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Gomez Electronics produces three models of portable compact disc (CD) players. The company uses a full-cost standard-costing system for both internal and external financial reporting. However, the company's president is considering changing to a standard direct costing (i.e., variable costing) system for internal purposes. Students are asked to prepare two sets of income statements: one based on a standard full costing system, and the other based on a standard direct costing system. Each set of income statements provides information that reflects budgeted sales and budgeted production, as well as actual sales and actual production. Gomez Electronics has three production departments, all of which have excess capacity. The company has received and an offer from a large discount company to purchase a large quantity of CD players that, except for the plastic case, are similar to one of Gomez Electronics' CD players. The offer stipulates the price, the total quantity, and the delivery schedule. Students are asked to make a decision regarding whether to accept the discount company's offer. In addition, students are asked to make a recommendation regarding the adoption of a standard direct costing system for internal use.

Tony Hamilton, brand manager for Distillers Delight in the United Kingdom, is preparing for his upcoming meeting with his boss, Charlotte Handy, managing director for the United Kingdom for Global Distillers, Inc., one of the leading companies in the alcoholic beverages industry. The purpose of the meeting is to review how well his brand performed during the company's 2003 fiscal year. To say the least, it had been a very difficult year. No one had predicted any increase in the country's excise tax, let alone the 60% increase that took effect shortly after the company's 2003 fiscal year began. From that point on, almost nothing had gone according to plan. Thus, Tony is looking for a way to reconcile actual results with planned results in a way that is accurate, informative and understandable. This case is based on an actual situation, and it was written with the cooperation of one of the leading global companies in the spirits industry. The company name, the product name, individuals' names and the numerical data have all been disguised, yet the issues presented are real.

Edward Englehardt Giberson, the proprietor, is a skilled glassblower whose business is on the verge of bankruptcy. He works in his studio almost every day, and his products sell reasonably well. On average, he has at least a two-week backlog of orders. He realizes his prices are too low, yet the artistic nature of his products makes it difficult to set prices based on any systematic assessment of demand or comparison with similar products. In desperation, he turns to the consulting club of a nearby graduate business school for help in establishing both a pricing policy and a production policy that he hopes will lead to profitable operations and a positive cash flow. Clearly, continuing "business as usual" is not an option for Giberson.

In 2002, a money manager is considering how to vote her shares in Hewlett-Packard on the proposal to merge with Compaq. The (A) case presents information about the strategic and financial motivations of the merger. Included are completed valuations of both HP and Compaq and detailed summaries of the leading advocate (Carly Fiorina) and critic (Walter Hewlett). The tasks for the student are to value the prospective synergies in the deal and critically assess the strategic arguments (pro and con). The (B) case affords a detailed examination of the terms of the proposed merger. The tasks for the student are to critically assess the specific design of the deal and its impact on shareholders. Of particular interest are the impact on earnings per share (that is, EPS dilution), the governance of the new firm and whether this is, indeed, a merger of equals. The (C) case describes the outcome of the proxy contest. Here the task for the student is to evaluate the strategies of each side in communicating with shareholders and presenting arguments. The objectives of the case module are to expose students to the mechanics of proxy contests, exercise skills in valuation and strategic analysis, and critically evaluate deal terms. The (A) and (B) cases can be taught in sequential classes, or in one class. The (C) case is typically distributed at the end followed by a brief discussion.

Set in India in the 1980s and 1990s, this series of cases concerns the attempts by the Unilever division Hindustan Lever Limited (HLL) to create, market, and distribute a detergent for India's rural poor. The upstart, low-priced Nirma detergent, manufactured by a former chemist, has overtaken HLL in the detergent market primarily because Nirma is being distributed and sold to this previously ignored market segment. In this war of laundry powders, HLL must revise its traditional practices in manufacturing, marketing, and distribution pursuant to C. K. Prahalad and Allen Hammond's theory of the worldwide four-tiered market, in which the "bottom of the pyramid" is an untapped and potentially lucrative market. See also the B (UV1972), C (UV4263), and D (UV5266) cases.

Explores the concept of strategic alignment within a public school district.

The president of Daikin Industries Residential Air Conditioning Shiga Factory confronted the prospect of an unseasonably cold summer at a time when the Shiga Factory had large quantities of its products in inventory in anticipation of strong summer sales. The president was concerned not only about pending losses in the current year, but also about the factory's long-term survival. Unprofitability was unacceptable and Daikin was caught in a stagnant market in which it was increasingly difficult to build share by product differentiation. The Shiga Factory had been forced to use large inventories to cope with uncertain demand and a long and unwieldy supply chain. The president must decide whether to reduce the number of models, build a lower cost factory outside Japan, or exit the business. He must also determine whether there are any other options.

In 2001, Bank Leu, a Swiss private bank, is considering creating the world's first public fund for catastrophe bonds. Cat bonds are securities whose payments depend on the probability of a catastrophe occurring, such as an earthquake or hurricane. Cat bonds are traditionally issued by large insurance or reinsurance companies. This case outlines the traditional reinsurance market and securitization efforts that have taken place in the past and focuses on Bank Leu's decision as a buy-side participant in the cat bond market.

In 2002, Swiss Re, the world's second--largest insurance company, is considering securitizing parts of its risk portfolio in the capital markets. This would be a first for the company that, until then, had never transferred risk off its balance sheet. Peter Giessmann, head of the Retrocession Group, is considering catastrophe bonds as a way of transferring risk. "Cat bonds" are securities whose payments depend on the probability of a catastrophe occurring, such as an earthquake or hurricane. This case outlines the traditional reinsurance market and securitization efforts that have taken place in the past and then focuses on Swiss Re's decision as a sell-side participant in the cat bond market.

Bob Berney, president of Newmarket Films, must decide on a distribution and marketing strategy for Mel Gibson's controversial new movie, The Passion of the Christ. Fueled by Gibson's star power as well as an extensive prescreening campaign among Christian leaders and others representing likely target audiences in the summer of 2003, the religious movie had started to generate publicity in mainstream media. Five months prior to the film's scheduled opening on February 25, 2004, Berney has to choose whether to continue with the prescreening campaign to stimulate further word-of-mouth among core audiences or switch to a mainstream media advertising campaign more commonly used to promote new movies. He also has to determine the appropriate distribution strategy, in particular whether to opt for a wide or limited release and whether to change the timing of the release.

George Latour considers himself a good leader. As CEO of Retronics, Latour has a mandate to grow revenues with an eye toward taking the software engineering firm public by 2006. At the behest of the chairman of the board, he has hired a new marketing director, Shelley Stern--"a thoroughbred" who, the chairman insists, just needs a little training in the business. Latour does his best to bring his new hire up to speed. He has Stern sit in on developers' meetings and accompany the sales force on client calls. He takes pains to help her correctly position marketing and press materials. But Stern never seems really to take the bit. In fact, Stern considers Latour's hands-on management style oppressive, and she's dreadfully unhappy. What's more, she is spread too thin. Yet, when she asks for help--if not additional staff, at least an outside contractor--Latour asks for a list of everything she's working on and tells her he'll help her prioritize. In this fictional case, a he-said, she-said debate erupts over competing management styles. In R0409A and R0409Z, four commentators--Jim Goodnight, the CEO of SAS Institute; Mark Goulston, a psychiatrist and the senior vice-president at Sherwood Partners; J. Michael Lawrie, the CEO of Siebel Systems; and Craig Chappelow, the senior manager of assessment and development resources at the Center for Creative Leadership--offer their perspectives on the problem and how to solve it.

George Latour considers himself a good leader. As CEO of Retronics, Latour has a mandate to grow revenues with an eye toward taking the software engineering firm public by 2006. At the behest of the chairman of the board, he has hired a new marketing director, Shelley Stern--"a thoroughbred" who, the chairman insists, just needs a little training in the business. Latour does his best to bring his new hire up to speed. He has Stern sit in on developers' meetings and accompany the sales force on client calls. He takes pains to help her correctly position marketing and press materials. But Stern never seems really to take the bit. In fact, Stern considers Latour's hands-on management style oppressive, and she's dreadfully unhappy. What's more, she is spread too thin. Yet, when she asks for help--if not additional staff, at least an outside contractor--Latour asks for a list of everything she's working on and tells her he'll help her prioritize. In this fictional case, a he-said, she-said debate erupts over competing management styles. In R0409A and R0409Z, four commentators--Jim Goodnight, the CEO of SAS Institute; Mark Goulston, a psychiatrist and the senior vice-president at Sherwood Partners; J. Michael Lawrie, the CEO of Siebel Systems; and Craig Chappelow, the senior manager of assessment and development resources at the Center for Creative Leadership--offer their perspectives on the problem and how to solve it.

George Latour considers himself a good leader. As CEO of Retronics, Latour has a mandate to grow revenues with an eye toward taking the software engineering firm public by 2006. At the behest of the chairman of the board, he has hired a new marketing director, Shelley Stern--"a thoroughbred" who, the chairman insists, just needs a little training in the business. Latour does his best to bring his new hire up to speed. He has Stern sit in on developers' meetings and accompany the sales force on client calls. He takes pains to help her correctly position marketing and press materials. But Stern never seems really to take the bit. In fact, Stern considers Latour's hands-on management style oppressive, and she's dreadfully unhappy. What's more, she is spread too thin. Yet, when she asks for help--if not additional staff, at least an outside contractor--Latour asks for a list of everything she's working on and tells her he'll help her prioritize. In this fictional case, a he-said, she-said debate erupts over competing management styles. In R0409A and R0409Z, four commentators--Jim Goodnight, the CEO of SAS Institute; Mark Goulston, a psychiatrist and the senior vice-president at Sherwood Partners; J. Michael Lawrie, the CEO of Siebel Systems; and Craig Chappelow, the senior manager of assessment and development resources at the Center for Creative Leadership--offer their perspectives on the problem and how to solve it.

In the late afternoon of a hot day in July, 2001, an accident beneath the streets of Baltimore threatened to turn into a disaster. A freight train carrying hazardous chemicals derailed and caught fire inside a tunnel that ran beneath one of the city's main streets. Not only did the tunnel accident block the major north-south train route for the eastern United States, it also released clouds of possibly toxic vapors into downtown streets. Incredibly, the first accident was followed by a second one-a break in a major water main, in exactly the same area, into which cascaded hundreds of thousands of gallons of water. It was a combination which a city official would call "everyone's worst nightmare." This case describes-blow-by-blow and meeting-by-meeting-the public emergency response to the tunnel fire and its aftermath. It details how a dozen different jurisdictions-including city, state and federal agencies-had to find ways to coordinate their response in the absence of established procedures for dealing with a situation which had never been specifically contemplated. Among the themes explored in this crisis management case is the role of the local chief executive (Baltimore Mayor Martin O'Malley), the conflicts and cooperation amongst agencies (including and especially fire and public works), and, more broadly, the question of how a series of crucial tactical decisions must be made in the absence of complete information (such as the level of toxic hazard). HKS Case Number 1767.0.

This series of short cases (see also UV0532) is written for use with high-school students. Da Click is a successful local rap band that has attracted the attention of the national recording company Becca Brothers. The series presents a multi-issue negotiation over the group's first recording contract. There are congruent, distributive, and integrative issues that provide an opportunity for creating and claiming value.

A U.K. real estate firm, required to adopt international accounting standards (IAS) by 2005, must change the reporting of its primary asset (investment property) from the revaluation model under U.K. GAAP to either the cost or fair-value model under IAS. This would have a number of effects on European investment property firms, including Land Securities.

All companies in a technology-intensive industry must worry about the development of their ecosystems and, in particular, the availability and cost of complementary assets. One strategy for promoting complements is to invest in them directly. Explores Intel's strategy to invest in complements through Intel Capital, perhaps the largest corporate venture capitalist in the world. Compares Intel's approach to the approaches of Panasonic, Microsoft, and Texas Instruments and asks how Intel should address its emerging areas of concern in the digital home. To examine and evaluate different strategies for investing in complementary assets.

This case provides a synopsis of three companies-Dell, Inc., IKEA, and Seven-Eleven (Japan)-that has developed a competitive advantage through channel management. Each case highlights the company's focus on customer relationships and how the channel is designed to maximize customer service. Examples illustrate how these companies think "outside the box" in their selection of channel partners and in the sequencing and assignment of the activities involved in product design, production, and transfer. They also illustrate how closely these companies work with their suppliers in order to coordinate activities and reduce channel cost. The net effect is a more efficient channel designed to serve the customer more effectively.

Environmentally preferable or "green" building uses optimal and innovative design to provide economic, health, environmental, and social benefits. In 1993 the U.S. Green Building Council (USGBC) was formed by a broad range of building industry stakeholders from the public, private, and nonprofit sectors. It is a committee-based, member-driven, and consensus-focused nonprofit coalition leading a national effort to promote high-performance buildings that are environmentally responsible, profitable, and healthy places to live and work. In 2000, USGBC created the Leadership in Energy and Environmental Design (LEED) rating system. That voluntary standard was intended to transform the building market by providing guidelines, certification, and education for green building. LEED is a comprehensive, transparent, and market-driven framework for assessing buildings' environmental performance. Compared to standard practice, "green" buildings can provide greater economic and social benefits over the life of the structures, reduce or eliminate adverse human health effects, and even contribute to improved air and water quality. Opportunities for reducing both costs and environmental impact include low-disturbance land use techniques, improved lighting design, high performance water fixtures, careful materials selection, energy efficient appliances and heating and cooling systems, and on-site water treatment and recycling. Less familiar innovations include natural ventilation and cooling without fans and air conditioners, vegetative roofing systems that provide wildlife habitat and reduce storm water runoff, and constructed wetlands that help preserve water quality while reducing water treatment costs.

MK Taxi Tokyo has developed a system to allow customers to use their mobile phones to find and contact the cab closest to them, bypassing the dispatch center. The system, called the Private Chauffeur Service (PCS), makes use of NTT's i-mode service, which essentially turns mobile phones into small Internet terminals. MK worked with NTT to develop an application that physically locates each PCS caller, determines the closest cab, and automatically connects the customer with the cab's driver for a voice call. At the time of the case, Maasaki Aoki, the head of MK Tokyo, wonders how best to expand and enhance the PCS service.