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Pharmex Industries is a high-growth pharmaceutical company that has aggressively expanded through acquisitions of financially sound firms. The chief financial officer must decide if their latest potential acquisition, the privately owned Formulex Group of Companies, is strategically attractive, and he must also determine the value of the company and how to finance the acquisition.

Two large oil and gas companies agree to merge to form Husky Energy Incorporated. An individual investor has received the information circular with respect to the transaction and has gathered some other information about the merger. She must decide whether the offer is attractive enough for her to vote her proxy in favour of the transaction and tender her shares. The case provides an opportunity for students to evaluate the acquisition from the unique perspective of an individual investor holding shares of the target company. Extensive data is provided on comparable firms and transactions allowing for ratio-based valuation of the transaction. This valuation is complicated by the fact that payment to shareholders consists of both cash and shares. Information is also provided that allows for a general discussion of the takeover process as well as the pros and cons of using a takeover as a means of going public (a reverse takeover).

The project manager for the Liquor Control Board of Ontario faces store network decisions in southeast Toronto. The Liquor Control Board of Ontario has developed a new five-year strategy in which all of their stores will be revamped into one of the four new formats, which has led to a review of every one of their nearly 600 retail locations. With a store within five minutes of 86% of the population of Ontario, the project manager's task is not about expanding coverage but rather improving the performance of the retail network. The (A) case focuses on what to do about a particular store in the area. The Liquor Control Board of Ontario (B): Market Segmentation, product 9B00A021 is a short follow-up about further decisions on store layout and merchandising. (A higher price applies to this case due to color exhibits.)

Stone Group Corp., one of the largest electronics manufacturers and distributors in China, practices transfer pricing, an allocation process that assigns costs, sales revenue and gross profits to each of its five divisions. When a customer approaches the company with an order and requests a recommendation for a multimeter model, the general manager of the Instruments Division is asked to quote a transfer price for the multimeters. He must decide whether to sell some of his stock to another Stone division (losing the sales revenue, but perhaps gaining the gross profit needed to meet the division's monthly profit quota) or to keep the product in stock for possible sales (and greater revenue and profit) during the company's fourth quarter.

Northeastern Mutual Life is a large insurance company. As a result of falling profitability, the chief executive officer has to evaluate the rights of various stakeholders as he plans to reduce staff. He must quantify in dollar terms the moral claims of shareholders and various other stakeholders, and apply ethical analysis where legal requirements are unclear. In particular, he must decide how to manage the layoffs and the implications to the company of the payout of pension benefits.

Beijing Biotech Corporation is a leader in biochip research and development in China. The president and chief executive officer must decide whether his company should go ahead with the Biochip Scanner project - a process that would read and analyse the information on biochips. He has some estimates of research and development costs and variable costs of the expected final product, however he doesn't have enough information about the market and customers. He must analyse the industry and competition, and fully evaluate the strengths and weaknesses of his company.

Tricon Logistics China is the logistics department of Tricon Restaurants International (China) and is responsible for supervising the operations and cost management of supplies to Kentucky Fried Chicken and Pizza Hut restaurants from 12 distribution centres in China. The market manager of one of the regional companies is concerned about the performance of his company's affiliated distribution centre in Suzhou. The director of Tricon Logistics China must determine why the actual cost of the distribution centre have exceeded the targets by analysing performance, cost variance and internal price negotiation.

As a major player in Western Canada's real estate market, Mainstreet Equity Corp. has a unique strategy for success: instead of simply buying and selling properties, Mainstreet also upgrades and manages them, thereby enhancing their value. In particular, Mainstreet concentrates its efforts on the multifamily sector, acquiring apartment buildings and townhouses to rented or sold at a profit under the Mainstreet brand. The company president and chief executive officer is at a professional crossroads where the future of Mainstreet is concerned. He wants to ride the wave of rapid growth that his young company is experiencing, yet at the same time, he wants to preserve the values of a small entrepreneurial firm. Control over issues such as quality, service, buying and staffing is important to him and easy to facilitate under current conditions. But the opportunity to expand is also tempting and at hand. Mainstreet's board of directors must work towards a decision regarding whether or not to expand the business, and if so, how rapidly and where? Or if not, the board must decide on an alternative course of action that would prepare the company for expansion in the future.

The president of a new hotel venture faces a financing decision. The choices include: mortgage debt, common stock, or preferred and common stock. The president has to balance the impact of the financing alternatives on the viability of the venture, her investment returns, the investment returns of prospective outside investors and the financial and business risks.

Three years after launching a content-based Web site, a nationwide hard goods retailer invested in software to support Internet shopping. The online component was one element in a multiple channel retailing approach, which also included retail stores, a phone-order service and an annual catalog. Although the company is the country's most shopped retailer, the online retail segment has not turned a profit. The director of marketing must consider the effect of multiple channel retailing on the company's profitability.

The programmer for Camp Happy Valley, a day camp for children, was wondering what he could do to boost the camp's morale and improve its organization. Last summer's disappointing season had resulted in many complaints from staff, campers and parents. Changes would have to be made to ensure that the camp's upcoming season would be successful. The young programmer must examine several aspects of the camp's organization in order to assess where change is needed. Staff selection, staff training and remuneration are some of the obvious areas that need attention. Camp morale and overall environment need a major overhaul as well. The programmer must decide how best to use his own leadership style to influence and motivate his staff to bring about the necessary changes.

A group of international business majors from a large Boston-area university traveled to Spain, France and Germany for a yearlong period of study and work. Some of the students described their initial impressions and reactions to living and studying in another country and functioning in another language. Topics discussed include adapting to life in Europe (including language, pace of life, personal space, smoking, local food, sexual norms, personal appearance, and government and bureaucracy), being away from family and friends during the holiday seasons, academics (including differences in learning and teaching styles), and language. The objective of the case is to help undergraduate students who will be living, studying, and working in another country to prepare for their experience. Supplement cases, The European Experience (B), product 9B02C032, discusses the students finishing their academic term and preparing for their work placement and The European Experience (C), product 9B02C033, follows the experience of one student on his co-op work assignment.

After completing their exchange semester, the American students felt that they had gone beyond being mere tourists. However, for most, the reality of spending a term in Europe had turned out very different from their expectations. This supplement to the European Experience (A) case, product 9B02C031 continues the discussion as students finished their academic term and prepare for their work placements. This case is the second part of a case series used to help prepare North American undergraduate business students for international exchange programs. See also European Experience (C), product 9B02C033.

Follows the experience of an American exchange student studying in Spain, as he embarks on a co-op work assignment with a major international manufacturing company. This supplement is the third part of a case series that is used to help prepare North American undergraduate business students for international exchange programs. Supplement to The European Experience (A), product 9B02C031, and European Experience (B), product 9B02C031.

A manufacturer of construction parts spends $150,000 annually on courier services. When the courier threatens to stop shipments because the required $10,000 deposit has not been maintained, one of the company's owners decided to switch couriers. The new courier is late in delivering a vital component, nearly causing a production shutdown. The materials manager wants to recommend that the company return to the previous courier service. He needs to consider that the owner is a principled person, who favored the new courier. As well, the company has had layoffs and pay cuts. Although he had been a long-term employee and is satisfied with his work, the manager needs to determine whether he should approach the issue at the next management meeting or simply allow the situation to be the sole responsibility of the owner.

ING Direct USA is a direct bank operating in the United States. Launched in September 2000, it offers a small menu of simple banking products available to customers online, via telephone, mail or fax. In September 2001, the global head of ING Direct asked the president of ING Direct USA, if he would consider adding e-brokerage to the portfolio of ING Direct USA's direct banking products. The president of ING Direct USA is approaching the decision to add e-brokerage to the ING Direct USA portfolio with care. He first has to decide if it makes sense to add this new service. If he decides to add it, he has to consider if he will build the capability in-house or purchase an existing player.

A student at a large Boston-area university would soon be completing a dual degree in Management Information Systems and Business Administration. She is the oldest child and only member of a Japanese family that spoke English and was learning to represent the family business, Kashiwa Tubing, with its international accounts. It was planned that she would eventually assume leadership of the company. During her studies she became a believer in the potential and reach of the Internet. She immediately set up a Web site for the company. Within six months, the Web site generated its first major sale, a $2.5 million order from Saudi Arabia. Recently, she had begun to negotiate a multi-million dollar deal with a Taiwanese firm. The company's Japanese headquarters recently forwarded an inquiry from Nigeria. The inquiry was from a member of the Federal Ministry of Works and Housing, proposed a business transaction that would, if successful, represent the largest single Internet order in the history of Kashiwa Tubing. Believing in personally meeting with customers and building long lasting ties, her father suggests that she should meet with this customer, even if that meant traveling to Nigeria.

Malkam Cross-Cultural Training is a provider of language and cultural diversity training. A development associate must prepare recommendations for the firm's latest marketing campaign. The company was anxious to develop its company brand as distinct from the reputation of its founder and president. The development associate had narrowed the promotional choices to two: develop a direct mail campaign or a print advertising campaign. He must be able to gauge and monitor the success of either or both campaigns.

Two engineers formed Teqswitch Inc. to design and produce faster networking equipment. Five years after they began, the company has 120 employees in Canada, England and Australia and sales in the tens of millions. The company decided to expand into Latin America and has worked out a $15 million joint venture with Unitas in Argentina to sell components. Teqswitch establishes an office in Buenos Aires and works with Unitas to develop sales personnel and business processes. As the company is about to launch its next generation of products, the vice-president international of Teqswitch receives information from the joint venture partner about terminating the agreement. He must determine what has gone wrong.

China's entry into the World Trade Organization at the end of 2001 brought promises that foreign financial institutions would be permitted to operate through China. In 1998, Citicorp and Travelers Group Inc. had merged to create the new Citigroup Inc. Travelers brought a vast array of financial services that added to Citibank's existing portfolio of consumer and commercial lending. Travelers had developed a very extensive business in investment banking, asset management, life insurance, property casualty insurance, as well as consumer lending. Citigroup now had to determine the business prospects for each of its activities in the growing China market. Fears of social and economic dislocation might lead China to impose regulatory restrictions limiting the pace of foreign expansion. Economic growth might be impeded by the existing political structure, and reforms might not occur in the near term. A myriad of other challenges included human resources difficulties, e-commerce limitations and regional disparities. The pace of privatization of state-owned enterprises and the societal preferences in regard to alternative insurance and investment products added to uncertainties. Citibank had a record of success in less developed countries, and had developed certain competitive advantages that might be the basis for success in China, but whether and how these could be extended to other Citigroup financial activities remained an important question.