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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.

With a new customer profitability system now developed at the Canadian Imperial Bank of Commerce (CIBC), the next challenges involved the rollout to the branches and the associated implementation problems. To prepare for a meeting with her staff, a regional sales manager discussed the new customer profitability system, named Managing Local Markets, with a sales leader from one of the pilot branches. Her feedback on the system was generally very positive; however, the people using the system in the branch didn't understand how the profitability was calculated; this jeopardized the credibility of the system. This is the third case of a three-case series. The (A) and (B) cases are products #9B00B014 and 9B00B015.

Spreadsheet Supplement for case 101039.

The president of a small consulting firm has just seen his second-quarter profit and loss statement, showing an increase in revenues but a substantial decline in profits. He asks his chief financial officer to explain the results. The CFO works hard to accumulate information to explain the impact of the quantity of billed hours, billing rates, consultant expenses, operating expenses, and the shifting mix of business between the two principal product lines.

Facilitates the teaching of cases on variance analysis and flexible budgeting. Uses algebra, diagrams, and numerical examples to illustrate the calculation of price, quantity, and mix variances for revenues and costs, and a flexible budget for analyzing indirect and support costs.

Examines the high-profile Firestone/Ford product recall/investigation that took place in the summer of 2000. Focuses on the management of supplier relationships and incentives.

In 2016, the new CEO of Vyaderm Pharmaceuticals introduces an Economic Value Added (EVA) program to focus the company on long-term shareholder value. The EVA program consists of three elements: EVA centers (business units), EVA drivers (operational practices that improve EVA results), and an EVA-based incentive program for bonus-eligible managers. Over the next two years, the implementation of the program runs into several stumbling blocks, including resistance from regional managers, who push for "line of sight" EVA drivers; the difficulty of managing a large number of EVA centers; and unexpected bonus adjustments due to poor EVA performance. The decision point focuses on the competitive situation in a business unit where the sudden exit of a competitor produces an unexpected one-time windfall in earnings. Vyaderm's top managers struggle with the question of whether to adjust the EVA results to prevent demoralizing managers in future years when EVA results are likely to decline.

Amid mounting concern by credit agencies about off-balance sheet liabilities, an analyst for one of the leading credit-rating agencies has been asked to make a presentation about off-balance sheet liabilities, the strategic analysis behind leasing versus purchasing property, and accounting for leases.

The Hong Kong Convention and Exhibition Centre (HKCEC), a trade infrastructure owned by the Hong Kong Development Council and operated by the New World Group, was the most prestigious convention and exhibition venue in Hong Kong. After hosting several musical events in Hall Three of HKCEC, the management of HKCEC decided to actively market Hall Three to concert organizers during the off-season. These events could bring in substantial rental income per day. Seat-risers had been leased and temporarily installed for these events, but the cost was prohibitively expensive for concerts booked for short durations, such as concerts by visiting international performing artists, a segment that HKCEC intended to target. The director of operations of HKCEC had been trying to find the most cost effective solution to provide a seat-riser for Hall Three. There were three options: to purchase a seat-riser, to rent a seat-riser for the duration of booked events, or to rent a seat-riser for the entire off-season period. He must analyse the options and find the solution that would be attractive to concert organizers, the most cost effective with the least risk to HKCEC, and consistent with HKCEC's current operations.

Sarah Simons, an investment analyst for the retail industry, has just received the Sears, Roebuck and Co. 1999 annual report. Sears has had trouble in the past with the collectibility of receivables from customer credit purchases using the Sears card. These problems have led to past write-offs, as well as legal problems, which have depressed the stock. Sarah must evaluate the provisions that the company has made for possible problems in collecting the receivables. This case provides background information on Sears' business and past problems, an introduction to accounting for contingencies, and financial information from public sources on Sears and the industry.

Introduces students to the concepts of inventory valuation (LIFO and FIFO) using a simple example. They then get the chance to apply this knowledge to help understand the inventory footnote for California Steel Industries.

Supplements the (A) case.

Prepares students for financial ratio analysis.

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.

Spreadsheet Supplement for case 101029

When looking for ways to cut costs, most managers reach for the head-count hatchet, and the markets usually roar with approval. But a company can almost always create far more sustainable value by rigorously evaluating the small-ticket capital items that often get rubber-stamped. Drawing on his experience as a consultant and providing numerous anecdotes, the author contends that those "little" requests often prove to be gold plated or unnecessary. A disciplined evaluation involves asking only eight questions and conducting postmortems--regular audits of units' capital spending. But the payoff is enormous. Because cutting the capital budget increases cash flow, the author argues that a permanent cut of just 15% in the planned level of capital spending could boost some companies' market capitalization by as much as 30%.

Designed for use during the introductory module of a financial accounting course, this case exposes students to the analysis of business transactions and preparation of financial statements. It analyzes the efforts of Mary Jane Bowers, who has recently moved to Lynchburg, Virginia, and plans to open a retail garden store. It covers her compilation of financial projections for the initial startup of her business and its first year of operation. This case can be used as a stand-alone case or can be followed by "The Garden Place-One Year Later" (UVA-C-2068), which examines the financial effects of what actually occurred during the startup and its first year of operation.

Supplements the (A) case.

Supplements the (A) case.