Shows students how a custom software programming company takes advantage of differences between the United States and India in the cost of skilled labor (software engineers) to give its customers rare expertise and lower prices. Asks students to examine the company from its customers' point of view. HCL America offers customers three ways to purchase its services. The company can send its engineers to work on customers' premises on a temporary basis; do programming projects at its U.S. facilities, or send work to its "software factories" in India. A range of factors, including cost, determine which of these methods is best for a particular customer's project. Customers who send work to India often save 50% off the costs of doing the work in the United States. The decision point presents a potential customer, Sateesh Lele, who must decide whether to hire HCL America or a competitor, or use his own staff, for a particular project. If he hires HCL America, he must decide between three methods of work--on-site, in the United States, or in India.
Explains the concepts and procedures behind the statement of cash flows. Presents an overview of the reporting objectives of this report, and describes in detail the preparation of the cash flow statement using both the indirect method and the direct method. A complete numerical example is presented. Financial analysis techniques using the cash flow statement are also described. A rewritten version of an earlier note.
RogersCasey Alternative Investments faces the challenge of managing distributions of stock by the private equity investors in which their clients have invested. These distributed shares appear to behave in complex ways, apparently at odds with market efficiency. A variety of strategies to capitalize on this behavior are considered.
YPF, a recently privatized and restructured Argentine-based oil company now turns its attention to international expansion and faces an opportunity to acquire Maxus, a troubled U.S. oil company. The case discusses whether the company should go ahead with the proposed acquisition.
Nypro is the world's leading injection molder of precision plastic parts, operating a global network of 21 plants. Nypro's strategy is for each plant to offer identical capabilities, because its customers are global companies with worldwide sourcing needs. The case describes the way Nypro manages product and process innovation across the global plant network.
The manager of Service and Business Development for Trizec, a large property management company, was trying to decide how to implement a new initiative, the Trizec Advantage Program. This program called for Trizec to negotiate services management agreements with business services companies to become preferred service providers for Trizec's tenants. Although Trizec, its tenants and potential service providers were very positive, some of Trizec's critical staff members were skeptical. Students have to analyze how the Trizec Advantage Program fits into Trizec's service concept, how it will affect the company's competitive position, and how to make sure the staff support it.
Chemfree has the rights to distribute a line of environmentally friendly pest control products in Canada and abroad. Under the leadership of the president and controlling shareholder, the firm has experienced significant growth since its formation a few years ago and is poised for even more rapid growth in the future. The firm requires a substantial amount of money to finance this growth as well as its seasonal funding needs. Four alternative means of financing are being considered including two venture capital firms and two corporations. All of the alternatives involve a dilution in the president's equity interest and he must choose which alternative is most appropriate.
On April 2, 1993 Philip Morris USA launched an elaborate integrated program of consumer and retail promotions of unspecified duration that effectively slashed the retail price of its flagship brand, Marlboro, by 20% in the U.S. market. This program represented a major shift in strategy designed by Philip Morris to reverse the alarming declines in Marlboro's market share, which had occurred in the face of severe price competition from discount brands. Given Marlboro's status as one of the world's premier brands and the changing environment of consumer marketing, the date these actions were announced was immediately labeled "Marlboro Friday" and heralded as a milestone in marketing history. This case describes the state of the cigarette industry in the early 1990s, reviews the history of Philip Morris and Marlboro, and sets forth the key elements of the radical defensive strategy launched on Marlboro Friday. Did Marlboro's actions represent incisive brand strategy and enlightened brand management? What were the long-term implications of Marlboro Friday?
Following Intel Inc.'s decision to replace flawed Pentium chips, the company faces revenue recognition choices. Events leading up to IBM's decision to halt shipment of computers that have Intel's microprocessor inside and Intel's decision to replace all the flawed chips are outlined. Intel must decide whether to: make a provision for the costs of replacing the chips, defer recognition of revenue on the flawed chips that it has now agreed to replace, or make no entries on grounds of materiality.
Sunbeam Television, owner of a television station in Miami (a Fox affiliate), buys Channel 7 (a CBS affiliate) in Boston. They bring to the Boston station the concepts and ideas of their Miami news product--that is, a crisp, content-based design rather than one centered around personalities. Industry changes force them out of the CBS affiliation in Boston. Having considered both FOX and NBC, Sunbeam finally settles on NBC. The implications and motivations of their decision are to be discussed.
A large entertainment company, extensively criticized for producing violent, offensive, and anti-social material, is considering whether to sell its material to a semi-illegal operation that is beaming satellite TV into Turkey. The opportunity raises many questions about cultural sensitivities and the concept of American cultural imperialism around the globe, especially in the traditional Muslim Middle East. The young executive responsible for the deal wonders if his company will be perceived as a "Western vulture."
Bob Reiss, a seasoned entrepreneur, "accidentally" started Valdawn in 1988 and in six years built the company into a $7 million marketer of "fun and fashion" watches. Valdawn, a "virtual" company, has very few employees or fixed assets and enjoys attractive profit margins and, Reiss believes, bright prospects for growth. Nevertheless, Reiss is wary of making the investment such growth would require and wonders whether he should scale back the business or sell his interest.