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It's the end of the quarter, and the sales staff at Exceso Corp. is scrambling to meet CEO R. Foley Vinton's overheated 9% sales target. Sure, the sales team has always hit its target in the past, and yes, that number was based on its forecast data. But the fact is, the projection was based on raw data. And as Martin Wu, the company's head of sales, warns Vinton, sales will do well to hit 3%. Vinton remains unconvinced. He has already given that number to the analyst community, and, he thinks, if he keeps up the pressure, Wu will find a way to make it, just like he always does. So Wu and his sales team do what they have done in the past--discount the heck out of their product and load up the distribution channel. That's great news for Alice Dias over at Flemings ValuMart. She just stocked up on 3,000 cases of ClickZipPlus at a 6% discount to the standing price, with the idea of shipping most of it to diverters and to other ValuMarts in regions that haven't been offered such a good deal. But it's bewildering to analyst Andrea Valdini who, after Vinton has just shepherded her through a plant cranking at full production, can't find any eight-packs at a store near the very offices where she and her colleagues are pondering the health of Exceso's stock. "They can't keep this up much longer," suggests a ValuMart manager, pointing to the empty shelves that are the ClickZipPlus display. As he falls asleep that night, Vinton thinks they'll be able to kick the loading habit--someday, when the timing's better. But should they? In R0205A and R0205Z, four commentators offer advice on this fictional case study.

In January 2002, speculators in the finance community suspected that Ha Chung Fong, chairman of Fountain Set (Holdings) Ltd., might be in the mood to reconsider a previous proposal to privatize the company. Ha was dissatisfied with the counter's trading volume, and some managers of the firm also believed that the share price did not reflect its true value. In 1995, Fountain Set had attempted to privatize by way of a scheme of arrangement under Section 166 of the company's ordinance. The scheme was later abandoned due to difficulties in reaching an agreement between the company's consortium shareholders and also problems in ascertaining the proportion of the holders of the company's convertible notes. With the redemption of the convertible notes in 1999, financial analysts believed that privatizing the company would not be as difficult as in 1995.

The president and chief executive officer of a large food manufacturer is preparing his company's strategic agenda for the next five years. One of the top five food manufacturers in Canada, the company went public and restructured its management team six years ago. The efforts were successful, resulting in an increase in the company's market share. Recent food industry trends, however, added "box" stores and private label brands to the domestic competition. At the same time, the terms of the Canada-U.S. Free Trade Agreement are expected to abolish food-related tariffs within two years, opening up competition from across the border. Although the company has experienced success in the past five years, the president and CEO needs a strategic plan that will take the company to the next level.

Gino SA is a manufacturer of burner units that are sold through exclusive contracts with distributors. As a result, the three distributors have significant bargaining power with Gino. A leading boiler manufacturer, who is currently purchasing through a distributor, has approached Gino to receive OEM treatment (a further discount by purchasing the burners direct from the manufacturer in return for a commitment to purchase a percentage of their burners from Gino). In deciding whether to pursue the company's first direct OEM relationship, the marketing manager must consider the impact of his decision on the distributors, the competition, and the company's corporate management.

Supplements the (A) case.

Flight SQ006, operated by Singapore Airlines, crashed on 31 October 2000. The accident was the first with fatalities in the 28-year history of the airline. More accustomed to favourable reports associated with its successes, the airline had to confront the challenges of managing a fatal accident and subsequent adverse publicity, which proved potentially damaging to its image and reputation.

Bethlehem Steel's 2001 bankruptcy filing inspires an employee's daughter to evaluate her father's pension plan, weeks after September 11's tragedies exacerbated a weakening U.S. economy and just months before her father planned to retire. Battered equity markets and plummeting interest rates foretell a "pension crisis," while the daughter discovers the history and government role in U.S. private defined-benefit pension plans. She tries to apply her newly acquired finance skills as an MBA student to estimate the pension plan's true asset-liability condition and to advise her father about his upcoming retirement from a historically dominant U.S. company that has lost its competitiveness to global producers.

Spreadsheet Supplement for case 202088

Cisco Systems's company strategy was acquire, acquire, acquire during the 1990s. Along the way the firm tailored an integration process unique to each acquisition that Cisco consumed. From the day the intended purchase was announced, human resources and business development teams traveled to the acquired company's headquarters to familiarize themselves with the new acquisition. The day after the deal closed, the human resources arm of the business development department hit the firm with tailor-made orientation programs. Cisco's approach had worked well between 1994 and 2000 with over 70 acquisitions. By 2001, Cisco's buying spree slowed and acquisitions dropped to only two that year, causing public speculation that the firm had over-shopped. Yet in early 2002 John Chambers, CEO of Cisco Systems, announced he still intended to acquire eight or ten companies that year. What new post-merger integration challenges would the firm face? This case provides an opportunity to examine Cisco's post-merger integration (PMI) strategy that takes place in a fast time period in order to achieve cost savings, high earnings, and an integrated culture. Students will discover how Cisco realizes value from its acquisitions and the role of executives in the acquired companies. They will also be challenged to think about how Cisco's PMI strategy reflects their corporate strategy and culture.

Supplements the (A) case.

Supplements the (A) case.

Describes a major organizational transformation process at John Hancock Financial Services in which CEO Stephen Brown takes a series of measured steps to turn the old-line mutual insurance company into a competitive, performance-oriented financial services firm. At the end of the case, Brown is considering whether to take the company public. Raises question of leadership, alignment, and culture change.

Discusses the differences between private and social returns and describes an economic framework for assessing a project's social return [known as the economic rate of return (ERR)]. The framework begins by analyzing the impact of a new project on private financiers [the private return known as the financial rate of return (FRR)]. The framework then identifies other stakeholders who might be affected, directly or indirectly, by the project and examines the project's impact on each group. Assumes readers have a working knowledge of cost-benefit analysis, microeconomics, and basic valuation mechanics.

In September 1998, Paul Cooper, Tate & Lyle's finance director for international investments, asked the International Finance Corp. (IFC) to consider lending up to $45 million to finance a $90 million sugar mill in northern Vietnam. Ewen Cobban, an IFC agricultural specialist, was in charge of reviewing the proposal and making a loan recommendation to senior management. Cobban's main concerns were whether the plant was commercially viable and whether it had support from the government. He also feared that world sugar prices were falling and that sugar was a protected commodity. Before he could recommend approval, he had to determine whether they were temporary or permanent problems. Cobban also knew he would have to assess the project's developmental impact. The IFC only supported projects that contributed to sustainable development, and one of the key determinants of sustainability was the degree to which the project was "fair" to all parties involved. Thus, Cobban would need to assess not only the private returns, but also the social returns as measured by the project's economic rate of return (ERR). To do so, he would have to consider the various groups affected by the project and, where possible, quantify the impact on them.

Andina Bottling develops an information system for monitoring the performance and operations of its various foreign and domestic subsidiaries.

On September 1, 1998, the government of Malaysia imposed currency and capital controls in response to the financial crisis that had swept Asia. The controls sparked an enormous controversy in the world of international finance. Some celebrated the controls for insulating the Malaysian economy from the unstable international financial system. Others criticized the controls for trapping investors and allowing the government to protect the interests of "cronies." This debate also raised the central question about the future of the international financial architecture: What is the appropriate balance between financial market freedom and government discretion in the management of the global economy?

The case documents the strategic options open to Quiñenco, the quoted holding company 82% owned by the Luksic family, in its ambition to become a major multilatina. Their successful strategy has been to acquire under-valued companies, enhance their assets and sell them for a gain. However, the stock price of Quiñenco has languished since the initial IPO in July 1997.

This case discusses the potential benefits and costs of issuing floating-priced convertibles, also referred to as ""death spirals"". These are convertibles where the conversion price is a discount from the market price in a look-back period. The management of Log on America is blaming investment banks and convertible investors for the stock price collapse after the convertible was issued.

Accellion sought to position itself as a service provider in the Distributed File Storage, Management and Delivery market space. Its major targeted customers are Global2000 entreprises and Internet-based providers of premium content who need to supply their organizations and clients with reliable and fast access to their Internet-linked servers. As more and more companies move their applications and data from isolated desktops and local area networks (LAN's) to more globally accessible Internet-based applications, Accellion promises the instant infrastructure to provide the required availability and download and upload times, improving their revenues and reducing their costs. Still new to the industry, Accellion developed its service guarantee as a part of its value proposition to potential customers. The guarantee was designed to credibly promise high service standards to potential clients.