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Bank of America has historically pursued a strategy of growth through acquisition. The bank acquired Countrywide Financial in 2008 and Merrill Lynch in early 2009, but at the same time took on $100 billion in toxic assets and exposure to potentially massive losses in the mortgage industry. After being bailed out by the U.S. government preventing what would have been the largest bankruptcy in history, Bank of America is looking to the future and new opportunities. Stephanie Miller is part of a team tasked with developing a new strategy for the bank. How should the bank position itself strategically to compete successfully and grow in the future?

The onset of the cloud computing industry reshaped IBM's strategy. Previously, it had excelled at vertically integrating all in-house activities to drive the value of their mainframe computers. The rise of personal computing was met with corporate denial at IBM. And, by the time it tried to enter the PC market, major players, like Apple, had a five-year lead. IBM then outsourced its operating system and microprocessors and sold its stake in Intel. The series of missteps after the era of mainframe computing brought IBM to its lowest point. After missing out on the PC boom, Cloud computing presented IBM with a new opportunity for it to become the dominant player in computing again. The question had become "How far should IBM venture into the cloud computing industry? And, which market segment would prove the most profitable for IBM?" This case shows the dynamism of the IT industry by the fact that even though IBM missed a cycle of innovation with the PC industry, it had the chance to catch the next wave with the advent of cloud computing.

The pharmaceutical industry faces the threat of patent expirations, diminishing new drug breakthroughs, adverse regulatory laws, increasing competition, and a harsh economic climate. Merck & Company felt these mounting pressures and had become increasingly reliant on blockbuster drugs. With its new drug pipeline running dry, Merck accepted that the biotech industry is too complicated for it to navigate alone. As it stood, it was producing only 1% of the biomedical research in the world. Thousands of new ideas were emerging around the world, both inside and outside of the company. An open innovation strategy would allow the company to source new ideas externally and at a faster rate. This came with many risks including the reduced competitive advantage of protected intellectual property. While Merck had been moving toward an open innovation strategy, its history of internal research and development had created a culture resilient to working externally. Should Merck pursue an open innovation strategy? If so, how?

Jeffrey Immelt started his tenure as General Electric's CEO in what would be called the "Decade from Hell". It started in 2001 with an economic depression due to the 9/11 terrorist attacks and was followed by the global financial crisis in 2008. GE's stock price fell 13% in a single day after missing its quarterly earnings forecast in 2009. On the heels of that loss, Standard & Poor's downgraded GE's AAA credit rating. Despite Jeffrey Immelt's efforts, the share price reached its all-time low of $6.66 on March 5, 2009. By 2010, GE's market capitalization was cut in half to $200 billion. Immelt knew that something had to change with GE's Corporate Strategy. He focused efforts on innovation in energy and healthcare that became known as ecomagination and healthymagination initiatives. Ecomagination sought innovative solutions to ecological challenge while healthymagination focused on delivering solutions for the healthcare industry. By 2010, the efforts from these initiatives had restored some of GE's market capitalization, but were far from the original $400 billion that he had inherited as CEO. Was Immelt's strategic plan enough to carry the company back to its former glory? And, would investors have the patience to stick o this path?

The global sentiment towards energy has focused on reducing fossil fuel dependence. This move to alternative energy represents an opportunity for the world's largest energy technology companies, such as Siemens, to lead the future with a disruptive innovation. There are many new and developing technologies vying to unseat fossil fuels. Wind, solar, geothermal, hydropower and nuclear are the most mature technologies. Siemens Energy has a hand in each of these technologies with its greatest focus in wind and solar, although the time has come to choose which alternative it will focus on to disrupt the industry. This decision comes down to anticipating the most successful technology for the future. Should Siemens wait to acquire a smaller company with an innovative product in order to limit its risk? Or, should Siemens partner with competitors despite bad history?

Infosys' global delivery model was being challenged by the United States backlash against outsourcing. Tax incentives and H1B visas for foreign workers were being reformed to support this policy. The tax incentives being proposed were meant to save American taxpayers $210 billion over ten years by repatriating taxes on foreign profits. Arguments for the H-1B reform advocate ensuring that where there are qualified American workers, those jobs are filled with those individuals before foreign workers. Also, competitors like Wipro and Tata were challenging Infosys' global consulting strategy. How should Infosys react to pressure to hire costly local talent while trying to remain competitive?

Roche had just finished purchasing the last public shares of Genentech in an effort to secure their expertise in biotechnology. However, the recent failure of the colon cancer drug, Avastin, had raised questions about the partnership. Roche's main motives in the acquisition were to gain rights to Avastin and use it for a myriad of other applications. Positive clinical trials would have lead to significantly increased sales and growth into other cancer applications. Instead, the negative results caused Roche shares to drop by 10 percent. The incident raised questions at Roche about the efficiency of drug development at Genentech. Phase III trial failures represented a significant loss of time and money. And, in this case, the FDA revoked Avastin's approval for treatment of breast cancer causing further harm to revenue opportunities for Roche. Now that Roche was in charge, expectations were raised for producing successful Phase III trials that would bring more products to market. But, what was the appropriate resource allocation for early drug discovery and Phase II and III trials? On one side, Genentech wanted to focus on early drug development as a means to keep the future product pipeline well stocked; on the other side, Roche was focused on getting drugs through Phase II and III trials and into the market to generate revenue.

Apple Inc.'s rise to success was punctuated by culture that Founder/CEO Steve Jobs had instilled in the company for over thirty years. This culture created the successful fusion of computing, industrial design, and brand power that led to popular innovations such as the iPod, iPhone and iPad. Apple experienced ups and downs along the way. Externally, it had to defend itself from competitors like IBM, Microsoft, and Dell. Internally, Apple suffered through power struggles that left it without Jobs for a season between 1985 and 1997. During that time, Apple's market share sunk to its lowest point - a mere three percent worldwide. Jobs returned as CEO after successfully founding Pixar Animations Studio and NeXT computer company. His return hailed one of the greatest corporate comebacks in modern history. However, what would happen to this company whose success seemed to be so closely tied to its founder when he was no longer able to lead?

Better World Books was founded as a for-profit "B corporation" committed to a triple bottom-line of financial, social, and environmental performance. After early growth, BWB now faces challenges growing while sustaining their social-entrepreneurship business model. Problems such as narrow margins, shrinking supply, low brand awareness, and even copycat competitors are a few of the issues BWB faces. CEO Andrew Perlmutter must decide how to handle these issues in a way that keeps BWB competitive in the crowded used-book industry and creates value for all of BWB's stakeholders.

Why is a U.S. solar technology firm manufacturing in China instead of the U.S.? Chuck Provini faces this question not just from the market, but also from the U.S. government. This case examines the making of a new joint venture in China at a time when both the U.S. and Chinese governments are eager to expand and develop their clean tech sectors.

Following a successful split-off of Conoco in 1999, management at DuPont engaged in a decade-long challenge to reposition the company from a mature worldwide petrochemical firm to a leader in biotechnology. In 2010, president and CEO Ellen Kullman considered how to structure her organization and how to position DuPont for future growth. In this case, students consider Dupont's six business segments at this point in time - agriculture and nutrition, electronics and communications, performance chemicals, performance coatings, performance materials, and safety and protection - and how to evolve a strategy that would create the most value for the company and for its investors.

Who are the right investors for a for-profit company targeting the world's poor? Before this start-up spends hundreds of hours pursuing venture capital (VC), Movirtu must decide whether a profit-oriented VC investment will fit its vision for both growth and social impact. Movirtu's "Cloud Phone" software is designed for the nearly one billion people who cannot afford mobile phones and, as a result, borrow phones from friends and family. Movirtu provides phone sharers with a private number that sends and receives calls. Movirtu already secured two seed-round impact investors, Gray Ghost Ventures and Grassroots Business Fund. For its next round of financing, Movirtu was approached by TLcom Capital, an experienced VC. Students must decide: will having TLcom as an investor allow Movirtu to not only survive but achieve maximum financial and social impact?

BHP, an Australian mining company, threatens to enter the potash mining industry through a hostile takeover of the Potash Corporation of Saskatchewan. Complicating matters is the fact that the Canadian potash industry has operated as a legal cartel in which the provincial government has a stake. This case enables students to assess BHP's strategy in terms of value creation and value capture, how it relates to its existing investments in the industry, and the risks and rewards of alternatives to BHP's strategy.

Stan Kent, vice president of pharmacy at NorthShore University HealthSystem, is faced with the challenge of seasonal planning for the influenza vaccine. The supply received by the multilocation healthcare system is unreliable in terms of timing and quantity. As part of improved planning, Kent is contemplating a new contract with NorthShore's major supplier of flu vaccines. The options under consideration include fixing either the date of delivery or the quantity delivered. The main decision involved in either option would be how much vaccine to order. The case also provides details about the seasonal influenza epidemic in the United States, illustrates operational complexities of the U.S. flu vaccine supply chain, and provides a brief description of the various channels used to distribute flu vaccine to end consumers.

Willow Creek Community Church, located outside of Chicago, IL, was one of the best attended and most influential churches in the United States. It was devoted to attracting seekers, people who were otherwise "unchurched," and helping them along a journey towards conversion and spiritual maturity. Greg Hawkins, executive pastor, wondered, of all the things that the Church did, what really made a difference? If a generous donor gave Willow $100,000 to invest in having the biggest impact on helping parishioners grow into disciples of Christ, would Hawkins and the leadership team truly know what to do with the money? In 2003, Hawkins was about to lead Willow in a strategic planning process. He was introduced to a consumer research expert who had helped an impressive list of large companies understand "what was happening in the hearts and minds of their existing and potential customers." This case explores Willow's decision to bring this type of research to its church and apply rigorous analytical techniques to understanding the needs and motivations of its congregants. It traces how Willow used the startling findings to identify which programs and ministries truly helped people grow spiritually and transform its approach to church.

Dr. Barrett Rollins, Chief Scientific Officer of the Dana Farber Cancer Institute, attempts to engender cross-scientist collaboration by applying project management principles to medical research. The resulting innovation, Integrative Research Centers, are novel in this field and present a substantial challenge to the Institute's culture, which had previously allowed faculty scientists complete autonomy over their research. Center leaders are required to develop a business plan, adhere to agreed-upon performance metrics, and undergo regular progress reviews conducted by a peer-led oversight committee. In the "A" case, the Center for Nanotechnology in Cancer, a new but crucial center in the program, had failed to meet almost all of its objectives in the first year, and a heated dispute between two faculty members in the center had complicated matters significantly. The "B" case outlines the decisions Rollins took in terms of leadership and other strategic matters, and shows how the Center is performing a year after its initial disappointing progress.

Delwarca Software provides business software to large corporate clients around the world. The firm serves customers who prefer to assemble corporate solutions using a combination of software programs from various suppliers rather than implementing a single enterprise resource planning system. Consequently, Delwarca must provide telephone support services for complex software-hardware interaction and performance problems in addition to the typical software support issues around software installation and upgrades, malware attacks, and processing failures. The manager of the remote support unit implemented a new triage program for customer calls hoping to reduce customer wait time, improve customer satisfaction, and reduce costs. After one year, customer dissatisfaction is at an all-time high and he must perform a quantitative analysis of the current process, considering wait times for customers as well as cost per call, before making a final recommendation. This case can be used in a first-year MBA course in Service Management or Operations Management or a course in industrial engineering. It can also be used to introduce simple queuing theory.

Spreadsheet Supplement for Product #913541

The cost of capital is one of the most important concepts in finance. It is the minimum acceptable rate of return that new investments must yield and it represents the long-term opportunity cost of the funds used by a company. If management decides to invest in projects with expected returns above the cost of capital, the company value goes up. Conversely, if a company invests in projects (that despite having positive profitability) with expected returns below the cost of capital, it destroys value and company value goes down. Similarly, the cost of capital is the discount rate that should be used in a discounted cash flow (DCF) analysis, in capital budgeting applications, when valuing a company or a division, or an acquisition target.