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Explores the interactions between China and its neighbors, and considers how those interactions will change as China emerges on the world economic stage in the coming years.

Trends emerging in recent years, such as divestitures, spin-offs and class action suits, make an understanding of valuation of companies with ongoing operations imperative, not only for investors, but also for managers and for a company's directors. The discounted cash flow method to valuation that is discussed in this note will be a guide, first, to business managers in their attempt to follow value maximizing strategies; second, to portfolio managers and security analysts in their effort to discover the true economic value of a company and its equity; and third, to investment bankers in their advisory role of companies involved in merger transactions and restructuring. This note will not demonstrate how to value companies in financial distress; in such cases, a contingent claims valuation will be more appropriate. The discounted cash flow valuation method is demonstrated through the valuation of a Canadian company using actual financial data.

This note is about customer care: what it is and how to manage it in a retail operation. Customer care, often referred to as customer service, has become a very popular subject for retail consultants and commentators because retail managers and customers alike have discovered that customer care just doesn't happen; retail customer care must be designed, delivered and controlled.

In the spring of 2004, an engineering inspection revealed that a 100-year-old historic bridge had serious maintenance problems. Several options were considered including repair, removal and replacement. The director of public works for the region must present a summary of the options and his recommendations to the public works committee, which would then submit his recommendation to the council for approval.

General Motors (GM) had a history of bold strategies in a wide variety of areas, including the creation of Saturn, the development of global operations, and the formation of strategic alliances with Fiat, SAIC, and Daewoo. Nonmarket strategies included pursuing government financial assistance, coping with new environmental regulations, and agreeing to very expensive health care and pension schemes. Meanwhile, GM had failed to create strategies to compete effectively with foreign automakers. By 2005, many of GM's strategic decisions seemed to have been inappropriate. Some that were undertaken for short-term gain had disastrous long-term consequences, and GM performed poorly compared with other global automakers. Many strategies had seemed disconnected, lacking an overall vision or purpose: GM was facing a serious crisis. In 2005-2006, GM introduced several new strategies. Whether these strategies could achieve sustainable profitability, or whether they would also bring undesirable consequences, was a subject of importance to employees, shareholders, and governments throughout the world.

It was late on Thursday, April 22, 2004, and Jean-Francois Dehecq, the Chief Executive Officer (CEO) of Sanofi-Synthelabo (Sanofi), France's second largest pharmaceutical company, was sitting in his office thinking about what had happened over the last three months. On January 26, 2004, he had launched a hostile tender offer to acquire Aventis, France's largest pharmaceutical company. The merger between Sanofi and Aventis would have created the world's third largest pharmaceutical company, closing the gap with U.S.-based Pfizer and U.K.-based GlaxoSmith-Kline (GSK). Jean-Francois Dehecq had offered €48.6 billion, but his offer had been rejected by Aventis's Supervisory Board. Since the end of January, Aventis had been fighting back, launching a poison pill and inviting Novartis, Switzerland's largest pharmaceutical company, to act as a white knight.

The entire pharmaceutical industry faced uncertain times in 2005. Many of the industry's most pressing issues-patent expirations, new drug pipeline development, price pressures, regulatory issues, and political pressures-were long standing. Fundamentally new technologies were changing the way drugs were discovered, developed, and tested, allowing smaller, specialized competitors to enter the industry, compete in new ways, and grow to challenge the majors. Some observers were even questioning whether the blockbuster model on which the industry was based could continue. Blockbuster drugs, with sales of more than $1 billion a year, were becoming increasingly difficult and costly to develop. In this context, and with stock prices depressed, the industry majors were reflecting on their strategies.

In 2005, just five years after its formal launch, Beijing-based Red Flag Software was the world's second-largest distributor of the Linux operating system and was expecting its first annual profit. On a unit basis, Red Flag led the world in desktops (PCs) shipped with Linux and was No. 4 in installed servers. On a revenue basis, Red Flag was fourth overall. Within China, Red Flag held just over half of the Linux market and ran key applications for the postal system, large state-owned enterprises, and more than a million PCs. The Chinese government supported Linux as an alternative to Microsoft's Windows operating system to avoid royalty payments to foreign firms and dependence on foreign technology. Even so, Red Flag President Chris Zhao felt the same pressure many start-ups faced: How could Red Flag compete against a giant like Microsoft? And what competitive advantages could Zhao bring to bear against an experienced Linux veteran like Red Hat, a U.S.-based software company that had just announced its plan to invest to capture market share in China? Zhao worried that government support would evaporate if Red Flag performed poorly.

Stoned fruit has quality variations, reducing consumption. Five independent growers formed a cooperative to provide quality control and a brand name--Ripe 'N Ready--that enabled retailers to differentiate their stores and producers to differentiate the products they supplied. Consumer acceptance has been high. The issue is how to expand the concept without adversely affecting the original users of the product. Also, what new kinds of competition are they creating?

The New Business Development unit is part of DSM, a Dutch globally operated chemical company. The unit looks for promising new ideas to develop into start-up businesses. Stamypor is a new project that the New Business Development unit is working on and the team leader of the project must decide whether it should be developed into a start-up company.

Based in Bangalore, Wipro Technologies is a rapidly growing software services company. Wipro is experimenting with a new software service delivery model that draws on the principles of the Toyota production system and "lean" manufacturing. Addresses the advantages and disadvantages of software outsourcing and how to mitigate the effects of, for example, lock-in and hijacking. Explores how Wipro has helped its customers deal with these issues and looks at the changing competitive role of Indian outsourcers (from low-cost, to high-quality/rapid turnaround). Specifically explores Wipro's experimental use of lean principles as a source of new competitive advantage in software services. Also addresses the issue of standardization in information technology, examining why companies progressively develop so many standards and how companies like Wipro can help them standardize, thus limiting one of the primary drivers of companies' IT costs.

A family-owned business, Acindar was one of the most important steel companies in Argentina. After the 2001-2002 Argentine economic crisis, it yielded its controlling stake to a new investor--Belgo Mineira, a Brazilian company of Austrian origin. Arturo Acevedo Jr., the founder's grandson, kept his managerial position as company CEO and president. Acindar Foundation, through the initiative of the company's founder Arturo Acevedo (grandfather) and in its capacity as corporate social policy enforcer, engaged in comprehensive educational, health, and environmental activities for 40 years. Depicts the changes resulting from the incorporation of the new shareholders to the company and how they reflected on the foundation's management and the corporate HR area. The triggering factor was an initiative to develop a corporate volunteer program similar to the one Belgo Mineira had implemented in Brazil--a project that integrated foundation, corporate, and HR management efforts at each production plant.

CEO James Herring of Friona Industries, a leading U.S. cattle feedlot operator, has a history of leadership in the highly fragmented and often contentious U.S. beef industry. Friona has established relationships up and down the beef production chain to provide high-quality, consistently tender beef that consumer's value. In 2005, Friona is partnering with Cargill, the leading U.S. meatpacker, to produce private-label beef products for grocery retailers such as Harris Teeter and Safeway. Will the introduction of high-quality, reasonably priced beef lead to higher sales for the retailer and ultimately stronger margins for Friona?

Spreadsheet supplement for case 806058.

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Introduces the major communication vehicles and the process by which they can be brought together in an integrated marketing communications plan.

Benaree Wiley, an African American, female HBS graduate (class of 1972), was appointed CEO and president in 1991 of The Partnership, a Boston-based nonprofit dedicated to developing leadership potential in professionals of color and in increasing their representation in area businesses and institutions. The organization suffered from a lack of unity among the board, an unclear mission, and financial challenges, including debt in excess of $100,000. Starting with only an administrative assistant, Wiley built the organization from the ground up, using her ability to develop and nurture relationships as the basis for growth. In December 2004, Wiley announced her impending retirement, leaving the organization with the strategic challenge of moving its programs and services to a level of greater impact (beyond the Boston community), without the leadership of its heralded CEO.

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Explains the concept of implied valuation--i.e., the valuation that can be inferred from a financing event--and how such valuations and financings are represented in a "cap" or capitalization table for a new venture.