The business development manager for General Electric (GE) Canada, met with executives from GE Supply, a US-based distribution arm of GE. The purpose of the meeting was to discuss new business opportunities in energy management and efficiency. The business development manager had identified some opportunities for business development in Canada, while leveraging GE's strategic capabilities did not fit well with GE's corporate structure. He was keen to work with GE Supply but wanted to retain a high level of operating autonomy. The challenge was to put together an appropriate organizational structure and find a home for the new development idea. (A sequel to this case is available, titled GE Energy Management Initiative (B), case 9A94G006. A 12-minute video may also be purchased with this case, video 7A94G005.)
The Newell Company, a multi-billion dollar company dealing in hardware and home furnishings, office products and housewares, was contemplating a merger with Rubbermaid, a renowned manufacturer of plastic products. Newell had a remarkable record of success in growth by acquisition. Rubbermaid would mark a quantum step in this program, but equally, would pose a formidable challenge to Newell's capacity to integrate and strengthen acquisitions. Corporate strategy and advantage is studied, particularly through the Collis and Montgomery framework, to determine if the proposed merger is a step too far.
After acquiring Greyhound U.S., Laidlaw, Inc. became the principal provider of intercity transit in North America. Nine months later, the board of Laidlaw asked its CEO to resign, citing performance problems and the need to divest certain operations to strengthen its balance sheet. Laidlaw's attempts to enter and to consolidate selected transportation service industries are examined. Something has gone terribly wrong and the search for the reasons pushes back to fundamental issues associated with growth by acquisition and the corporate management of (arguably) diverse businesses. This sets up a discussion of whether the CEO's strategy was reasonable or fundamentally flawed; whether something could have been done earlier by the CEO or the board, and if so, why action wasn't taken; and finally, the prospects for Laidlaw as they look ahead.
Provincial Papers is a very troubled manufacturer of coated paper located in Thunder Bay, Ontario. The director and chairman of the board of Provincial Papers is being informally pressed to take on the CEO role. He is assessing the possibility of rescue in the face of depressed market prices, an over-supplied industry, departing personnel and money-losing operations. The (B) case, 9A99M017, presents the issues he faces when he decides to accept the job.
The new CEO of Provincial Papers, a coated paper manufacturer, was very concerned about the many issues facing the company - including union relations, credibility, reliability, lack of information, lack of communication, poor morale and financial difficulties. He must decide how best to focus his efforts in the short term. This case is a follow-up to Provincial Papers Inc. (A), case 9A99M016.
In early 1996, Vincor was Canada's largest wine company. It had grown rapidly, largely through acquisition. It was now looking at the prospects of an Initial Public Offering (IPO) in order to reduce debt and fund further growth. But what specifically was the case to put before the investment community? What were the industry opportunities? And what were the strategies to capitalize on these? Could a compelling case be built for a reasonably priced IPO? The case presents relevant industry and company data and asks the reader to take the position of management and develop the IPO case. (A 23-minute video, which presents management's road show program, can be purchased for the case; video 7A96M007.) Data are available on the nature and success of the IPO.
This case explores a proposal by Labatt management to purchase a 22% interest in a Mexican brewing business and strike associated agreements for cooperative activities throughout North America. An evaluation of the deal requires an assessment of the prospects of the venture in the Mexican and U.S. beer markets, the potential for synergies in the cooperative activities, and ultimately the pricing and financing of an investment in a developing economy. This case is similar to Una Cerveceria Por Favor: Labatt Buys Into Mexico, case 9A95G013, in that it varies primarily in the time perspective from which the issues are addressed. Only one of these cases is necessary in a course.
The case traces the story of Canadian Airlines from its early days of profitable regional operations, growth through acquisitions to the status of a national and international carrier, and ultimately to the crisis of the early and mid 90s. Fundamental questions of strategy need to be resolved. How is revenue generated? What are the sources of cost? How do airlines make profits? In pursuing these questions, students need to sort out the realities of the airline industry and the specific opportunities and challenges facing Canadian.
The business development manager for General Electric (GE) Canada, met with executives from GE Supply, a US-based distribution arm of GE. The purpose of the meeting was to discuss new business opportunities in energy management and efficiency. The business development manager had identified some opportunities for business development in Canada, while leveraging GE's strategic capabilities did not fit well with GE's corporate structure. He was keen to work with GE Supply but wanted to retain a high level of operating autonomy. The challenge was to put together an appropriate organizational structure and find a home for the new development idea. (A sequel to this case is available, GE Energy Management Initiative (B). A 12-minute video may also be purchased with this case, GE Energy Management Initiative - Video.)
Six months into the operation of the energy management business, GE Energy Management Initiative has lost a bid for a large contract. Its general manager learns that the division to which it reports is getting out of the energy management business because of a questionable strategic fit within the division, and a lack of results. The general manager wonders how to proceed. (This is a sequel to GE Energy Management Initiative (A).)
The chairman and CEO of Imasco Limited was reviewing an acquisition proposal from one of its operating units, Hardee's Food Systems, to purchase the Roy Rogers Restaurant chain. While he was inclined to support the proposal, he wanted to carefully weigh its broader impact for Imasco as a whole. The probable price of $390 million represented a substantial commitment of funds, at a time of slowing growth in the U.S. fast food business.
Kettle Creek has opened an attractive fashion market niche by selling its unique garments through a chain of franchised retail outlets. Rapid growth has stretched its financial and management resources, seemingly to the limit. The President, a majority shareholder, is concerned about her next steps. See Kettle Creek Canvas Company 1985 (B).
The president is considering three steps to deal with financial and operating problems at Kettle Creek (see Kettle Creek Canvas Company 1985 (A)). They were to sell equity, even the whole business if necessary, to recruit a board of directors, and to hire a general manager. She reviews three applicants' resumes for the job. Do any of them fit the bill?
The president of Medtron Limited, a fast growing Canadian manufacturer of wheelchairs, was preparing for a strategic planning session with his management group. In recent years, Medtron had met its sales growth and dealer expansion objectives and earned healthy profits. The president saw tremendous potential for further growth. He was concerned nevertheless that growth might outpace the company's financial and manufacturing capabilities and that a larger scale operation would create inflexibility. Our planning job is to identify any constraints and develop a strategy that maintains our reputation for quality products and fast, personalized service. As competitive conditions became more difficult and the company's environment changed, the president had to decide how aggressively Medtron should grow. What are management's realistic choices and which of these decisions would you recommend?
An immensely successful Western Canadian real estate agency is considering questions of continuity and sustaining its growth. The agency has prospered because it acted as an agent for its client, not as a broker trying to bring parties together in a sale. A key, the president feels, is getting and keeping good people and instilling in them the concept of acting as an agent.