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With the development of the customer profitability system complete, the product and marketing groups of the Canadian Imperial Bank of Commerce now needed to address how to improve customer profitability, one customer at a time, by examining new market segmentation and identifying new sales opportunities. Issues they had to resolve were: what to do with customers who were not profitable, who should have access to the data, how to use the data to gain competitive advantage over the competition and what changes should be made to the compensation system so it is aligned with the company's sales focus. This is the second of a three-case series that follows the design and implementation of a customer profitability system at a large Canadian financial institution. The (A) and (C) cases are product #9B00B014 and 9B00B016 respectively.

A non-profit manager faces a challenge in how to grow a network of informational services to patients, their parents and medical practitioners, including allied health professionals. To date, this service has been free. Should it now be priced, and if so, how and at what price? The service also links five hospitals who can share diagnostic information for greater system efficiency. All of these hospitals put up seed money for the development of the network. How to grow this business is the challenge, including marketing, organizational structure, pricing and operational concerns.

A senior manager in a hospital is determining a system-wide approach linking physicians, social welfare agencies, and single issue volunteer health organizations in a coordinated network. The approach taken will determine likely success or failure of this innovative approach. The hospital faces a problem as the initiator of the network, as it is a teaching hospital and is viewed by many in one community as too big. The decision maker has to be able to sell the idea to the board (who seek accountability), the various agencies (who seek direct benefits) and the community at large (who seek a seamless health care delivery system). Thus potential conflicts and trade-offs abound.

The vice president of an innovative community hospital is proposing a plan focusing upon family practitioners to deliver an integrated health delivery system. A key issue is how to alter the incentive/compensation plan from fee-for-service (i.e., piece rates) to a schedule based on capitation (i.e., guaranteed income based on serving all the health needs of a defined population). The teaching purpose is to examine change management issues in a very complex, political environment involving professionals and develop appropriate metrics of physician accountability.

The head of the Clinical Resource Management Committee at St. Catharines General Hospital which was responsible for monitoring and promoting optimal resource utilization by physicians and the other staff at the hospital. While the committee had made some gains, there was little effect on the hospital's operating costs and many physicians were uninterested or resistant to the concept of utilization. In addition, hospitals in the region were faced with restructuring proposals and budget cuts in the near future. The case highlights the changes taking place in the health care sector and the implications for managerial analysis and control. Issues covered include: cost analysis, design of a funding scheme to promote certain behavior, data collection and validity, incentives, and performance measurement.

An entrepreneur is hoping to open Caribbean Internet Cafe in Kingston, Jamaica. He has gathered data on all the relevant costs: equipment, rent, labor, etc. He has also found a partner in the local telephone company, Jamaica Telecommunications Limited (JTL). JTL has provided equity and a long-term loan at favourable interest rates. He is now faced with the task of analyzing fixed, variable and start-up costs, contribution margin, and the concept of break-even to guide his decision.

Big City Courier is a small regional courier company operating in Toronto, Ontario. The business was started two years ago, and has grown rapidly since its inception. The company is making profits, but has a severe cash flow problem. This case may be used to illustrate the statement of cash flows, the impact of rapid growth on a company's cash position, and the financing gap between receivables and payables.