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In July 2010, Microsoft, the global leader in software, services, and solutions, announced record revenue of US$62.48 billion for the year ending June 30, 2010, an increase of 7% from the previous year. This came as a relief to investors, given that the previous year had seen the company report its first-ever annual drop in sales. Founded in 1975, Microsoft's software pervaded computers worldwide. The company had traditionally been regarded as being on the cutting edge of software and services. However, for some time-particularly since the middle of the last decade-it had been increasingly criticised for having had the opportunity for massive disruptive potential in the market but repeatedly allowing it to slip away. Its huge employee base of bright and talented engineers had not kept up with the creativity and innovation displayed by its competitors, whether it was Apple's iPod or iPad, Google's search engine, Nintendo's Wii, Amazon's Kindle, or social networking services such as Facebook and Twitter. Despite its undisputed financial success, Microsoft was being described as having become a "clumsy, uncompetitive innovator". In a tangible reflection of this concern, on 26 May 2010, Microsoft's position as the technology industry's most valuable player was overtaken for the first time in many years, when Apple exceeded the company's US$219.2 billion market capitalisation by almost US$3 billion. Then on 4 October 2010, Goldman Sachs downgraded Microsoft's stock, which it had supported since the company's initial public offering in 1986. Why was Microsoft no longer creating the truly disruptive and breakthrough technological products and services that the company used to pride itself on? How could the company once again regain its position as the powerhouse of technology innovation?

Louise Murray, Vice-President of Tour Planning and Partnerships at Cirque du Soleil, has been informed that the company has received two unsolicited partnership proposals to present a show in Istanbul, Turkey. Both offers are serious and the projects are potentially interesting. The first offer comes from a government agency in partnership with the City of Istanbul, while the second was submitted by a leading Turkish media group. Louise Murray must now decide on the suitability of this destination and analyze the proposals themselves. She also has to assess the different scenarios for inserting this destination in Cirque's planning horizon and choose the best one. The choice of work and the type of partnership agreement to be negotiated with the potential promoter must also be decided. The tight deadlines imposed by the proposals are an opportunity for Louise to make a critical assessment of the flexibility of the planning process, which she has been working to standardize over the past few years. The case thus encourages a broader reflection on the delicate balance between flexibility and standardization in the context of an organization that still has a strong circus culture. As such, the case is an opportunity to reflect on the organization of the planning process and to propose improvements.

This case can be used as a capstone valuation exercise for first-year MBA students in an introductory finance course. A senior associate in the business development group at American Cable Communications, one of the largest cable companies in the U.S., must prepare a preliminary valuation for acquiring AirThread Connections, a regional cellular provider. The acquisition would give American Cable access to wireless technology and the wireless spectrum and enable the company to offer competitive service bundles including wireless, currently a hole in the company's service offering. Students learn the basic valuation concepts including DCF (discounted cash flow) using APV (adjusted present value) and WACC (weighted average cost of capital) and they must choose the appropriate approach for situations in which the capital structure is changing or assumed to be constant. Students must consider the effect of constant debt versus the D/V (debt-to-value ratio) in estimating betas and the costs of capital. In addition, students analyze the effects of non-operating assets on valuation. As an additional assignment, instructors can require students to consider the personal tax disadvantage of debt as well as the synergies American Cable expects to achieve following the acquisition.

This case is about the establishment, growth, and direction of the Shanghai Zhangjiang Hi-Tech Park ("Zhangjiang Park"), which is located in the Pudong New Area of Shanghai. Considered to be one of the most competitive hi-tech industry clusters in China, the combined business strategy of Shanghai Zhangjiang Hi-Tech Park Development Co., Ltd. ("Zhangjiang Hi-Tech"), a key operator of Zhangjiang Park, included real estate development, hi-tech investment, and integrated services. As of the time of the case, members of the Board of Directors of Zhangjiang Hi-Tech were faced with open questions such as how Zhangjiang Park would be able to maintain its sustainable competitiveness in comparison with other hi-tech and industrial parks in China. Board members were also concerned with how Zhangjiang Hi-Tech would be able to meet the needs of both capital market and regional development.

After its founding in the late 1980s, Cree Inc. quickly grew into a major player in the emerging LED market. By 2007, technological improvements in LEDs had made them suitable for TV, computer, and mobile "backlighting"; and concerns over global warning led to calls to shift to more energy-efficient sources of general lighting (which favored LEDs, as they were far more efficient than the traditionally-dominant incandescents). In this context, Cree faced a strategic conundrum: Should it focus on its historical expertise in manufacturing LED "chips" and components for use in other manufacturers' applications and screens, where LEDs now had established usage? Or should it instead attempt the risky venture of manufacturing its own LED light-bulbs for direct sale to consumers for general lighting? This case presents the history of Cree and information on the LED and general-lighting markets, as background for a debate on Cree's strategic choice.

The co-founder of an Italian, design based bicycle manufacturer evaluates if reducing costs by outsourcing would impact its brand. The company was founded in 2005 in Italy by three friends and in its first five years, it had enjoyed steady growth and built a strong reputation for producing high-quality city bicycles, appreciated for their retro-look and style. Its country of origin had probably helped them exporting their products as their bicycles were 100% made in Italy and the Made in Italy label had a reputation of high quality, craftsmanship and creativity. Yet their profit margins were relatively low as their manufacturing costs were very high. Should they outsource their production? If so, to China or to Eastern Europe? Was there some other way to improve the profitability of the company?

Joseph Vigneault and his entrepreneurial partners wanted to raise $500,000 through the purchase of a currently existing company in the $4 million to $5 million price range in order to pursue a new venture. A boutique investment bank introduced them to the features of the Capital Pool Company (CPC) program. Vigneault must decide if a CPC is an option he and his partners should consider. He must consider the effect on their ownership stake in the company and calculate the return on their investment. The case is focused on the quantitative and qualitative decision factors that go into deciding how to finance a new business venture and exposes students to the unique CPC program offered by the TSX Venture Exchange.

In a controversial decision, the Bank for International Settlements includes deferred tax assets as part of a bank's core capital.

Riverview Technologies was a Stockholm, Sweden-based company that had developed software hedge funds. After spending more than a year in an organized sale process, the winning bidder had become increasingly difficult to work with and the closing had been substantially delayed. Despite the late stage of the process, the selling shareholders were considering walking away.

The general manager of Craig Manufacturing Cambridge Branch felt that there was room to improve top-line growth through better utilization of plant capacity. The company was losing out on sales due to the highly seasonal nature of demand; the plant was fully loaded four months of the year, but it had unused capacity during the remaining months. The general manager had just attended a lecture where a more flexible approach to pricing had been suggested as a way to better manage supply chain and capacity issues. An idea began to emerge: Could Craig Manufacturing use pricing to better match demand to plant capacity? If so, would this practice boost profitability, or would it merely reduce revenues?

The three-part case study "Mr. KLM" recounts the story of the world's deadliest plane accident: the crash of two Boeing 747 aircraft at Tenerife in 1977. The case describes both the actual events leading up to the disaster as well as the main character and the case protagonist, KLM Captain Jacob "Jaap" Veldhuyzen van Zanten, to account for the fact that there had actually been two crashes that day: the airplane crash and the crash of "Mr. KLM," Jacob Veldhuyzen van Zanten. The case illustrates the paradigm of a homo rationale who, in an unusual situation, seems to throw aboard principles of rationality while reverting to decisions and behaviors best understood in the light of intuitive, unreflected, biased, or irrational decision making. The case serves as an illustration of findings and principles of social psychology, irrational decision theory, and behavioral economics.

Suitable as an assignment or as an exam case, this short case is effective in illustrating the use of linear and integer programming in an assignment problem, wrapped around R&D project selection in a global IT firm. A twist in the case requires the use of binary variables to implement certain logical conditions on which projects can be undertaken by which project teams. The case is suitable for graduate or advanced undergraduate courses or modules on optimization, decision models, management science and the like, both for class discussion and as a part of assignment or exam. A spreadsheet is available to enhance student learning.

In late 2010, Silicon Valley-based Chegg, the leading online college textbook rental company, is scaling rapidly. The case recounts Chegg's history from its origins as a distant competitor to Craigslist in college classified listings through a pivot into textbook rental followed by a period of explosive growth. Resulting challenges in scaling warehouse operations, customer service, and information technology are described, along with efforts to professionalize sourcing/pricing and product management functions. The case closes with questions about how Chegg should respond to the pending transition from printed textbooks to electronic textbooks.

OPOWER, a software startup that helps utilities engage their customers in ways that reduce energy consumption, is scaling rapidly. The company's new head of product management has designed a system to address a point of constant tension: whether to build custom features in response to new customers' requests, even if these custom features entail expensive departures from OPOWER's product roadmap. The system grants Sales a number of tokens it can "spend" annually on engineering work to build custom features - boosting the odds of signing contracts with new customers. In December 2010, a request for proposal from a very large utility will put the token system to the test, because the customer is demanding a custom feature that would be unusually disruptive to develop.

James Gutierrez has started a socially responsible consumer lending company focused on serving the underbanked Hispanic market. The company has gone through a succession of sales directors and Gutierrez has now pinned his hopes on his operations director Sam Ulloa to help stem the tide. Can Ulloa do it? The future of Progreso Financiero depends on it.

This case is appropriate for undergraduate, MBA, and MBA Exec audiences but is specifically designed for Decision Analysis and Decision Analysis and Optimization, first-year MBA electives. It is related to but separable from "Salmones Puyuhuapi (A)" (UVA-QA-0749). That A case was about whether to harvest salmon early due to the threat of a virus, and it used a simple approximation for relating the value of a harvested salmon to its live weight. This production planning case addresses in detail how harvested salmon are processed and sold. Here, the plan Elisa Perez develops will determine how much value Salmones Puyuhuapi achieves from a day's harvest of salmon from one of the company's sites in southern Chile.

This profile chronicles McDonald's rise over 40 years, its sudden descent in the early 1990s, and then its return in the early 2000s. Students are encouraged to think about what happened, why, and the lessons that can be learned. This profile was written for an undergraduate business course. This case is included in Module 2 of the course Business Thought & Action.

PCL is a leading European consumer electronics, lifestyle and healthcare company that has been operating in the Chinese market since 1995. While its consumer electronics business has grown quickly in China, it has discovered that the costs of returned goods in its TV division equal 5% of its sales. Even more worrying is that 37% of the products returned are of good quality and have been returned without good reason. PCL has set up taskforces to study and remedy the situation and has uncovered a more serious problem within the organisation: control measures designed to handle returns have simply not been executed by its staff and third-party after-sales service centres. What can PCL do to ensure enforcement of company policies in the future?

Henry Silva, a soon-to-be Columbia MBA graduate and aspiring change agent, wrestled with the decision about whether to join New Power LLC, an innovative start-up energy company, as the director of special projects. In this new capacity, he would be responsible for the transformation of the company culture with the goal of creating a more dynamic and productive work environment. What steps would be necessary to win over employees and to implement a successful change agenda?

In 2009, the small heavy marine transport company Fairstar entered into bidding on one of the largest contracts in the history of the industry. Chronicles the company's year-long tendering process, leading up to a final make-or-break meeting.