In September 2014, a real estate and procurement expert was preparing his notes for an upcoming strategic meeting with the management team of the Regional Council of Lombardy (RCL), the governing body of one of the 20 regions in Italy. The RCL wanted to analyze the procurement process for two of its most important projects: the construction of Ospedale Papa Giovanni XXIII, a new cutting-edge, high-technology public hospital; and the construction of the hospital's surrounding parking area. During the construction of the hospital, a number of scope changes had been introduced and a major issue emerged. Construction had concluded at the end of 2012-€156 million over budget. The surrounding parking area was also subject to some issues, but with relatively minor economic and reputational impacts. Two years after the end of construction, the RCL was performing post-project reviews with the intent of improving future project procurement performance.

Student spreadsheet for case W16347.

Monique Oxender, chief sustainability officer for Keurig Green Mountain Coffee, is carefully considering the criticism the company has received regarding its plastic K-Cups that deliver a single serving of coffee to consumers through the Keurig brewing system. Billions of the difficult-to-recycle K-Cup pods are ending up in landfills. Keurig Green Mountain has pledged to produce 100% recyclable K-Cups by 2020, but how will it achieve this goal? Oxender must address the environmental impact and public scrutiny of the company's signature product. However, she must find a way to overcome the inconsistent and sometimes inadequate recycling infrastructure in Keurig's markets. Students join Oxender in finding the best, workable solutions.

This reading covers the basic elements of bonds and introduces some of the analytical techniques used to understand and compare them. It assumes the reader is familiar with the concept of the time value of money (see HBP 8299). The reading provides an economic analysis of simple risk-free bonds, including both zero-coupon and coupon bonds, and extends to bonds with credit risk. The material covers the relationships between prices, yields and maturity and introduces the concept of duration. The reader is introduced to the yield curve and the term structure of interest rates. Selected advanced topics (floating rate bonds, forward rates, evaluating default risk) are included in the Supplemental Reading. The reading concludes with a brief discussion of how the formulas in the reading relate to pre-programmed Excel functions. The reading includes nine interactive illustrations: "Bond Terminology" is a term sheet excerpted from an Apple, Inc. prospectus which familiarizes the reader with bond terminology. "Calculating the Price of a Coupon Bond" calculates the price (present value) of a bond's cash flows, based on reader inputs for maturity, coupon and yield to maturity (YTM). "Inverse Relationship Between Bond Price and Yield to Maturity" demonstrates the inverse relationship between prices and yields. "Historical Yield Curves" is an animated display of the U.S. Treasury yield curve from 1962 to 2015. "Bond Duration" calculates the duration of a bond based upon inputs for maturity, coupon and YTM. "Bond Duration and Maturity" demonstrates the relationship between duration and maturity over a 50-year horizon. "Calculating Bond Duration" is an animated demonstration of how duration is calculated. "Bond Price Sensitivity to Changes in Interest Rate" demonstrates the sensitivity of bond duration to changes in interest rates and maturity.

This Reading examines the challenge of achieving sustained, superior profitability. It begins by considering some trends in financial returns that raise the question of whether sustained profitability is feasible. The Reading then explores seven mechanisms that can lead to extraordinary long-term performance, including switching costs, network effects, and learning. Finally, the author considers forces outside the market that can undermine superstar firms. Overall, the author argues that a long-lasting advantage is difficult, but not impossible, to achieve.

For over five years, the third generation (G3) of Valley Pulp & Sawdust Carriers, Ltd.<br>had been laying the foundation for the professionalization of the family firm. However, it was met with resistance from the second generation (G2). G3 had no ownership in the family business, and no true leadership role. At the management meetings, only four votes counted—the four votes of G2 members who were shareholders of the business. G3 members needed a commitment and clarification regarding their roles and future in the company. The question was how to approach G2. The G3 cousins knew that the challenge for them to garner G2’s respect and to have G2 understand G3’s roles and contribution to the family business would be nothing short of daunting.<br><br>This case series also includes Valley Carriers (B): Working on Versus Working in the Business 9B16M096 and Valley Carriers (C): Restructuring the Governance of the Family Firm 9B16M097.

This is the second case in the Valley Carriers series, which also includes Valley Carriers (A): Establishing Status in a Family Business 9B16M095 and Valley Carriers (C): Restructuring the Governance of the Family Firm 9B16M097.

This is the third case in the Valley Carriers series, which also includes Valley Carriers (A): Establishing Status in a Family Business 9B16M095 and Valley Carriers (B): Working on Versus Working in the Business 9B16M096.

In 2014, the general manager of the established and successful Hong Kong-based company Hung Fook Tong, which produced and sold herbal teas, wondered how his company could profitably expand to mainland China. After Hung Fook Tong’s recent initial public offering on the Hong Kong Stock Exchange, its shareholders’ equity had tripled. The initial public offering committed Hung Fook Tong to expanding its business in mainland China; however, that market posed many challenges, in part because it represented a far larger market. The general manager knew it was critical to determine a suitable and successful expansion strategy.

<p>Nissan&rsquo;s Strategy in Operations Management&nbsp;</p> <p>Nissan's resilience strategy&nbsp;in&nbsp;international&nbsp;business&nbsp;had been considered an exemplary response to the triple disaster in Japan in March 2011. The Japanese automobile industry made their respective recovery efforts to resume production and delivery of vehicles after suffering damage from an earthquake, tsunami, and a nuclear crisis, but it took months before they could reach pre-disaster levels of operations. Nissan's resilience practices,&nbsp;operations management,&nbsp;and supply chain disruption management were acknowledged as superior to those of their peers and were appreciated by experts and analysts. Nonetheless, it took Nissan more than a month to resume production, and each day of lost production cost Nissan $25 million.&nbsp;</p>

For over five years, the third generation (G3) of Valley Pulp & Sawdust Carriers, Ltd. had been laying the foundation for the professionalization of the family firm. However, it was met with resistance from the second generation (G2). G3 had no ownership in the family business, and no true leadership role. At the management meetings, only four votes counted-the four votes of G2 members who were shareholders of the business. G3 members needed a commitment and clarification regarding their roles and future in the company. The question was how to approach G2. The G3 cousins knew that the challenge for them to garner G2's respect and to have G2 understand G3's roles and contribution to the family business would be nothing short of daunting.

Supplement to case W16326.

Supplement to case W16326.

In 2014, the chief executive officer (CEO) and owner of Pak Sweets was worried about diversity issues in his organization. The sweets-making factory, once a one-room business and now a full-fledged factory in Rawalpindi, Pakistan, was highly dependent on blue-collar workers. Each production process required workers with diverse skills, so the company hired employees from different provinces of Pakistan, representing multiple ethnicities. The ethnicities were fundamentally diverse with different languages, cultures, and codes of conduct. As the company grew, conflicts increased between employees of different ethnicities. This everyday minor problem turned into a major challenge when it caused property damage, financial losses, and a decline in productivity. Pak Sweets was unable to meet demand, and the company's reputation was at stake. The CEO believed that firing the troublemakers was not an option; it would only address the problem temporarily and might result in union strikes and lockouts. The CEO needed a plan to resolve the ethnic-based conflicts in the factory and their negative impact on the company.

In 2010, the recently appointed chief executive officer of VOSS Water (VOSS), a Norwegian luxury bottled water company, had been given an opportunity to take the brand in a new direction. He knew that take-home retail markets represented a huge opportunity for growth for a company that was used to selling its water in on-premises, luxury locations such as resorts and restaurants; however, the company's past attempts to grow into the retail space had produced dismal results. VOSS's new leader understood that he would have to work hard to unite his team behind his vision. How could he learn from the steps of his predecessors and use hindsight to create an opportunity for the luxury water brand?

Sprint Corporation, a major U.S. wireless carrier, had been losing customers and suffering financially since its merger with Nextel in 2005. Sprint was also ranked the lowest among major U.S. carriers in terms of network speed and data performance. But a new opportunity emerged when the SoftBank Group acquired Sprint in 2013. The new chief executive officer (CEO), appointed in August 2014, publicly gave himself three to five years to turn around this major telecommunication company. The new CEO had a plan; however, he faced many challenges. Sprint had national brand recognition, but customers demanded improvements in network quality and service reliability, and the turnaround plan needed to be implemented in a capital-intensive industry with a saturated market. The optimistic CEO admitted that he faced the biggest challenge of his career. Would he be successful in turning around Sprint's fortunes in this competitive industry?

In 2014, the general manager of the established and successful Hong Kong-based company Hung Fook Tong, which produced and sold herbal teas, wondered how his company could profitably expand to mainland China. After Hung Fook Tong's recent initial public offering on the Hong Kong Stock Exchange, its shareholders' equity had tripled. The initial public offering committed Hung Fook Tong to expanding its business in mainland China; however, that market posed many challenges, in part because it represented a far larger market. The general manager knew it was critical to determine a suitable and successful expansion strategy.

Nissan's resilience strategy had been considered an exemplary response to the triple disaster in Japan in March 2011. The Japanese automobile industry made their respective recovery efforts to resume production and delivery of vehicles after suffering damage from an earthquake, tsunami, and a nuclear crisis, but it took months before they could reach pre-disaster levels of operations. Nissan's resilience practices and supply chain disruption management were acknowledged as superior to those of their peers and were appreciated by experts and analysts. Nonetheless, it took Nissan more than a month to resume production, and each day of lost production cost Nissan $25 million.

In May 2015, a managing partner in an Australian venture capital firm faced a major dilemma. As one of five partners, he held the deciding vote on whether his firm, KTN Capital, would take an entrepreneur's idea for a solar-powered water filter and build a new company around it, or instead, invest in the entrepreneur's company. The venture capital firm would not be doing anything illegal by taking the entrepreneur's idea because the entrepreneur had not properly protected his intellectual property through patents, but the decision-maker was struggling with the ethics of that choice. To further complicate the situation, the entrepreneur was very difficult to deal with, and the investment firm was facing pressure from the fund's investors to find investments that would yield big returns. The managing partner had many business and ethical considerations to factor into his decision, and it seemed there would be no easy choice.