Since the 1960s, SMI has quietly executed a series of brilliantly negotiated takeovers throughout Europe, often acquiring companies much larger than itself. Despite formidable obstacles, SMI has managed to acquire state-owned competitors in Italy and France, as well as a tightly held semi-finished copper producer--one of Europe's largest--in "fortress" Germany, a country notoriously hostile to takeover bids from foreign firms. In an interview with the chairman of SMI's copper operations at the company's Florence headquarters, Prof. J.K. Sebenius of the Harvard Business School explores the negotiating strategies that have enabled what was once a little-known firm in Italy to consolidate a fragmented industry and become one of Europe's leading producers of semi-finished copper.
The case opens with a discussion of the evolution of the private branch exchange industry in the 1970s and 1980s. It follows the path of Rolm from an independent company to an IBM acquisition and its problem as an IBM division. Then describes Siemens' growing interest in the U.S. PBX market. At the end IBM and Siemens are negotiating over Rolm's future.
The Fojtasek Companies, a family business, faces several financing choices to address generational succession issues. Several buyouts have expressed interest in acquiring the firm outright; an investment bank has proposed a leveraged recapitalization; and a private equity group, Heritage Partners, has proposed a hybrid transaction.
OXO, a kitchen tools and gadgets company, was started by a businessman who had 30 years of experience in the housewares industry. With his wife and son as founders, he creates a new niche in the gadgets industry for high-end gourmet stores. The company has headquarters in New York City, but it outsources product design to a NYC industrial design firm, manufacturing to Asia, and warehousing to a site in Connecticut in order to manage start-up costs and growth. Because of the veteran businessman's reputation and industry sense, the company grows quickly and in 1992 is sold for $6.2 million to a large housewares distributor, General Housewares. The original owners stay on as consultants to the parent company and decide to turn over management of the company to a Harvard MBA who also has extensive industrial design experience. Innovative product design is the key to OXO's success, and the company has worked exclusively with one design firm based on royalties of sold products. The new managing director initiates new product category programs for the bathroom, the garden, and home baking. He must coordinate the outsourcing of the design and development function.
In January 1996, the chief financial officer must fashion a response to a raider who claims that a major business segment of the company should be sold because it is not earning a satisfactory rate of return (ROR). The case recounts the debate within the company over the use of a single hurdle rate to evaluate all segments of the company versus a risk-adjusted hurdle rate system. The students' tasks are to resolve the debate, estimate weighted-average costs of capital (WACC) for the two business segments, and respond to the raider. Because the case was prepared to serve as part of an introduction to estimating investors' required rates of return, it would best follow one or two class sessions introducing techniques for estimating WACC. Although the numerical calculations required are light, some of the subtleties about the use of risk-adjusted hurdle rates will require time for the novice to absorb. The case can be used to pursue a variety of teaching objectives, including (1) extending risk return (i.e., mean variance) analysis to corporate finance; (2) surveying classic arguments for and against the use of risk-adjusted hurdle rate systems; (3) assessing the assumptions and limitations of risk-adjusted hurdle rate systems; (4) exercising the estimation of segment WACCs; and (5) considering possible organizational barriers to the implementation of risk-adjusted hurdle rates.
A brief introduction to simulation--what it is, why it's used, etc. Meant to set context for a first class on simulation. A rewritten version of an earlier note.
This case provides the confidential role information necessary for one person in a four-person negotiation simulation about a major corporate change. Specifically, it describes the role of David Carlson as he attempts to negotiate a new uniform corporate information system with three peers.
This case provides the confidential role information necessary for one person in a four-person negotiation simulation about a major corporate change. Specifically, it describes the role of Helen Freeman as she attempts to negotiate a new uniform corporate information system with three peers.
This case provides the confidential role information necessary for one person in a four-person negotiation simulation about a major corporate change. Specifically, it describes the role of Jack Morris as he attempts to negotiate a new uniform corporate information system with three peers.
This case provides the confidential role information necessary for one person in a four-person negotiation simulation about a major corporate change. Specifically, it describes the role of Paul Stokes as he attempts to negotiate a new uniform corporate information system with three peers.
In July 1996, Mr. Thomas Zimmermann, European Manager of Computron, must select a price for a new computer for his largest customer. A rewritten version of an earlier case.
This note discusses the ranking of creditors in a bankruptcy, why financial institutions secure collateral when extending a loan and how a lender accesses collateral.
This case describes an innovative response-modeling project at INTUIT. The case can help students understand the basics of (and the issues surrounding) response modeling, an important tactic in data-base marketing.
The case presents financial ratios for eight pairs of unidentified companies and asked to mate the description of the company with the financial profile apparent in the ratios. It provides a foundation for student discussion of financial ratios and the insights that may be gained through their use. Classroom discussion of the students' attempts to match results and companies reveals the strong influence of both industry and corporate strategy on the financial results and ratios for firms.
Chaos and disorder in the public housing system of San Juan, Puerto Rico (second largest in the US, prompt the newly-elected governor Pedro Rosello to consider an unprecedented new approach: using the island's national guard troops to patrol the projects. The Guard would replace police who had become so frightened or corrupted by the dominance of drug gangs in public housing that they seldom ventured into the apartment complexes at all. The National Guard, moreover, was a popular force on the island. At the same time, Rosello knew that there were risks associated with calling out the Guard. Many in its ranks were young and inexperienced. Sustaining the commitment over time would be difficult and expensive. The kind of tactics thought necessary to regain control of the projects might offend civil libertarians. The new governor, urged on by the superintendent of police, had to decide whether and how to deploy the Guard. HKS Case Number 1390.0
Chaos and disorder in the public housing system of San Juan, Puerto Rico (second largest in the US, prompt the newly-elected governor Pedro Rosello to consider an unprecedented new approach: using the island's national guard troops to patrol the projects. The Guard would replace police who had become so frightened or corrupted by the dominance of drug gangs in public housing that they seldom ventured into the apartment complexes at all. The National Guard, moreover, was a popular force on the island. At the same time, Rosello knew that there were risks associated with calling out the Guard. Many in its ranks were young and inexperienced. Sustaining the commitment over time would be difficult and expensive. The kind of tactics thought necessary to regain control of the projects might offend civil libertarians. The new governor, urged on by the superintendent of police, had to decide whether and how to deploy the Guard. HKS Case Number 1390.0
Describes the efforts of a manufacturer of scientific instruments to implement new methods of managing new product development, which its executives had learned in a Harvard Business School seminar. The executives left the seminar excited to implement a new way of working, but, through a series of seemingly logical steps, got little accomplished.
Faced with the need to dispose of an offshore oil storage installation, the Royal Dutch Shell Corporation develops what it believes is a straightforward and sensible plan: to dump the oil platform deep in the ocean, 150 miles off the northwest coast of Scotland. Doing so avoids a number of problems, including potential environmental threats involved with transporting it and otherwise disposing of it. The British government agrees but the unprecedented plan sparks outrage among environmental groups. HKS Case Number 1369.0