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On February 9, 1995, the purchasing officer at Fisher & Paykel Limited in Auckland, New Zealand, was preparing for the next meeting of the evaporator pad cover team. Recent supply problems had threatened to close down the refrigerator assembly line and the purchasing officer's task was to propose a workable and cost effective solution.

The owners of the company were concerned with the rapid rate of growth facing their company. The company had revenues of $6.3 million and employed 30 highly skilled workers. These numbers were expected to double or triple in the next couple of years. To determine how well the company was structured to achieve its future goals, they hired a consultant he had worked with successfully in the past. The consultant's major role was to make recommendations as to the appropriate organizational design (culture, people, layers of management and administrative systems) in the event that the company grew from 30 to 60 or even 120 employees. Among other issues, questions regarding compensation were surfacing, and the owners wanted to address these questions as soon as possible.

A small team of Canadian managers from a large financial institution is faced with the challenges of managing a recently acquired Mexican operation. Managers must cope with a language barrier and cultural differences as they try to restructure the over-staffed Mexican financial institution. A second teaching note (5A97L01) discusses how to use this case from a cross-cultural orientation perspective.

The international investments program initiated in 1990 by the Ontario Teachers' Pension Plan, Canada's largest public pension fund, had created a large exposure to currency risk. Some successful tactical currency hedging activities in 1995 prompted management to pursue the possibility of a structured foreign currency hedging program. The issue before management was whether such a hedging program should be undertaken and what form it should take.

After a substantial devaluation in the value of the Mexican currency, a major automaker attempts to reduce the price it is paying to a Mexican based supplier. The supplier (Ventramex) is put in a difficult position because a large portion of its costs is based in US dollars. The company must decide how to respond to the automaker while considering options that would increase the proportion of its costs that are based in Mexican pesos.

The general manager of Qualibrands (QB), a Philippine company with interests in the auto components industry, must decide what to recommend to the owner of QB regarding a proposed four-way joint venture between QB, Autobelt (Malaysia), Autoliv (Sweden), and SMACA (Philippines) to produce seat belts in the Philippines. The financial projections look good, but the general manager is concerned that there may be other aspects of the proposed joint venture that might lead to the failure of the joint venture either in total or in reaching its financial and operational goals.

Advanced Material Technology (AMT), a Japan-based company and one of the world’s largest manufacturers of advanced ceramic products, was considering the prospect of raising 24 billion yen ($200 million) to finance its planned capital expenditure program. AMT must consider a variety of financing sources including straight debt, convertible bonds, and bonds with warrants. Currency denomination and location of a global offering are also considered. The case also examines the economic and banking environment in Japan.

The managing director and founder of Bangkok-based Siam Canadian Foods Co., Ltd., was considering the emerging business opportunities in neighboring Burma (also known as Myanmar). Although relatively undeveloped compared to the rest of Southeast Asia, Burma had been experiencing increasing levels of foreign investment activity in recent years. Siam, who had considered entering Burma in the past but declined, needed to determine if the time was now appropriate for the company to enter the market.

In 1994, William Booth, a member of the management team of the Ontario Teachers' Pension Plan Board, was asked to re-examine the diversification strategy that the $30 billion fund had been pursuing since its inception and to determine an optimal long-term asset allocation policy for the fund. After inheriting a portfolio that consisted entirely of fixed-income securities in 1990, by the end of 1993, the allocation to equity was only 20% short of a 1995 interim policy target of 66%. Booth's primary task was to determine whether the shift in asset mix should stop at 66% equity in 1995, which was above the allocation to equities for the average pension plan, or whether it should continue to some higher amount (an independent consultant recommended an 80% allocation to equity). Booth knew that a higher allocation to equities would likely increase total returns over the long-term, thereby reducing the cost of funding the plan. However, equities exhibited greater volatility than bonds and a higher allocation to equities therefore created some risk that future funding costs might rise above current levels.

Two business partners of Hempline Inc. are trying to re-establish hemp as a feasible agricultural product in Canada. Their first request from a wood processing mill in Oregon, USA, has left them with a number of decisions to be made. Among the decisions, they must determine the number of labour hours, the number of machines to rent and the amount of land to rent for this specific order. Alternatives to renting machinery include purchasing new and used equipment. As well, they wanted to calculate the cost per ton of this experimental crop to meet effectively with the Oregon firm.

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 chief financial officer of Sunshine Juice Company needs to finalize the company's marketing strategy for the upcoming year. Initial results for the launch of the company's product, a four-litre bag-in-a-box orange juice product, had been favourable. The case touches on all aspects of developing a marketing strategy, with emphasis on price setting and distribution.

The vice president, finance of a firm notes that although performance of the firm as measured by traditional accounting measures has steadily improved, share price has been decreasing. She attempts to employ the concept of economic value added to get to the bottom of the puzzle.

Mike Wilson and Jim Thompson of Northern Mining Inc., a Canadian-listed junior-mining company, deliberated carefully the prospect of acquiring the largest graphite deposit in Ontario, owned by Graphite Mining Corporation (GMC). GMC's U.S. parent company, the Jameson Corporation, had stopped mining operations in the previous year and then proceeded to sell its interest in GMC to Quebec-based graphite producer Graphcar Inc. Over the past five years, CDN$30 million had been spent in developing the mine and erecting a mill, and now Graphcar Inc. was prepared to sell the mill for CDN$1.5 million. (A Microsoft Excel spreadsheet is available for use with this case, product 7A96B014.)

The deregulation of the natural gas industry permitted the creation of new companies, gas marketers or gas banks, such as CoWest. Still in its first year of operations, CoWest had the opportunity to bid on a fixed-price long-term contract to supply gas to a cogeneration plant. The focus of the case is to investigate the possibilities of putting a deal together using financial derivatives.

The assistant treasurer of Videotron Ltee (Videotron) pondered over the Citibank proposals that lay on his desk. Videotron was about to launch a US$150 million, 10-year high yield issue in almost a week's time. Since Videotron's business was transacted almost exclusively in Canadian dollars, it would be exposed to foreign exchange risk on the US-dollar denominated interest and principal debt payments. In light of the recent and dramatic depreciation of the Canadian dollar against the U.S. dollar, the treasurer wondered if he should hedge this exposure. The Citibank Canada exposure management team had proposed hedging techniques using either forwards or cross-currency swaps. (A Microsoft Excel spreadsheet is available for use with this case, product 7A96B021.)

This case demonstrates how forming strategic partnerships with suppliers and clients can lead to win-win-win situations in the supply chain. It can be used to discuss the importance of information sharing and the use of information technology to drive the direction of the individual relationships. It also shows how cultivating partnerships can result in a competitive advantage in a highly competitive service industry. Techniques for developing and maintaining such a relationship are also brought out in the case, and it provides an opportunity to focus on the key concepts of supply chain management as they apply to service industries.

This is a condensed version of case 9A95E003. Western Mining Corporation is one of Australia's largest mining companies. This case tells the story of a large information system project from its inception through its development and to the eve of its rollout into the implementation phases. The Operations Management Project was commissioned to produce the Operations Management System (OMS), a new information system designed to provide operational personnel with better and more timely information to help them in their daily tasks. The project experienced significant delays and problems, from project management difficulties, to systems development methodology shortcomings, to steering committee dealings. Two additional cases on the Operations Management Project are also available: Western Mining Corporation (B), case 9A95E005, and Western Mining Corporation (C), case 9A95E006. The three cases together provide a rich and comprehensive description of the various challenges experienced by information systems personnel and operational personnel alike in the course of developing and implementing new information systems. Both the original case and the (B) case can stand on their own. The (C) case is best used in conjunction with the (B) case.

The Bank of Nova Scotia faced the decision whether to expand its investments in the Mexican bank, Inverlat. In 1995, it had to write down the value of its investments from $154-million to $10-million as a result of the Mexican peso crisis and subsequent recession. This case examines the environment of business in Mexico during the time of the currency devaluation. In particular, it focuses on the factors underlying the peso crisis. Privatization of Mexico's banks and liberalization of regulations created new opportunities, but at the same time, resulted in extreme instability within the financial sector. While Mexico offered the opportunity to become a major player in the growing Latin American market, nevertheless there were risks of major losses. (A sequel to this case is available, titled Bank of Nova Scotia: The Mexico Decisions (B), case 9A97H004.)