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TWA Parts (Abridged)
Transworld Auto Parts had to implement its new strategy flawlessly to survive the auto industry upheaval. The new CEO asked her leadership team to craft strategy maps and balanced scorecards to help each division implement its strategies. -
Coca-Cola: Residual Income Valuation
The case illustrates the use of the residual income (also known as the abnormal earnings) valuation approach. Students are asked to provide a valuation of Coca-Cola Company using the residual income valuation methodology and understand how it maps into the discounted cash flow method. Students learn how forecasts of sales, performance, dividends, and other valuation inputs feeds into a valuation model. Students also learn the modified Dupont decomposition technique and how to reclassify financial statements to perform the modified Dupont analysis. -
Gerry Pasciucco at AIG Financial Products (A)
Gerry Pasciucco was appointed to lead American International Group's Financial Products (AIGFP) group after the government bailout of AIG in 2008 and charged with the task of shutting down the division while minimizing the government's losses. AIGFP's failed trades had threatened to bring down the entire company, and the government had responded by loaning AIG $182 billion in exchange for 79.9% of the company, because it feared that AIG's failure could trigger the collapse of the entire global financial system. Several months into his tenure, the division paid large retention bonuses to all of its professionals according to a contract negotiated before he joined AIGFP. These bonuses were seen by the public as going to the very people whose mistakes resulted in the need for a bailout in the first place and resulted in an unprecedented storm of public outrage, culminating in a Congressional hearing in which AIG's CEO, Ed Liddy, was repeatedly attacked for making the bonus payments. Liddy responded by asking people who had received the largest payments to return the money to the company. Now Pasciucco has to decide how to lead his team through this crisis while grappling with the larger issues of the justice of the retention payments. -
The World Bank in 2012: Choosing a Leader
In 2012, the World Bank faced important questions in terms of its future strategy and mission. Should the Bank continue to focus on micro-level development initiatives, such as the Millennium Development Goals (MDG), or return to traditional macro-level financial support? Was the Bank's role as a source of funds for developing countries still relevant? Should emerging market nations be given a greater role in the governance structure? Most importantly, was Jim Yong Kim, a US national, the right choice to lead the Bank, in preference to highly qualified candidates from developing nations? -
J-TRADING: Full Circle Outsourcing
J-TRADING is a US-based arm of a Japanese keiretsu that is focused on commodity trading between the East and North America counting about 350 employees in the US. It has experienced problems with its information technology (IT) infrastructure and help-desk functions. IT employees were not motivated to work on these rather mundane tasks leading to quality and cost issues. J-TRADING CIO decided to solve the problem by outsourcing both functions. The case relays J-TRADING's outsourcing journey through its ups and downs discussing the process of vendor evaluation and selection, task transition, relationship management, and business outcomes. The case provides full financial details necessary for financial analysis and asks students to evaluate the sourcing decision itself as well as vendor selection and governance processes. It also asks students to elaborate on alternative sourcing approaches such as offshoring and cloud-based solutions. -
Sony PlayStation: Security Breach
In April 2011, Sony's PlayStation and Qriocity services were attacked by an illegal and unauthorized intrusion into the company network, compromising user account information. For five days, the corporation turned off both its PlayStation Network and Qriocity services while it conducted a full and complete investigation with the help of an external security firm. Although brief statements about the issue were posted on the PlayStation blog, Sony did not publicly disclose the full extent of the security breach or the expected date when network services might return to normal, leaving many people speculating if personal or financial information had been illegally obtained. The timing was complicated by the imminent announcement of the launch of Sony's first tablet computer. With its public statement, Sony intended to communicate key points of information about, explanations of and solutions to the network interruption. With over 70 million PlayStation Network and Qriocity services user accounts worldwide, customers, industry analysts, investors, consumer protection groups and government officials were all waiting for answers. -
SANY: Going Global
April 17, 2012, was a special day for SANY Group and for its founder Liang Wen'gen. Headquartered in Changsha, SANY Group had transformed itself in two decades from a small welding material factory in 1989 to a leading global construction equipment manufacturer with 5 industrial parks in China; 5 R&D and manufacturing bases in America, Germany, India, Brazil, and Indonesia; and 21 sales companies worldwide. SANY Heavy Industry Co., Ltd. (SANY), SANY Group's major subsidiary, engaged in the construction equipment business and was number six on International Construction's 2012 Yellow Table, a ranking of the world's largest construction equipment manufacturers. -
The Jersey-Atlantic Wind Farm
Community Energy Inc. was founded in 1999 with the goal of developing the United States' renewable energy supply. In 2003 Eric Blank, cofounder and executive vice president of CEI, considers a proposal for an Atlantic County wind farm. Though the proposal clearly fit within the firm's strategy of identifying and developing renewable energy projects that could generate attractive financial returns, coastal wind farms were nonexistent in the United States in 2003. -
Pricing and Partnership at Zillow, Inc.
As Zillow's real estate search service gains user adoption, some real estate professionals question Zillow's policies, fees, and power. Dissatisfied real estate professionals could remove listings from Zillow, reducing the service's value to users. Should Zillow adjust its approach in order to address complaints? -
The Facebook IPO Litigation
Despite its success in the social-networking space, Facebook Inc.'s May 2012 IPO was largely considered a failure. Facebook faced multiple lawsuits and its share price had dropped significantly. Adversaries contended that Facebook had misled investors and violated securities laws. Were the allegations legitimate, and did the litigation pose a serious threat to Facebook's share price? -
MBA Starting Salaries
Every year MBA programs across the country advertise for prospective students. They promote the academic excellent of their programs, the uniqueness of their offerings, the quality of their faculty and a variety of other factors. In a competitive market, the goal is to attract the brightest and the best. Many schools claim that graduates of their programs will see large salaries on graduation. This is clearly a very important part of many students' decision criteria. In fact, the Financial Times rating of MBA programs uses graduates' salaries as a large component of their rating system. A student has access to the salary data from a prominent MBA school in North America. She sits down to analyze the data and see what factors are associated with higher salaries. -
Just Clean Your Hands
A fourth-year science student at The University of Western Ontario must provide the manager of Infection and Prevention Control her recommendations to improve staff compliance with the hand hygiene requirements of the medical and support staff at London Health Sciences Centre and the Ministry of Health and Long-Term Care. The Province of Ontario's Ministry of Health and Long-Term Care had implemented an initiative called "Just Clean Your Hands" to improve hand-cleaning rates that would directly affect the number of infections acquired by patients while in hospital. The task is complicated by the large number of employees working at LHSC and the many different employee groups, ranging from physicians to cleaning staff. Hand-cleaning procedures must also be followed by the patients' families and friends who visit. In addition, workplace sub-cultures have historically not enforced compliance with discipline. Essentially, the challenge is to change the behaviour of a large group of people in diverse roles. Students should realize that because health care is publicly funded in Ontario, any plan of action to improve hand-cleaning compliance will need to be justified financially and implemented at a reasonable cost. -
New York City Center for Economic Opportunity: An Evidence-Based Approach to Alleviate Poverty
In late 2006, New York City Mayor Michael Bloomberg created the Center for Economic Opportunity (CEO). Born out of recommendations made by the Bloomberg appointed public-private Commission for Economic Opportunity, CEO was designed to be an innovations lab that would test anti-poverty programs by applying a results-based approach. With a budget of $100 million, CEO would closely monitor new programs and hold them accountable for producing measurable results. Uniquely, CEO would cut funding for programs that did not "make the grade." Bloomberg named Veronica White the Executive Director of CEO. White had decades of experience working in executive positions in several New York City agencies but with CEO she had daunting tasks ahead. She would have to redefine how poverty was measured in the city, facilitate cross agency partnerships, and most important, develop an effective and achievable evaluation system for all programs. This case traces the CEO team's challenges in placing program evaluation at the core of their mission. CEO programs are geared toward three target populations-working poor adults, young adults between the ages of 16 and 24, and families with children ages five and below. In the first year of operation, White and her team launched a slate of anti-poverty programs that varied widely in scale and scope and ranged from New York's first ever conditional cash transfer program to a program that would accelerate graduation rates in community colleges. But from the beginning, CEO's evidence-based programming was put to the test. White faced constant pressure to "produce results quickly." With the 2008 recession, however, CEO endured significant cuts in its evaluation budget. White and her team had to make the most of limited resources while still sustaining a comprehensive evaluation policy. Case Number 1971.0 -
ChemChina
ChemChina is China's largest basic chemical manufacturing firm. It was included in Fortune Global 500 in 2011 and 2012, ranked No. 475 and 402. Its sales revenue in 2011 was 179 billion yuan, and profit was 600 million yuan. The year-end total assets were 254.2 billion yuan. The major products of ChemChina are basic chemicals, new chemical materials, oil processing & refining products, agrochemicals, rubber products, and chemical equipment. The company has106 subordinate enterprises. Its production and R&D bases are located in 140 countries and regions all over the world. Looking retrospectively, ChemChina has been a rapidly growing enterprise and is one of a small number of Chinese enterprises founded after the economic reform and rapidly growing to enter the Fortune Global 500 in 20 years. The development history of ChemChina from nothing to a world giant as well as its strategic measures taken during the process are both characterized by the unique features of itself and deeply stamped with those of the era, reflecting the constantly changing environment faced by the Chinese enterprises in the economic transition years and the strategic movements taken creatively by the Chinese local enterprises to adapt to the environment.Unquestionably, ChemChina is a representative of "big but less strong" companies, lagging far behind the world leading chemical giants in terms of technology and management. Nevertheless, its historical development to become a Fortune Global 500 giant and a leading chemical enterprise in China in less than 30 years is sufficient to motivate us to study its unique history, current reality and future. Today, ChemChina confronts the tasks of internal integration and dealing with financial stringency. New opportunities exist, particularly as Blackstone has became a strategic partner of BlueStar. -
Microsoft's Attempt to Acquire Yahoo: A Case in Letters
On January 31, 2008, Microsoft CEO Steve Balmer wrote a letter to YAHOO seeking to acquire the company at a 62% premium above that day's closing stock price. Yahoo's board, led by CEO Jerry Yang, unanimously declined this first offer-prompting Microsoft to make several subsequent attempts to close a deal. This case outlines the negotiating process over a three-year period between Microsoft and Yahoo, asking student to analyze whether Microsoft's offering prices were in line with Yahoo's value. -
Andrew Sullivan and Faraway Ltd
The "Andrew Sullivan and Faraway Ltd" case series focuses on entrepreneurial selling, and is based on an older case study, "Deaver Brown and Cross River Inc." (9-394-042). It concerns two entrepreneurs, Andrew Sullivan and Hope Abasi, who have designed an innovative pushchair (baby stroller) and, a year later, are looking for an order from a large retailer. The case requires students to prepare, deliver, and evaluate Sullivan's sales calls on two important retail buyers, Sam Cartwright of Mothercare and Anthony Pierce of John Lewis. The main case provides relevant background information about Faraway's market opportunity, business model economics, and scaling requirements. The (B) case provides information about Sam Cartwright's view of his job and supplier issues. The (C) case does the same for Anthony Pierce. -
Innovation Clusters in the Global Economy: The Welfare Technology Region in Denmark
In February 2012, Lars Kolind, chairman of Welfare Tech Region, a cluster organization in Southern Denmark that promotes the use of technology to assist people with daily living activities, considered the challenges that the cluster organization's member companies face in developing and commercializing new products on the global market. The case explores whether regional innovation strategies can help foster the global competitiveness of small countries. It focuses on critical issues related to the development and commercialization of new products, influenced by factors such as national innovation culture, product choice, access to capital, human resources and ability to attract talent. Case Number 1970 -
Capitec Bank: Leveraging Banking Innovations to Attract Wealthier Customers
Capitec Bank was a new bank established at the end of apartheid to offer banking services and loans to the large numbers of low-income potential customers newly opened to economic progress and aspiration by the end of the discriminatory system. The banking context was dominated by four major and long-established banks characterized by conservative legacy practices. Capitec planned to create an innovative offering to serve the low-income market and to migrate this offering into higher income groups. At the same time, the competitive context began to change, as other banks sought to attract lower-income clients as well. The case examines Capitec's strategic options for survival and expansion in this context. -
Developing a New Smartphone Application: UrbanBaby
UrbanBaby is a newly developed smartphone application (app) that allows users to address the difficult task of finding activities, restaurants and other forms of entertainment for newborns to young teens. A number of issues must be addressed if it is going to be profitable. First, the app's creators, Alex and Pavel, are unsure how to characterize the large potential target market, parents, or if there are other target markets that might be interested. This is critical, as the success of the app depends on the cultivation of a strong online community that will contribute content. Second, they have to find a reliable source of data to populate the app. Third, they must decide whether to focus on Apple's operating system, which is popular in North America, or put more of their energy into competing operating systems that are much more popular in the rest of the world. Finally, they have a number of strategic marketing choices to make and to prioritize, including whether to keep the UrbanBaby brand name and risk the ire of similarly named competitors, how to price the app, how to position and promote the app and how to time the rollout. How these initial choices will affect subsequent strategic and tactical decisions is also a matter of concern. -
The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation
In response to the potential collapse of large financial institutions in 2007, the U.S. government committed trillions of dollars to loans, asset purchases, guarantees, direct spending to provide fiscal stimulus, expansionary monetary policy, and bailouts of various private financial institutions. The bailouts were especially controversial because public money was used to protect private financial institutions and their wealthy executives while ordinary citizens received no such protection. One outcome of the government's response was the proposal to enact into law the Volcker rule, which prohibited banks from engaging in proprietary trading, or trading for their own-not their clients'-benefit. Proprietary trading was believed to generate up to 10 percent of total trading revenues, which would have exceeded $5.9 billion in 2010 for the six largest American banks alone. If the Volcker rule were to become law, government agencies, including the Federal Reserve, the Securities and Exchange Commission, the FDIC, and the Office of the Comptroller of the Currency, would write the detailed regulations that would implement the law. These agencies employed civil servants but were run by political appointees with technical backgrounds. After issuing a notice of proposed rulemaking the agencies would solicit comments from the public, which would help shape the regulations. Executives of large banks needed to decide how to respond to this potential change in their business environment.