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This interactive spreadsheet accompanies the ProfitLogic case (#802-110) to enable analysis of the cash flow implications of three business models that the company is considering. Students are able to change key assumptions and see the impact on cash flow.

After opening 60 schools in 8 years through opportunistic growth, the national office of the KIPP schools network has designed a strategy dubbed "smart growth." Each KIPP school is a separately incorporated entity led by a principal who was selected and trained by the national office. The national office proposes to play a screening role whereby a national growth committee will "green-light" the plans of local schools to create multi-site regions in selected areas of the United States. The case describes the criteria and rationale for the new strategy, and focuses on a disguised application from a KIPP school that plans to grow from one to five locations in five years. Readers are challenged to green-light the application, or not.

Members of IBM's fifth Integration and Values Team (IVT5) were close to finishing their deliberations. Convened by Sam Palmisano, Chairman and CEO, and sponsored by Jon Iwata, Senior VP of Corporate Communications and Marketing, and John E. Kelly III, Senior VP and Director of Research, the IVT5's focus was on "the global IBMer"-define and develop global leaders; make the "globally integrated enterprise" relevant to all employees through corporate citizenship initiatives reflective of the company's values; and help IBM compete globally by ensuring market access. The scope was all 170 countries in which IBM operated. As leaders who had risen to their positions as systems thinkers committed to innovation, the team knew it was necessary to stand back and look at the big picture-to see how IBM worked now and operate at its best in order to understand the gaps, dilemmas, and opportunities.

IBM's transformation into a globally integrated enterprise (GIE) began with a conviction about what should never change. Since its founding in 1911, the company operated under a set of principles articulated by founder Thomas Watson and became known for a strong culture and a commitment to fairness and social responsibility. As IBM entered its second century, it was appropriate to take a fresh look at its values while remaining unwavering in ethics, integrity, and-to use the twenty-first century word-the highest standards of corporate citizenship. All of this could be done with strategic use of IBM technology and innovation. Yet IBMers in a variety of businesses and geographies also wanted the company to do even more. Members of the fifth Integration and Values Team (IVT5) pondered this and other global citizenship possibilities, reviewing how people were developed and worked as the transition to the GIE was underway.

On a winter day in December 2007 at the American Family Mutual Insurance Company (AMFAM) headquarters in Madison, Wisconsin, Dave Anderson and Jack Salzwedel remained in the conference room after the senior management meeting had concluded. Anderson, CEO of AMFAM since January 2007 and Salzwedel, named President in August 2006, reflected together on how far the company had come over the past two years. Both recalled meetings in which top executives simply read out activity reports to help prepare a previous CEO for a largely ceremonial board meeting. These days, they sensed energy and movement at different levels--whether in a strategic planning meeting, or in Salzwedel's recent visit to a regional office to explain in person the content of and motivation for the company's new strategic plan. Anderson and Salzwedel were pleased that the just-ended meeting exhibited the kind of engaged discussion, "pushback," and argumentation they had been encouraging.

Since the mid-1980s, Sona Steering Systems (later renamed as Sona Koyo Steering Systems Ltd) has been a competitive player in the Indian auto component industry. The firm has made remarkable progress in competitiveness through numerous initiatives over the past two decades. Starting as a single-source supplier of simple mechanical steering systems, the firm has systematically improved competitiveness, evolving into a capable Deming Prize-winning firm with capabilities across the industry value system. By November 2005, the firm had many customers and, for some of them, had designed entire systems to their specifications. This case provides a context for identifying Sona Koyo's sources of competitiveness through two important concepts. The versatile yet simple assets-processes-performance (APP) framework is used to identify relevant factors of competitiveness, while the concept of the "competitiveness journey" is introduced to examine different contexts, scenarios, strategies and initiatives as well as company performance. The case builds on analysis of data and insights culled from professionals at different levels of the company, up to the chairman.

A newly appointed operations manager was expected to provide his expertise in the planning, launch and ongoing operations for three corporately-owned Part King stores, the first of which was scheduled to open in December 2005. The operations manager wondered if moving to a corporate model made sense at all or whether it was better to retain the franchise structure that was already in place. He was particularly concerned about how best to motivate the managers of a corporate-owned store given that they did not share in its ownership. Were there some components of the control system that was currently in place in the franchise store model that would also be appropriate for the corporate-owned store model that was in the works? Were there some components of the existing control system that needed improvements as well?

The protagonist is Lars Dalgaard, a young manager with solid experience but none in leading a technology company. Through a combination of circumstances, Dalgaard becomes the CEO of a drowning software company focused on the HR space at the peak of "Nuclear Winter" in Silicon Valley. The case explores how he and his small team attempt to restart SuccessFactors and transform it into something sustainable in the face of seemingly insurmountable obstacles.

The case tells the story of a company where innovation is tremendously important, but not working well. In 2003, the LEGO Group had a number of positive attributes: it had a well-respected brand with some very good toy lines. It had a passionate customer base that in many areas was more sophisticated than its internal designers. And it had been able to extend the brand into many areas such as toys, games, clothing, theme parks, movies, and many others types of play, earning significant revenues (but not profits). But, in 2003, the company had gotten itself into deep trouble. Over the previous 5-10 years, the toy industry had been changing dramatically in ways that did not favor the LEGO Group. These changes, coupled with some poorly planned investments and a downturn in the sales of some important toy lines, combined to almost put the LEGO Group out of business. The company lost nearly DKK 1 billion in 2003 and its cash dwindled dangerously low. This was the largest loss in the history of the company, and many analysts believed that bankruptcy and perhaps even the breakup and sale of the company were likely. The company quickly sold off assets, reduced headcount, and outsourced production to cut costs and generate cash. But it knew, to turn around the company, it had to improve its overall innovation system. It had to improve the time to market, success rate, and profitability in its innovation system. The case presents a number of representative challenges that LEGO was facing during 2004 and beyond. Learning objectives: 1) How to restructure an innovation system. 2) How to encourage all types of innovation (innovation in pricing, business model, channel to market, branding, customer experience, etc.) and coordinate these innovations across the company. 3) How to involve external parties such as customers, complementary product producers, and external inventors in your innovation system.

The (B) case describes the specific steps that the LEGO Group took to improve innovation. They include: 1) Restructuring the company to make responsibility for each part of the business clearer. Each toy line was given responsibility for its own sales and profitability, and the Concept Lab, which before had lacked focus, was separated and charged with developing new ideas that were "obviously LEGO but never seen before." 2) The definition of innovation was redefined through the LEGO innovation matrix. 3) A new stage-gate process was implemented. 4) A new way of working with external inventors and complementary product producers was integrated into the structure and process. 5) Users were involved in the development of new toys, in particular the new generation of LEGO Mindstorms. Through these and other activities, the LEGO Group dramatically improved its performance, returning to profitability in 2005 and achieving very healthy profits in 2007. Learning objectives: 1) How to restructure an innovation system. 2) How to encourage all types of innovation (innovation in pricing, business model, channel to market, branding, customer experience, etc.) and coordinate these innovations across the company. 3) How to involve external parties such as customers, complementary product producers, and external inventors in your innovation system.

Cambrian House builds internet-based products and services by relying entirely on its user community for all aspects of its innovation and new product development process. Users suggest ideas for new products and services and also participate in a monthly voting process to select the best ideas. The company is now considering the deployment of a prediction market to deepen user involvement and commitment in its innovation; however, it is not sure if it is an appropriate strategy for its community.

By March 2008, the U.S. Government and the U.S. Federal Reserve Board had taken various policy measures over the last few months to tackle the subprime mortgage crisis that threatened to drag the economy into a recession. The Bush administration approved a fiscal stimulus package exceeding $150 billion. Interest rates had been repeatedly cut at the fastest pace in decades, to 2.25% as of March 2008. The Fed, in an unprecedented move, helped JPMorgan Chase to take over Bear Stearns, which was on the brink of collapse. Yet as the global economy faced slower growth stemming from the U.S. mortgage crisis, policy makers were caught in an intense debate over what the 'right' solution would be, and the implication of these policies on global imbalances.

Spreadsheet Supplement for case 708036

Spreadsheet for case UV1312

This note develops a framework for considering the challenges of incorporating marketing input when setting innovation strategy. The framework lays out the possible innovation opportunities a firm can entertain and describes how the customer knowledge gained from conducting market research at the front end of NPD affects which of these opportunities the firm should pursue. Pitfalls in analyzing the customer data are described, along with guidelines on how to overcome them. The impact of competition in the context of setting innovation strategy under market uncertainty is also addressed.

This is a supplement to the (A) case. It shows that the networks that the firm had been investing in-- commercial banks--were becoming less and less valuable over time. Given this, Tamotsu Adachi must think about how to go about building a new set of networks.

This is a supplement to the (A) and (B) cases. It documents the shift in Carlyle's networking strategy. The firm decreased its focus on building contacts in commercial banking an increased instead the focus on building more contacts with industry directly.

This note explains how health care providers, health insurers, and consumers are held accountable for their performance and the entrepreneurial opportunities thus created.

After negotiations with a key supplier for lower prices and quicker turnaround go nowhere, two employees of Acme Medical Imaging realize there's no more low-hanging fruit to pick to keep their project on time and on budget -- no more concessions from external parties, no more superficial, short-term fixes. They have to convince their chief executive officer and the project team to take a hard look at "internal processes." From the perspective of Operations, this case examines the challenges that can arise - and some steps that can be taken - when the greatest obstacles to a project are the people and procedures responsible for its success.

Mapleleaf Corporation is a mid-size player in the paper products industry. The firm has recently become aware that growing demand will soon outstrip its present production capacity. The primary objective of this case is to introduce students to the world of capacity planning and optimization.