A proposal to give all pharmacists computer database access to the prescription histories of all British Columbians was meeting stiff media criticism over privacy issues. While the Ministry of Health foresaw many benefits of the proposed Pharmanet to consumers, pharmacists, and government regulators, many others felt access to so much information would lead to misuse or abuse. With province-wide implementation only two months away, the Pharmanet project director had to decide what, if any, additional changes to the database system had to be made to ensure public support.

Palliser is a large, successful family-owned furniture manufacturer in Manitoba, Canada, that must respond to the increasingly global nature of its business. Its current business strategy, a product of international trade liberalization, is clearly centered on exports to the U.S. However, management perceives risks and limitations to growth with their current product/market position and must decide whether and how to change. Management is faced with a foreign entry mode decision in Mexico and/or China. This case is suitable for a course on international management, international marketing, or strategic management. (A three-minute video, 7A98M036 can be purchased with this case.)

The merger of Asea AB and BBC Brown Boveri required a restructuring of operations and a change in organizational cultures. Competitive success also necessitated the benefits of scale while remaining "local" for political and customer-responsiveness reasons. The case describes these competitive pressures, which resulted in the decision to adopt a matrix organization. To be used with Asea Brown Boveri: The ABACUS System.

A venture capital/private equity fund is preparing to negotiate with the two parties in a prospective PCS joint venture: the entrepreneur and AT&T Wireless. The negotiation will decide how equity and control are shared in the venture.

Danny Wegman, president of Wegmans Food Markets, is trying to decide how to evaluate the success of a nutrition-counseling program for diabetics, and whether and how to expand the program beyond the two stores currently involved. Wegmans, with 57 stores and $2.3 billion in revenues, implemented the program in conjunction with a local hospital and a disease-management company. Initially intended to stem the erosion of pharmacy margins due to managed care plans, the program filled a genuine social need--diabetes can be inexpensively controlled through diet if caught early. In addition to discussing how the program has been established, the case presents financials for the supermarket industry and Wegmans' competitors. The new role of supermarkets in addressing disease, health, and preventive medical needs is also presented.

This guide, written for students, is intended to help in case preparation and in understanding case learning.

A guide to writing case studies and the accompanying teaching notes for teachers and casewriters. Begins with generating case leads and moves through field interviewing techniques, case drafting, case release, and preparing the teaching note. Also deals with the instructor/casewriter relationship.

An Israeli high-tech start-up has developed an innovative simulator which makes possible non-patient training in medical ultrasound. The marketing function moves to the United States, the largest market, while other functions remain in Israel. The case describes a number of options for further growth.

In New Rules of the New Economy, Kevin Kelly urges companies to rethink their business strategies--to base their decisions on a new set of rules in which networks are everything. Easy electronic communication is indeed altering business strategies in many industries, and Kelly's book provides colorful examples and analysis of the opportunities ahead. But are networks, in fact, everything? In reviewing Kelly's book, economics consultant Peter Bernstein reminds readers that networks have been influencing businesses for centuries. Consider the railroad, which boosted living standards enormously by connecting isolated economies into a worldwide market. The Internet is just one more step in the growing interconnectedness of business, and hardly the most important. Nevertheless, Bernstein agrees that a "new economy" has arrived. Network-based opportunities are just one of several facets of this new orientation, all made possible by the regime of low inflation and intense competition introduced in the 1980s. Paul Volcker and his colleagues at the Federal Reserve gave managers the monetary stability necessary for taking risks. T. Boone Pickens and Michael Milken successfully challenged the old guard of corporate leaders that had been slow to respond to competitive challenges from Europe and Asia. The companies emerging from the turmoil of this period are intensely focused on innovation, competitiveness, risk management, and profitability. Without the environment created by Volcker, Pickens, and Milken, Kelly's highly interconnected economy could not have become the dazzling reality that it is.

This fictitious case written by Andy Blackburn, a Boston Consulting Group vice president based in San Francisco, explores the question of how PC companies can make money in the increasingly price-competitive consumer market. The senior staff of Praxim, a multibillion-dollar maker of desktop computers, face some tough questions: Is it possible to make money selling personal computers to consumers? And if so, how? What resources need to be mustered? Where should they be directed? After years of strong profits, Praxim is being dragged down by increasing competition in the consumer segment of the PC market. In response, CEO Jack Thompson has hired a new manager for the consumer division, Linda Marcus, luring her away from a leading packaged-goods company. Linda wants to make Praxim into a trusted brand by putting Praxim's people into retail stores at peak selling times, setting up an 800 number to answer consumers' technical questions in plain English, and bundling extensively. But the other members of the senior staff are skeptical. The vice president of the commercial division argues that PCs are a commodity and urges Linda to concentrate on cutting costs. The chief technology officer wants Praxim to concentrate on developing the next killer app so that it can charge consumers a premium for new technology. The CFO thinks Praxim should cut its losses and mostly give up on the consumer segment. Mindful that continued losses in the consumer segment will pull down Praxim's share price and put his top executives' stock options at risk, Jack is at a loss. Should he try to make money selling PCs to consumers? Can he keep the doubters on his staff from defecting if he goes ahead with Linda's plan? In 98603 and 98603Z, Geoff Moore, Donna Dubinsky, Larry Keeley, George Quesnelle, Scott Ward, and Philip Pifer give Jack their advice.

This fictitious case written by Andy Blackburn, a Boston Consulting Group vice president based in San Francisco, explores the question of how PC companies can make money in the increasingly price-competitive consumer market. The senior staff of Praxim, a multibillion-dollar maker of desktop computers, face some tough questions: Is it possible to make money selling personal computers to consumers? And if so, how? What resources need to be mustered? Where should they be directed? After years of strong profits, Praxim is being dragged down by increasing competition in the consumer segment of the PC market. In response, CEO Jack Thompson has hired a new manager for the consumer division, Linda Marcus, luring her away from a leading packaged-goods company. Linda wants to make Praxim into a trusted brand by putting Praxim's people into retail stores at peak selling times, setting up an 800 number to answer consumers' technical questions in plain English, and bundling extensively. But the other members of the senior staff are skeptical. The vice president of the commercial division argues that PCs are a commodity and urges Linda to concentrate on cutting costs. The chief technology officer wants Praxim to concentrate on developing the next killer app so that it can charge consumers a premium for new technology. The CFO thinks Praxim should cut its losses and mostly give up on the consumer segment. Mindful that continued losses in the consumer segment will pull down Praxim's share price and put his top executives' stock options at risk, Jack is at a loss. Should he try to make money selling PCs to consumers? Can he keep the doubters on his staff from defecting if he goes ahead with Linda's plan? In 98603 and 98603Z, Geoff Moore, Donna Dubinsky, Larry Keeley, George Quesnelle, Scott Ward, and Philip Pifer give Jack their advice.

This fictitious case written by Andy Blackburn, a Boston Consulting Group vice president based in San Francisco, explores the question of how PC companies can make money in the increasingly price-competitive consumer market. The senior staff of Praxim, a multibillion-dollar maker of desktop computers, face some tough questions: Is it possible to make money selling personal computers to consumers? And if so, how? What resources need to be mustered? Where should they be directed? After years of strong profits, Praxim is being dragged down by increasing competition in the consumer segment of the PC market. In response, CEO Jack Thompson has hired a new manager for the consumer division, Linda Marcus, luring her away from a leading packaged-goods company. Linda wants to make Praxim into a trusted brand by putting Praxim's people into retail stores at peak selling times, setting up an 800 number to answer consumers' technical questions in plain English, and bundling extensively. But the other members of the senior staff are skeptical. The vice president of the commercial division argues that PCs are a commodity and urges Linda to concentrate on cutting costs. The chief technology officer wants Praxim to concentrate on developing the next killer app so that it can charge consumers a premium for new technology. The CFO thinks Praxim should cut its losses and mostly give up on the consumer segment. Mindful that continued losses in the consumer segment will pull down Praxim's share price and put his top executives' stock options at risk, Jack is at a loss. Should he try to make money selling PCs to consumers? Can he keep the doubters on his staff from defecting if he goes ahead with Linda's plan? In 98603 and 98603Z, Geoff Moore, Donna Dubinsky, Larry Keeley, George Quesnelle, Scott Ward, and Philip Pifer give Jack their advice.

Using actual examples from front-line managerial situations, this article explains and explores three work-life principles executives can adopt to create wins for their organizations and individual employees. Most companies view work and personal life as competing priorities in a zero-sum game, in which a gain in one area means a loss in the other. From this traditional perspective, managers decide how their employees' work and personal lives should intersect and often view work-life programs as just so much social welfare. A new breed of managers, however, is trying a new tack, one in which managers and employees collaborate to achieve work and personal objectives to everyone's benefit. These managers are guided by three principles. The first is to clearly inform their employees about business priorities and to encourage them to be just as clear about personal priorities. The second is to recognize and support their employees as whole people, not only acknowledging but also celebrating their roles outside the office. The third is to continually experiment with the way work gets done, looking for approaches that enhance the organization's performance and allow employees to pursue personal goals. The managers who are acting on these principles have discovered that conflicts between work and personal priorities can actually be catalysts for identifying inefficiencies at the workplace.

In order to solve high-tech's employee retention problems, Bill Gross, the chairman and founder of Idealab, proposes a radical solution: give all workers a significant equity stake. In 1994, when the software maker Knowledge Adventure decided to spin out a new venture--Worlds, Inc.--founder Bill Gross expected the worst. He had argued with the board that it was in KA's best interests to maintain a controlling ownership stake in Worlds, whose powerful new software technology had enormous revenue potential. But the board prevailed, and KA took only a 20% ownership in the new company, giving the rest to Worlds' employees. Within a year, the company's performance had surpassed all expectations, and instead of owning 80% of a $5 million business, KA owned 20% of a $77 million business. The arithmetic may have been counterintuitive, but the lesson was clear. When KA let go of Worlds and gave its employees near total ownership, the company unleashed a new level of employee performance. That, in turn, led to the creation of economic value that more than made up for the equity KA had surrendered. So compelling was this "new math of ownership" that Gross founded a new company, Idealab, on this principle. The company, which develops ideas for Internet-based businesses and seeds the most promising ones, takes no more than a 49% equity stake in the new ventures and gives at least 1% of ownership to each employee. For Gross, this radical approach to ownership is the key to inspiring stellar performances. In part, employee-owners are motivated by their potential to earn great financial reward. But the drama of ownership, he argues, is even more important. In that drama, employees become personally involved in the struggle to outdo the competition and emerge victorious.

The orchestra conductor is a popular metaphor for managers today--up there on the podium in complete control. But that image may be misleading, says McGill University and INSEAD Professor Henry Mintzberg, who recently spent a day with Bramwell Tovey, conductor of the Winnipeg Symphony Orchestra, in order to explore the metaphor. He found that Tovey does not operate like an absolute ruler but practices instead what Mintzberg calls covert leadership. Covert leadership means managing with a sense of nuances, constraints, and limitations. When a manager like Tovey guides an organization, he leads without seeming to, without his people being fully aware of all that he is doing. That's because in this world of professionals, a leader is not completely powerless--but neither does he have absolute control over others. As knowledge work grows in importance, the way an orchestra conductor really operates may serve as a good model for managers in a wide range of businesses. For example, Mintzberg found that Tovey does a lot more hands-on work than one might expect. More like a first-line supervisor than a hands-off executive, he takes direct and personal charge of what is getting done. In dealing with his musicians, his focus is on inspiring them, not empowering them. Like other professionals, the musicians don't need to be empowered--they're already secure in what they know and can do--but they do need to be infused with energy for the tasks at hand. This is the role of the covert leader: to act quietly and unobtrusively in order to exact not obedience but inspired performance.

In this article, Michael Porter, the C. Christensen Professor of Business Administration at the Harvard Business School, explains how clusters foster high levels of productivity and innovation and lays out the implications for competitive strategy and economic policy. Economic geography in an era of global competition poses a paradox. In theory, location should no longer be a source of competitive advantage. Open global markets, rapid transportation, and high-speed communications should allow any company to source any thing from any place at any time. But in practice, location remains central to competition. Today's economic map of the world is characterized by what Porter calls clusters: critical masses in one place of linked industries and institutions--from suppliers to universities to government agencies--that enjoy unusual competitive success in a particular field. The most famous examples are found in Silicon Valley and Hollywood, but clusters dot the world's landscape. Porter explains how clusters affect competition in three broad ways: first, by increasing the productivity of companies based in the area; second, by driving the direction and pace of innovation; and third, by stimulating the formation of new businesses within the cluster. Geographic, cultural, and institutional proximity provides companies with special access, closer relationships, better information, powerful incentives, and other advantages that are difficult to tap from a distance. The more complex, knowledge-based, and dynamic the world economy becomes, the more this is true. Competitive advantage lies increasingly in local things--knowledge, relationships, and motivation--that distant rivals cannot replicate.

In this article, University of California at Berkeley professors Carl Shapiro and Hal Varian explain how a "versioning" strategy can enable a company to distinguish its products from the competition and protect its prices from collapse. This insightful article will be essential reading for any executive competing in the information economy. Many producers of information goods assume that their products are exempt from the economic laws that govern more tangible goods. But that's just not so. Information goods are subject to the same market and competitive forces that govern the fate of any product. And their success, too, hinges on traditional product-management skills: gaining a clear understanding of customer needs, achieving genuine differentiation, and developing and executing an astute positioning and pricing strategy. What makes information goods tricky is their "dangerous economics." Producing the first copy of an information product is often very expensive, but producing subsequent copies is very cheap. In other words, the fixed costs are high and the marginal costs are low. Because competition tends to drive prices to the level of marginal costs, information goods can easily turn into low-priced commodities, making it impossible for companies to recoup their up-front investments and eventually bringing about their demise. The best way to escape that fate, the authors say, is to create different versions of the same core of information by tailoring it to the needs of different customers. The authors draw on a wide range of examples to illustrate how companies use different versioning strategies to appeal to customers with different needs. The power of versioning is that it enables managers to apply tried-and-true product-management techniques in a way that takes into account both the unusual economics of information production and the endless malleability of digital data.

In this article, Bob Zider, president of the Beta Group, a California-based firm that invests in commercializing new technologies, presents an analysis of present-day venture capitalists and shows why its practitioners have a lot more in common with investment bankers than you might think. The popular mythology surrounding the U.S. venture-capital industry derives from a previous era. Venture capitalists who nurtured the computer industry in its infancy were legendary both for their risk taking and for their hands-on operating experience. But today things are different, and separating the myths from the realities is crucial to understanding this important piece of the U.S. economy. Today's venture capitalists are more like conservative bankers than the risk takers of days past. They have carved out a specialized niche in the capital markets, filling a void that other institutions cannot serve. They are the linchpins in an efficient system for meeting the needs of institutional investors looking for high returns, of entrepreneurs seeking funding, and of investment bankers looking for companies to sell. Venture capitalists must earn a consistently superior return on investments in inherently risky businesses. The myth is that they do so by investing in good ideas and good plans. In reality, they invest in good industries--that is, industries that are more competitively forgiving than the market as a whole. And they structure their deals in a way that minimizes their risk and maximizes their returns. Although many entrepreneurs expect venture capitalists to provide them with sage guidance as well as capital, that expectation is unrealistic. Given a typical portfolio of 10 companies and a 2,000-hour work year, a venture capital partner spends on average less than 2 hours per week on any given company. In addition to analyzing the current venture-capital system, the author offers practical advice to entrepreneurs thinking about venture funding.

In this article, authors James Anderson, professor at the Kellogg Graduate School, Northwestern University, and James Narus, associate professor at the Babcock Graduate School, Wake Forest University, illustrate several ways in which suppliers can figure out exactly what their offerings are worth by creating and using what they call customer value models. Field value assessments--the most commonly used method for building customer value models--call for suppliers to gather data about their customers firsthand whenever possible. Through these assessments, a supplier can build a value model for an individual customer or for a market segment, drawing on data gathered from several customers in that segment. Suppliers can use customer value models to create competitive advantage in several ways. First, they can capitalize on the inevitable variation in customers' requirements by providing flexible market offerings. Second, they can use value models to demonstrate how a new product or service they are offering will provide greater value. Third, they can use their knowledge of how their market offerings specifically deliver value to craft persuasive value propositions. And fourth, they can use value models to provide evidence to customers of their accomplishments. Doing business based on value delivered gives companies the means to get an equitable return for their efforts. Once suppliers truly understand value, they will be able to realize the benefits of measuring and monitoring it for their customers.

Shortly after his 1989 inauguration, President George Bush confronts a seemingly intractable dispute which had simmered through the 1980s: how to legislate the clean-up of the so-called "big dirties", large coal-burning Midwest power plants linked to acid rain and a decline in the vitality of lakes and forests in the Northeast. This case describes both the policy innovation which helps to break a long-standing political logjam and the process of negotiation and compromise involving the White House staff (led by White House Special Assistant for Economic and Domestic Policy Roger Porter) and key members of committees of the Congress. Specifically, the case describes how the Bush administration formed an alliance with key environmental groups (such as the Environmental Defense Fund) by embracing the concept of tradeable emission rights-the right to buy and sell permits to emit sulfur dioxide, for instance, one of the key pollutant byproducts of coal-burning. The advent of such "emissions trading", however, can only proceed once agreement is reached on the total amount of pollution reduction to be achieved by the key enabling legislation which will create the permit regime, the Clean Air Act of 1990. This case, in large part, tracks the shaping of that legislation. HKS Case Number 1514.0