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In June 1996, executives of the multinational mining company RTZ-CRA contemplate bidding to acquire the Antamina copper and zinc mine in Peru. The Antamina project is being offered for sale by auction as part of the privatization of Peru's state mining company. RTZ-CRA has to determine what the mine is worth and decide whether and how it should bid in the upcoming auction. The bidding rules put in place by the Peruvian government dictate that each company's bid contain two components: an up-front cash amount and an amount the bidder will invest to develop the property if development is warranted after further exploration is completed.

Kenny Rogers Roasters (KRR) in China series consists of two cases. The Kenny Rogers Roasters in China (A) case documents the efforts of a U.S.-based fast food chain to penetrate the Chinese market in the mid-1990s. The cases focus on Tony Wang, president of Franchise Investment Corporation of Asia (FICA), as he evaluates the market potential for KRR in China and selects a joint venture partner for the first restaurant. The accompanying KRR in China (B) case focuses on site selection issues which are at the heart of Tony Wang's ambitions for the restaurant chain in China. Both the (A) and (B) cases can be taught together in a single 90-minute class.

AES develops and operates electric power plants all over the world, and by late 1996, has approximately 20,000 employees. But, the corporation has no human resources staff, either at corporate headquarters in Arlington, VA, or in any of its operating facilities. Moreover, the company has very little centralized staff at all--little or no strategic planning, no environmental department, and almost no legal staff. The question is: Could and should the company continue to operate in this same way, with little specialized staff, as it continues to expand and geographically diversify? Another question is: How had the organization been able to be so successful without developing and relying on specialized expertise?

Introduces the student to the recently developed concept of value-at-risk (VAR) in risk analysis. By working through a stylized example using spreadsheet tools, the student learns the conceptual framework of VAR and its implementation mechanics.

Presents the history and features of credit derivatives, a new class of securities. A stylized problem is also provided.

Emergency Vehicle Positioning, Inc. (EVPI) has developed a satellite-based tracking system that continuously updates and displays the location of every vehicle in its network. A recently signed contract presents new technical challenges that may make the normally installed system inadequate. While it is possible to augment the system so that it will definitely work, doing so would entail considerable cost. This case is a modified version of "Integrated Siting Systems, Inc." [UV0355]. The only difference is that the latter case provides all possible conditional probabilities, offering a slightly different introduction to Bayes Theorem. In this case, only the recent conditional probabilities are provided. Indeed, except for the name, date, final paragraph (which mentions the other probabilities), and the exhibit on conditional probabilities, the cases are identical. Therefore, the teaching note for the Integrated Siting Systems case [UV0356] is also appropriate for this case.

Consumer products giant Procter & Gamble is faced with an urgent need to revitalize new-product innovation, given its recent focus on incremental product improvements and its aggressive growth goals. As part of this effort, the company's top executives form a small, autonomous, cross-functional Corporate New Ventures team led by a young former brand manager. Operating within a conducive work environment, the team invents a systematic approach to gathering information and producing creative ideas for radically new product categories.

The marketing director of Oscar Mayer faces a series of strategic marketing options regarding established and new products, including budget and capacity allocation decisions.

This series of cases (see also the B [UVA-E-0108], C [UVA-E-0109], D [UVA-E-0110], and E [UVA-E-0147] cases) takes students through five design-and-manufacturing decisions confronting Albin Kalin, managing director of Rohner Textil AG, a textiles manufacturer in northeastern Switzerland. Faced with community pressure to use quieter machinery and challenged by increasingly stricter environmental regulations, Kalin has committed himself to improving the ecological profile of the mill. He has adopted a set of rule-based design imperatives proposed by William McDonough based on McDonough's concept "waste equals food." Given these strict environmental parameters, Kalin attempts to design and manufacture a compostable fabric for DesignTex, a division of the U.S. company Steelcase. The A case examines Kalin's choice of a twisting-yarn supplier: the two alternatives pose significant differences in product quality, reliability, and performance.

The DSL de Mexico case series consists of four cases (one primary case and three one- page case extensions) which focus on the ethical dilemmas managers often face in international business. DSL is a $200 million, US-based shipping company, which is relatively new to Mexico. The DSL (A) case documents the history of DSL in Mexico; reviews industry conditions and provides background on the devaluation of the Mexican peso. The case focuses on Lane Cook, the 28 year old General Manager of DSL de Mexico, as he contemplates how to respond to a questionable request by a potential customer. The accompanying DSL de Mexico (B) and (C) cases present a series of follow-up ethical dilemmas for Cook to address. The (D) case can be handed out at the end of the class period as an up-date. The entire case series should fill a 90-minute class.

In July 1996, Jim Gulkin, 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. Gulkin, who had considered entering Burma in the past but declined, needed to determine whether the time was now appropriate for him to enter the market.

Didier Pineau-Valencienne (DPV), the CEO of Schneider SA, a leading French multinational company in the electrical distribution and industrial automation industry, is faced with the prospect of failure of joint venture discussions with the US company, Square D. The negotiations have already consumed two and one-half years. Mr. Pineau-Valencienne must decide whether to call off the discussion and go ahead with a tender offer for the US company, and if so, determine how much he should pay for Square D's equity. The case addresses issues of strategic fit between the bidder and the target, target performance, valuation (both base-case and synergies), financing decisions associated with the acquisition, and how the target's poison pills and anti-takeover amendments might affect outcomes in the battle for corporate control. An additional aspect of the case involves putting participants in the shoes of risk-arbitragers on Wall Street through a bidding game to make "buy-sell-hold" decisions. This involves forming judgments about Schneider's moves and Square D's counter moves, and DPV's (and their own) assessments of how high a price is likely to be paid if the acquisition goes through.

OXO, a kitchen tools and gadgets company, was started by a businessman who had 30 years of experience in the housewares industry. With his wife and son as founders, he creates a new niche in the gadgets industry for high-end gourmet stores. The company has headquarters in New York City, but it outsources product design to a NYC industrial design firm, manufacturing to Asia, and warehousing to a site in Connecticut in order to manage start-up costs and growth. Because of the veteran businessman's reputation and industry sense, the company grows quickly and in 1992 is sold for $6.2 million to a large housewares distributor, General Housewares. The original owners stay on as consultants to the parent company and decide to turn over management of the company to a Harvard MBA who also has extensive industrial design experience. Innovative product design is the key to OXO's success, and the company has worked exclusively with one design firm based on royalties of sold products. The new managing director initiates new product category programs for the bathroom, the garden, and home baking. He must coordinate the outsourcing of the design and development function.

The Fojtasek Companies, a family business, faces several financing choices to address generational succession issues. Several buyouts have expressed interest in acquiring the firm outright; an investment bank has proposed a leveraged recapitalization; and a private equity group, Heritage Partners, has proposed a hybrid transaction.

The case opens with a discussion of the evolution of the private branch exchange industry in the 1970s and 1980s. It follows the path of Rolm from an independent company to an IBM acquisition and its problem as an IBM division. Then describes Siemens' growing interest in the U.S. PBX market. At the end IBM and Siemens are negotiating over Rolm's future.

In January 1996, the chief financial officer must fashion a response to a raider who claims that a major business segment of the company should be sold because it is not earning a satisfactory rate of return (ROR). The case recounts the debate within the company over the use of a single hurdle rate to evaluate all segments of the company versus a risk-adjusted hurdle rate system. The students' tasks are to resolve the debate, estimate weighted-average costs of capital (WACC) for the two business segments, and respond to the raider. Because the case was prepared to serve as part of an introduction to estimating investors' required rates of return, it would best follow one or two class sessions introducing techniques for estimating WACC. Although the numerical calculations required are light, some of the subtleties about the use of risk-adjusted hurdle rates will require time for the novice to absorb. The case can be used to pursue a variety of teaching objectives, including (1) extending risk return (i.e., mean variance) analysis to corporate finance; (2) surveying classic arguments for and against the use of risk-adjusted hurdle rate systems; (3) assessing the assumptions and limitations of risk-adjusted hurdle rate systems; (4) exercising the estimation of segment WACCs; and (5) considering possible organizational barriers to the implementation of risk-adjusted hurdle rates.

In July 1996, Mr. Thomas Zimmermann, European Manager of Computron, must select a price for a new computer for his largest customer. A rewritten version of an earlier case.

This case describes an innovative response-modeling project at INTUIT. The case can help students understand the basics of (and the issues surrounding) response modeling, an important tactic in data-base marketing.

The case presents financial ratios for eight pairs of unidentified companies and asked to mate the description of the company with the financial profile apparent in the ratios. It provides a foundation for student discussion of financial ratios and the insights that may be gained through their use. Classroom discussion of the students' attempts to match results and companies reveals the strong influence of both industry and corporate strategy on the financial results and ratios for firms.

Chaos and disorder in the public housing system of San Juan, Puerto Rico (second largest in the US, prompt the newly-elected governor Pedro Rosello to consider an unprecedented new approach: using the island's national guard troops to patrol the projects. The Guard would replace police who had become so frightened or corrupted by the dominance of drug gangs in public housing that they seldom ventured into the apartment complexes at all. The National Guard, moreover, was a popular force on the island. At the same time, Rosello knew that there were risks associated with calling out the Guard. Many in its ranks were young and inexperienced. Sustaining the commitment over time would be difficult and expensive. The kind of tactics thought necessary to regain control of the projects might offend civil libertarians. The new governor, urged on by the superintendent of police, had to decide whether and how to deploy the Guard. HKS Case Number 1390.0