This case follows John Fernandez, CEO of Massachusetts Eye and Ear, as he evaluates whether or not his organization should join Partners HealthCare, the state's largest healthcare provider. Starting in the mid-2000s, there was a growing trend towards provider consolidation in health care. Many physician practices joined larger groups or hospitals, while independent hospitals integrated into larger health systems. The case explores the causes and consequences of health care consolidation, including the impact of policy reform. It then identifies key costs and benefits for an independent hospital considering an acquisition offer from a major health system. In doing so, it highlights the challenges and opportunities that managers of small providers face in a changing regulatory environment.
CEO Hubert Joly has successfully tackled BBY's two main problems - declining comps and margins - and engineered a financial turnaround within his first five years on the job. Now Joly must develop and implement a strategic plan to create a sustainable competitive advantage for Best Buy in the highly competitive, electronic retail industry. With less than 20 percent of revenues coming from online sales, Best Buy is still predominantly a bricks-and-mortar store with an online presence and has not yet transformed into a "bona fide, multi-channel retailer." The case provides an overview of Best Buy's main competitors: Circuit City (now defunct), Walmart, Target, Apple, and Amazon.com. It further highlights the threat emanating from the continuous shift to online retailing.
CyberArk was the recognized leader in the Privileged Account Management (PAM) space, a cybersecurity subsegment it had essentially created to secure organizations' IT systems and sensitive data. Over 17 years, the Israeli company had grown to a market capitalization of over $1.6 billion, with sales exceeding $217 million and 900 global employees with a strong corporate culture. In May 2017, Udi Mokady, founder, chairman, and CEO, debated how best to drive growth. He mulled over whether he should stay the course and remain focused on providing best-of-breed PAM for enterprises, both on-premise and in the cloud, or expand into new markets. Cyber threats were on the rise, which afforded numerous growth opportunities such as entering the broader identity management space, creating new products to protect critical infrastructure, and securing the burgeoning world of the Internet of Things (IoT). This case explores the company's competitive position, the challenges of sustaining its advantages in a highly competitive and consolidating industry, and whether it should pursue organic or inorganic growth, while maintaining company culture.
Becton, Dickinson and Company (BD) was a medical technology firm headquartered in Franklin Lakes, New Jersey, with 43,000 employees and 2016 revenues of $12.5 billion. For several years, the company had pursued development of products that created shared value, defined as those that both generated profits and created positive social impact. One of the primary ways the company advanced such products was through establishing and maintaining public-private partnerships (PPPs) with governmental or non-governmental organizations. In June 2017, Gary Cohen, an Executive Vice President of BD, and Renuka Gadde, Vice President of BD's Global Health function, were deeply engaged in a six-year PPP to bring a new low-cost labor and delivery tool called the Odon Device to market. This device had the potential to avert hundreds of thousands of maternal and newborn deaths, primarily in low-resource settings. Although they had faced many challenges in bringing together multiple organizations to develop and launch the device, Cohen and Gadde were convinced that BD's ability to collaborate with governments and international agencies to address urgent global health needs was a source of competitive advantage for the company. Through these collaborations, BD had strengthened important external relationships and developed a distinctive corporate strategy for its expansion in emerging markets. Cohen, Gadde, and the BD Global Health team were also working to construct a framework for measuring both the social and financial impact of the company's shared value initiatives, starting with the BD Odon Device. Cohen believed that creating shared value was "fundamentally a better way to do business," but he wanted hard data to demonstrate the full economic and social benefit of BD's shared value initiatives. The competition for internal capital and the challenges of taking on new types of products meant that any shared value initiative required a rigorous business case and clear indicators
This case explores the long-term relationship between Tempur Sealy (TPX, a mattress manufacturer) and Mattress Firm (MFRM, a bedding retailer and TPX's largest customer). For almost 20 years, the firms enjoyed a mutually beneficial and commercially prosperous relationship. Yet in August 2016, Steinhoff (a large, South African retailer) made an offer to acquire MFRM. Whether this acquisition will affect the symbiotic relationship that had existed between TPX and MFRM was the subject of intense speculation. While some industry observers believed it would increase MFRM's bargaining power vis-Ã -vis TPX, others argued it would not alter the balance of power, and that the incentives to collaborate would remain intact.
For the first time since the 2008 financial crisis, Lenovo, the world's largest PC maker, not only fails to increase its revenues and profits, but it has a net loss. Lenovo's market share is still growing, but the PC market itself is shrinking about 5% annually. Lenovo had hoped that the US$2.91 billion acquisition of the Motorola Mobility handset business in 2014 would prove as fruitful as the company's acquisition of IBM's Personal Computing Division a decade earlier. Such hopes proved to be too optimistic, however, as Lenovo faces strong competition in local and international markets. Its position in the Chinese smartphone market dropped from 2nd to 11th between 2014 and 2016, while its worldwide market share shrank from 13% to 4.6%. In 2016, its smartphones group showed an operational loss of US$469 million. At the same time, the global smartphone market quickly lost steam. In response, Lenovo devised a two-pronged strategy of consolidating its core PC business while broadening its product portfolio. The PC group, which focused on desktops, laptops and tablets, aims for improved profitability through market consolidation and product innovation. The smartphones group focuses on positioning the brand, improving margins, streamlining distribution channels and expanding geographical reach. It is not clear, however, how the company could thrive with PCs in decline. Nor is it obvious how it could compete in a tough smartphone market dominated by the international juggernauts Apple and Samsung, and strong local players such as Huawei, Oppo, Vivo and Xiaomi. How could Lenovo best deploy its vast resources?
Behavioural economics, a relatively new branch of study, formally began in the 1980s and has garnered increasing attention from economists and neuroscientists since. Behavioural finance, a subfield of behavioural economics, attempts to explain financial market–related behaviour. This note introduces behavioural finance by providing an overview of fundamental behavioural economic theories and empirical findings, including more recent findings that have expanded the breadth of the field. It also outlines strategies for correcting irrational financial behaviour.
In its first three years, East Coast Lifestyle, a Nova Scotia-based apparel company and one of Canada's fastest-growing business ventures, sold more than 500,000 products and received plenty of publicity from celebrities who wore its gear. To continue its substantial growth, the company needed a market that offered room for expansion. In early 2017, the 25-year-old chief executive officer faced several options, including developing the company’s Canadian brand portfolio with West Coast Lifestyle; expanding its main brand, East Coast Lifestyle, into the United States; and licensing the brand abroad. The real question was which strategy to pursue, and more importantly, how to implement the chosen strategy and roll it out.
In summer of 2010, Murat Çavuşoğlu (HBS MBA 1994) led private equity firm Actera Group's investment in Mars Cinema Group (Mars), the leading movie exhibitor in Turkey. Immediately after acquiring Mars and merging it with the second larger player in the market, AFM, Çavuşoğlu focused on institutionalizing and implementing value creation work streams in Mars. While transforming an entrepreneurial company into an institutionalized firm, Çavuşoğlu established adjacent businesses such as movie advertising and ticket sales. The most recent step in transforming Mars was to establish a movie distribution arm, which would help the company to monitor and manage the seasonal cycles, enhance the appeal for investors in the exit, and improve the valuation. However, while Çavuşoğlu was laying out the plans for his next move with movie distribution in 2014, Turkey's Council of State, the highest administrative court in the country, had decided to cancel the approval for the merger of Mars and AFM, putting all of Actera's efforts on Mars at risk. Should Çavuşoğlu push the stop button for distribution? If Çavuşoğlu decided to move forward with distribution, should he do it now or wait until the process with Turkey's judiciary and regulatory authorities cleared out?
In summer of 2010, Murat Çavuşoğlu (HBS MBA 1994) led private equity firm Actera Group's investment in Mars Cinema Group (Mars), the leading movie exhibitor in Turkey. Immediately after acquiring Mars and merging it with the second larger player in the market, AFM, Çavuşoğlu focused on institutionalizing and implementing value creation work streams in Mars. While transforming an entrepreneurial company into an institutionalized firm, Çavuşoğlu established adjacent businesses such as movie advertising and ticket sales. The most recent step in transforming Mars was to establish a movie distribution arm, which would help the company to monitor and manage the seasonal cycles, enhance the appeal for investors in the exit, and improve the valuation. However, while Çavuşoğlu was laying out the plans for his next move with movie distribution in 2014, Turkey's Council of State, the highest administrative court in the country, had decided to cancel the approval for the merger of Mars and AFM, putting all of Actera's efforts on Mars at risk. Should Çavuşoğlu push the stop button for distribution? If Çavuşoğlu decided to move forward with distribution, should he do it now or wait until the process with Turkey's judiciary and regulatory authorities cleared out?
This note describes four broad categories of process architectures and then examines the nature of task assignment that typically would be found in a factory organized along the lines of each process type. It then delves more deeply into work flow policies, materials handling, and line pacing for the assembly line, since this process architecture is so widely used for the mass production of everything from smartphones to automobiles.
This case describes the process BorgWarner Transmission Systems undertook when an increase in demand required that it create new production lines in another country. To minimize inventory costs, the company engaged with a graduate student team from the University of Michigan's Tauber Institute for Global Operations for assistance with creating optimal operating procedures. The student team was tasked with developing a prediction tool to ensure a high probability that BorgWarner friction plate samples would pass pre-production verification testing. The case provides students with an overview of the production and quality assurance processes for friction plate manufacture, as well as data classification models for machine learning. Students then develop a reliable forecasting methodology to systematically evaluate process parameters and maximize test pass rates for friction plates.
The "LEGO IN THE AGE OF DIGITIZATION" case is in two parts. Part A provides an opportunity to follow the developments of the LEGO Group in the digital gaming arena. It focuses on the "failure" of LEGO Universe, the LEGO Group's first Massive Multiplayer Online Game (MMOG), versus the success of Minecraft, launched by the start-up Mojang. The LEGO Group followed the traditional waterfall process of sequential phases: design, development, testing and commercialization. The company experienced the issues of partnering with a development studio located in Colorado, far away from the Lego Group's HQ. That caused problems in aligning on the image, branding and safety of the game versus the LEGO Group's values and selling proposition. After years of development, LEGO Universe was finally launched in 2010, but failed to meet the Group's ambition for it to become a second core business. By the end of 2011, a decision had to be made on whether to continue LEGO Universe or to close it. In contrast, Minecraft followed a very different development pattern that could be described as agile, where early users did testing and provided ideas for further development. In addition, the start-up followed a more usual digital pricing scheme of initial low price and add-on purchases. The success of Minecraft is even more in contrast to LEGO Universe because both development projects started around the same time, building on a very similar gaming concept and user experience, but with very different means and development approaches. Part B is an epilogue to Part A. It describes the LEGO Group's decision to close the LEGO Universe game, its learnings on how to embark on digital together with partners, the need to internally develop a unit to manage these partnerships and the conclusion to adopt a "hybrid" approach between waterfall and agile development.
Supplement to case IMD976 The "LEGO IN THE AGE OF DIGITIZATION" case is in two parts. Part A provides an opportunity to follow the developments of the LEGO Group in the digital gaming arena. It focuses on the "failure" of LEGO Universe, the LEGO Group's first Massive Multiplayer Online Game (MMOG), versus the success of Minecraft, launched by the start-up Mojang. The LEGO Group followed the traditional waterfall process of sequential phases: design, development, testing and commercialization. The company experienced the issues of partnering with a development studio located in Colorado, far away from the Lego Group's HQ. That caused problems in aligning on the image, branding and safety of the game versus the LEGO Group's values and selling proposition. After years of development, LEGO Universe was finally launched in 2010, but failed to meet the Group's ambition for it to become a second core business. By the end of 2011, a decision had to be made on whether to continue LEGO Universe or to close it. In contrast, Minecraft followed a very different development pattern that could be described as agile, where early users did testing and provided ideas for further development. In addition, the start-up followed a more usual digital pricing scheme of initial low price and add-on purchases. The success of Minecraft is even more in contrast to LEGO Universe because both development projects started around the same time, building on a very similar gaming concept and user experience, but with very different means and development approaches. Part B is an epilogue to Part A. It describes the LEGO Group's decision to close the LEGO Universe game, its learnings on how to embark on digital together with partners, the need to internally develop a unit to manage these partnerships and the conclusion to adopt a "hybrid" approach between waterfall and agile development.
This is a three-part case. Case A introduces Rahzi Putera, a product manager at Samudera Pharma Corporation (SPC), one of Indonesia's largest manufacturer and distributor of generic pharmaceuticals. SPC had earlier that year entered into an agreement with Braxton Biotech Corporation (Braxton) in India, to distribute Epogex, a drug used for the treatment of anaemia. The regulators at the Ministry of Health gave a conditional registration that Epogex could be sold in the country, but only to the private sector, until SPC conducted a clinical study to monitor the safety and adequacy of the drug. Rahzi was tasked to manage the clinical study. When the Epogex shipment arrived, temperature readings showed that it had been frozen. Epogex's product leaflet very clearly stated that the product should be discarded if frozen. However, when Rahzi recommended throwing away the supply, he faced great resistance from both his colleagues and superiors at SPC, and Braxton. Braxton provided data from a quality assurance study it had conducted in 2012, which concluded that the product remained stable despite the temperature excursions. Rahzi now had to make a decision whether to commercially sell the once-frozen shipment of Epogex, which would not be used in the clinical study. Case B sees Rahzi sending an email to all the key decision makers at SPC, stating his concerns about selling the frozen shipment stock to the public, and strongly recommending that it be destroyed. However, he is once again pressured to approve the frozen batch of Epogex for commercial sale. In Case C, Rahzi speaks to his boss, Alia Iman, again to support him in destroying the stock. Alia agrees and convinces her boss, Bobby Suharto, to do so. Unhappy about how the incident was managed, Rahzi quits SPC shortly thereafter.
Supplement to case SMU312. This is a three-part case. Case A introduces Rahzi Putera, a product manager at Samudera Pharma Corporation (SPC), one of Indonesia's largest manufacturer and distributor of generic pharmaceuticals. SPC had earlier that year entered into an agreement with Braxton Biotech Corporation (Braxton) in India, to distribute Epogex, a drug used for the treatment of anaemia. The regulators at the Ministry of Health gave a conditional registration that Epogex could be sold in the country, but only to the private sector, until SPC conducted a clinical study to monitor the safety and adequacy of the drug. Rahzi was tasked to manage the clinical study. When the Epogex shipment arrived, temperature readings showed that it had been frozen. Epogex's product leaflet very clearly stated that the product should be discarded if frozen. However, when Rahzi recommended throwing away the supply, he faced great resistance from both his colleagues and superiors at SPC, and Braxton. Braxton provided data from a quality assurance study it had conducted in 2012, which concluded that the product remained stable despite the temperature excursions. Rahzi now had to make a decision whether to commercially sell the once-frozen shipment of Epogex, which would not be used in the clinical study. Case B sees Rahzi sending an email to all the key decision makers at SPC, stating his concerns about selling the frozen shipment stock to the public, and strongly recommending that it be destroyed. However, he is once again pressured to approve the frozen batch of Epogex for commercial sale. In Case C, Rahzi speaks to his boss, Alia Iman, again to support him in destroying the stock. Alia agrees and convinces her boss, Bobby Suharto, to do so. Unhappy about how the incident was managed, Rahzi quits SPC shortly thereafter.