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This case describes how Netflix created the business model of delivering DVDs using mail services. Essentially, Netflix exploited a whitespace that other players, such as Blockbuster, could not engage in primarily because they were constrained by their own business models. The case allows the instructor to develop the details of the capabilities that have allowed Netflix to deliver the values its customers desire. The case can then explore the competitive dynamics between Blockbuster, Netflix and Wal-Mart, a new entrant, in this space. Finally, the case describes future technologies, such as Video on Demand (VOD), that in turn pose a threat to Netflix's business model.<br><br>There are two follow-up cases: Netflix Inc.: The Second Act - Moving into Streaming, 9B16M080 and Netflix: Proving the Skeptics Wrongs, 9B16M081.

In December 2008, the ArcelorMittal Dofasco (Dofasco) accounting team was facing a significant challenge. In the past few years, Dofasco had undergone significant ownership changes, and when the firm had first been acquired the market had placed a premium share value on the Dofasco subsidiary. In light of a recent economic downturn, the accounting team was required to reassess the values assigned to the subsidiary's net assets. Dismal forecasted earnings for the operations indicated a potential impairment of the operation's assets under international financial reporting standards (IFRS). The team began with a review of the original fair value estimates, subsequent purchase price and its allocation to various tangible and intangible assets and liabilities. It was discovered the evaluator's fair value assessments for the various intangibles had relied on an income approach, using projected EBITDA derived from each intangible to determine its value. The team wondered how the revised EBITDA projections would change the recoverable value of Dofasco's intangible assets and therefore discover the implications of the current economic situation on the value of intangible assets recognized at Dofasco's acquisition.

A recession in the U.S. economy began at the end of 2007. Concerns deepened as an epic financial crisis shattered business and consumer confidence. By the fall of 2008, the United States was in the midst of the worst recession since the 1930s, and major financial institutions were on the verge of bankruptcy. The financial crisis and recession spread around the world. Many saw a risk that the global financial system might collapse, perhaps precipitating a repetition of the lengthy economic devastation of the 1930s depression. Governments reacted by creating huge stimulus packages that greatly increased national deficits and debts, and by loosening monetary policies with interest rates close to zero and huge expansions of the money supply. In their efforts to save the financial system, governments also offered bail-out packages to banks, including loans, guarantees and equity. By the fall of 2009, the crisis had stabilized, and the appearance of green shoots gave promise of recovery. By 2010, it was possible to put the financial crisis in perspective, and to raise questions about the causes and consequences. Of particular concern was whether new regulations might be needed to prevent a recurrence, and whether some of the tighter regulations should be international in scope. A related concern was whether such regulations should be applied to non-bank financial institutions as well as banks. Governments were also trying to determine how to exit the unique fiscal and monetary positions that now seemed to put their economies at risk of ongoing deficits and future inflation.

This case traces the attempt by the Liberal Government of Ontario, Canada, to introduce recycling fees on a large range of household products as part of the government's larger provincial waste management program. The Ministry of the Environment created an industry-funded, non-profit organization called Stewardship Ontario to oversee the regulation and collection of recycling fees in the province. In 2008, Stewardship Ontario began to levy recycling fees on a limited number of household products, fees that producers and retailers passed on to the consumers at the point of transaction. Ontario's consumers seemed to accept these fees as part of the cost of doing business in a province that was attempting to become a greener and less wasteful place to live. However, in 2010, Stewardship Ontario changed the fee structure on household products from a product-based to a material-based structure: products were now assessed a fee according to the kind and degree of material (chemical, metal, plastic) in the product. This change greatly expanded the number of products on which a recycling fee could be assessed, and it greatly complicated the fee structure for both producer and consumer. Consumers this time took notice of the new fees, and, objecting vociferously to the number of new fees and to the fee structure's lack of transparency, they called on the Minister of the Environment to scrap the program or at least to explain it clearly.

The chief executive officer (CEO) of Social Media Group had to develop a social media campaign for ING Direct Canada, an online retail bank. The CEO had successfully developed social media campaigns for other businesses in the past but ING wanted the CEO to measure the success of the campaign. With little information available on how to determine the success of such strategies, the CEO set out to design one of Canada's first measurable social media campaigns.

The chief financial officer of Granite Apparel is trying to determine which of the three fundraising options is optimal for Granite Apparel to finance a projected rapid growth strategy. The three options are an initial public offering of equity, a privately placed debt issue and a private placement of preferred shares.

The vice-president of the National Association of Software and Services Companies (NASSCOM) was reflecting on the role NASSCOM currently played: it was considered the voice of the software and services industry in India and had been extremely successful in promoting Indian information technology (IT) to the world. Each success had now forced NASSCOM to reconsider its goals to better align itself to the complex needs of the quickly evolving IT business process outsourcing (IT-BPO) industry in India. The vice-president had been asked to address attendees at a leadership conference with details of NASSCOM's strategic refocusing. How could NASSCOM maintain its relevance in an industry that was already considered a global leader? How would NASSCOM position itself in response to its own president's desire to focus on the small-medium enterprise (SME) segment of the Indian industry, and also in response to a report that identified the domestic market as a significant future growth driver of IT enabled services? What role would it play, and how would it get there?

In November 2008, Bell Canada Enterprises Inc. (BCE) appeared to be on track to meet a December 2008 deadline to complete a $52-billion privatization deal. A consortium had previously submitted a winning leveraged buyout (LBO) bid that was estimated to add around $32 billion in debt to the company. Mere days before the deal’s termination date, BCE executives were stunned to hear that KPMG auditors advised that the deal was in jeopardy of collapse — based on a clause that normally merited little attention. The auditors noted that, on the basis of preliminary assessment, the company had not passed a required solvency test which compared the estimated value of BCE’s assets and liabilities in the event that BCE needed to liquidate. BCE executives had little time to determine if the deal could still be saved and, if so, how. Conversely, if the deal could not be completed, what would the organization’s next steps be?

A fourth year business student prepares for an interview as an assistant marketing manager with one of the world's largest electronic conglomerates. To help secure the position, he develops a marketing plan for the Canadian launch of a new product. This case serves as an introduction to marketing management at the undergraduate level. Students can properly analyze this case after having been introduced to the 4 Ps (product, placement, price, promotion) and or a marketing framework. Students are required to complete the following: 1) an industry analysis, 2) a corporate size-up, 3) a consumer analysis, 4) a competitive analysis, and 5) a marketing plan design.

The case illustrates a sports betting product offered by the Ontario Lottery and Gaming Commission. The particular game involved has odds that favour the bettor over the game provider under certain settings. The supplement B case, product 9B09E015, summarizes the results from a series of bets made and provides an email response from the game provider following the discontinuation of this particular game. The case provides an interesting introduction into probability or simulation and expected value calculations.

The case describes the political, regulatory and stakeholder challenges confronting the founder of Porter Airlines, located in Toronto, Ontario, during the 2002/03 period when he was seeking formal permits to launch the airline from Toronto City Centre airport. The case also includes information on the market opportunity for a new airline, enabling students to assess a) the business case for new entry into a hyper-competitive industry, b) the appropriate competitive strategies for successful performance and c) the political or non market strategies for managing stakeholder and political opposition.

In May 2008, the board of directors of BCE Inc., one of Canada’s leading integrated communications companies, was dealing with the fallout of a Quebec Court of Appeal decision. The court had ruled to disallow a $50 billion privatization deal as, according to the court, the process was flawed and did not consider the debenture (bond) holders of Bell Canada (a wholly owned subsidiary of BCE). The court had ruled that the board had allowed a deal in which benefits accrued only to the shareholders (a 40 per cent increase in value since the firm was in play) at the expense of the bondholders, who were dealt an 18 per cent decrease in value over the same period. In deciding whether or not to launch a last-ditch appeal to the Supreme Court of Canada, management and the board needed to determine who were the key stakeholders involved in the decision to take the firm private, what their interests were, and how those interests should guide the board.

This case provides a means to illustrate enterprise valuation analysis questions such as: 1) Given a stock price, what is the implied value attributable to the operating business? 2) Given a valuation multiple for an operating business, what is the implied target stock price? In addition, the case 1) illustrates how arbitrage acts to enforce the law of one price and keep markets efficient 2) provides a model case to understand why stocks can become mispriced 3) shows application of a stub valuation analysis 4) provides an illustration of a common hedge fund strategy (long/short equity) 5) show how to calculate margin requirements for a portfolio containing both long and short positions 6) illustrates the effects of leverage and capital requirements on investment returns 7) provides an example framework to calculate risk in a complex investment position.

The case follows the rise and decline of Pets.com from its inception in 1994 until 2000. It starts with a look at the birth of Pets.com, followed by a discussion of the market, consumer behaviour and key competitors. It then focuses on Pets.com's business strategy and marketing mix. The case study provides the basis for class discussion of a number of key issues, including but not limited to a) the decision whether to enter a strategic partnership, b) the pursuit of an aggressive growth strategy, c) the design and management of the marketing mix, d) the use of aggressive communication and pricing strategies, and e) brand-building decisions. Pets.com is often cited alongside the Edsel, New Coke, Betamax and others as one of the biggest marketing blunders of all times. As such, students find it a fascinating story. The case study also asks students to reflect on some common challenges faced by organizations, such as entry and survival in a highly competitive market, how to deal with a dominant player, venture capital and entrepreneurial issues, business model design, brand management, marketing mix decisions, and the benefits and perils of a growth strategy. The case has been used successfully in the following courses: a) an MBA elective course dealing with popular marketing mistakes and failures, b) a postgraduate strategic marketing course dealing with growth strategies, c) a marketing management course at the undergraduate level focused on the design and management of the marketing mix, and d) a services marketing module at the undergraduate level on the topic of online marketing.

In August 2009, a portfolio manager for Resolute Funds Inc. is considering adding WestJet Airlines to his fund’s holdings. WestJet, a fast-growing airline based in Calgary, Alberta, has grown rapidly from a start-up to the second-largest airline in Canada. Despite its recent successes, its share price has halved from its high in December 2007, due to the economic crisis. The portfolio manager is trying to determine whether WestJet’s shares are attractive. To support his analysis, he has asked his team to assemble comparative financial data on WestJet and its key competitors. The portfolio manager wants to know if he should buy, hold, or sell WestJet’s shares.

The case reviews responses by governments, securities commissions and others to the U.S. Sarbanes-Oxley Act. It discusses the certification of financial statements and internal controls, the role of boards and board committees, including the audit committee, and issues of auditor independence. The Canadian Public Accountability Board is also discussed.

Thirteen years after it began operations with three airplanes, WestJet is the second-largest airline in Canada. It has grown revenues at an annual rate of 37 per cent per year for the past 11 years, and is poised to become the country’s dominant airline in the future. As it has grown, WestJet seems to have made changes to its original strategy of low-cost, no-frills, point-to-point, single-class service. The case examines WestJet’s strategy over the years and focuses on the company’s latest decision point: whether to add smaller planes to its single-model Boeing fleet. The objective of the case is to examine changes in a company’s strategy over time, and to review the potential impact of these changes on a company’s future performance.

BCE Inc. (BCE), one of Canada's leading integrated communications companies, faced numerous challenges. In the key wireless communications market, BCE was trailing its competitors on growth and revenue. BCE's share price was underperforming and shareholders, including the powerful Ontario Teachers' Pension Plan, were becoming concerned. In addition there were regulatory changes on the horizon that could have a serious impact on BCE's wireless division. BCE's chief executive officer (CEO) was faced with the task of improving BCE's competitiveness and shareholder value in a dynamic industry. What options did the CEO and his leadership team have, which ones were better for BCE and how could the better ones be executed in order to satisfy BCE's shareholders? The case provides a good opportunity to assess financial performance and assist in understanding the interaction of strategy and finance.

BCE Inc. (BCE), one of Canada's leading telecommunications companies, had struggled under its weak stock price performance and low valuation relative to its comparable peers, and faced increasing pressure from its largest shareholder, the powerful Ontario Teachers' Pension Plan (Teachers'). On March 29, 2007, it was reported that private equity firm Kohlberg Kravis & Roberts (KKR) had held informal meetings with BCE executives in the hopes of launching a friendly takeover bid for the company. This essentially put BCE in play with the leadership team confirming, on April 17, 2007, that it would be reviewing its strategic alternatives, which included discussions with various Canadian-led consortiums to explore the possibility of a privatization. As the deadline to the bid date drew closer, four contending bidding consortiums emerged, including three consortiums of financial buyers and one strategic buyer. The case provides a good opportunity to discuss private equity investments as well as valuation in a mergers and acquisition context. This case is a follow-up to Ivey case BCE Inc.: Facing the Future, product # 9B09N015.

When Yves Saint Laurent died in June 2008, his estate passed to his business partner, Pierre Bergé. Bergé decided to auction several items from Laurent's estate at Christie's international auction house, including two antique bronzes from China. The general feeling in China was that these artifacts had been looted and should be repatriated rather than auctioned. The case highlights issues of ethics, corporate governance and corporate responsibility.