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Discusses how Grey Worldwide Hong Kong and China (Grey WW-HK/China) is repositioning itself through defined e-marketing and CRM strategies for the Asian market. Examines how integral its customer relationship group is in building a CRM strategy to deliver client value proposition. Grey WW-HK/China has very strong umbrella brand equity, but the brand capital has to be invigorated through a renewed e-marketing focus. Constrained by changing market conditions, particularly industry pressure on commission margins, Grey WW-HK/China needs to differentiate itself and is assessing CRM's value in developing loyal and lifetime customers. However, in a growing Asian market, Grey WW-HK/China is in heated competition with other players, including management consultants, traditional agencies, and pure on-line players who are actively pursuing a CRM business focus. Grey WW-HK/China's CRM team is in the process of developing an Asia-specific CRM blueprint for its internal management, something that is transferable to Grey's clients. Grey WW-HK/China is considering merging technology with traditional marketing philosophy, and the team is expected to deliver a proposal that outlines the CRM tools that Grey WW-HK/China should use to reposition its brand and build customer loyalty.

New World Development Co. Ltd. (NWD) was a leading conglomerate based in Hong Kong. After more than 20 years of operations, the group had expanded its core businesses to include property, infrastructure, services, and telecommunications. From late 1997 to June 2001, the stock price performance of the company had been abysmal. Its efforts at asset disposals to reduce gearing, while making additional investments in new businesses, confused investors. Security analysts also blamed the company for not keeping its promise to focus on its core business of property.

In January 1998, Peregrine Investments Holdings Ltd., once billed as "Asia's only indigenous investment bank," was forced into liquidation after the revelation of huge losses in its fixed-income business and the withdrawal of potential investors from Europe and the United States. Peregrine became the highest profile corporate failure in the Asian financial crisis to date. A firm that seemed to be on top of its world in early 1997 had collapsed under a pile of bad debts less than a year later. Peregrine's demise raised questions about how the firm might have avoided the debacle. This case can be used to teach corporate governance and strategy development in volatile environments.

Although mortgage securitization was old hat in the United States and Europe, it had not really caught on in Asia. Past experience in Hong Kong suggested that efforts by individual institutions to securitize mortgages had not been entirely successful. In spite of this, the Hong Kong government placed high hopes in Hong Kong Mortgage Corp. (HKMC) to develop the mortgage-backed securities (MBS) market. However, some banks wondered whether it was timely for them to get into the MBS business in Asia. In particular, the banks and the HKMC had very different risks and concerns regarding the development of MBS. Teaching Purpose:

In July 2001, Acer, Taiwan's best-known company, was in the midst of an ambitious reorganization. The goal was to reverse flagging sales in Acer's branded computer and peripherals businesses and to address the concerns of major clients of its contract manufacturing business. The reorganization would involve splitting the company into three parts, massive layoffs, a shift in geographic focus, and a complete change in business philosophy. Acer's chairman and cofounder Stan Shih had personally taken charge of the reorganization, signaling the seriousness of Acer's position and his commitment. However, questions remained as to whether the reorganization would be effective in meeting Acer's challenges and turning the company's fortunes around. This case can be used to teach strategy development in volatile environments, the challenges of creating a successful brand, and the links between company strategy and location advantages and disadvantages.

Digital Angel is considering the appropriate marketing plan for the launch of its new locator device. The device, a watch and pager worn in combination, provides GPS location information and monitors heart rate and body temperature via body sensors. Parents of young children and caregivers of Alzheimer's patients are the initial target markets for the device, but at least 26 potential markets have been identified for the product. Building a brand and generating positive word of mouth are central to the marketing plan decision. But the technology also raises concerns over privacy issues, and the benefits of the product are complex and challenging to communicate.

French utility, Vivendi, purchased the United States-based entertainment giant Universal in late 2000. In so doing, the rechristened Vivendi Universal became a major force in music, films, and television production, adding to its European-based cable television and telecommunications assets. By the end of 2001, Vivendi Universal was betting on continued convergence of distribution channels to knit together an international entertainment conglomerate. Its plans would put Vivendi Universal in direct competition with established entertainment giants such as Disney, Viacom, and the merged AOL Time Warner.

"If you try to use money to motivate behavior, you are in a powerful and dangerous place, especially with engineers and scientists," remarked Tom Furman, CEO of Camp Dresser & McKee, Inc. (CDM), a consulting environmental engineering firm. Historically, CDM had followed an "egalitarian" management bonus program based on qualitative measures. As industry growth decelerated and competition intensified since 1991, management changed the incentive plan to tie it closer to the achievement of business objectives. This case describes the bonus and incentive compensation system and the evaluation process. It ends with Furman reflecting on how to interpret the CDM system to reward four CDM executives suitably.

Scientific knowledge surrounding diabetes mellitus has grown over the last century to include its cause, treatment, and prevention strategies. However, the type and level of care that patients receive is suboptional. This case examines the forces in industry, knowledge, education, public policy, and reimbursement that drive the management of this disease and the potential for innovation in the management of other chronic diseases.

Grupo Elektra is Latin America's largest consumer finance company based on credit sales in its hard goods retail outlets. It has started to internationalize in Latin America but now must to decide whether to enter the U.S. Hispanic market and which of its two core businesses (retail and finance) to emphasize.

In-depth look at the emergence of venture capital (VC) in Israel, tracking not only the industry itself, but also its many drivers, including high technology and its roots in Israel (government sponsorship, etc.). Examines the VC industry in 2001. Professional VC has grown rapidly, with growth driven by internal players capitalizing on local knowledge and experience and by non-Israeli firms, which have come to Israel looking to invest in the next high-tech winner. Asks what role the Israeli VC firms have in the future: Will Israeli VC firms be able to survive or will U.S. firms come in and pluck the best deals away? Should Israeli firms partner with U.S. firms and, if so, how? Should and can Israeli firms venture out of the Middle East and attempt to compete with U.S. firms on U.S. soil?

This case presents an ethical choice: How should a prospective buyer respond when a homeowner quotes a price that the buyer knows is significantly below market value? The case describes a private transaction in which the prospective seller is fully competent mentally but is apparently uninformed about current market prices. The buyer could agree to the asking price (or even counter with a lower figure) without taking any financial risk, because he or she could obtain appropriate guarantees of good title, absence of environmental problems, and so forth.

Governor Patton decides how to use settlement funds to develop a long-term plan for Kentucky's tobacco producers and rural communities.

Solectron Corp. grew rapidly from a small contract manufacturer in the early 1980s to the dominant company in the electronics manufacturing services industry by the late 1990s. In doing so, it evolved from providing peak capacity for its clients to providing services that clients could not provide on their own (low-cost materials and access to expensive capital equipment). Its next phase was to provide its clients with new ways of operating--such as outsourcing all operations except research, product conceptualization, marketing, and sales--allowing clients to outsource those activities that were not part of their core competencies. Describes this evolution and the rapid growth of the company. In 2001, the company's clients suffered severe business downturns, which in turn caused the first contraction in Solectron's history. Describes the company's initial response and raises questions about how the company should proceed.

A new director of this small German brewery must prepare to vote on three issues coming before the board of directors the next day: (1) approval of the financial plan for 2001, (2) declaration of the quarterly dividend, and (3) adoption of an incentive-compensation plan for the marketing manager. The task for students is to evaluate the past and prospective financial performance of the company and to critique its liberal credit and inventory policies.

Describes USA Networks following its failed bid to buy the Internet portal Lycos in 1999. By 2001, USA Networks was an agglomeration of assets in two distinct areas: electronic commerce (something USA Networks refers to as "interactivity") and entertainment. In each of these two areas, USA Networks faced much larger competitors operating discretely. Explores USA Networks' attempts to compete simultaneously in the spheres of online retailing and television and filmed entertainment.

Jill Hoover was looking skyward, marveling at the heart-stopping beauty of Paradise Park-Seattle's newest attraction, its tallest and scariest roller coaster to date: the Anaconda. "Quite impressive," Jill thought. But a scuffle in the ride queue quickly brought the CEO of Paradise Parks back to earth. The company's 19 seasonal and year-round amusement parks had always been popular--ever since Jill's father founded the original Paradise Park just after the Second World War--but they hadn't been very profitable of late. Operating costs had been spiraling, and every dollar of extra revenue had been hard won. At the company's annual management off-site meeting, held that morning at the Seattle park, CFO Nathan Cortland proposed that Paradise offer its customers the option of a "preferred guest" card. Cardholders would pay more, but they would get first crack at the rides--entering through separate lines--and would get seated immediately at any of the parks' restaurants. According to Nathan, the plan would bolster Paradise's sagging finances because it would target the "mass affluents"--a rising demographic of moneyed but time-pressed people who might visit the park more often and spend more if it weren't for long lines at the rides. Jill respects Nathan's idea--but hasn't her plan to upgrade some of the parks' souvenir shops to gift boutiques already shown some promise? And doesn't Nathan's plan smack of elitism, as Jill's longtime friend and park manager Adam Goodwin suggests? The CEO has resolved to get back to Nathan with a decision about "Operation Upmarket" by the time she leaves Seattle and returns to headquarters. Should Paradise Parks offer guests different levels of service? In R0110A and R0110Z, John Harrington, Edward Goldman, Alexander Labak, and Robert Crandall offer their advice in this fictional case study.

In May 2000, Bob Eckert sat on a plane bound for the West Coast and thought to himself, "What have I done?" He was about to become CEO of Mattel, a struggling company in an industry he knew nothing about. And he was facing unrealistic expectations not only from Wall Street but also from Mattel's 30,000 employees, who hoped for an effective leader yet feared sweeping change. How did this former CEO of Kraft Foods address employees' anxiety, gain their trust, and start to turn Mattel around? By using the concept of "mealtime." When people gather together to share a meal, they are nourished in both body and spirit. They become face-to-face equals who exchange opinions, ask questions, receive answers, and share ideas. Eckert knew that he had to build brands and cut costs, but he found that the most crucial and challenging task was to make others comfortable enough to share their metaphorical meals with him. And he found that his favorite place to share these metaphorical--and actual--meals was the employee cafeteria. To make each meal a success, Eckert practiced what he calls "setting the table," which means preparing the atmosphere for honest dialogue by drawing on a set of tools--utensils, if you will--designed to quell apprehension. These include naming the source of tension and calling for honesty; deferring, when appropriate, to the other person's realm of expertise; and recognizing common experience. In this article, Eckert tells the story of his first steps from food guy to toy guy and describes what it takes to fit into the strange new world of another company.

In the last 20 years, business has become the dominant institution in American society, in many respects usurping the role once played by religion. As such, business has infiltrated every aspect of our lives--including the hearts and minds of our children. For many, it is an unsettling force. The wild competitiveness of business today compels managers to be constantly available for customers and colleagues, inevitably reducing the time and energy they can devote to their kids. Although stories of the impact of business life on children rarely appear in the business press, debate rages in the broader community, and many parents fear that their children may be paying the price for their success. Is that price too high? In an in-depth interview with HBR senior editor Diane Coutu, writer and child psychoanalyst Robert Coles speaks to that question. Perhaps surprisingly, given the fashion for criticizing the way children are raised today, Coles is optimistic about the next generation. He rejects the stereotype of the hopelessly spoiled rich kid, instead emphasizing children's extraordinary adaptability and ingenuity. "Wealth can weaken some children in certain ways," he says, "unless parents know how to ask of them as well as give to them." In this interview, Cole also examines the role of working women in parenting, explores the difference for children between healthy and narcissistic entitlement, and suggests how we might listen to our children better. "Our children are wonderfully aware and awake," Coles says. "If only we'd stop and listen to the spiritual reflections and questions of our sons and daughters, we might learn something very important about them and about ourselves."

What was it Wayne Gretzky said about why he was so good at hockey? He just skated to where the puck was going next. Executives and investors wish they could do so, too--to sense where profits are going next. Following a six-year study of profitability patterns, the authors have developed a model for doing just that. In the early stages of a product's evolution, companies compete on the basis of performance. And because they can't make substantial improvements in product performance unless the entire value chain is housed under one organizational roof, it works best if companies are vertically integrated. But as the underlying technology improves to meet the needs of most customers, companies begin to compete on the basis of convenience, customization, price, and flexibility. At that point, vertical integration is no longer an advantage--in fact, it quickly becomes a disadvantage. Different links in the industry value chain become modular, and the chain subsequently fragments. In either stage, most profitability goes to the companies that own the interdependent links in the value chain--the places where everyone's still vying to satisfy their customers with ever-better product functionality. Initially, that's the makers of the proprietary products aimed at the end-use consumers. But as those products become standardized, profitability shifts to the makers of components, and as components themselves become standardized, it can shift further back in the value chain. That's predictable, but it causes a problem for incumbents. As their products become commodities and profits decline, pressure from investors to maintain ROA causes them to spin off asset-intensive units that design and manufacture components--the very places where profits are heading.