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The Liquid Gold cases (see also the B case, UVA-QA-0588) are an adaptation of the earlier Calambra Olive Oil cases (UVA-QA-0440 and UVA-QA-0442). This version supports a modified classroom experience. The cases describe the start-up of Calambra, a company built to sell a premier brand of olive oil. Frank Lockfeld, the founder, has to determine how much olive oil to make for the second year's production. Unfortunately, he has to make this decision before learning the results of the first year's sales. Thus, there is enormous uncertainty around the decision. The A case tells the start-up story and presents enough information for students to do a sensitivity analysis to decide which of the many uncertainties are most important, which leads to a discussion of tornado diagrams. The B case provides information on those critical uncertainties, which leads to a discussion of spreadsheet modeling and simulation modeling, searching for an optimal order quantity, adjusting for risk, etc. It also affords a discussion of a key general business issue: the difference between make-to-order and make-to-inventory businesses and the fundamental flaw in most business plans that leads to gross overestimates of potential profitability. Student spreadsheet files are available.

Spreadsheet for case UV6224

The mere mention of the term "merger and acquisition" (M&A) can send messages of misinformation or half-truths. Clarity about motives and intent, as well as timing the release of information during a merger, requires strategic information management. But when is the right time to tell employees about a pending merger? Who should make the announcement, and what communication channels should they use? A recent survey of managers conducted by the Darden Graduate School of Business explored communication practices that companies use to communicate internally during their firms' merger or acquisition. This note reveals the findings and makes communication recommendations.

Optical Recording Corporation (ORC) secured the rights to a technology known as digital optical audio recording. During the time it took to negotiate the final transfer of the technology ownership, it was rumored that some major electronics manufacturers were developing compact disc (CD) players that recorded digital optical audio signals. A patent lawyer advised ORC that the compact disc players and compact discs recently released by these companies might be infringing the claims of ORC's newly acquired patents. Based on this information, the company proceeded to successfully negotiate licensing agreements with the two largest CD manufacturers, Sony of Japan, and Philips of the Netherlands The third largest manufacturer, WEA Manufacturing, a subsidiary of Time Warner Inc., maintained a position of non-infringement and invalid patents. With the U.S. patent expiry date looming, ORC decided to sue Time Warner for patent infringement. When the defense counsel presented testimony that questioned the integrity of the licensing agreement, ORC's president realized that the entire licensing program was in jeopardy and must decide whether he should accept a settlement or proceed with the lawsuit.

The founder of a Canadian publishing company is nearing retirement. His mission has been to promote Canadian authors and he has actively pursued government assistance and policies to protect Canadian cultural industries. However, there are often policies against free trade of cultural products which has hurt exporting. Discussed is how firm value is affected by government policy and the trade-offs of cultural protectionism.

The rent-to-own industry is a four billion-dollar industry that rents appliances, furniture and electronic goods to customers. There is a potential threat to the rent-to-own industry as a result of an article in a national newspaper that accused the industry of taking advantage of poor consumers. Law makers and politicians were becoming active on the issue and the industry must formulate a response. Would the public really care enough about the rent-to-own industry for new laws to be passed that would change their operations? This case deals with the relationship between business, government and society and implications of public perception.

Hutchison Whampoa Limited is a holding company based in Hong Kong with its core business interests in property development, retail and manufacturing, telecommunications and finance and investment. The deputy managing director must assess the company's corporate strategy. She must consider how the corporate office adds value to the underlying business and review the business portfolio and its considerable geographic scope. It is unlikely Hutchison Whampoa can be a global player in all of its businesses, so she must determine which of the businesses can be global, regional or local.

Most parties today agree that insiders should hold the balance of power on a board. Perhaps so, but there is also a third way, write these authors, who suggest that insiders and outsider should have equal power.

Almost all discussions of corporate governance focus on boards of directors. But what about managers? Faults in the way a company is governed can be found in certain limits imposed on managers and in the relationship between managers and directors, a relationship that managers themselves can make more productive. One of the world's leading management thinkers offers some ideas for doing so.

Customer Relationship Management (CRM) initiatives have been disappointing There are five major reasons why CRM's failure rates are abysmally high. This article describes these five reasons and what was learnt from them. First, CRM is not properly understood, leading to unrealistic and inappropriate expectations. CRM is an attitude rather than a technique or software and implies comprehensive relationship marketing rather than mass marketing for most of the clients. Furthermore, any understanding of what CRM is must be accompanied by an understanding of what it is not. CRM does not replace, but rather complements, other marketing and customer service initiatives. Second, CRM initiatives should add value to the relationship for the customer, not just the company. Too many CRM initiatives are designed to help the company rather than the customer. Third, it is difficult to choose the appropriate CRM solution as the technology is constantly evolving. Recently, many CRM vendors are launching industry-specific suites (referred to as vertical tools) that enable companies to deploy the software faster than generic packages, and without the costly customization. Fourth, Implementing a CRM system is complex and difficult. While resistance may come from salespeople who do not wish to give up ownership of customer information or from IT people who do not wish to change legacy systems, experience has shown that for a CRM program to be successful, above all else it must have the full support and ongoing commitment of top management. They must view CRM as a strategic initiative, not as a technological tool or tactical program. Lastly, it is easier to demonstrate the costs of CRM relative to the benefits. While measuring the costs are fairly straightforward, measuring the payoff of a CRM system, especially in its early stages, can be difficult and contentious, which can lead to poor judgments by management. Measurement criteria should be based on the objectives of the CRM program and used to manage and continuously improve strategic CRM performance.

The Big Three no longer have the automobile market to themselves, but almost every market, including the one for cars, is ruled by three dominant firms. That reality does not prevent other firms from being successful. However, all firms, regardless of their market share, must still understand The Rule of Three and how it will affect their strategy and attempt to operate efficiently.

Organizations need a leadership pipeline where leaders use and develop their judgment to a point where it becomes wisdom. This author uses 25 years of teaching experience to conclude that leaders can be developed within a company. The challenge for human resource development is to accelerate the development of high-quality leadership in organizations, increase the yield of mature leaders from a pool of high potentials, and create a pipeline of management talent that delivers leaders where and when they are needed. Organizations should involve the expertise of senior executives in the recruitment process and hire talented individuals. These individuals should be channeled into the right experiences that encourage individual development. Learning should be combined with doing so practical skills are gained and development must be integrated with personal career management and organizational development. People in development programs must be monitored for dedication levels and high-potentials should be given frequent performance reviews and constant reassurance that they are high-potentials. The article also examines the extensive role of human resource development in development. The best organizations centralize ownership of high-potential leaders rather than delegating responsibility to individual departments. Human Recourses should ensure that leadership development is connected to broader organizational strategy, integrate critical HR systems around the leadership development challenge, manage the leadership development process, advice and consult on individual career plans , brief management on developments in leadership thinking, seek and evaluate outside leadership development resources and benchmark leadership development practices against high-performing organizations.

Ebao is a year-old Web-based technology company whose founders believe that their e-insurance programs and products have the potential to improve the overall efficiency of China's traditional insurance industry. In its first year of operation, Ebao has grown into a 70-person organization with offices in Shanghai and Beijing, and almost all the major insurance companies in China have signed up with the company's Web site and are using its e-insurance applications. Ebao's chief executive officer and founder has a long list of challenges to confront in the coming year. The company needs to strengthen its market position in the face of rapidly growing competition and to sustain its rapid growth in a year full of market downturns. As well, Ebao's management team has targeted to achieve break-even by the end of the current year. The company's chief executive officer must determine a concrete business strategy that will lead Ebao onto the next stage of success. His challenge is to build competitive advantage in the new Internet industry and in an emerging market.

In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 1, "The Quest for the Right Portfolio Management Process," introduces major themes in product portfolio management, including the integration of new products with established ones. Key terms are introduced and defined.

In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 2, "Three Decades of R&D Portfolio Methods: What Progress?," probes the literature on portfolio management, identifies the main generic types of portfolio management tools proposed in the literature, and defines the requirements for an ideal portfolio management approach. The chapter ends with a look at the three goals in portfolio management.

In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 3, "Portfolio Management Methods: Maximizing the Value of the Portfolio," is the first of three chapters that examine the methods that leading corporations employ to manage their new product project portfolios and allocate their R&D resources. Chapter 3 looks at approaches used to maximize the value of a portfolio.

In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 5, "Portfolio Management Methods: A Strong Link to Strategy," Used and Performance Results Achieved," is the third of three chapters that examine the methods that leading corporations employ to manage their new product portfolios and allocate their R&D resources. Chapter 5 looks at approaches used to develop a strong link to strategy; topics include: product and technology roadmaps; strategic buckets-a powerful top-down approach; an analysis of bottom-up approaches; and a top-down/bottom-up approach. The authors conclude with a brief discussion on "how much should we spend?"

In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 6, "Portfolio Management Methods Used and Performance Results Achieved," lowers the microscope on portfolio performance. The authors reveal the performance results achieved by each portfolio management method and how users rate the various methods.

In the Second Edition of Portfolio Management for New Products, published and distributed by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. Chapter 7, "Challenges and Unresolved Issues," examines the pitfalls, hurdles, and concerns that managers are addressing as they attempt to implement portfolio management.

In the Second Edition of Portfolio Management for New Products, published by Perseus Books, Professors Cooper, Edgett, and Kleinschmidt (all of McMaster University) present a rigorous and practical approach to managing a company's product portfolio as you would a financial portfolio - by investing for maximum long-term growth. Numerous mini-cases illuminate key themes. This is a useful book for practitioners and educators alike. In Chapter 8, "Data Integrity: Obtaining Reliable Information," the authors propose methods for improving estimates for such things as market and revenue forecasts, pricing, costing, and probabilities of success.