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The Emerging Capital Market for Nonprofits
Why is it that effective business start-ups frequently grow into corporate giants, but effective new nonprofits rarely reach national scale? Because, say Harvard Business School's Kaplan and Grossman, the mechanisms and institutions that channel money and information between donors and nonprofits are underdeveloped. They don't provide reliable data on performance and don't hold organizations accountable for producing results. So inefficient nonprofits swallow up dollars that effective ones could use to serve more constituents. The good news is, that's beginning to change: A new generation of charitable foundations and intermediaries is measuring the impact of donations and targeting the highest-performing nonprofits. Taking a page from mutual funds and venture capital firms in the private sector, the new intermediaries conduct extensive due diligence on nonprofits and demand hard data on outcomes achieved. A few pioneers provide ongoing support, helping grantees develop action plans, detailed frameworks to measure impact, and strategic advice. If practices like these spread, we could soon see a social capital market that delivers real returns on donors' dollars. -
HP Product Variety Management
HP sells configure-to-order products. With millions of part combinations going into an order, the challenge is deciding which parts to keep in the portfolio to balance costs with revenues. The case explains how one would approach this problem before product introduction, but focuses on managing the existing portfolio. -
Bush Brothers & Company
The chairman and CEO of Bush Brothers grapples with leading and managing changes in strategy, governance and board composition, as well as succession, compensation and ownership issues, as he takes the family owned/family operated business into its fourth generation. As the company faces the prospect of hiring a non-family member to lead it into its second century, chairman and CEO Jim Ethier and the board strive to ensure that the business both remains faithful to the values of its founders and is well-positioned to take on the multiple challenges it faces. -
Ondine Biopharma Corporation
The chairman and chief executive officer (CEO) of Vancouver's Ondine Biopharma Corporation (Ondine) - a biotechnology firm specializing in the developing of medical devices - was faced with a strategic dilemma. Her publicly listed firm had developed a product that appeared to address an unmet need in the dental profession. She gathered her team to discuss whether management's efforts should be focused on maximizing returns from its new product by developing a new capability (building a direct sales force) or by capitalizing on its current expertise in photodynamic disinfection (PDD) technology to develop a host of new applications (navigating the complex regulatory approval process). Ondine did not have the financial resources to pursue both strategies, so had to choose one path and execute it well. -
EvelineCharles: Sizing Up Opportunities
Eveline Charles, the founder and chief executive officer (CEO) of EvelineCharles (a chain of upscale salon and spas focused in western Canada) was planning the next growth phase of her company. It was currently well positioned for growth: it had nine locations, a 26,000-square foot training facility, a warehouse and its own line of over 1,800 different spa and salon products. Despite these advantages, EvelineCharles was a small company and the CEO needed to be selective in her chosen growth strategy. She was trying to determine whether franchising her stores made more sense than relying on either organic growth or product distribution. -
Bradley Smoker Inc.: The Licensing Opportunity
In late 2007, the CEO of British Columbia-based Bradley Smoker Inc. was considering a potential licensing opportunity with Beam Global Spirits & Wine, owner of the Jim Beam brand of bourbon drinks. Bradley Smoker was a small Canadian manufacturer of food-smoking machines and bisquettes, which it sold through a variety of retail channels around the world. The current opportunity would see Jim Beam-branded bisquettes produced from wooden barrels used in the production of Jim Beam bourbon. The CEO was excited by the possibility of co-branding his product with a well-recognized global brand, but was also intimidated about the negotiations and legal aspects of such an agreement. As head of a fast-growing company with many current projects, the CEO wondered if such a deal made sense. -
Mobilia Interiors Inc.: The Operations Decision
In May 2008, the president of Montreal-based retailer of designer furniture store, Mobilia, was reviewing her workload. Mobilia's growth had required she to spend increasing amounts of her time in operations, finance and human resources and significantly less time on sourcing and purchasing. With a doubling of her direct reports in recent years, and recognizing that external hires would soon be necessary to support Mobilia's growth, she wondered if the organization might be best served by hiring an operations manager. A successful operations manager would need to be experienced, flexible and demonstrate a willingness to work in a family-owned enterprise; however, she also was cognizant of the costs to be incurred if the initiative stalled. She wondered what factors to consider when deciding whether outside help was needed or whether efficiencies could still be reached with her current team in place. -
China's Banks 2012
In the 1990s, considerable debate arose concerning the strength and stability of China's banks. Of particular concern were the debts owed to the banks by state-owned enterprises (SOEs). Many SOEs were experiencing financial difficulties and so they might not have been able to repay these loans. Some analysts emphasized that, since the banks and the SOEs were both owned by the government, the only relevant concern was the financial strength of the government and its preparedness to take responsibility for any of the banks' non-performing loans. In the early years of the 21st century, the government undertook a widespread program aimed at improving the balance sheets at the banks by purchasing non-performing loans from the banks and then reselling these at a discount, often to foreign private sector financial institutions. Prior to 2010, this process provided a generally accepted faith in the stability and security of China's banks. Total non-performing loans as a per cent of total bank loans decreased from 20 per cent in 2003 to three per cent in 2008. The year 2010 brought a new realization that the non-performing loan problem had reappeared. However, China's banks now had private as well as government shareholders, and so the solution had become more complex. The government's response was to insist that China's banks increase their capital base by issuing new equity. -
The Stitch It Group Inc. (B)
This is a supplement to Stitch It (A), product number 9B09M022. The Stitch It Group (Stitch It) is a mall-based clothing alteration service. Having previously sold Stitch It to its current owners in 1990 (retaining the chief executive officer (CEO) position), the founder and CEO was presented with an opportunity in 2003 to repurchase the company. Having originally sold the business because he was too cash-strapped to grow it himself, Stitch It had since grown from three store locations to 84 stores under three brand names spread throughout Canada and the United States. In determining whether to buy back the firm he founded, the founder and CEO also needed to consider his daughter Jennifer's expressed interest in becoming an executive in the firm. How would he provide Jennifer with the proper technical training to become familiar with all aspects of the firm's business, and improve her business acumen and leadership skills? The founder and CEO had one week to inform the owners of his intent to purchase and he felt it was a good deal, considering the opportunity for growth. Even if the founder and CEO resolved to buy back his company, he wondered how to train Jennifer to take over the business one day. -
Anita Norris Model Management
In March 2010, the owner of Anita Norris Model Management (ANMM) was trying to discern a strategic direction to best serve the growth of her company. Its quick growth in the past two years was due to the owners' efforts to pursue any revenue stream opportunity that presented itself. The owner was concerned that this pace was unsustainable in the long run and would in fact stretch the business too thinly. Currently, the business's revenue stemmed from four main areas: modeling workshops, signing and booking models, model development and speaking fees. The owner wanted to develop a future business strategy that would allow her to focus the business and spend the majority of her time on developing and managing her models. To do this she had to carefully analyze the strengths and weaknesses of her company within the context of her competitors and the industry as a whole. -
Ontario Ministry of Small Business & Consumer Services: Managing the Toronto Propane Explosion (A)
In August 2008, there was a large propane explosion at a propane facility located in Toronto, Ontario and the resulting media coverage was nothing short of extensive. Within 24 hours of the explosion, media coverage shifted from developments at the site to the responsibilities of the Technical Safety and Standards Authority (TSSA). The TSSA was a not-for-profit corporation that was responsible for the delivery of regulatory services and ensuring technical safety in a number of areas. It currently fell under the supervision of the Ministry of Small Business and Consumer Services (the Ministry), although it had been separated from the government since 1996. By the fourth day of the crisis, the TSSA was perceived to be underperforming and had lost all credibility with the media and public. Opposition parties were calling for the TSSA to be brought back in-house. The Ministry was under criticism for actions of this arm's-length body, and was determined to deliver a media statement that would accurately capture the nuances of this politically sensitive event, thus showing leadership without taking ownership. -
Ontario Ministry of Small Business & Consumer Services: Managing the Toronto Propane Explosion (B)
In August 2008, there was a large explosion at a propane facility located in Toronto, Ontario. The Technical Safety and Standards Authority (TSSA) was a not-for-profit corporation that was responsible for the delivery of regulatory services and ensuring technical safety, and fell under the supervision of the Ministry of Small Business and Consumer Services (the Ministry). By day four of the crisis, the TSSA was perceived to be underperforming and the minister was called to deliver a statement. He decided neither to support nor reject the TSSA but instead called for the TSSA to audit all propane facilities in Ontario. The audits revealed that many of the facilities had minor compliance issues. The reporting of these results, combined with intense public scrutiny of the event, again called TSSA's credibility into question. Faced with TSSA's damaged reputation, the minister evaluated three actions: 1) change TSSA's leadership; 2) bring TSSA back into the government; or 3) perform an organizational review. -
Ontario Ministry of Small Business & Consumer Services: Managing the Toronto Propane Explosion (C)
In August 2008, there was a large explosion at a propane facility located in Toronto, Ontario. The Technical Safety and Standards Authority (TSSA) was a not-for-profit corporation that was responsible for the delivery of regulatory services and ensuring technical safety, and fell under the supervision of the Ministry of Small Business and Consumer Services (the Ministry). After the explosion, with the TSSA facing intense public and political scrutiny, the Ministry requested that the TSSA perform audits at every propane facility in Toronto. The audit results were reported by the media in such a way as to damage TSSA's reputation. The Ministry then ordered an organizational review of the governance structure of the eight Delegated Administrative Authorities (DAAs) of which the TSSA was one. Determined to act in the best interests of the province, the Ministry subsequently ordered a 30-day Propane Safety Review but needed to make three decisions: 1) select an insider or outsider to lead the panel? 2) should the leader be a prominent figure or technical expert? 3) what is the optimal timing of the review? -
Lake Eola Charter School: Securing the Brand Through Environmental Analysis
In late 2009, the principal of the Lake Eola Charter School (LECS) in downtown Orlando, Florida completed a course on nonprofit branding at the Philanthropy & Nonprofit Leadership Center at a local college. She was energized and ready to apply the information she had learned to evaluate the school's competitive position and to determine its level of mission fulfillment and progress toward goals. Well-suited for running a school, with a doctorate in education administration, the principal had taken the class to shore up her understanding of planning for and managing a nonprofit organization (NPO). In her mind, the key lesson was the need for an environmental analysis to better understand the school's internal environment and external competitors in order to improve the position of the school vis-a-vis the community's educational needs. She employed an MBA intern to help her develop tools for an internal and external environmental scan. The intern had just wrapped up the data collection and analysis. The principal was ready to use the summer "down time" to make changes for the 2010 academic year, if only she knew how to proceed. This case is suitable for marketing strategy courses. The detailed treatment of environmental analysis could also make the case useful in business policy and strategy courses. Instructors will find the case particularly well-suited for classes on marketing, strategy and management in the area of public administration and nonprofit organizations. -
Stitch It Group Inc. (B)
This is a supplement to Stitch It (A), product number 909M22. The Stitch It Group (Stitch It) is a mall-based clothing alteration service. Having previously sold Stitch It to its current owners in 1990 (retaining the chief executive officer (CEO) position), the founder and CEO was presented with an opportunity in 2003 to repurchase the company. Having originally sold the business because he was too cash-strapped to grow it himself, Stitch It had since grown from three store locations to 84 stores under three brand names spread throughout Canada and the United States. In determining whether to buy back the firm he founded, the founder and CEO also needed to consider his daughter Jennifer's expressed interest in becoming an executive in the firm. How would he provide Jennifer with the proper technical training to become familiar with all aspects of the firm's business, and improve her business acumen and leadership skills? The founder and CEO had one week to inform the owners of his intent to purchase and he felt it was a good deal, considering the opportunity for growth. Even if the founder and CEO resolved to buy back his company, he wondered how to train Jennifer to take over the business one day. -
Resuming Internationalization at Starbucks
Starbucks enjoyed tremendous growth over the previous two decades. In 2007, it had a global reach of over 17,000 stores in 56 countries. Between 2007 and 2009, however, Starbucks' relentless march was slowed by three forces: increasingly intense competition, rising coffee bean prices and a global economic recession. In order to remain profitable, the company started to scale back its overseas operations. In 2010, Starbucks was faced with a critical strategic decision: Should the company resume its international expansion and once again intensify its commitments in overseas markets? If so, what approach should the company take? Had the pace of Starbucks' internationalization (i.e. the rate of opening new stores abroad), the rhythm of its internationalization (i.e. the regularity by which stores were opened abroad) and geographical scope of its internationalization (i.e. number of new countries entered) had an impact on the company's performance in previous years? Could Starbucks learn from its prior internationalization within the coffee industry in order to guide its future international strategy? -
Dupont Teflon: China Brand Strategy (Traditional Chinese version)
DuPont had spent six years helping licensee manufacturers to develop the domestic market for non-stick cookware. While DuPont Teflon brand coating held 80 per cent of the non-stick market, the non-stick market overall represented 2 per cent of the domestic cookware market. Moreover, the amount of money spent on developing the non-stick market exceeded the revenue that DuPont received in the Chinese market. If DuPont decided to take a different role in the market, it faced many obstacles that required significant additional investment. It appeared that the domestic market offered tremendous opportunity, but it would require new efforts, skills, distribution channels and patience. The case examines the issues around leadership and product development that DuPont considered in their decision to go from licensing the manufacture of non-stick coating technology in China, to introducing a wholly owned brand of non-stick cookware. -
UTV and Disney: A Strategic Alliance (A)
The case describes the dilemma faced by the senior vice-president of business development and strategy when deciding in 2006 whether UTV Software Communications Ltd. (UTV) should go ahead with a joint venture with Walt Disney Company (Disney) even if it meant selling Hungama TV, the leading children's channel in India, to Disney. UTV was one of the large media companies in India and had diversified interests, including TV content, movies, animation and new media content. Although UTV had opened operations in the United States, the United Kingdom and other countries two years before, its international presence was limited. The CEO of UTV wanted UTV's business to increase from Rs2 billion to Rs5 billion by 2008 and to Rs10 billion by 2010. This seemed possible if UTV went ahead with a strategic alliance with Disney. UTV anticipated that an alliance with Disney in India would help it increase its business in all other verticals globally. On the other hand, Disney, a large multinational, had several records of acquisition. The vice-president of UTV was concerned that Disney's interest in a strategic alliance could be part of a long-term plan to acquire the company and benefit from its profitable business. Since UTV had established itself in the Indian media industry over the last 15 years, it could collaborate with different companies through its various verticals, thereby reducing the threat of losing its identity.<br><br>The case achieves the following learning objectives: 1) to explore various possibilities of strategic alliances with multinationals in order to expand business when it means selling off one part of the business toa multinational; 2) to assess the costs and benefits associated with cross-border mergers involving acquisitions of one part of the business and alliances in another part; 3) to identify business opportunities while integrating with a foreign entity; 4) to come up with "win-win" strategies that encompass multiple stakeholders of a business. -
Resuming Internationalization at Starbucks
Starbucks enjoyed tremendous growth over the previous two decades. In 2007, it had a global reach of over 17,000 stores in 56 countries. Between 2007 and 2009, however, Starbucks' relentless march was slowed by three forces: increasingly intense competition, rising coffee bean prices and a global economic recession. In order to remain profitable, the company started to scale back its overseas operations. In 2010, Starbucks was faced with a critical strategic decision: Should the company resume its international expansion and once again intensify its commitments in overseas markets? If so, what approach should the company take? Had the pace of Starbucks' internationalization (i.e. the rate of opening new stores abroad), the rhythm of its internationalization (i.e. the regularity by which stores were opened abroad) and geographical scope of its internationalization (i.e. number of new countries entered) had an impact on the company's performance in previous years? Could Starbucks learn from its prior internationalization within the coffee industry in order to guide its future international strategy? -
Goodwill Industries of Greater Grand Rapids
The president and chief executive officer (CEO) of Goodwill Industries of Greater Grand Rapids Inc. (Goodwill) was analyzing a staff proposal to begin selling donated books online. Her initial response to the proposal had been to approve the idea without any reservation; however, some pointed questions raised during discussion at a recent board meeting caused her to revisit her support for the project. The CEO determined that to make a thoughtful recommendation about the proposal, she needed to evaluate three main criteria: 1) The strategic and financial fit of the proposal in relation to the current salvage buyers of Goodwill's books; 2) The operating and revenue needs of Goodwill's retail stores, and; 3) Alignment of the proposal with Goodwill's mission statement.