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Hutchison Whampoa was considering strategies for its long-term capital structure. The HK$35 billion Hong Kong-based conglomerate had ambitious growth plans in multiple business sectors in different geographies. Traditionally, like many of its domestic peers, Hutchison had relied entirely on short to medium-term bank loans. Its demand for long-term financing, attractive rates in other capital markets (especially the U.S.) and concern about a more diversified investor base had led Hutchison to explore other financing options. In particular, the company was debating the benefits of a Yankee Bond Offering. At the time, Hutchison had already approached Moody's and Standard & Poor's for a bond rating.

The Works Manager at Dofasco was faced with rapidly increasing market prices for fuel oil and natural gas in the late 1990s. Anticipating that similar price increases were likely to continue for the foreseeable future, he wanted to be certain that the steel works was making the best use of its energy dollars and, in particular, that the fuels produced as by-products from plant operations were being efficiently utilized. (A Microsoft Excel model is available for use with this case, product 7A98E025.)

The manager of customer service and operations at a branch of financial services institution is considering his options following the third cash shortage, totalling almost $5,000, within a two-month period. His career and anticipated promotion depended on effectively handling this situation.

Although British Airways had been lagging behind other carriers in the region, in the opinion of the new general manager for Latin America, the company had the potential to be the leading European airline in Latin America. He believed the market had all the characteristics in which British Airways had traditionally been most strong. However, after six months of visiting all the offices in the region, he began to feel that some key country managers were not supporting the changes necessary to move the company ahead. Head Office in London was also skeptical. Latin American is breaking even, so there is no real need to solve the problem, was one typical response. This case deals with efforts to implement major organizational change in a short period of time.

The president must determine how to increase business development at the feedmill. The challenge facing him is to have the feedmill's managers adopt attitudes and behaviours that are consistent with a market driven enterprise. This is no easy task considering that the feedmill is a former state-owned enterprise which did not strive to achieve independent profitability.

Amway of Canada is faced with decisions surrounding the replacement of photocopiers at its Canadian headquarters. As the lease has expired on its current copiers, Amway is beginning the process of evaluating new copier brands, vendors and related technologies. However, what initially appeared to be a rather straightforward rebuy purchasing situation is becoming a more complex organizational decision. Specifically, the number of potential vendors is increasing as different technologies are considered, because the purchasing team realizes that the new photocopier decision inherently impacts other areas of Amway's operations. The purpose of this case is to examine how seemingly simple organizational purchases - particularly those related to new and emerging technologies - can become extremely complex and involve the consideration of related functional areas and operational characteristics within the firm. As such, the case is ideally suited for a discussion around prioritizing key issues in a complex organizational purchase and achieving rapid closure on a procurement initiative, which has apparently spiralled out of control.

The vice-president of acquisitions for Canadian Real Estate Investment Trust (CREIT) was contemplating two investment opportunities facing his firm. CREIT had been very aggressive recently in an attempt to increase the size and diversity of its portfolio. One potential deal that he was contemplating involved the purchase of a 161-unit apartment building in a Montreal suburb, while the other potential deal involved the purchase of a retail complex in a Chicago suburb. Both deals were under a due diligence period, meaning that CREIT had a short period of time to review the properties and decide whether or not to proceed with either purchase. He had to make his recommendation to the senior board of CREIT, and he wondered what specifically about each property was attractive or unattractive, whether the respective markets justified the price levels, and if the respective properties were consistent with CREIT's acquisitions strategy. The case introduces real estate investment trusts and demonstrates some generic concepts relating to the valuation of real estate assets, including discounted cash flow and comparable sales analysis.

A summer intern must decide how he will manage the launch of a sampling despite product shortages, a too-tight time frame, and potentially explosive legal implications. In particular, the intern must determine who in the organization is best able to help him and how he needs to approach those potential sources of help.

Augat Electronics Inc. was finalizing its plan to launch a new line of connectors and tools for cable television service technicians. While the line was being developed, a major new U.S.-based competitor launched a new product line at a premium price and captured the leadership position in the Canadian market. Key decisions facing Augat were how to price its products and what the supporting marketing strategy should be. The new Augat connector appeared to offer customers significant economic benefits.

The management team at ING Bank of Canada was preparing to launch Canada's first discount bank. Initially, the bank planned to serve its customers using mail and telephone. Later, it planned to supplement the telephone banking service with an interactive voice response system and an Internet-based service. ING hoped to attract customers by offering significantly higher interest rates on its savings products than any of its competitors. There was some skepticism about the viability of the proposed business model. At the time of the case, the president and CEO of ING Bank was reviewing the proposed launch strategy.

Canada's largest privately owned department store, the T. Eaton Company Ltd., founded in 1869, had recently emerged from bankruptcy protection and was now planning to raise $175 million through an initial public offering (IPO). Investment bankers must determine the appropriate share price and consider the appropriateness of the timing for the issue. The case describes North American retail industry trends and the bankruptcy protection process and provides a detailed discussion of the IPO process and valuation considerations. Detailed comparables are provided for such firms as Federated, Nordstrom's and Dillard. The case provides an opportunity to apply a number of valuation techniques, including discounted cash flow, price-to-earnings multiples and enterprise value-to-EBITDA multiples.

Jeff Smith, formulation analyst for New England Feed Supply Inc., was evaluating the following week's requirements for three animal feed mixes produced by the Burlington plant. A shortage of one ingredient, meat meal, meant that the company would find it difficult to meet the orders on hand. Smith needed to determine which, if any, of the mixture formulae should be altered, and in what way; alternately, he could elect to buy additional meat meal on the spot market, at a significantly higher price. (A Microsoft Excel model is available for use with this case, product 7A98E034.)

The vice-president and general manager of Mitel's semiconductor division is faced with a rapidly growing market for the company's business communication chips, but has limited capacity at the semiconductor plant. There is little industry capacity to outsource production. He must determine how to pursue the growing market and how to secure additional capacity. Options include modifications to the current facility, construction of a new facility, or the acquisition of a plant from another company.

Ford Motor Company was concerned that five tug operators, each costing $100,000 annually over three shifts, was too many. Colin Cruji was hired to look into the tug operators and see if Ford could eliminate one or more of the five positions per shift. A supplement to this case is available, titled Ford Motor Company and Cruji Management Consulting (B), case 9A99E014. (A Microsoft Excel data file is available for use with this case, product 7A99E013.)

The founder of English Street has decided to take the company to a group of venture capitalists. English Street is an Internet company that provides multimedia content for teaching English to Hong Kong and China residents. She has developed the idea of English Street into a prototype Web site, and is putting together a prospectus (proposal) for a presentation to obtain funding for full development of her business plan.

Nanpo (Holdings) Limited, a Hong Kong-based Chinese food distributor is planning for its initial public offering on the Stock Exchange of Hong Kong. Nanpo was established in 1981 with a mandate to be the sole distributor of poultry, fresh water fish, livestock, and fruit and vegetables produced in Guangdong, the bordering province of mainland China. Throughout the years, Nanpo has built up an admirable market share in many food categories and a distribution channel of 500 wholesalers. Recently, the Ministry of Foreign Trade and Economic Cooperation in the PRC reaffirmed its sole distributor status. The management of Nanpo has developed an aggressive growth plan which includes new food processing facilities and forward integration into retail outlets and restaurant chains. Nanpo has turned to the capital market of Hong Kong to finance its future growth. Nanpo's management has decided to float 25% of the company and has engaged a local merchant bank, Hinson Capital, as its lead underwriter. Three weeks away from the planned IPO, Jack Yang, a director of Nanpo, is once again reviewing the details of pricing.

An assistant manager of a branch has been asked by his superior to hide documents relating to a lawsuit outside of the office until the trial is over. He does not have the best of the relationships with this superior, and so he must decide what to do.

The Vancouver plant manager of British Columbia Box Limited was about to make a half-million dollar decision. The plant required a new $500,000 machine, and the manager must decide which manufacturer will get the order. The case illustrates many concepts in industrial buying.

The CFO of UniHost Corporation is faced with a requirement to raise capital. UniHost is involved in the development, syndication, franchising and management of motels and hotels in Canada. Most of its properties were flagged under the Quality and Comfort brands. UniHost required capital to repay a $52 million bridge loan facility and fund multiple growth opportunities. Financing alternatives included equity, convertible bonds and high yield debt. The CFO had to decide on both the form and structure of the financing. The case allows for discussion of a number of issues, including: the public financing process in Canada, financing strategy (i.e. choice of the form of financing in the context of a likely sequence of financings), optimal capital structure, and the impact of financing decisions on the overall strategy of a firm. With respect to the debt alternatives, data is provided which allows for analysis of the choice of debt maturity, bond covenants and bond rating agencies.

The vice president, finance must quickly address several choices concerning a proposed office relocation. His analysis will likely include discounted cash flow analysis (DCF) and the topics of capital asset pooling and tax benefits. The case compares and contrasts the concepts of DCF and net present value analysis with Seagram's version of EVA (Economic Value Added). The case also provides a unique Asian focus for this type of decision. Office space location and the rent vs. buy option are extremely important decisions faced by a multitude of managers in Hong Kong. The traditional wisdom in Hong Kong has been that buying property was more efficient - especially given the phenomenal appreciation of property values. However, it can serve to distract a firm from its' core competencies and tie up working capital in non-producing assets. Finally, the case also provides a brief overview of capital asset pooling and depreciation tax law in Hong Kong. While the discussion is brief, it nevertheless provides an adequate first step towards further study in this area. Students from other areas of the world will also be interested in examining the differences between their country's tax laws and Hong Kong's.