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Outlines the evolution of Lilly's corporate manufacturing strategy over the past decade. The corporate vice president of manufacturing must decide on the next phase of Lilly's strategy for the early 1990s, as well as to what extent and what role process development will play. Provides data outlining three different points in the product development process at which manufacturing process development might be initiated. Using learning curve concepts and data, students can estimate the economic costs and benefits (as well as organizational issues and challenges) associated with each. Illustrates process improvement's substantial impact in a capital-intensive industry, describes possible roles of manufacturing process technology in an industry that has viewed product R&D as its primary competitive advantage, illustrates phases through which manufacturing can evolve in pursuit of comparative advantage, and introduces students to a challenging and changing industry.

Provides descriptive background about the development of an international market for currency swaps and, by means of a detailed example, instructs readers in the determination of swap flows and all-in costs of financing using market swap rates. A rewritten version of an earlier note.

Spreadsheet Supplement for case 292043

Monsanto has yet to receive FDA approval for BST, a growth hormone for cows. Anti-BST groups have successfully lobbied Wisconsin and Minnesota, major milk producing states, to ban milk from BST-injected cows; the FDA has charged Monsanto with improperly promoting BST before receiving approval and eventual consumer acceptance of BST generated produce is uncertain.

Describes the changes made to Frost, Inc. to exploit CNC technology. The focus is on the impact in each functional area.

Supplements the (B) case.

Nucleon is a small biotechnology company whose first potential product is about to enter clinical testing. Before Nucleon can begin clinical trials, however, its management must decide how and where to manufacture the product. Three options are being contemplated: 1) build an in-house pilot plant, 2) contract production to a third-party, 3) license the development, manufacturing, and marketing rights to a corporate partner. Allows discussion of a number of manufacturing strategy issues relevant to R&D-intensive entrepreneurial firms. A key issue is the strategic value of in-house manufacturing to a company that competes largely on very distinctive and specialized R&D capabilities.

Describes the development of a fully automated production line for manufacturing radio pagers. The company regarded the project as highly successful; it becomes clear in the case, however, that there were some shortcomings as well. Some marketing issues were not properly addressed and, despite the claims of the company that the project was completed in 18 months, development of the line continued after the official end date for over a year. The student must analyze the situation to determine what lessons should be taken from the project and how best to apply those lessons to other projects.

John Martin, Taco Bell CEO, brings the company into line with its competitors through incremental change during the 1980s. In the early 1990s, he adopts breakthrough approaches to improve service levels while reducing prices, providing a distinct competitive advantage. Illustrates the power of breakthrough thinking in a service industry and demonstrates the importance of a coordinated, holistic approach to implementation.

Describes the Puerto Rican manufacturing plant of a transnational company. The award-winning plant has dramatically improved the quality of flexibility of its operations, by taking a radical approach to manufacturing. The methods center on the use of specific techniques along with a building of trust with the workforce. This generates broad participation and creates a strong commitment to continuous improvement throughout the plant. In 1987, the plant was held responsible for quality problems which marred the launch of an important product. Four years later, a new product is to be launched and the plant must develop a plan to ensure that this launch is a success, as well as develop a strategy for the future. Examines, in detail, the development of a manufacturing infrastructure for quality and flexibility and introduces students to the challenges of managing manufacturing in a transnational environment.

Describes the outcome of the (A) case.

Updates the (A) and (B) cases.

Airline frequent flier programs offer members the opportunity to earn free flights by accumulating mileage. Accounting and reporting the obligations of airlines and the cost of frequent flier programs raises difficult measurement issues. In 1991, the U.S. Securities and Exchange Commission began to require airlines to disclose the number of free flights program members took. The case allows estimates of the cost and obligations of the United Air Lines program.

Whelan Pharmaceuticals, a U.S. company with $3 billion in sales, must decide where to manufacture its newest product. In considering possible sites, both foreign and U.S., the firm must identify and make trade-offs between tax, marketing, and manufacturing factors.

Develops the idea that the relevance of costs and revenues depends on what decisions are under consideration. Revenues and costs are relevant if they would be different under one decision choice than under the other. Teaching purpose: Basic background material for decision making under certainty and under uncertainty. Provides a framework under which a variety of costs and revenues, resulting from substitution, complementarity, capacity, etc., can be identified as relevant.

Describes the start-up and rapid growth of a company whose founder holds strong, non-traditional beliefs about the role of the corporation and its responsibility to society. After profiling Anita Roddick as a person, the case describes the anti-mainstream approach she took to building her highly successful business (no advertising, simple packaging, non-traditional R&D). After elaborating on the strong values she has imposed on the business, concludes by highlighting questions of the business' transferability to the United States and its survivability as Anita steps back.

On Thursday, November 7, 1991, Los Angeles Lakers star Earvin "Magic" Johnson announced his retirement from basketball in the wake of having tested positive for HIV, the virus that causes AIDS. Magic Johnson was one of the most popular figures in sports, both nationally and internationally. Among the many affected by Johnson's sudden retirement were his commercial sponsors, a group of companies comprising both sporting goods and other consumer products. The case looks at the situation through the lens of the sponsors. Should they retain their association with Johnson? If so, for how long and in what ways? Provides students with the opportunity to put themselves in the shoes of a marketing director, faced with the sudden reversal of fortune of one of the company's key endorsers. Allows for role playing from various perspectives: that of the MD of a sporting goods company compared to the MD of some other consumer product for example.

Examines pre-packaged bankruptcy of Southland.

A capital budgeting problem is viewed from the context of a marketing representative attempting to make a sale of energy saving heavy industrial equipment. Tax law changes promise to have a significant impact on the customer's decision process. Teaching purpose: To surround the capital budgeting decision with the complexities often found in the actual decision making process. These include taxes, inflation rates, and uncertainty about cost savings to be realized.

Describes the innovative use of a cross-level team as a tool for driving change at a troubled AT&T plant. After the team is disbanded, the case raises questions about the group's achievements, and about how well the organization is positioned to tackle the changes that still lie ahead. Teaching Objective: To raise issues relative to teamwork and empowerment and encourage students to examine what it takes for an organization to embrace long-term, continuous change.