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In recent years, Au Bon Pain (ABP), a chain of upscale French bakeries/sandwich cafes based in Boston, confronted a set of human resource problems endemic to the fast food industry (i.e., a labor shortage which made it difficult to attract and maintain quality crew personnel and management candidates, an inadequately trained management staff, and high turnover). To deal with the resulting "cycle of failure" while increasing individual initiative and performance at the unit level, ABP devised a new compensation-incentive system for its store managers--the Partner/Manager Program. Under this program, store managers would be paid a standard base salary plus a share of the incremental profits. The case asks students to evaluate the program by comparing it to ABP's existing compensation system, determining the different ways in which managers from two stores operating under an experimental run of the program achieved their results, and by considering the strategic implications of implementing the program in all of the company's stores.

Describes a dispute between the owners of the major league baseball teams and the players' union about the profitability of the baseball teams. The issue is important because of the ongoing collective bargaining negotiations. A consultant is brought in to decide whether a representative team, the Kansas City Zephyrs, is making or losing money. He has to settle a number of accounting disputes about roster depreciation, signing bonuses, deferred compensation, and stadium costs.

Canada's largest chemical company produces and markets butyl rubber in two divisions, each treated as a profit center. The new plant in the North American Division operates below capacity resulting in a significant volume variance and an operating loss. The European Division is at capacity and is profitable. The actions of the European Division affect the capacity utilization of the North American Division. Includes divisional financial statements and interviews with the vice-presidents of each division.

Bill Ryan, president of the Gillette Co.'s Personal Care Division, is considering changing the division's planning and control system for marketing. White Rain, the division's most recent success, had been launched by taking shortcuts through the system, while other marketing programs the system produced sometimes still faltered. The case examines the components of a planning and control system for marketing, criteria for good systems and good programs, and ways that marketing managers work with a system.

Involves the initial public offering of a firm's stock. The offering includes a money-back guarantee to investors from the issuing firm which comes in the form of a "put" option. Option valuation is thus an important issue in this case.

Focuses on the competitive interaction between Coca-Cola and Pepsi-Cola specifically and the effect their dominance has on the other industry participants. Coke and Pepsi's competitive strategies are examined in an in-depth analysis; each firm's behavior is used to demonstrate the influence their strategic choices have on the future evolution of the industry. Taught in the section entitled "Predicting Competitive Behavior" of the Competition and Strategy course and should be taught in conjunction with Note on the U.S. Soft Drink Industry in 1986.

Walt Disney is considering hedging future yen inflows from Disney Tokyo. It is evaluating techniques using FX Forwards, swaps, and Yen term borrowings. Goldman Sachs presents a rather unusual but potentially attractive solution: Disney could issue ECU Eurobonds and swap into a Yen liability. The case explains how this alternative would work and suggests to the students ways to evaluate the hedging choices.

Reynolds must source a substantial portion of the financing of its Nabisco acquisition in offshore bond markets. Morgan Guaranty has proposed a yen/dollar dual currency Eurobond that could be hedged into dollars. This structure is compared to Eurodollar Bonds, Euroyen Bonds, and Euroyen Bonds swapped or hedged into dollars.

In the 1980s Japan dominated the world industry for video cassette recorders. This case looks at the evolution of the technology and competition in VCRs, the battles between VHS and Beta, and the emerging threats to Japanese dominance.

The executive vice-president of Markborough Properties Inc. was preparing for an upcoming Board of Directors meeting. On the agenda was the proposed use of interest rate hedging to minimize the company's interest rate exposure. Among the alternatives were interest rate swaps and caps. Was it an appropriate time for Markborough to hedge its floating rate debt? If so, how and using what vehicle?

A bank account manager is reviewing the risk and credit facility for a specialty food store operator. The case permits a size-up of the company and provides detailed information to decide the loan rate that should be charged.

A sole proprietor, with depleted savings, has requested both an operating loan as well as a line of credit. The operating loan will be used to retire his 'run-away' trade debts and the line of credit to service his cash-tight months.

In this exercise, the owner and sole proprietor of an art importing business must prepare a statement of changes in financial position.

The owner and operator of Merlin's Magic Mansion must attempt to reconcile his books to the bank statement. The bookkeeper has disappeared and the owner must determine the cash position of Merlin's Magic Mansion.

This case presents Harlequin in 1979 at the peak of its success. The company is looking at diversification, trying to use its ever increasing cash flow. Specific issues are the type of diversification (if any) the company should engage in, and whether it should set up its own sales force in the U.S. The general issue is one of accurately identifying Harlequin's capabilities. This case should be used, although it is not strictly necessary, with the Harlequin Enterprises Limited - 1984 case 9A87M003.

The entrepreneur and owner of Designer Classics Carpet, is deciding upon future growth opportunities for his company. Opportunities for forward and background integration have been identified. As well, the acquisition of a firm manufacturing a related product line is being considered. He must decide upon priorities, direction and timing of all these moves.

Kettle Creek has opened an attractive fashion market niche by selling its unique garments through a chain of franchised retail outlets. Rapid growth has stretched its financial and management resources, seemingly to the limit. The President, a majority shareholder, is concerned about her next steps. See Kettle Creek Canvas Company 1985 (B).

The president is considering three steps to deal with financial and operating problems at Kettle Creek (see Kettle Creek Canvas Company 1985 (A)). They were to sell equity, even the whole business if necessary, to recruit a board of directors, and to hire a general manager. She reviews three applicants' resumes for the job. Do any of them fit the bill?

A sole proprietor, with depleted savings, has requested both an operating loan as well as a line of credit. The operating loan will be used to retire his 'run-away' trade debts and the line of credit to service his cash-tight months.

In this exercise, the owner and sole proprietor of an art importing business must prepare a statement of changes in financial position.