computer's new consumer notebook. Describes the groups, selection method, and methodology in detail. Should Compaq base its product design on the opinions of 64 people? Must be used with the video.
The head of a bank's Mexico Team must consider her options when confronted with the task of aiding in the arrest of one of her clients. She had just returned from Switzerland, where Swiss narcotics agents were encouraging her to lay a trap for the wife of one of her clients, the brother of a former Mexican president, who had been arrested in Mexico a few months earlier on charges of murder, illegal enrichment, and laundering money for the Mexican drug cartel. As she pondered her options, the fate of one of her former employees, who had recently been sentenced to 10 years imprisonment for managing the account of a convicted money launderer, provided food for thought. She must consider extraterritoriality, bank secrecy laws, and professional ethics in international private banking.
After decades of poor economic performance, the Irish government adopted major changes in economic policy in 1987. By the end of the 1990s, Ireland's real GDP growth rate of almost 10% per year exceeds that of all member nations of the European Union (EU). A key component of Ireland's growth strategy has been the encouragement of foreign direct investment through low tax rates and financial and logistical support provided by the Irish Industrial Development Agency (IDA). In 1999, Ireland confronts the issue of sustainability of the "Irish miracle" in the face of diminishing access to EU subsidies, increasingly strained physical infrastructure, and questions of equity in the distribution of economic gains across the population. The case includes substantial material relating to the Irish political, social, and historical context in addition to traditional economic statistics.
Al Dunlap was one of the best-known corporate turnaround artists of the 1990s. In 1996, he was hired at Sunbeam to effect a restructuring, but was fired almost two years later when the company's financial performance and stock price began to decline. Many of the controversies that had surrounded him at his previous job, Scott Paper, followed him to Sunbeam: his rejection of the multiple stakeholder view of corporate governance, his aggressive managerial style, his shaky relations with the media, and his high level of pay. The case describes Dunlap's compensation package at Sunbeam and addresses the issue of how U.S. companies compensate "superstar" CEO's.