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The aluminum industry has suffered from long periods of depressed prices and profits interspersed with relatively short-lived price and profit peaks. The case investigates why, this has occured, focusing on the decision Alusaf must make on whether to invest in a major new facility in the face of depressed aluminum prices. Courseware provides cost data on all the facilities in the industry to develop a supply curve. It also provides a supply and demand model that allows students to investigate: the drivers of average industry profitability and relative profitability of individual players in it; the impact of changes in demand over the economic cycle on the price of metal; the impact of different elasticities of demand on price and profitability; the impact of oligopolistic pricing on industry profitability; the impact of adding capacity on industry profitability; and the ability of a firm to preempt the aluminum market. A rewritten version of an earlier case.

With electricity generating businesses around the world, AES Corp. is seeking a methodology for calculating the cost of capital for its various businesses and potential projects. In the past, AES used the same cost of capital for all of its capital budgeting, but the company's international expansion has raised questions about this approach and whether a single cost of capital adequately accounts for the different risks AES faces in its diverse businesses and diverse environments. The company recently suffered heavy losses from currency devaluations in South America and regulatory changes in other countries. The director of the corporate planning group is developing a methodology for taking account of different country and project risks, and the case allows students to use this methodology to calculate the cost of capital for 15 different projects around the world. Students must consider how a global firm can account for differing risks in evaluating its international operations and in investing abroad. To obtain executable spreadsheets (courseware), please contact our customer service department at [email protected].

In April 2002, Guy Semmens, a partner in Argos Soditic, has to decide whether to take the lead in the management buyout (MBO) of Kermel, a niche player in the specialty fiber market. Invites participants to consider an MBO from the perspective of the private equity investor and answer the following questions: What is the fair value of Kermel? How should you structure the deal to provide incentives for management while generating adequate returns? What would be the exit strategy?

In 1996, U.S. Surgical launched a hostile takeover bid against Circon Corp. CEO Richard Auhll recruited an old HBS friend, George Cloutier, to the Circon board to help him defend the company. Circon's primary defenses include a "poison pill" and a staggered board and lead to the longest-running takeover battle in U.S. corporate history. This is an abridged version of an earlier case.

This case describes corporate management's recent discovery of widespread unethical pricing transactions in one division and key managers' different views on how to respond. Students are asked to evaluate management's position and decide who should do what to resolve Rein Chemical Co.'s problem. The improper pricing problem, involving an undetermined large number of customers, is complicated by the lack of clarity as to who the injured parties were and by the harm that any course of action could have on innocent parties.

The Fox television network, launched in 1987 by Rupert Murdoch's News Corp. was in a precarious position in 1993. Although it had met its business plan targets, its ratings in the recently concluded November "sweeps" were indifferent, several of its newly launched shows had failed, and entry of two other networks was imminent. In December 1993, Fox made an outrageous offer to purchase the television rights for the National Football League (NFL) games and, in the process, broke the stranglehold of the major networks on broadcasting these games. Describes the events surrounding Fox's bid and those of the other three networks. Industry sources estimated that Fox could lose several hundred million dollars on the deal, whereas Fox believed that it had purchased the NFL at a discount.

In early 1998, a few major content deals threatened to shape the competitive battle between the television networks for the next several years. These were the bidding for the National Football League (NFL) games, the announcement by Jerry Seinfeld (star of the show Seinfeld on NBC) that this would be the show's last season, and the decision by Warner Brothers to invite multiple bids for its hit drama ER (which also aired on NBC). Describes how these various deals were concluded.

Describes the early development of the Segway Human Transporter and focuses on the organizational issues that arise between the parent company and the new company that is being spun out to produce and market the Segway. Key issues are the distribution of bonuses and stock options.

CEO Aaron Feuerstein of Malden Mills decided to pay idled workers after a massive fire at his mill in 1995. Focuses on the decisions made post-fire and the rebuilding process and eventual bankruptcy of the company. Also outlines creditors' struggle to decide whether to lend Feuerstein additional funds to enable him to regain control of the company after emerging from bankruptcy.

Seattle's theatre industry had a rich, 38-year history of producing top-quality plays and musicals. In a typical year, the theatres collectively sold over 1 million tickets and pumped over $8 million into the local economy. Historically, the five major theatre companies--Seattle Repertory Theatre, A Contemporary Theatre, The Empty Space Theatre, Intiman Theatre, and Seattle Children's Theatre--each had a clearly defined mission statement and unique artistic focus. However, by the close of the 2001 season, the theatres' strategic and artistic identities had blurred as each company pursed growth. Some attributed theatregoers' and donors' waning interest and declining support to this homogenization in addition to the slumping U.S. economy. Others argued that there was too much capacity in the industry and that to survive, the stronger theatres had to expand their niches and even drive smaller, weaker players out of business. The vibrant Seattle theatre industry appeared to face monumental challenges to remain both critically acclaimed and financially sound.

HiJinx is formulating its financial policy after a failed IPO. Options include landlord financing of its expansion, though with the knowledge that its real estate strategy may be compromised.

This note provides a brief overview of some important perspectives on how advertising messages "work" to persuade consumers. The note reviews the traditional hierarchy of effects, cognitive dissonance, lower involvement, and elaboration by aspects models of consumer behavior.

Gives prominence to Mr. Justice Holmes' Prediction Theory of the law as a practical--and by analogy to forecasting in finance and other functional areas of business--comfortable, and familiar way for businesspeople to think about the law. Law is defined as a forecast of what the relevant facts proving the presence or absence of those concepts or principles will turn out to be. The basis for the forecast of concepts is a hierarchy of sources beginning with statutes, followed in sequence by an assessment of case precedent and considerations of social advantage.

During a weekend social event, a company president learns of an attractive investment tenuously connected to his firm's line of business. Is this a corporate opportunity?

Abstract to follow.

Discusses the concept of a fiduciary, as developed in the Anglo-American common law tradition, and outlines the principal differences between the legal standard applied to fiduciaries compared to ordinary arms'-length contractors.

In June 2003, the U.S. Supreme Court announced its decision in Grutter v. Bollinger, upholding the principle of affirmative action in university admissions, which had been challenged as a violation of the U.S. Constitution's Fourteenth Amendment. This case includes excerpts from the amicus curiae briefs filed by General Motors and by the United States.

Irving Tanning, one of the few remaining U.S. leather tanneries, has successfully emerged from bankruptcy. The CEO is now looking at strategic options for the future of Irving.

Vincor International Inc. was Canada's largest wine company and North America's fourth largest in 2002. The company had decided to internationalize and, as the first step, had entered the United States through two acquisitions. The company's CEO felt that to be among the top 10 wineries in the world, Vincor needed to look beyond the region. To this end, he was considering the acquisition of an Australian company, Goundrey Wines. He must analyze the strategic rationale for the acquisition of Goundrey as well as probe questions of strategic fit and value.

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