A new medium--the Internet and World Wide Web--is changing distribution channels like no other force since the Industrial Revolution. It is modifying many of the assumptions on which channel structure is based, and in some cases it is transforming and even obliterating channels themselves. As a result, many intermediaries will die out, while new channels and intermediaries will take their place. There are three essential purposes of distribution channels: to support economies of scope, to routinize transactions, and to search for information essential to both producer and consumer. However, the Internet and Web have brought about the death of distance, the homogenization of time, and the irrelevance of location. A matrix model of these developments, arrayed versus distribution channel functions, provides a guide to identifying which traditional channels will either undergo transformation or perish and where new channels will emerge. The matrix model suggests how existing firms and entrepreneurs can perform their distribution functions more efficiently. It enables identification of competitors poised to use the media to change the rules of the marketplace. Finally, it helps managers brainstorm ways in which an existing industry can be vulnerable and a totally new one defined.
Describes the introduction of capitation by a managed care company and the challenges of managing financial risk in the Medicare population. Focuses on the relationship between the health plan and physicians.
The taxpayer purchased land and later transferred it to a family controlled corporation in return for an earn out. When funds were eventually received, the IRS treated them as dividends, whereas the individual and corporate taxpayers contended they were sums paid on the individual taxpayer's sale of a corporate asset to the corporation. The question is whether the original transfer to the corporation was a contribution to capital (equity) or the creation of a debtor/creditor relationship.
Book-In-Time, developed at Xerox, can dramatically reduce the cost of printing "one" book. Combined with the possibilities of digital content storage and transmittal, the new technology has vast opportunities. Xerox needs a commercial plan. The case describes the state of the book publishing industry and the potential for a new technology.
Describes TelePizza, is Spain's leading chain of pizza restaurants and delivery services. TelePizza has experienced rapid growth to 500 stores since its creation in 1987. The company went public on the Spanish stock market in late 1996. Franchising has played an important role in the firm's expansion to date. For further growth, the founder and CEO is contemplating three strategies: further expansion in Spain, international expansion, or the creation of new restaurant concepts.
Georgian Glass and Mineral Water (GGMW), was created in 1995 by a Georgian entrepreneur and Western investors in Georgia (former Soviet Union) to bottle and market the famous mineral water from the Borjomi valley. At the height of the Soviet Union's power, Borjomi was Georgia's leading export product with 450 million half-liter bottles per year. During the early 1990s, however, Borjomi factories suffered underinvestment, theft, and neglect. GGMW's management needs to raise additional financing in order to fully capitalize on the market opportunity. Furthermore, management is faced with serious operating challenges in a newly privatized economy.
An employee is permitted to choose any one of three stock option plans. The first involves options that are in the money and must be exercised within 10 years. The second involves options that are at the money and must be exercised within 10 years. The third involves options that are at the money and must be exercised within 15 years. A wise decision requires students to consider a number of tax and nontax business considerations.
Chevron Corp., headquartered in San Francisco, manages a worldwide, vertically integrated value chain from the oil well to the gasoline station. Mishandling of oil at any stage of production can damage the natural environment, human health, corporate profitability, or all three. But at the same time Chevron needs to be prudent about the amount of money it spends on measures to manage these risks, and environmental programs within the firm can conflict with a long-standing tradition of decentralized management. To manage risks more efficiently, Chevron executives are contemplating the use of quantitative decision tools that enable operating managers to compute rough benefit-cost ratios for various alternative risk management projects. The case focuses on the pros and cons of using such tools within the context of Chevron's overall system for environmental risk management.
Describes the creation and operation of the initial two heavyweight teams for new drug development and launch. The primary focus is on one of the teams, Evista, although comparisons to the other team, Zyprexa, are included. Lilly must decide the next phase (postlaunch) for managing Evista's rollout.
This series presents the challenges facing the board of directors of a small merchant-banking company in London that is trying to get into the New York market. After hiring an American to develop the business, the board has become concerned about his operating style and his requests for additional authority. The A case ends after the American has made substantial improvements to the business and reports to the board, leaving the board to decide what to do with him. See also the B case (OB-0666). The two cases can be used as a team role-playing exercise.
Pandesic is a joint venture of SAP and Intel designed to develop turnkey information architectures for marketspace companies. The case explores the problems of developing the joint venture from the perspective of its general management. Describes the development of its strategy and organization. At the end of the case, performance is poor and Harold Hughes (Intel) steps in from his position as part-time chairman to run Pandesic.
A small hydraulic-valve manufacturer attempts a second buyout in order to take out its current equity partners. A three-way deal must be negotiated between management, the new mezzanine lender, and the departing equity owners.
Through their competitive battle, Coca-Cola and PepsiCo have created a stable and highly profitable duopoly in the U.S. soft drink industry. As the domestic industry matured and the cola wars moved to international markets, Coke and Pepsi tried to redesign their competitive strategies as well as the vertical structure of their corporations. A rewritten version of an earlier case by Michael E. Porter and David B. Yoffie.
Introduces students to the best practices for managing new product development projects. Includes concepts and tools related to structuring teams consistent with the project objectives as well as concepts and processes for improving project execution.
Raises the issue of customer definition in economic development. Because of the multiple stakeholders and their varying interests, understanding where and how value is created is critical to understanding the customer.
British Columbia Hydroelectric found itself facing substantial foreign exchange losses in 1988 as a result of debt service requirements on large quantities of U.S. dollar denominated debt. The debt originated from the late 1970s and early 1980s when the U.S. dollar had been substantially weaker against the Canadian dollar. The Chairman of BC Hydro, Larry Bell, was now evaluating a number of alternative strategies to protect the provincial utility against further losses associated with this debt.