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In 1992, Mayor Gabriel Garcia Romero confronted a situation all too familiar in developing countries-an inadequate and under capitalized water system. Only 28 percent of Cartagena's households had reliable drinking water. Thirty percent were not hooked-up to the system, and the remaining 42 percent had access, but their supply was frequently interrupted. Less than half the population had sewerage services, and there was no wastewater treatment-a problem with serious implications for public health. The water system had not been maintained adequately for more than a decade, and losses were estimated at 52 percent of the total supply. Only a percentage of the customers received bills, and many of these were never collected. Prices remained below cost, so even if the bills were collected, revenues would not have covered expenses. HKS Case Number 1482.0

In 1992, Mayor Gabriel Garcia Romero confronted a situation all too familiar in developing countries-an inadequate and under capitalized water system. Only 28 percent of Cartagena's households had reliable drinking water. Thirty percent were not hooked-up to the system, and the remaining 42 percent had access, but their supply was frequently interrupted. Less than half the population had sewerage services, and there was no wastewater treatment-a problem with serious implications for public health. The water system had not been maintained adequately for more than a decade, and losses were estimated at 52 percent of the total supply. Only a percentage of the customers received bills, and many of these were never collected. Prices remained below cost, so even if the bills were collected, revenues would not have covered expenses. HKS Case Number 1482.1

This is an MIT Sloan Management Review article. By sharing components and production processes across a platform of products, companies can develop differentiated products efficiently, make their manufacturing processes more flexible, and take market share away from competitors that develop only one product at a time. The platform approach also enables companies to manufacture products in high volumes that are tailored to meet the needs of individual customers. A platform is a collection of assets--components, processes, knowledge, people, and relationships--that a set of products share. The platform planning effort involves two key tasks. First, product planning, where marketing managers determine which market segments to enter, what the customers in each segment want, and what product attributes will appeal to those customers. Second, system-level designers decide which product architecture to use to deliver the different products while sharing parts and production steps across the products. Three key ideas underlie the platform planning process. First, customers care about distinctiveness, how closely the product meets their needs. At the same time, the cost of a firm's internal operations is driven by the level of parts held in common among a group of products. Second, given a particular product architecture, there is a trade-off between distinctiveness and commonality. Third, product architecture dictates the nature of this trade-off. By developing and aligning three tools--a product plan, a differentiation plan, and a commonality plan--managers can balance the need for distinctiveness with the need for commonality. The process must involve all key functions and be guided by top management.

Presents the outcome of the (B) case and relates development in the company up to 1997.

Discusses a young MBA plant manager who is improving the operations of a small General Motors components plant in Fredericksburg, Virginia. At 29 years old, Joe Hinrichs is the youngest plant manager at GM, and in his new assignment, he is faced with the daunting challenge of designing and implementing significant manufacturing procedures that will dramatically improve the plant and remove it from its current unprofitable and inefficient state. Aided by the introduction of new carbon fiber technology that has revolutionized the plant's product (the torque converter clutch, a component of the automatic transmission of a car), Hinrichs hopes to keep the plant open by streamlining operations, reducing inventory, redesigning worker jobs, increasing worker commitment, and other improvements. During this process, he must deal with an unexpected union strike, equipment malfunctions, and other problems that threaten the success of the improvement process. He has, however, found unusual ways to overcome these barriers without eroding worker trust. At the end of the case, Hinrichs faces the serious dilemma of what to do about the broken 1,500-ton press, one of the most important machines in the production process. Three options are outlined, each with technical and managerial tradeoffs.

Features the challenges facing an entrant in the New Zealand telecommunications market during the period 1989-1994. Clear Communications Ltd. (CCL), a joint venture owned by Bell Canada, MCI, New Zealand Television Corp., and Todd Companies, begins offering long distance service in May 1991. The firm is dependent on access to the network of the incumbent, Telecom Corp. of New Zealand, to offer most of its services. This dependence proves to be a significant obstacle to CCL's expansion into the local business call market, particularly given New Zealand's unique "light-handed" regulatory system. Clear ultimately spends millions of dollars in a failed four-year lawsuit to obtain better terms of interconnection. In October 1994, CEO Andrew Makin must decide the future strategic direction of the firm.

This case is a relatively straightforward exercise in valuing a potential acquisition target. The case affords students an opportunity to use both discounted cash flow and multiples in their analyses. In addition, at the instructor's discretion, students can do a simple valuation of an option contract and analyze currency choice in a debt issue. The latter two objectives arise if the case is used as an examination. Case Exhibit 1 poses the relevant questions for student preparation.

This case focuses on the creation of a work plan for a consulting engagement.

This aggressive retailer is adding store space at the rate of 25% per year. The case presents an external financing requirement amounting to $1.4 billion over the next five years. Students must decide how to meet this requirement wisely, acknowledging the relationship between business strategy and financial policy. Analysis of the firm's share price reveals a substantial overvaluation in the market.

CarPoint.com was Microsoft's Web-based entry into on-line automobile retailing. While it could not, in fact, "sell" or deliver any cars, it could shift much of consumer search, comparison, and decision-making, including pricing, the traditional car dealer to the Web. This shift in buying behavior from marketplace to marketspace was significant in its implications for consumers and dealers, CarPoint and its competitor firms face a double challenge in creating effective e-commerce businesses and in influencing their channel partners to provide effective service experiences. CarPoint, however, was a late entrant, and it faced competition from category first-movers AutoByTel.com, AutoWeb.com, and AutoVantage.com. As a result, the case deals with larger issues of channel and consumer behavior change as well as tactical issues pertaining to competitive positioning in a competitive market both on-line and off-line.

Supplements the (A) and (B) cases.

Analyzes the competition between Netscape and Microsoft in the market for Web browsers and related products. Despite its first mover advantage, Netscape sees its market share fall once Microsoft becomes "hard-core" about the Internet. By the spring of 1998, the future of both companies is on the line.

Ken Zelazny, general manager of COM DEV's Chinese facility, which assembled satellite components, was trying to decide whether the plant should seek ISO 9000 certification. Not only did ISO 9000 registration have a number of advantages and disadvantages, but also the decision in the Chinese plant would have some implications for COM DEV's other facilities in Canada and Europe. In addition, if Zelazny decided to seek ISO 9000 certification for his plant, he would have to decide which level of certification to seek. The case is intended to expose students to the ISO 9000 series of quality standards.

Starbucks is faced with the issue of how it should leverage its core competencies against various opportunities for growth, including introducing its coffee in McDonalds, pursuing further expansion of its retail operations, and leveraging the brand into other product areas. The case is written so that students need to first identify where Starbucks' competencies lie along the value chain, and then assess how well those competencies can be leveraged across the various alternatives. Also provides an opportunity for students to assess what is driving growth in this company. Starbucks has a tremendous appetite for cash since all its stores are corporate, and investors are betting that it will be able to continue its phenomenal growth so it needs to walk a fine line between leveraging its brand to achieve growth and not eroding it in the process.

Brand loyalty is one of the core concepts of the marketing discipline that has enjoyed practical and academic attention for over 75 years. The era of relationship marketing, with its focus on retaining customers for life, has instilled yet greater interest in the concept, precipitating unprecedented growth in frequency programs designed to lock in customer loyalties over time. Despite this rich history, many questions remain about the definition, measurement, and significance of brand loyalty. Some state that brand loyalties are declining and that in today's consumer world, multibrand usage--not brand loyalty--appears the norm. Others feel that the concept of loyalty itself is not outmoded or outdated, but rather that new theoretical and methodological perspectives are required that can revitalize what has become a theoretically uninspired, overly simplistic, and conceptually limiting idea. This case seeks to inform this latter point of view by encouraging students to "see" brand loyalty from the perspective of the consumers that live it. Includes color exhibits.

Egghead Software, an entrenched traditional chain retailer specializing in computer software and peripherals, had established a nationwide chain of mall and shopping center stores and a well-organized national brand. In early 1998, management made a highly unusual, and perhaps unprecedented, decision: the company closed down all its stores in North America and moved its retail operations exclusively to the Web. This rejection of marketplace in favor of marketspace illustrated the differences in managing retail operations for "information products," such as software, and "physical products," such as home furnishings or tools. The fact that software could be examined, sampled, purchased, and even distributed on-line indicated to Egghead management the high costs in PPE and labor represented by physical retailing were no longer justified by the category. The brand promise of Egghead could be realized as effectively at lower cost of operations on the Web, and the Web could begin to provide new sources of consumer value as the Egghead site harnessed the unique attributes and advantages of the digital environment.

Wells Fargo, the industry leader in electronic banking, has implemented a Balanced Scorecard in its online financial services group (OFS) to track and measure performance. The OFS group develops and supports services that allow existing and future banking customers to perform transactions via the Internet. The new division faces rapid change and must invest heavily in new technology and in the development of innovative products and services. OFS was finding it difficult to balance the need for a clearly articulated strategy and measurable objectives with the flexibility required in its dynamic environment. Wells Fargo had a culture that embraced financial metrics. Yet OFS management believed that its business could not be measured and evaluated on the basis of financial metrics alone. For example, the group was not yet profitable, yet it provided a critical component to the bank's long-term strategy. The OFS group believed that the Balanced Scorecard would allow them to develop a set of integrated, multidimensional measures to assess performance against its goals and to communicate and update its strategy in a rapidly changing environment.

Spreadsheet Supplement for case 198146

Describes the business and legal context surrounding personal and corporate bankruptcy.

The credit department of Wiegandt, a furniture manufacturer, is evaluating the financial condition of two stores that retail the company's furniture.