ToyWorld, a fast growing retailer, was revitalizing its information technology (IT) infrastructure and called in AT&T to help plan for the future. Five strategic alternatives for use of information and communications technology were identified through value chain analysis and use of proprietary AT&T methodology. While two could be implemented by ToyWorld action alone, two would require external cooperation, and one represented an entirely new (but related) line of business.
Provides an introduction to three cash flow valuation methods. The three methods differ in their measure of cash flows and the discount rate applied to those cash flows. The names for the three methods correspond to the type of cash flow that is used in the valuation: Equity Cash Flow (ECF), Capital Cash Flow (CCF), and Free Cash Flow (FCF). The three methods provide consistent valuations when applied correctly.
In early 1994, Kimberly-Clark agreed to manufacture private-label training pants for Wal-Mart under the "Atta-Boy!" and "Atta-Girl!" labels. To place this decision in perspective, the case describes Procter & Gamble's battle with Kimberly-Clark for market share in the disposable-diaper market. The case also describes Procter & Gamble's adoption of value pricing, as well as Wal-Mart's introduction of premium store brands. Students must use this information to answer three questions: (1) How should Procter & Gamble respond to the introduction of Huggies Supreme with Velcro fasteners? (2) What should Procter & Gamble do with Luvs disposable diapers, which had been repositioned against private labels with a 16% price cut in May 1993? (3) How should Procter & Gamble respond to Wal-Mart's decision to sell private-label diapers manufactured by Kimberly-Clark?
About 15 operators work in a simple hybrid batch-flow environment to produce the Earth Buddy novelty product. The case introduces the topic of process analysis. Sufficient information is presented to introduce and discuss the following concepts in an 80-minute class: capacity, throughput time, cycle time, bottleneck identification and resolution, and work-in-process inventory accumulation and draw-down. Issues that can be explored during the discussion include: shift scheduling, the impact of cross-training, batch versus flow production, rush orders, and the impact of defects on capacity. (An Extend simulation file is available for this case, Earth Buddy - Extend Simulation file.)
In theory, mastery of a single competency provides a distinct niche in the marketplace. In practice, today's global competition is more dynamic and multidimensional than those models suggest. The mature industry paradox is that leadership demands differentiation, yet differences are quickly copied. Single-factor innovations tap one competency, and capable competitors can usually match it. Multiple competencies strengthen several dimensions and in effect redefine the basis of competition. The "shadow strategy task force" is offered as a method to force managers to relinquish the comfort of the firm's accepted view of itself. This approach begins with the objective of identifying the strategies and competencies that, in the hands of competitors, might be used to attack the firm's competitive position successfully. Especially critical on the task force are individuals with insight into how customers, suppliers, and competitors view the firm's products and services. Developing new competencies requires constant experimentation. The innovation-imitation-equilibrium cycle suggests that industry leaders teach customers what to demand by defining the current state of the art in performance, price, service, and other dimensions; customers learn to judge competitive offerings against these standards, and the learning effect is cumulative.
The management team at Electrohome's projection systems division must decide what to do in response to a surprise new product introduction by Sony Projection Systems. The new product threatens Electrohome's position at the high end of the market. The case focuses on competitive analysis as three players from three different regions of the world vie for profitable positions in the industrial projection system market. This case presents Electrohome's perspective of the same event documented in the Barco Projection Systems (A) case (HBS 9-591-133). Two follow-up cases Electrohome (B): The Phoenix Project and Electrohome (C): The Marquee Launch are available.
This case follows Electrohome (A): Projection Systems Division, and discusses the key events that have taken place among the competitors since the (A) case date. Electrohome is developing a new projection system which has the potential to be the best projector on the market. Of key importance is an understanding of the likely actions and reactions of the major competitors in the market. If the Phoenix project fails, Electrohome will likely go bankrupt.
This case follows Electrohome (A): Projection Systems Division, and Electrohome (B): The Phoenix Project. The Phoenix project is on track for completion before a critical trade show in January 1993. It is now August and the management team must decide whether or not to pre-announce the product or delay the announcement for maximum impact and surprise.
The vice-president of Damark Packaging Inc. must decide whether to accept or reject a US$1-million order for shrink wrap packaging equipment. Should Damark focus on external markets for survival? Is there a 'fit' between the company's external environment, its internal resources and the preferences of its management team. Pedagogically the case explores the issue of external markets and the decision faced by many companies of how to decide on the external environment that presents the best opportunities for their organization.
This is the second case in a two-part case series about decisions relating to the introduction of a new product, Johnson's face powder, to the Philippines market. In the first case, J & J (Philippines), Inc. - Johnson's Face Powder (A), the student was asked to assess the merit of the strategy, both in terms of market acceptance and their calculations as to projected contribution. In this case, the marketing vice president of J&J (Philippines) gets a phone call from the U.S. headquarters telling him to cancel the introduction. The subsequent discussion focuses on the issue of how product policy should be managed in an international organization. (A two-minute video can be purchased for this case, J & J (Philippines) Inc. - Johnson's Face Powder - Video.)
North Pittsburgh Telephone Company (NPT) was the 31st largest telephone company in the United States. The marketing supervisor was wondering what position to take at the next management committee meeting regarding the possible introduction of usage sensitive pricing for NPT's new advanced custom calling services. He was responsible for marketing all NPT's network services. NPT was introducing the new services the following year on a subscription pricing basis, but there was some management support for offering usage sensitive pricing for the features as well. The next meeting would be critical in determining whether to offer usage sensitive pricing and if so, how.
Describes the purpose and nature of industry self-regulation and outlines the factors self-regulatory groups must consider to avoid infringing U.S. antitrust laws. Several examples of industry self-regulation are discussed.
Portrays the change process Oticon went through in moving from a bureaucratic, role-driven organization to a creativity-driven, flexible, informal one.
A company making data communication devices has adopted a Total Quality philosophy for working with suppliers, employees, and customers. The finance group finds its existing cost system has become obsolete because of a shift from manual to automatic production technologies. As part of its improvement activities, the group develops an activity-based costing system to replace the obsolete standard costing system. The new system is being used to value inventory for financial reporting, provide monthly feedback on operational efficiencies, and inform product managers about the cost and profitability of their products. It is also being used for target costing, influencing decisions made by product design and development engineers so that future generations of products can be produced at lower cost. The case enables discussion about how well a single system functions for these diverse roles, and to compare this company's target costing approach with those used by Japanese companies, such as Nissan, Komatsu, and Olympus.
In the postwar years, planning and control systems were the tools that enabled companies to grow and helped managers deal with sprawling enterprises. Yet many of the problems companies experience today are inherent in the strategy-structure-systems doctrine that produced those tools. The systems that allowed managers to control employees also inhibited creativity and initiative. Today the challenge for top-level managers is to engage the knowledge and skills of each person in the organization in order to create what the authors call an individualized corporation. In the individualized corporation, top-level managers don't direct and correct middle and frontline managers; they create an environment in which individuals monitor themselves. The authors have conducted research on 20 high-performing corporations. They have concluded that systems, no matter how sophisticated, can never replace the richness of close personal communication and contact between top-level and frontline managers.
In 1993, BP Exploration Operating Co. Ltd., the $13 billion division of British Petroleum Co. that explores for and produces oil and gas, outsourced all its information technology operations in an effort to cut costs, gain more flexible and higher quality IT resources, and refocus the IT department on activities that directly improve the overall business. BP Exploration took a different path to outsourcing than most companies have taken. The company sought a solution that would allow it both to buy IT services from multiple suppliers and to have the pieces delivered as if they came from a single supplier. To that end, three contractors were hired and required to work together to deliver a single seamless IT service. This arrangement--multiple IT suppliers that act as one--is the cornerstone of the company's outsourcing strategy. The IT department has final accountability for IT services, but it is not mired in the operations. Only by relinquishing operations could IT employees begin to focus on doing business instead of running the business.