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The founder of English Street has decided to take the company to a group of venture capitalists. English Street is an Internet company that provides multimedia content for teaching English to Hong Kong and China residents. She has developed the idea of English Street into a prototype Web site, and is putting together a prospectus (proposal) for a presentation to obtain funding for full development of her business plan.

Nanpo (Holdings) Limited, a Hong Kong-based Chinese food distributor is planning for its initial public offering on the Stock Exchange of Hong Kong. Nanpo was established in 1981 with a mandate to be the sole distributor of poultry, fresh water fish, livestock, and fruit and vegetables produced in Guangdong, the bordering province of mainland China. Throughout the years, Nanpo has built up an admirable market share in many food categories and a distribution channel of 500 wholesalers. Recently, the Ministry of Foreign Trade and Economic Cooperation in the PRC reaffirmed its sole distributor status. The management of Nanpo has developed an aggressive growth plan which includes new food processing facilities and forward integration into retail outlets and restaurant chains. Nanpo has turned to the capital market of Hong Kong to finance its future growth. Nanpo's management has decided to float 25% of the company and has engaged a local merchant bank, Hinson Capital, as its lead underwriter. Three weeks away from the planned IPO, Jack Yang, a director of Nanpo, is once again reviewing the details of pricing.

The vice president, finance must quickly address several choices concerning a proposed office relocation. His analysis will likely include discounted cash flow analysis (DCF) and the topics of capital asset pooling and tax benefits. The case compares and contrasts the concepts of DCF and net present value analysis with Seagram's version of EVA (Economic Value Added). The case also provides a unique Asian focus for this type of decision. Office space location and the rent vs. buy option are extremely important decisions faced by a multitude of managers in Hong Kong. The traditional wisdom in Hong Kong has been that buying property was more efficient - especially given the phenomenal appreciation of property values. However, it can serve to distract a firm from its' core competencies and tie up working capital in non-producing assets. Finally, the case also provides a brief overview of capital asset pooling and depreciation tax law in Hong Kong. While the discussion is brief, it nevertheless provides an adequate first step towards further study in this area. Students from other areas of the world will also be interested in examining the differences between their country's tax laws and Hong Kong's.

Kandy Chan, the director of operations at the Hong Kong Convention and Exhibition Centre is trying to decide whether or not to purchase 2000 new chairs. As he looks ahead, Chan anticipates an occasional shortage of chairs during major events. He has a choice between purchasing the needed chairs outright, or signing an agreement to rent the chairs for the coming peak season with an option to rent them as well during the following season.

Gervais Lavoie, managing director of the Canadian-Chinese joint venture, Beijing Oasis High Nutrition Food Co., needs to decide what means of distribution is most appropriate for the company's newly-developed fruit nectars. The decision is complicated by the fact that different means of distribution have different implications for the ultimate pricing and promotion of the products.

Anthony Ng, the general manager of Kowloon Development Co. Ltd., has been approached by a real-estate agent proposing a new development project for possible investment by Kowloon Development. Although the project is attractive, there are a number of associated uncertainties that complicate Ng's decision about whether or not to recommend investment. He has only a few days to review the proposal and make a decision before the next board meeting.

Tom Barnes, executive director of Asiasports Ltd., was evaluating several options for growth for the sports management company. Asiasports principal sports properties were the South China Ice Hockey League and the World Ice Hockey 5's tournament, both based in Hong Kong. Among the alternatives available: Barnes could develop hockey in other countries in Southeast Asia; he could acquire new sports properties; or he could expand into in-line hockey promotion in Hong Kong.

Two managers attending a financial management course are attempting to compute the cost of capital for Sun Hung Kai Properties Limited, a well-known local Hong Kong firm. The two managers are somewhat confused about the costs of various sources of capital, the calculation of the overall corporate cost of capital, and the appropriate use of the hurdle rate.

The newly appointed division head must examine organizational or communication problems within a division of a billion dollar semiconductor manufacturer. The manager made a decision, which an employee emotionally responded to, creating the potential for conflict within the department. Cross-cultural issues come into play given that the manager, although originally from China, was educated and gathered extensive experience in the West and was thus considered an expatriate by his employees. The manager must also examine the effect of organizational culture on an employee's behavior.

The Acer Group is one of the world's largest PC and computer component manufacturers. The vice-president of Global Operations is pondering whether the timing and environment is conducive for Acer, based in Taiwan, to commence full-scale manufacturing operations in the Chinese mainland. Students are asked to examine the criteria on which Acer should base their decision to manufacture overseas, and in so doing, create the framework for a corporation's global manufacturing strategy. The teaching objectives also include having students consider the political, economic and social environments of a global manufacturing strategy. A related case entitled Acer Group's R & D Strategy - The China Decision (9A99M007) is also available.

The manager of business development for Carvel Asia Limited is trying to determine how best to increase ice cream cake sales in Beijing. In doing so, he needs to develop a complete marketing program which includes decisions about product offerings, pricing, placement (distribution) and promotion - the 4 Ps. Carvel Asia was a 50-50 joint venture between Carvel (USA) and China's Ministry of Agriculture.

Looking for a creative option to promote 3M products to medical professionals, a 3M Chile sales manager developed the idea of a first-aid kit or botiquin that could be used as a promotional gift. Managers at the company's world headquarters had not previously focused on branded first-aid kits. It was the same all over the world, a plain white box with the red cross in front. You just can't brand a first-aid kit! they replied. At the same time, the Chilean managers lacked the resources necessary for adequate market research. Should they go ahead with the botiquin concept anyway? If they did, questions such as channels, packaging, promotion, and pricing, would still have to be addressed. (A sequel to this case is available, titled 3M Chile - Health Care Products (B), case 9A99A005.)

Canada-based Oxford Learning Centres (OLC) entered into a licensing agreement with U.S.-based Childtime Learning Centers (Childtime) where Childtime would operate OLC supplemental education programs in their facilities. In less than six months, Childtime decided to make an offer to purchase OLC. OLC's CEO must decide how to approach the impending negotiations. The case describes the North American supplement education industry, valuation considerations and private firm purchase negotiations. Detailed comparables are provided for such firms as Sylvan Learning Systems and Corporate Family Solutions. The case provides an opportunity to apply a number of valuation techniques including discounted cash flow, and multiples based on comparable firms and transactions.

Arriving in greater numbers to poverty-ridden cities throughout Latin America, international executives, by their increased visibility, become targets. Newspapers have been filled with stories of kidnappings, abduction and robbery of foreign business people. However, in many respects, Latin America posed no greater danger than the United States, and with proper preparation, risks can be managed. This note briefly presents the current security risks, and actions that can be taken by international firms and individuals to reduce these risks. Comparative statistics are also provided.

The head of a bank's Mexico Team must consider her options when confronted with the task of aiding in the arrest of one of her clients. She had just returned from Switzerland, where Swiss narcotics agents were encouraging her to lay a trap for the wife of one of her clients, the brother of a former Mexican president, who had been arrested in Mexico a few months earlier on charges of murder, illegal enrichment, and laundering money for the Mexican drug cartel. As she pondered her options, the fate of one of her former employees, who had recently been sentenced to 10 years imprisonment for managing the account of a convicted money launderer, provided food for thought. She must consider extraterritoriality, bank secrecy laws, and professional ethics in international private banking.

Alpha Gearing Systems Shanghai Co., Ltd. (Alpha Shanghai), a joint-venture between Alpha Gearing Systems of Illinois, USA (a large producer of gearing products), and Kai Li Machine Systems (one of China's largest manufacturers of gearing systems for mopeds and motorcycles), had invested several millions of dollars in tooling in the hope of winning a major contract. The general manager of Alpha Shanghai had made the decision that the next round of negotiations would either significantly advance, or sever, the relationship between Alpha Shanghai and San Yu Mopeds, a large Chinese moped producer, and a customer which Alpha Shanghai had hoped would become one of its largest. The case decision revolves around Alpha Shanghai's senior management perspectives, strategy and assumptions which affected the negotiating process, and specifically how their communication patterns were affected by their experience and culture.

Executives of a telecommunications corporation are wondering what they can learn from an experience to develop managers to run expanding Latin American operations. The corporation signed a letter of intent to purchase control of a leading telecommunications provider in Mexico with 2,300 employees. Senior executives knew that one of their most pressing issues would be finding the right people to manage their Latin American operations. The 14 managers sent to Mexico to manage the corporation were double the number then being prepared for that type of assignment. The executives must consider the issues encountered by this team of expatriates and their families as they try to adapt to life in Mexico.

The president of Canadian-based Pacific Western Brewing Co. Ltd. is preparing a Japan market entry strategy for the company's newly developed organic beer. Although she has considerable experience in Japan, several factors are at play which make this product entry particularly challenging. First, the product is unlike any other in the market. Second, Japanese consumer behaviour is undergoing a revolution. Third, the company's last product launch in Japan failed. Therefore, there is a higher than normal level of risk associated with the product launch.

<p style="color: rgb(197, 183, 131);"><strong> AWARD WINNER - Regional Asia-Pacific Case Writing Competition</strong></p><br>The regional HR manager of a multinational conglomerate that operates in over 100 countries had to make decisions regarding the evacuation of its senior management from a politically unstable country. In particular, the firm's expatriate and ethnic Chinese managers and their families faced considerable risk. The HR manager is charged with executing corporate policies and plans. Some of the challenges to consider relate to the development and initial execution of the evacuation plan. These challenges are heightened by a decentralized decision-making process entrenched in the firm's structure and culture, as well inconsistent information from numerous sources in the field operations. Moreover, the issue of which employees to evacuate poses a moral dilemma for the decision-maker. Specifically, he must decide what criteria - rank, ethnicity, tenure - should dictate whether an employee and/or his or her family is offered assistance, and of what sort.