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B/E Aerospace, Inc., (BEAV) the market leader for cabin interior products for commercial aircraft and business jets, and a leading aftermath distributor of aerospace fasteners, was reviewing its financial strategy. BEAV was a heavily leveraged company in the cyclical aircraft products industry. Its business had been threatened by the terrorist act of September 11, 2001, the epidemic of SARS in 2003 and the war in Iraq in 2004. These events discouraged Americans from flying, bankrupting airlines and reducing their investments in aircraft. The company sold 18.4 million shares of common stock, raising $156 million to pay down some of its high-cost debt, reduce interest expense and achieve a more balanced capital structure. Still, after restructuring, debt on a pro-forma basis would constitute 79 per cent of its long-term capital. The chief financial officer was considering a more appropriate debt target and how the company might achieve it. Further, he was contemplating a $50 million reduction in debt from available cash. Students are to recommend a target capital structure and steps to achieve it. Data are available to apply theoretical and practical approaches to making recommendations in advanced undergraduate and graduate courses.

The chief executive officer (CEO) and owner of Alara Agri, a major Turkish cherry and fig producer, wants to convince retailers in Belgium and Germany (and, later, other parts of Europe) to change cherries from a bulk product to a higher-end luxury product packaged in small carry bags. The move from bulk to small packages has been highly successful in the United Kingdom where retailers reduced waste and increased margins. The German and Belgian retailers are resisting the change, claiming greater price sensitivity in their consumer base. The CEO thinks he needs a detailed test marketing plan to offer to selected retailers.

Bio-Oil is a multi-purpose skin care product that has gone from being sold only in South Africa to being the No. 1 scar treatment product in 16 of the 17 countries in which it is distributed. Retail sales have jumped from R3 million per annum to R1 billion from 2000 to 2008. Justin and David Letschert made key decisions to eliminate all of the other 119 products that were being manufactured by the company that they took over in 2000, and focused on the mainstay product of Bio-Oil. Union-Swiss accomplished its successful sales through the use of a hybrid distribution model that compelled its distributors in each country to communicate and share knowledge with each other. Union-Swiss also ensured that it remained focused on building the brand through limiting its activities in the value chain to that of marketing. It did this to such an extent that it created a separate entity to run the distribution of Bio-Oil in South Africa.

By 2008, Rodamas Group, owned by the ethnic Chinese Tan family, was one of the top-20 business groups in Indonesia. The company started as a trading firm in 1951 and, over time, became a joint venture partner in manufacturing businesses with a range of mainly Japanese partners. In the 1980s, the company transferred to the second generation leader. The businesses included glass manufacturing (with Asahi), personal care products (with Kao), packaging (with Dai Nippon) and MSG production. The role of Rodamas in these partnerships was to deal with local regulations, hire local personnel and distribute the products in Indonesia. When the then President Suharto was toppled in the Asian Crisis in 1998, Indonesia underwent several drastic changes, including the transition to democracy. Its economy became more open, and foreign firms were allowed to operate in the country without having a local partner. In addition, several global business developments, including the tendency of multinationals to rely on lawyers and consultants rather than local equity partners, threatened the Rodamas business model. In view of this, the current leader, Mucki Tan, is reconsidering the future of his company and weighing strategic options: 1) internationalize with existing partners; 2) develop own businesses that need little technology, such as property; 3) buy existing manufacturing firms; 4) focus on distribution of products for foreign multinationals; 5) focus on a traditional partnership role with a new wave of foreign direct investment (FDI) from developing market multinationals, more specifically, China. Students are asked to analyze the company and its environment, decide on a strategic direction and reflect on the consequences.<br><br>Rodamas Group: Designing the Portfolio (9B14M029) is available as a supplement to this case.

The case illustrates the opportunities, challenges and trade-offs involved in developing a pro-social business venture in emerging economies by outlining the interplay between a Nairobi-based venture by Insta Products (Insta) and a Toronto-based non-profit volunteering consultancy for sustainable new ventures with a high potential to accelerate local development. The case is set in the midst of social unrest in the spring of 2008, as the consulting team prepares to give their strategic recommendation based on detailed entrepreneurial, financial and marketing considerations. Focused on the commercial introduction of enriched flours to the retail market in Kenya, the opportunity presented in the case is expected to double the production of Insta in five years while building a stable Ksh 2.1 billion business. The new venture represents a pro-social corporate venture by a 15-year old company with strong capabilities in relief food aid. Insta had been engaged with CARE Kenya and Acumen Fund to solicit funding, and had commissioned independent market research. The Bridge Expedition Partners stepped in to critically review the business plan and offer financial modeling and market analysis to assess Insta Products in opportunity evaluation and the implementation of the new venture. The decision boils down to how Insta framed the venturing opportunity. If Insta focused on affordability, they would minimize pack size and focus on kiosk distribution (potentially supported through high frequency bicycle deliveries). If, however, the most important driver for low-income families when purchasing the porridge-like product uji was price sensitivity instead, Insta could be better off launching with larger packages, with better value per kilogram, distributed through dukas and supermarkets, where Insta's products and prices would be compared against established uji producers. The latter value proposition could still appeal to low income consumers and economize on distribution costs by pushing buyers to save for a weekly/monthly uji mix purchase rather than buy it as needed from local kiosks. The two strategies were radically different. The former tasked Insta with developing new distribution networks and likely investing in promotional activities that would have kiosks owners at the centre of its business model. The latter would expose Insta to fierce competition in the supermarket uji niche, and pit it against strong (and resource rich) competitors, putting the onus on Insta to differentiate its offering (on nutrition, price or likely a combination of product attributes and brand promise). There was no middle of the road - the two approaches required dramatically different models, and Insta was unlikely to have the managerial capability, let alone acquire the resources to finance both. The case ask students to make this decision, taking on either the roles of Insta's representatives and/or the Bridge consulting teams as the three recent Ivey MBAs engage in complex modeling and draw on the expertise of local and international students.

This case illustrates a grassroots enterprise's path to self-sufficiency in a subsistence market context. It explores the gradual evolution of a business model with strong social mandates (pro-health, pro-women) and asks which growth options best marry profitability and positive social change. The Mwanza, Tanzania-based Yogurt Mamas emerge as entrepreneurial role models in their communities, with funds from Western donors and an exciting new technology.<br><br>The Yogurt Mamas produce and locally distribute a probiotic yogurt to their small community; they are interconnected in a local value chain and benefit from annual inflows of expertise from Western partners, including free access to patented technology and free culturing of probiotic bacteria in a local lab. The case asks students to critically analyze the hurdles to profitability and suggest working solutions to scale up the venture. Challenges include funding sufficiency, clarity of roles and responsibilities, patent restrictions, kitchen ownership, food safety and quality concerns, and liability concerns. Options include technology/model licensing and franchising, organic growth and expansion to gain higher margins and greater control over the milk supply, and extending their distribution reach. If the Yogurt Mamas cannot find an attractive and feasible growth option, the partners will have to contemplate venture termination once the grant funding comes to an end, or consider alternative exit options.

In May 2008, the business manager at Western Day Care Centre (WDCC) was considering expanding the company's services at its Emery Street location. WDCC was currently running at full capacity with a continuously growing waiting list and demand for day care services was increasing. The business manager was evaluating the financial feasibility of renovating the first-floor gymnasium and converting it into a classroom. Incorporating the care requirements and regulations under Ontario's Day Nurseries Act, she wanted to know the total cost of the renovation, as well as the amount of new revenue that would be generated and the payback period. Financial modeling in a spreadsheet, cost-benefit analysis (differential analysis), and determining the decision variables are all techniques used to determine the feasibility of the renovation.

The Stitch It Group (Stitch It) is a mall-based clothing alteration service. Having previously sold Stitch It to its current owners in 1990 (retaining the chief executive officer (CEO) position), the founder and CEO was presented with an opportunity in 2003 to repurchase the company. Having originally sold the business because he was too cash-strapped to grow it himself, Stitch It had since grown from three store locations to 84 stores under three brand names spread throughout Canada and the United States. In determining whether to buy back the firm he founded, the founder and CEO also needed to consider his daughter Jennifer's expressed interest in becoming an executive in the firm. How would he provide Jennifer with the proper technical training to become familiar with all aspects of the firm's business, and improve her business acumen and leadership skills? The founder and CEO had one week to inform the owners of his intent to purchase and he felt it was a good deal, considering the opportunity for growth. Even if the founder and CEO resolved to buy back his company, he wondered how to train Jennifer to take over the business one day.

A biotech company receives umbilical cells for processing. A number of operational improvements are being considered in order to maintain the company's position and reputation in the market. Information on expected delivery dates is known. However, there is a great uncertainty around these dates. The company needs to take account of this variability when arranging for staffing. A supporting data set is available, product 7B09E010 for the (A) case, as well as the supplemental B case, product 9B09E011.

This case describes the history and activities of the A-Team, a major alliance of bicycle assembly firms and parts suppliers in Taiwan, which was created in 2003. A strategic alliance with competitors posed challenges. For the A-Team, it was more complicated because the alliance was between both competing bicycle assembly firms and between parts suppliers. By 2006, progress had been made in making the alliance work but the senior executives were wondering what they could do to ensure future progress. The case can be used in a strategy module or course on alliances/joint ventures in a section examining the competition versus cooperation challenge.

The case describes existing performance management systems at a leading business school in India, the National Institute of Management (Central India campus) (NIM (CI campus)). The institution, which ranked among the top 20 business schools in India, is facing critical issues of attracting and retaining faculty members. The director of NIM (CI campus) has implemented a unit based performance measurement and incentive system that has worked favourably and enabled the institute to recruit top academicians. However, the management committee believes that the system has outlived its utility and desires to replace it with more robust systems that are less vulnerable to misuse. The faculty members, however, support retention of the existing system. The key teaching objective of this case is to understand performance management systems from perspectives of different stakeholders and develop a framework that meets all objectives of performance management. The case enables users to understand all steps in performance management and examine shortcomings at each stage. The role of incentive systems both as a tool to enhance individual performance and as a management control mechanism is also discussed. The case provides users an opportunity to evaluate the strategic significance of performance management. The case is to be used along with Performance Management at the National Institute of Management (Central India Campus) (A) No. 9B08C020.

In 2008, the acquisition of the General Healthcare Group (GHG) in the United Kingdom had propelled Netcare Limited (Netcare) from a predominantly South African operation into one of the largest private hospital groups in the world. One of Netcare's key long-term goals was to deliver innovative, quality health-care solutions to patients in every continent. Recent South African parliamentary legislation had introduced the potential for regulated pricing and collective bargaining in medical centres, which could change the industry structure and possibly affect Netcare's strategy. As acquisition at home would be increasingly subject to stringent scrutiny from competition regulators, Netcare wondered what the impact of global acquisition would have on executing its strategy. What lessons could be learned from the GHG acquisition, how could those lessons be leveraged for further international growth, and what continent would be best suited to expansion? The case illustrates the international expansion strategies of Netcare, and illustrates the challenges of operating in an emerging market. The ability to overcome these challenges is the basis of a competitive advantage when entering developed markets.

Ho Tak Kee was originally a professional publisher and printer that started in the 1950s in Hong Kong. Having faced static performance for decades, the founder and grandfather of the family decided to close the printing department. This pushed his youngest son, On-ping, to a critical decision: whether and how to continue the family business. Under pressure, On-ping turned to his son John for support but the request put John in a difficult position of choosing between a professional career and the family business. As a young man without much life and work experience, John had to go through a personal development process to shape up as a leader in order to make the family business thrive again and keep the family together. Case (A) is from John's point of view as he is making his decision and is intended to stimulate students to look at a family business from a third generation's perspective. Case (B) starts with John's decision to join Ho Tak Kee.

The case deals with how Shoppers Stop, a home-grown Indian retailer of branded apparel and accessories closely identified with the adult segment of customers for a decade and a half since inception, looked at the growing segment of the youth population. Against the backdrop of an aging demographic, particularly among countries in North America and Europe, India had an advantage of a largely young population. Thirty-five per cent of Indian were under 15 years of age and 70 per cent under 35 years of age - a profile likely to remain so for the next two decades. Topics of discussion include: Is there a risk for an adult company in targeting the young? Is there a risk in not targeting the young? Is there a business opportunity in the youth segment? What should Shoppers Stop do if it were to seize the opportunity? What is the addressable segment? Is a change in strategy required now or will tweaking the current strategy do? An interview with the Shoppers Stop chief executive officer is available on DVD.

In June 2008, the president and owner of Canada Goose Inc. (Canada Goose), a producer of luxury sport jackets, was contemplating the future of his company. Despite recent years' steady growth in both his company and the industry in general, the president believed that a significant opportunity existed for Canada Goose to further cement itself as a market leader for this industry. The president was intrigued by two separate offers from national retailers in Canada. Both were in the form of long-term contracts; in the past Canada Goose had used such contracts to maintain successful relationships with its many distributors. The offers were lucrative; however, the president needed to consider whether the offers aligned with the company's current marketing strategy. Agreeing to stock its product through a national chain would be a departure from its current method of distribution through independently-owned regional retailers. Accepting either of the offers would not only potentially price these retailers out of the market but could also lead to the devaluation of the brand.

Alara Agri, based in Bursa, Turkey, is one of the world's foremost cherry and fig producers. The president and chief executive officer (CEO) was concerned about a recurring capacity problem at the end of the process where cherries were packed. On some of the plant's conveyor belts, piles of cherries of one size waited to be packed while other belts had too few cherries to keep workers busy, and thus delayed order fulfillment. Diverting excess cherries from a busy line to an underutilized line was not an option as cherries were sorted by size. One solution the CEO had considered was to build another processing line at a cost of US$2 million, although he thought a better solution may be achieved by changing the process or reconfiguring the flow of the machine. The CEO wondered how best to improve capacity with the equipment they already had. To aid in his decision, he examined corporate data with regards to revenues and production figures, incoming cherries received in tonnes, expected size distribution of cherries, and the plant layout and packaging options.

The founder and president of Nuway Software (Nuway) must determine the pricing strategy for their new internally-developed mobile software product, Nulogic. Nuway develops custom mobile software applications that provide great competitive advantage to each of their customers; no two software modules it develops are similar. Nuway is now ready to market Nulogic as a stand-alone product and has identified three unique customer segments: Corporate in-house developers, competitors and independent software developers. The company has historically followed a cost-plus pricing model and has maintained positive profit margins. The software industry as a whole is moving towards value-based pricing, where cost is based on perceived value to the customer. The president does not favour value-based pricing and views it as price-gouging; however, he is aware that cost-plus pricing has limitations with regards to cost accuracy. By considering the entire software industry, Nuway's capabilities and his own preferences, the president must determine how to price the new software.

Dr. Michael Lehman was the newly appointed external chairman of the Department of Anatomy and Cell Biology (the department) at the Schulich School of Medicine and Dentistry. He had been brought in specifically to address the consistent underperformance of the department. Department members had divided into two camps - clinical teaching and research - and open conflict existed between members with the result that the clinical anatomy division was considering leaving the faculty. Another area of concern involved the declining research output by the cell biology division; many research programs had stalled, resulting in the loss of external funding. Lehman wondered how to balance competing interests and incentives with his five-year plan. His overall strategy was three-fold: keep the department together; enable faculty to generate scholarly research; and rejuvenate research activities. From a change-management perspective, Lehman wanted to identify his key challenges and develop a plan of action for each issue. He thought about how to implement change in his new department.

Dexter Nelson recently accepted a summer analyst position at PPC Consulting (PPC) in Toronto, and was excited to take on the challenge in a high-performance organization. It had only been a few days since he had started his internship when the rest of Dexter Nelson's team left to conduct primary research at a client site. Left alone to work on his first real project, he began to feel overwhelmed. Having recognized the project as a new product launch, Nelson wanted to identify key elements to address in the financial model. He also wanted to identify a series of actions to make a significant contribution not only to the client, but his team. He began to approach his task by identifying his problem and decision to be made, using an importance-urgency matrix and developing and analyzing appropriate alternatives.

In April 2007, the senior vice-president and chief financial officer (CEO) of Crown Investments Corporation of Saskatchewan (CIC) was faced with a challenging decision. CIC was contemplating the sale of 50 per cent interest in a heavy oil upgrader and wanted an assessment of the worth of the company. To obtain a reasonable estimate, the CEO had instructed an independent advisor with industry experience to provide input. In addition to receiving an estimate of value (based on the methods of free cash flow, comparables and precedent transactions), the CEO also had to formulate a strategy for selling off the company.