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Citigroup 2007: Financial Reporting and Regulatory Capital
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Gone Rural
Gone Rural employs 750 women in rural communities across Swaziland to produce handwoven baskets and other hand-crafted items. The women are mostly grandmothers caring for children orphaned as a result of the country's high AIDS-related death rate. The company has a strong social mission to improve the economic situation of these women and wants to grow rapidly. It has been very successful designing, making, and selling its products in the high-end global marketplace. It now needs to raise significant external capital to build new facilities. This may be the first time in its 18-year history that the company brings in external profit-minded stakeholders. -
China's Banks 2010
In the 1990s, considerable debate arose concerning the strength and stability of China's banks. Of particular concern were the debts owed to the banks by state-owned enterprises (SOEs). Many SOEs were experiencing financial difficulties and so they might not have been able to repay these loans. Some analysts emphasized that, since the banks and the SOEs were both owned by the government, the only relevant concern was the financial strength of the government and its preparedness to take responsibility for any of the banks' non-performing loans. In the early years of the 21st century, the government undertook a widespread program aimed at improving the balance sheets at the banks by purchasing non-performing loans from the banks and then reselling these at a discount, often to foreign private sector financial institutions. Prior to 2010, this process provided a generally accepted faith in the stability and security of China's banks. Total non-performing loans as a per cent of total bank loans decreased from 20 per cent in 2003 to three per cent in 2008. The year 2010 brought a new realization that the non-performing loan problem had reappeared. However, China's banks now had private as well as government shareholders, and so the solution had become more complex. The government's response was to insist that China's banks increase their capital base by issuing new equity. -
High Mountain Technologies
The certified management accountant (CMA) has been asked to evaluate two potential new products for the New Products Review Committee (NPRC) of High Mountain Technologies. The case focuses on the application of the net present value approach to capital budgeting, determining an appropriate cost of capital and capital rationing. -
Merging Esso Iceland and Bilanaust (A)
In 2006, Hermann Gudmundsson (the chief executive officer [CEO] of Bilanaust, an Icelandic automotive spare parts retailer) was part of a group of partners that had purchased Esso Iceland. He had subsequently been appointed to the CEO position at Esso Iceland. The two companies were quite different: Bilanaust dealt with real-time customer needs, carried a wide range of products, and enjoyed a rising market share and profits. Esso Iceland was 12 times the size of Bilanaust, skilled at developing and executing medium- to long-term strategies, and was operating in a stagnated market. Gudmundsson evaluated the opportunities in front of him: could a successful merger be wrought from the two companies or would it be better to maintain two separate entities? He determined that a lot of work would need to be done to gain consensus around the right strategic direction for the future. Careful thought identified three areas of initial focus: 1) improving staff morale; 2) creating a sense of optimism; 3) placing effective leaders at key points in the organization. -
W.C. Wood Company (A)
The vice-president of manufacturing for W.C. Wood Company was reviewing a proposal to change the company's packaging for their line of refrigerators and freezers. The proposal recommended a move from cardboard packaging to a combination of polystyrene foam and clear plastic film. Switching to this method of packaging would save on material and labour costs, and result in a significant reduction in damage claims due to the increased package stability; however, a substantial capital investment would be required to launch the change. The equipment required to convert to the new design would require a six-month lead time and one week to install, preferably over the company's summer shut-down. The vice-president needed to evaluate his options of converting all lines at once or transitioning to the new packaging system in stages in order to make his decision. -
Upper Canada Insurance
Deborah McDonald of Upper Canada Insurance (Upper Canada) was reviewing several pieces of data she and her team had spent the last month collecting. McDonald and her team had been asked to address the inefficiencies in the life insurance application process, largely due to the high numbers of applicants withdrawing from the system (known as "wastage") in the midst of the process. Upper Canada had determined that the most common reason for clients abandoning the application process was the long time required to get a response, followed by lack of communication and poor customer service. It was thought that by solving these problems, Upper Canada could meet or exceed industry wastage levels and improve the efficiency of the sales team. McDonald was assigned the task of analyzing the data and making recommendations to resolve the issues of the application process, but was not certain where to begin. -
The Parent Academy: Family Engagement in Miami-Dade County Public Schools
In 2004, Miami-Dade County Public Schools began the planning process for creating the Parent Academy, a new district-wide initiative to increase family engagement in schools. This case discusses the planning and implementation for this major initiative, and describes how the initiative changed when a new superintendent entered the system in 2008. It delves into the theory behind the initiative, the challenges and benefits of this approach to addressing family engagement, and presents the dilemma of whether and how to sustain the program into the future. -
United Technologies Corporation Fire & Security: Field Operations (A)
Appropriate for courses in operations strategy and general management. Some 400 Fire & Security branches are given the opportunity for improvement. Executives call for the design and deployment of a global initiative aimed at the cost-overrun issues. But how much emphasis should be placed on grass-roots, branch-level continuous improvement of the bidding and installation processes, and how much direction and implementation should be driven by division staff? Students will explore the possible cost drivers for the cost-over-runs and discuss possible root causes. Corrective actions and mistake-proofing recommendations are developed for the executives. A teaching note (OM-1422TN) is available. -
British Columbia NICU Bed Allocation
The executive director of British Columbia's Neonatal Services Program (BCNSP) is thinking about her last meeting with the officials at the British Columbia Ministry of Health Services (MHS). Following a report indicating that in 2007 to 2008 the province had sent 98 expectant mothers and newborns to the United States for treatment, the province was considering adding more neonatal intensive care (NICU) capacity. Political pressure was mounting after one of Canada's national newspapers covered the problem in a front page story. The MHS asked the executive director to suggest bed allocations and other improvements to address the situation.<br><br> This case is useful in a management science of service operations course. Students may be asked to describe a model to address the situation, and students with familiarity with a graphical simulation could be asked to build a model. -
HBS Class of 2009: All Talk As They Prepare to Walk?
Max Anderson, HBS Class of 2009, founded the MBA Oath Initiative. The oath was a voluntary pledge "to create value responsibly and ethically." Anderson and a team of students and faculty worked to launch the first MBA Oath Ceremony conducted on campus during Harvard graduation week. -
Student Plays Fantasy Hockey (A)
A student is trying to incorporate various analytical tools to assist in selecting National Hockey League (NHL) players to a fantasy hockey pool, using individual player data from the NHL seasons 2006 to 2009. The student must come up with a strategy in which 16 players are selected for the 2010 season. -
Alnylam Pharmaceuticals: Building Value from the IP Estate
The learning objective of this case is to help students to recognize the interplay between intellectual property (IP) rights and corporate strategy. We do this by examining what is a fairly atypical circumstance today in which a single firm is able to secure what it perceives to be a frontier IP "estate" that blocks competitors from "practicing" in a significant part of the field. Those who elect to sign a license agreement must pay a high license fee and therefore help to fund the company's R&D. The company, meanwhile, must balance the immediate benefit of non-dilutive financing obtainable from the license fees vs. enabling a potential future competitor. The case setting is a lawsuit over a seemingly arcane issue: whether one of the co-owners of a key patent application is properly prosecuting the application. Understanding the issue requires students to progressively build up an understanding of some key aspects of U.S. patent law. Then by piecing together the strategy of the company and how it is driven by its IP position, students can understand why the litigation represents such a high stakes gamble. -
Salud Digna: Successfully Competing with For-Profit Organizations
Hugo Moreno, CEO of Salud Digna, was considering his growth options for the next three years. Would becoming a for-profit with access to greater capital be the best strategy or would this cause the organization to lose its social mission? Salud Digna provided diagnostic medical tests to the poor, had experienced rapid growth and was financially self-sufficient. Moreno was determined that the organization be as well managed as any company in Mexico -
When the Longtime Star Fades (HBR Case Study and Commentary)
Bob Antice is well-loved and famously connected in the music industry. For decades he was a star-the most successful salesman in the company's history, friend and mentor to generations of performers, and a sought-after speaker at industry events. Bob's work from the mid-1970s to the early 1990s put Powerful on top: The company outsold all its competitors for eight straight years in the 1980s. And when he wasn't finding new ways to sell records, Bob was discovering new performers the label's talent-and-repertoire staff had somehow missed. But now his sales are flagging, and the label's CEO wants him out. Bob's current manager isn't sure that what he offers as a mentor and a public face for Powerful is relevant in the age of iPads, Shazam, and Live Nation. Still, Bob has an important personal relationship with the label's most important performer. Should he stay or should he go? Two commentaries are attached to the case, one from Peter Cappelli and Bill Novelli, the authors of Managing the Older Worker, and the other from Tamara J. Erickson, the author of "Retire Retirement" and "What's Next, Gen X?" -
When the Longtime Star Fades (HBR Case Study)
Bob Antice is well-loved and famously connected in the music industry. For decades he was a star-the most successful salesman in the company's history, friend and mentor to generations of performers, and a sought-after speaker at industry events. Bob's work from the mid-1970s to the early 1990s put Powerful on top: The company outsold all its competitors for eight straight years in the 1980s. And when he wasn't finding new ways to sell records, Bob was discovering new performers the label's talent-and-repertoire staff had somehow missed. But now his sales are flagging, and the label's CEO wants him out. Bob's current manager isn't sure that what he offers as a mentor and a public face for Powerful is relevant in the age of iPads, Shazam, and Live Nation. Still, Bob has an important personal relationship with the label's most important performer. Should he stay or should he go? Two commentaries are attached to the case in R1009M and included in R1009Z, one from Peter Cappelli and Bill Novelli, the authors of Managing the Older Worker, and the other from Tamara J. Erickson, the author of "Retire Retirement" and "What's Next, Gen X?" -
When the Longtime Star Fades (Commentary for HBR Case Study)
Bob Antice is well-loved and famously connected in the music industry. For decades he was a star-the most successful salesman in the company's history, friend and mentor to generations of performers, and a sought-after speaker at industry events. Bob's work from the mid-1970s to the early 1990s put Powerful on top: The company outsold all its competitors for eight straight years in the 1980s. And when he wasn't finding new ways to sell records, Bob was discovering new performers the label's talent-and-repertoire staff had somehow missed. But now his sales are flagging, and the label's CEO wants him out. Bob's current manager isn't sure that what he offers as a mentor and a public face for Powerful is relevant in the age of iPads, Shazam, and Live Nation. Still, Bob has an important personal relationship with the label's most important performer. Should he stay or should he go? Two commentaries are attached to the case in R1009M and included in R1009Z, one from Peter Cappelli and Bill Novelli, the authors of Managing the Older Worker, and the other from Tamara J. Erickson, the author of "Retire Retirement" and "What's Next, Gen X?" -
The Cradle Dilemma, Investing in Adoption Learning Partners
As CEO of not-for-profit adoption agency The Cradle, Julie Tye had taken the organization from the brink of dissolution in 1992 to a position of financial stability and health by 2007. One of the innovative steps Tye took in 2002 was to introduce an online learning venture that provided education for families preparing to adopt. The Cradle launched Adoption Learning Partners (ALP), using donated funds and government grants when possible and subsidizing the rest. The income generated by ALP grew from zero in 2002 to approximately $50,000 per month in 2007. But ALP's major market (parents preparing to adopt internationally) was forecasted to decline 50% over the next three years; the Web site was outdated; and new competitors were entering the market. ALP had built a reputation as a pioneer in adoption e-learning by providing high-quality, effective online courses. But without the infusion of at least $400,000, ALP risked losing its leadership position and, possibly, its viability. ALP needed a significant investment of time, talent, and funding. Tye had an MBA, a keen business sense, and fourteen years of experience in healthcare administration and the social services field. Even with her leadership, did The Cradle have the appetite to take on such a demanding strategy? In the end, would it be worth the investment? -
Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products
The Namaste case is a story of how Kellogg alumni couple Gary and Denise Gardner grow their Namaste-branded hair care line from production at the family's kitchen table into a formidable $80 million empire within a 14-year period. The Gardners come from a longtime hair care business lineage, the Soft Sheen dynasty, started by Gary's father decades earlier. Soft Sheen was ultimately sold to hair care giant L'Oreal for over $100 million. The Gardners claim Namaste's growth occurred through listening to the needs and desires of customers for healing hair care products that reminded them of nourishing household remedies. The hair care line became a leader in its industry but faced the dilemma of how to expand sales in new markets, especially international markets such as South Africa and Nigeria. -
Developing an App for That
At a time when ever-rising smartphone sales are driven as much by demand for devices that run must-have third-party apps as by the quality of traditional voice and data services, there is a myriad of challenges facing the software developer who is looking to choose which mobile development software platform to invest in. Written from the perspective of an established consumer bank that is about to commence development on its first downloadable application for mobile devices, the case surveys the state of the smartphone market in 2010 and considers the challenges of a platform landscape that includes significantly varying installed device base sizes, growth rates, application distribution models, and hardware device profiles. Focusing on Apple's market-leading iOS platform and App Store, for iPhones and other devices and on Google's developing Android OS and associated Android Market, the case considers potential benefits and pitfalls of each and touches on the reasons that other longer-standing platforms, such as RIM's BlackBerry platform, are less appealing to modern-day application developers.