best-selling cases 2011 edition

ecch the case for learning

2011 edition

best-selling cases

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This bibliographical supplement presents the best-selling cases from the ecchcatalogue during 2010. It incorporates abstracts and full bibliographical detailssuch as setting, topics and details of any teaching note. Visit the ecch website atwww.ecch.com/bibs to view and download a pdf version of the bibliography.

Cases are listed under ten major subject categories, each with its own entry.Within each subject category, cases appear alphabetically by title. Teachingnotes do not have separate entries. Their reference numbers and lengthsappear within the corresponding case entry.

Case entry:

404-015-1KIDNAPPED IN COLOMBIA

Rarick, CABarry University, Florida

Dan and Melissa Woodruff, an Americancouple, moved to Medellin, Colombiawhen Dan is offered a position with his.....

Colombia; Textiles; 275 employees;2001

KidnappedColombiaPolitical risk

9ppPublished sources404-015-8 (4pp)

Reference numberTitle

Author(s)Author’s institution

Abstract

Setting

Topics

LengthSourceTeaching note (length)

Reference numberThis is the number to use when ordering the item.TitleCases in a series are generally denoted by the use of (A), (B), (C) etc.Author(s)The individual(s) listed either wrote or supervised the writing of the case.Author’s institutionWhere there are multiple institutions, their names will appear directly under the corresponding author(s).AbstractThe abstract summarises the content of the case and its teaching objectives.SettingThis provides information on the geographical location of the subject of the case, the typeof industry, the size of the organisation and the year(s) of the case event.TopicsThese are key words, subjects and issues within the case which are supplied by theauthor(s).LengthThe length is given either in pages or in minutes if a video; if the item is a CD-ROM this willbe indicated here; s/w means software.SourceThis relates to the main source of data:Field researchPublished sourcesGeneralised experienceTeaching note (length)If a teaching note is available for the case its reference number will appear here followedby its length in pages in brackets.

How to use the case bibliography

Visit our website at www.ecch.com

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Finding products

Visit the ecch website to search for relevant cases, management articles andbook chapters from the ecch collection of over 69,500 items. Once you haveidentified the item you are interested in, you can preview it on-line, if authorised,or order a paper inspection copy.

Advanced search helps you identify an item that most closely meets yourrequirements. Refine your search by selecting up to four of the followingoptions:

• reference number • abstract• title • topic• author • industry• author’s institution • geographic location

Additional specific options (eg publication year and teaching note availability)may also be selected. The more criteria you select, the more refined your searchwill be.

Receiving the latest information

On the ecch website you can find out about the many services ecch provides tosupport the writing and teaching of cases. You can also subscribe to:

• Monthly e-mail updatesA free service giving details of cases, management articles and book chaptersregistered during the preceding month. This service is the most comprehensiveof its kind worldwide and can be tailored to cover the subject areas you areinterested in. To subscribe visit www.ecch.com/emailupdates

• Case method trainingSelect to receive information on the latest case writing and teaching workshops.For further details visit www.ecch.com/workshops

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ecch Case Awards 2011

Overall winner

9-710-467APPLE INC IN 2010David B Yoffie and Renee KimHarvard Business School

Economics, Politics and Business Environment

9-910-410PHILIPS VERSUS MATSUSHITA: THE COMPETITIVE BATTLE CONTINUESChristopher A BartlettHarvard Business School

Entrepreneurship

9-808-128FACEBOOK'S PLATFORMSMikolaj Jan Piskorski, Thomas R Eisenmann, David Chen and Brian FeinsteinHarvard Business School

Ethics and Social Responsibility

9-906-414IKEA'S GLOBAL SOURCING CHALLENGE: INDIAN RUGS AND CHILDLABOR (A)Christopher A Bartlett, Vincent Dessain and Anders SjömanHarvard Business School

Finance, Accounting and Control

A07-08-0008SOUTHWEST AIRLINES 2008Andrew C InkpenThunderbird School of Global Management

Human Resource Management / Organisational Behaviour

408-083-1RICHARD MURPHY AND THE BISCUIT COMPANY (A)Michael Jarrett and Kyle IngramLondon Business School

Knowledge, Information and Communication Systems Management

909-018-1KNOWLEDGE MANAGEMENT INITIATIVES AT IBMVivek Gupta, Indu Perepu and Sachin GovindIBS Center for Management Research

Continued overleaf

ecch Case Awards 2011 (continued)

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Marketing

IMD-5-0702XIAMETER: THE PAST AND FUTURE OF A 'DISRUPTIVE INNOVATION'Kamran Kashani and Inna FrancisIMD

Production and Operations Management

IMD-6-0315LEGO: CONSOLIDATING DISTRIBUTION (A)Carlos Cordon, Ralf W Seifert and Edwin WellianIMD

Strategy and General Management

9-910-036GOOGLE INC.Benjamin Edelman and Thomas R EisenmannHarvard Business School

Case writing competition 'Hot topic':Renewable and sustainable energy, technology and development

IMD-4-0302PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITYGeorge Kohlrieser, Francisco Szekely and Sophie CoughlanIMD

Case writing competition: New case writer

110-062-1 and 110-063-1TANGO vs VICTOR (A & B)Franco Quillico and Gregory MoscatoInternational University of Monaco

Outstanding contribution to the case method

Professor Kamran KashaniIMD

For more information visit www.ecch.com/caseawards

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Case method and specialist management disciplines

International businessService management

23 ppPublished sources5-693-082 (12pp)

9-803-069FOUR SEASONS GOES TO PARIS: ‘53PROPERTIES, 24 COUNTRIES, 1PHILOSOPHY’

Hallowell, RBowen, DKnoop, CI

Harvard Business Publishing

Illustrates how Four Seasons manageshotels in countries with strong anddistinct national cultures. Focuses onhow the chain meets its exacting servicestandards in a variety of settingsworldwide, with special attention onFrance. The teaching purpose is toexplore the role of organizational valuesand culture in a global strategy, leadingto the development of a frameworkillustrating what differs and what remainsconstant in a service organization acrossmultiple national settings.

FranceGlobalizationHotels and motelsHuman resources managementOrganizational behaviorService managementValues

24 ppField research5-803-173 (9pp)

9-181-027FREEMARK ABBEY WINERY

Krasker, WSHarvard Business Publishing

Freemark Abbey must decide whether toharvest in view of the possibility of rain.Rain could damage the crop but delayingthe harvest would be risky. On the otherhand, rain could be beneficial and greatlyincrease the value of the resulting wine.This decision is further complicated bythe fact that ripe Riesling grapes can bevinified in two ways, resulting in twodifferent styles of wine. Their relativeprices would depend on the uncertainpreference of consumers two years later,when the wine is bottled and sold.

NegotiationsPrivatization


9-894-011COLONIAL BROADCASTINGCOMPANY

Wu, GHarvard Business Publishing

Colonial Broadcasting Co (CBC), a majorAmerican television network, mustdetermine whether fact-based televisionmovies garner higher Nielsen ratingsthan movies based on fictional concepts.Furthermore, CBC must decide whetherto accept a fixed fee advertising contractor a sliding scale contract. Illustrates howregression can be used to determine therelative merits of two different types oftelevision movies and for evaluating twodifferent advertising contracts.

Decision makingEntertainment industryForecastingRegression analysis

9 ppGeneralised experience5-896-040 (10pp)

9-693-013EURO DISNEY: THE FIRST 100 DAYS

Schlesinger, LLoveman, GAnthony, RN


The Walt Disney Co theme parkshistorically have thrived on the basis of aformula stressing excellent customerservice and a magnificent physicalenvironment. The formula has provensuccessful in Japan, as well as the UnitedStates. With the controversial opening ofEuro Disney in France, however, there hasbecome reason to doubt theinternational appeal of the formula. Thecase documents issues involved withEuro Disney. Examines the transferabilityof a successful service concept acrossinternational boundaries.

Paris, France; Entertainment; Large,employees 16,000, $1 billion revenues;1992

Entertainment industryFrance

9-673-057BENIHANA OF TOKYO

Sasser Jr, WEKlug, JR


Discusses the development of a chain of‘theme’ restaurants. The student is askedto evaluate the current operatingstrategy and suggest a long-termexpansion strategy.

1972Corporate strategyExpansionMultinational corporations


9-895-004CEMENTOWNIA ODRA (A)

Holle, AWu, G


The Polish government is privatizingCementownia Odra, a cement firm.Tomasz Budziak, a team leader, isnegotiating on behalf of the PolishMinistry of Privatization. Hans-HugoMiebach, owner of a German cementcompany, has made an attractive offer,but a deal hinges on several issuesconcerning potential liabilities, a Polishtax credit, land acquisition, and theimport of refuse-derived fuel. The case isdesigned as a simulation in whichstudents actually negotiate, either asBudziak or Miebach. More specifically, thesimulation provides students withexperience in deal structuring andcrafting agreements with contingentarrangements. Provides generalinformation on the Odra negotiation. Thesimulation involves a negotiation inwhich the need to make contingentarrangements arises naturally. For bothBudziak and Miebach, there isuncertainty, sometimes quite substantial,about the extent of liabilities, thelikelihood of a tax credit, and thepossibility of acquiring requisite quarryland. Students learn an important lesson:differences in beliefs about the outcomeof events can be exploited for joint gains.

Building materials industryContractsEastern Europe

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9-683-068SHOULDICE HOSPITAL LIMITED

Heskett, JLHarvard Business Publishing

Various proposals are set forth forexpanding the capacity of the hospital. Inassessing them, serious considerationhas to be given to the culture of theorganization and the importance ofpreserving it in a service delivery system.In addition to issues of capacity andorganizational analysis, describes a well-focused, well-managed medical servicefacility that may well point the way tofuture economies in the field.

Ontario; 1982Organizational behaviorSocial enterpriseMarket segmentationExpansionQuality managementCapacity planningWord-of-mouth marketing


9-805-002SHOULDICE HOSPITAL LIMITEDAbridged version

Heskett, JLHallowell, R


A hospital specializing in herniaoperations is considering whether andhow to expand the reach of its services.The teaching purpose is to teach inservice management, management ofoperations, and business strategycourses.

CanadaCapacity planningExpansionHospital administrationOrganizational behaviorServicesSocial enterprise

14 ppField research

UVA-QA-0389MARRIOTT ROOMS FORECASTING

Bodily, SEWeatherford, L

Darden Business Publishing

The manager of a large downtown hotelhas to decide whether to accept 60additional reservations or not. If sheaccepts, she will be overbooked and facecertain costs if all the reservations showup. She must forecast, based on historicaldata, how many of the people holdingreservations will show up and thendecide whether to take the additionalbookings after taking into account thecost involved. The case is used to treatseasonality and exponential smoothingin time-series forecasting.

Large city; Hotel; $5 billion in sales; 1988Decision theoryForecastingDiverse protagonist, femaleDiversity caseManagement of service industriesTime seriesDiversity

5 ppField researchUVA-QA-0389TN (9pp)

California; Winery; Mid-size; 1980BeveragesDecision analysisDecision treesManagerial economics


9-895-007HANS-HUGO MIEBACH Supplement

Wu, GHolle, A


Provides private information for studentsassuming the role of Hans-HugoMiebach in a simulated negotiation ofthe sale of Cementownia Odra. Must beused with: (9-895-004) ‘CementowniaOdra (A)’.

Europe, Eastern; Building materialsindustries

ContractsNegotiationsPrivatization


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9-895-006TOMASZ BUDZIAK Supplement

Holle, AWu, G


Provides private information for studentsassuming the role of Tomasz Budziak in asimulated negotiation of the sale ofCementownia Odra.

Building materials industryContractsEastern EuropeNegotiationsPrivatization


9-601-163THE RITZ-CARLTON HOTEL COMPANY

Sucher, SJMcManus, SE


In just seven days, the Ritz-Carltontransforms newly hired employees into‘Ladies and Gentlemen Serving Ladiesand Gentlemen’. The case details a newhotel launch, focusing on the uniqueblend of leadership, quality processes,and values of self-respect and dignity, tocreate award-winning service.

District of Columbia; Lodging industry;18,000 employees, $1.5 billion revenues;2000

BrandsChange managementHuman resources managementInnovationOperations managementOrganizational behavior


9-801-393TO HELL WITH THE FUTURE, LET’SGET ON WITH THE PAST: GEORGEMITCHELL IN NORTHERN IRELAND

Sebenius, JKCurran, DF


Examines the strategies and tactics usedby US Negotiator George Mitchell duringhis two-year tenure as chairman of theall-party talks in Northern Ireland. Hisefforts culminated in the signing of thehistoric Good Friday Accords.

Northern Ireland; 1996-1998International relationsNegotiationsPolicy making

46 ppPublished sources

9-694-023SOUTHWEST AIRLINES: 1993 (A)

Hallowell, RHeskett, JL


Southwest Airlines, the only major USairline to be profitable in 1992, makes adecision as to which of two new cities toopen, or to add a new long-haul route.Provides windows into Southwest’sstrategy, operations, marketing, andculture.

Texas; 1993Corporate strategyOperations researchService management

29 ppField research

9-910-419SOUTHWEST AIRLINES: IN ADIFFERENT WORLD

Heskett, JLSasser, E


This is the fourth in a 35-year series ofHBS cases on an organization that haschanged the rules of the game globallyfor an entire industry by offering bothdifferentiated and low-price service. Thefocus of the case is on whetherSouthwest Airlines should buy gates andslots to initiate service to New York’sLaGuardia airport, which does not fit theairline’s profile for cost, ease of service,and other factors. The bigger issue ishow the organization should deal withcompetition that has successfullyemulated more and more of what it doesin an operating environment that haschanged significantly. Hence thesubtitle, which was suggested by HerbKelleher, Southwest’s Chairman and CEO,Emeritus.

New York, Texas; 35,000 employees, grossrevenue $10 billion; 2008

OperationsService management


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9-797-085ENRON DEVELOPMENTCORPORATION: THE DABHOL POWERPROJECT IN MAHARASHTRA, INDIA(A) (Abridged)

Wells, LTHarvard Business Publishing

A large, lucrative power plant isnegotiated for construction/operation byan American power company in India’sevolving privatized power sector. Theprocess of incorporating the project iscaptured in this case. The Americancompany will own and operate the plantin India, which will sell power to India.

Business government relationsEnergyIndiaManagement of changeMarket entryNatural gasNegotiationsPrivatization

15 ppField research

9-700-047HITTING THE WALL: NIKE ANDINTERNATIONAL LABOR PRACTICES

Spar, DLBurns, JL


In the mid-1990s Nike, one of the world’smost successful footwear companies, ishit by a spate of alarmingly bad publicity.After years of high-profile mediaattention as the company that can ‘justdo it’, Nike is suddenly being portrayed asa firm that relies on low-cost, exploitedlabor in its overseas plants. Nike officialsvigorously deny the charges, claimingthat Nike has no control over theindependent contractors whomanufacture Nike shoes. But the activistswill not retreat. Eventually, Nike mustlearn to deal with the activists’ claims andwith the tangle of conflicting data thatsurrounds the concept of a ‘fair’ or ‘living’wage.

United States, Indonesia, Vietnam; 16,000employees, gross revenue: $9 billionrevenues; 1991-1999

Labor relationsDeveloping countriesBusiness government relationsActivistsInternational operationsEthics

Brazil; 2001-2006MacroeconomicsBusiness conditionsEconomic developmentInternational trade


P22ECHELON IN EUROPE

Baron, DPStanford Business School

This case focuses on the non-marketstrategy of a high technology companyto influence European standard settingfor control networks. EchelonCorporation is a small, privately-heldcompany located in Palo Alto, CA thatproduces open architecture controlnetworks - communications systems thatintegrate disparate pieces of electronichardware over some distance. Thesesystems have applications ranging fromautomated assembly lines, to patientmonitoring in hospitals, to fly-by-wiresystems. This case addresses standardsetting in Europe. Echelon’s Europeancompetitors, led by Siemens, sought toestablish application-specific standardsthat would limit the demand forEchelon’s open architecture technology.Echelon had followed a strategy ofblocking Siemens’ attempts in theEuropean Union standard-setting bodiesby enlisting the support of its customersin countries such as the United Kingdom.The absence of standards caused by thisblocking strategy was detrimental,however, to the development of themarket for control network applications.Echelon had to determine whether itshould continue with its current strategy,or work directly to have openarchitecture standards established, orinitiate discussions with Siemens andother companies to develop openarchitecture standards jointly. Poses thestrategy issue and asks how the strategyshould be implemented.

Europe; Electronics; 1996-1997Government and businessEuropean economic communityStrategy formulationGovernment regulation

6 ppField research

9-792-060ACID RAIN: THE SOUTHERNCOMPANY (A)

Reinhardt, FLHarvard Business Publishing

The Southern Co, an electric utility, isplanning its compliance with the 1990amendments to the Clean Air Act. TheAct established a system of tradeablepermits for sulfur dioxide emissions. Thecompany must decide whether to installpollution control equipment andgenerate excess permits for sale to otherfirms, or to emit larger quantities of sulfurdioxide, save capital costs, and purchasepollution permits. Can be used to teachdiscounted cash flow analysis of a makeversus buy decision. Also raises issues ofexpected cost minimization, questions ofeconomic and political uncertainty, andthe value of flexibility.

United States; Electric utilities; Large, $8billion revenues; 1992

Buy or make decisionsElectric powerEnvironmental protectionFinancial managementFinancial planningPollution controlPublic utilitiesRates of return


9-707-031BRAZIL UNDER LULA: OFF THEYELLOW BRIC ROAD

Musacchio, AGilbert, CAmorim, T


Covers President Lula’s challenges toreduce ‘Brazil cost’ and grow like otherBRIC countries (Brazil, Russia, India, andChina). Experts agreed that for Brazil togrow like other BRIC countries, theBrazilian government would have toreduce the cost of doing business in thecountry (‘Brazil cost’). At the same time,President Lula’s challenge is to developprograms that accelerate growth withoutundermining the progress achieved inreducing inequality and poverty. Can theBrazilian government reverse inequalityand grow at the same time? Whatdevelopment strategy should Lula followin his second term? Does Brazil belong inBRIC? What do these countries have incommon?

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Must be used with: (9-704-040) Journey toSakhalin: Royal Dutch/Shell in Russia (A).

EnergyForeign investmentGlobalizationStrategic alliances


9-707-038JOURNEY TO SAKHALIN: ROYALDUTCH/SHELL IN RUSSIA (C)Supplement

Abdelal, RVandamme, MN


Must be used with: (9-704-040) Journey toSakhalin: Royal Dutch/Shell in Russia (A).



9-910-410PHILIPS VERSUS MATSUSHITA: THECOMPETITIVE BATTLE CONTINUES

Bartlett, CAHarvard Business Publishing

Describes the development of the globalstrategies and organizations of two majorcompetitors in the consumer electronicsindustry. Over four decades, bothcompanies adapt their strategic intentand organizational capability to matchand counter the competitive advantageof the other. The case shows how each isfaced to restructure as its competitiveadvantage erodes.

Europe; 120,000 / 300,000 gross revenue:$30 billion / $90 billion; 1970 to 2009

Global businessInternational businessOrganizational structureCore competenciesCompetitionExecutionStrategy


number of challenges, however. Aproduction sharing agreement (PSA) - acommercial contract between theforeign investor and a host governmentthat replaces the country’s tax andlicense regimes for the life of the project -governs Sakhalin II. Although Sakhalin II’sPSA enjoys the status of Russian law,other Russian laws conflict with the termsof the PSA. PSAs have also becomecontroversial within Russia. After severalyears of waiting in vain for ‘legalstabilization’, Shell and SEIC executivesmust decide whether the project shouldgo forward.

Russia; Energy; 90,000 employees, $236billion revenues; 1991-2003


27 ppField research

9-706-013JOURNEY TO SAKHALIN: ROYALDUTCH/SHELL IN RUSSIA (B)Supplement

Abdelal, RTarsis, I


Wages and salariesWorking conditions


9-704-040JOURNEY TO SAKHALIN: ROYALDUTCH/SHELL IN RUSSIA (A)

Abdelal, RHarvard Business Publishing

Operations of Royal Dutch/Shell in Russiaincluded a strategic alliance withGazprom, the country’s natural gasmonopoly, the development of theSalym oil fields in Siberia, and a smallretail refilling network in St Petersburg.Focuses on the Sakhalin II project.Sakhalin II is the reason for the existenceof the Sakhalin Energy InvestmentCompany (SEIC), owned by RoyalDutch/Shell (55%), Mitsui (25%), andMitsubishi (20%). Worth approximately$10 billion, the second phase of SakhalinII would be the single largest investmentdecision in the history of RoyalDutch/Shell, as well as the single largestforeign direct investment in Russia’shistory. Sakhalin II would also be thelargest integrated oil and gas project inthe world. The project, however, faces a

The annual ecch Case Awardsinclude two case writingcompetition categories:

• Hot topic:Social Media and Change

• New case writer:for a first teaching case.

Submission deadline:14 October 2011

Prize: €1,500 per category

www.ecch.com/casecompetition

case writing competition

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9-700-135THE GERMAN FINANCIAL SYSTEM IN2000

Schaede, UHarvard Business Publishing

Describes the evolution and currentsituation of Germany's financial system.Based on a discussion of the Germaneconomy in the post-war period, the casehighlights the impact of financialglobalization and EU policies onGermany's domestic system of bankingand finance, corporate governance, andbanking regulation.

Banking industryBusiness government relationsDeregulationGermanyRegulation


197-006-1WILL BIDDIFORD’S TRAMS MAKE ARETURN?

Rickard, SCranfield School of Management

The purpose of this case study is todemonstrate how a basic understandingof demand and cost curves can aidfundamental business decisions.

United States; Transport; Small; 1997DemandCostsElasticityPrice discriminationProfitsFixed costsVariable costs

8 ppGeneralised experience

IMD-2-0070THE BRENT SPAR PLATFORMCONTROVERSY (A)

Steger, UKilling, PSchweinsberg, MWinter, M

IMD

This is the first of a three-case series (IMD-2-0070 to IMD-2-0072). In April 1995Greenpeace boarded a Shell oil platformnamed ‘Brent Spar’ in the North Sea toprotest its scheduled disposal in theAtlantic. This action took the operatorShell Expro (a joint venture between Shelland Esso) totally by surprise, as this wasthe first protest of any kind that Shellmanagement had encountered. The casedescribes the reasons why Shell wantedto dispose of the Brent Spar Platform inthe deep sea and why Greenpeacerejects these plans.

Germany, UK, Netherlands; Oil;Multinational; April 1995

Stakeholder managementCrisis managementEnvironment

15 ppPublished sourcesIMD-2-0070-T (8pp)

IMD-2-0071THE BRENT SPAR PLATFORMCONTROVERSY (B)

Steger, UKilling, PSchweinsberg, MWinter, M

IMD

This is the second of a three-case series(IMD-2-0070 to IMD-2-0071). The protestof Greenpeace against the deep-seadisposal of the Brent Spar leads to amajor consumer boycott against Shell.Within weeks, Shell suffered a significantloss of market share in Central Europeand faced protests from the highestpolitical leaders across Europe. Despite allthis Shell continues towing the platformto its planned disposal site in the Atlantic.Meanwhile at sea strong fights are takingplace between Shell and Greenpeace.

Germany, UK, Netherlands; Oil;Multinational; April 1995

Stakeholder managementCrisis managementEnvironment

13 ppPublished sourcesIMD-2-0070-T (8pp)

9-703-040SINGAPORE, INC

Vietor, RHThompson, EJ


In early 2003, Prime Minister Goh ChokTong is assessing Singapore’sdevelopment strategy - tax cuttingcombined with an industrial policyfocused on six ‘clusters’, includingbiomedical sciences. After 36 years ofstupendous growth, Singapore hasslowed down and faces intensecompetition in exports and foreign directinvestment, especially from China. Is itsnew strategy the right choice? This caseexamines several key aspects ofSingapore’s growth, includingorganizational / cultural arrangements,the savings / investment balance, andtotal factor productivity growth. May beused with: (9-794-051) ‘Accounting forProductivity Growth’.

Singapore; 3.2 million population, US$85billion revenues; 2001-2002

Country analysisEconomic developmentGlobalizationIndustrial policyMacroeconomicsProductivity


AD-0268-ESTEPHEN’S T-SHIRTS

Arino, MAIESE Business School

A family firm that produces and sellsprinted T-shirts at events and festivals inmid-sized towns must decide how manyT-shirts to produce for an upcomingevent. Three possible scenarios aredefined, each with a different probability.This case was previously numbered 602-074-1.

Decision analysisProductionUncertainty

2 pp

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Entrepreneurship

how to share risk, when and how to exit);and (2) to compare and analyse offersfrom different private equity firms, as wellas different offers from the same firmmade in the course of negotiations.

Canada; Music production anddistribution; CAD$27 million (approx 15million euros) annual revenues; 1999-2004

Private equityEntrepreneurshipExpansion financingTerm sheetValuationExit


804-072-1CUMBERLAND ENTERTAINMENT (B):THE REVISED OFFER

Zott, CLeland, A

INSEAD

This is the second of a four-case series(804-071-1 to 804-074-1). CumberlandEntertainment, a niche music producer,was looking for capital to finance itsplanned expansion. CEO Tom Smithentered into negotiations with privateequity firms, and struck an agreementthat turned out to be incomplete. As aresult, serious problems arose betweenfinancial investors and management. Thecase series describes how the partiesdealt with these problems as theirrelationship evolved. The teachingobjectives are: (1) to highlight andanalyse the dynamic nature ofentrepreneur-venture capitalistrelationships, and to address some of thekey issues that might arise over time (eg,how to share risk, when and how to exit);and (2) to compare and analyse offersfrom different private equity firms, as wellas different offers from the same firmmade in the course of negotiations.

Canada; Music production anddistribution; CAD$27 million (approx 15million euros) annual revenues; 1999-2004

Private equityEntrepreneurshipExpansion financingTerm sheetValuationExit


9B08M041CORAL DIVERS RESORT (REVISED)

Beamish, PWNeupert, KESchotter, A

Richard Ivey School of Business

The owner of a small scuba divingoperation in the Bahamas is reassessinghis strategic direction in the light ofdeclining revenues. Among the changesbeing considered are shark diving, familydiving, exit, and shifting operations toanother Caribbean location. Theseoptions are not easily combined, nor arethey subtle. The case is intended toprovide a work-out on the relationshipbetween strategy, organization andperformance, and how changes instrategy will dramatically affect theorganization. The case also highlights theimportance of understandingdemographic changes as part of anenvironmental analysis. (A nine-minutevideo can be purchased with this case,video 7B08M041.)

Bahamas; Miscellaneous services; Small;2008

Strategic changeServicesSmall businessIndustry analysis

19 ppPublished sources8B08M41 (14pp)

804-071-1CUMBERLAND ENTERTAINMENT (A):EXPANDING WITH PRIVATE EQUITY?

Zott, CLeland, A

INSEAD

This is the first of a four-case series (804-071-1 to 804-074-1). CumberlandEntertainment, a niche music producer,was looking for capital to finance itsplanned expansion. CEO Tom Smithentered into negotiations with privateequity firms, and struck an agreementthat turned out to be incomplete. As aresult, serious problems arose betweenfinancial investors and management. Thecase series describes how the partiesdealt with these problems as theirrelationship evolved. The teachingobjectives are: (1) to highlight andanalyse the dynamic nature ofentrepreneur-venture capitalistrelationships, and to address some of thekey issues that might arise over time (eg,

808-035-1BEYOND PRODUCTS

Manigart, SVlerick Leuven Gent ManagementSchool

Peter Van Riet, a young entrepreneur andenthusiastic snowboarder, hasdeveloped a revolutionary snowboardbinding for which he holds patent rightsin Europe and the USA. A first prototypehas already been successfully tested. Hisbusiness and marketing plan show thatthere is room for a new binding,introduced on the fragmentedsnowboard binding market by a smalland young company. He targets theEuropean and North-American marketsin the first place, expanding to a globalbrand as the company takes off. He willmainly sell through smaller nationaldistributors. His goal is to develop thecompany over time into a full-fledgedsnowboard branch, not only offeringbindings but also clothing andaccessories. Having invested all his timeand savings of approximately £350,000 inproduct development, patent rights andinitial marketing expenses, he is currentlylooking for a £300,000 cash investmentby a syndicate of four business angelswho he has found through a localbusiness angel network. This money isneeded for further productdevelopment, prototyping and testing,and for marketing and sales. The keyissues that he cannot resolve is whatequity percentage would be fair to thebusiness angels, without diluting thefounders’ position too much and alsocompensating them honestly for theirefforts until now? In order to answer thisquestion, he has developed a fullfinancial plan with profit and loss, andcash flow statements. Moreover he hasgathered information on the relativevaluation of quoted companies in thesports apparel business.

Belgium; Sports apparel; Small (start-up);2006

FinancingStart-upBusiness angelsValuationEquity stakeHigh techSnowboard bindingsInvestment


8

Entrepreneurship

in handling family dynamics such asdecisions regarding succession. With thiscase family business owners can learnimportant management lessons thathelp them in their strategic decision-making process and prepare them forpossible developments in their ownbusiness. Classes in which this case canbe applied ideally are introductorylectures on family business managementor general corporate governance classes.This case can also be applied in anorganisational theory and a principal-agent and stewardship context, as thereis the possibility to discuss and focus onthe incentive problem for different typesof managers, namely external ones orfamily members.

Germany; Precious metals, hightech; 8.3billion euros; September 2006

SuccessionCorporate governanceFamily governanceFamily-owned companyFamily dynamicsStrategyEntrepreneurshipFamily firm


9B09M019IMAX: LARGER THAN LIFE

Nair, ARichard Ivey School of Business

IMAX was involved in several aspects ofthe large-format film business:production, distribution, theatreoperations, system development andleasing. The case illustrates IMAX’s use ofits unique capabilities to pursue afocused differentiation strategy. IMAXwas initially focused on large format filmsthat were educational yet entertaining,and the theatres were located ininstitutions such as museums, aquariumsand national parks. However, IMAX foundthat its growth and profitability wereconstrained by its niche strategy. Inresponse, IMAX sought to grow byexpanding into multiplexes. Additionally,IMAX expanded its film portfolio byconverting Hollywood movies, such asHarry Potter and Superman, into thelarge film format. This shift in strategy wassupported by the development of twotechnological capabilities - DMR forconversion of standard 35 mm film intolarge format, and DMX to convert

9-384-079HEATHER EVANS

Stevenson, HHRoberts, MJ


Focuses on the efforts of Heather Evans, asecond-year MBA student, and herattempts to start her own dress business.Examines the business plan and theprocess of acquiring control over thefinancial and human resources necessaryto implement the plan.

New York, NY; Fashion industry; Start-up,3 employees; 1982-1983

Business plansDevelopment stage enterprisesEntrepreneurial managementFinancingPlanning


807-052-1HERAEUS: FAMILY GOVERNANCE FORA GLOBAL COMPANY

Eiben, JMay, PDieterich, KFellhauer, SFranke, ABernier, JF

WHU Otto Beisheim School ofManagement

This case covers the process ofestablishing a family constitution for oneof the biggest German entrepreneurialfamilies, owning the Heraeus Holdinggroup of companies. Students have toanalyse possible sources of conflict dueto family ownership, suggest a possibledesign for the process of establishing afamily constitution (format, involvedpersons, timeframe) as well as evaluatingpossible solutions regarding theupcoming succession in the company’smanagement as the family membercurrently in office approaches retirement.The case targets undergraduate businessschool students in their last year ofstudies as well as young family businessowners who are interested in what issuesthey might be facing in the familycontext of their business. With this case,the students will learn the differencebetween the management of a familyand non-family business. The caseintroduces them to the challenges ofbusiness strategy and the success factors

807-016-1FRESH TRADING (A)

Bates, JMitchell, JRivers, O

London Business School

This is the first of a two-case series (807-016-1 and 807-017-1). ‘Could you turn thelight on?’ Adam Balon asked hiscolleague Jon Wright. Wright, Balon andtheir friend Richard Reed had assembledin Balon’s office at Virgin Cola to begindrafting the plan for their businessventure, a new brand of fresh fruitsmoothie drinks. It was a typical Englishlate summer afternoon - heavily overcast,with the promise of rain. In the steadilyincreasing gloom it was becomingimpossible to read the mass of datagathered on the desk in front of them.‘You think we need to cast light on theproblem?’ joked Reed. In truth, each ofthe three knew it would take more thanelectricity to illuminate the difficultiesthat confronted them. They had beenresearching their idea for almost sixmonths, and at the outset they had setthemselves some ambitious goals. ‘Thequality of our closest rivals’ product is notas good as you would make at home, noras good as the smoothies you can buy inthe USA,’ they had said to one another.‘We’ll beat them on taste, and matchthem on price.’ But the three friends’analysis now seemed to show that if theystuck to those targets they wouldstruggle to meet a third, no less crucial,objective. ‘If you’re going to survive you’llneed to hit gross margins of 40 percent -that’s the standard for the FMCG (fastmoving consumer goods) sector,’ a seniorcolleague of Wright’s at Bain, themanagement consultancy, had toldthem early on. But every time that Wrighthad run a spreadsheet model, themessage had seemed to be the same:they would not be able to achieve theirfinancial goals and remain true to theirother aspirations. This left the three withsome stark choices. Should they plan toincrease price, or lower quality? Or wasthere another solution to enable them toget this business off the ground?

UK; 1998EntrepreneurshipBusiness plansEntrepreneurial financeEntrepreneurial marketing

20 ppField research

standard multiplexes to IMAX systems.The shift in strategy was partiallysuccessful, but carried the risk of IMAXlosing its unique reputation.

United States, Canada; Motion pictures -TV, radio and video, amusement andrecreation services; Small; 2009

Strategic positioningIndustry analysisCorporate strategyBusiness policy

18 ppPublished sources8B09M19 (11pp)

806-015-1MARSTON VENTURE MANAGEMENT

Mullins, JWLloyd, J


Marston Venture Management operatedas the venture capital arm of a leadingEuropean business school and manageda growing portfolio of seed and pre-seedinvestments. Four new proposals werenow being evaluated: (1) ProCom; (2)Oxiden; (3) Darian Holdings; and (4)Glencoren, each operating in differentsectors and each at different stages oftheir product and business development.

Charles Poulton, Marston’s newestInvestment Executive, had been asked forhis view of which of these fourbusinesses represented the mostpromising entrepreneurial opportunity.He knew that rival venture capitals hadbeen approached - Marston would needto act quickly if it wanted to get involved.It was up to Poulton to decide which oneto prioritise.

London; Venture capital; Less than 10employees; 2002

EntrepreneurshipVenture capitalOpportunity assessment

4 ppField research

802-014-1PHARMA UK (A): THE TRANSDERMALTECHNOLOGY

Birkinshaw, JLondon Business School

This is the first of a two-case series (802-014-1 and 802-015-1). This case examinesthe decision by the UK subsidiary ofPharma (a Swiss pharmaceuticalcompany) to develop a new technologyfor transmitting drugs through the skin,despite the absence of support from theparent company’s R&D labs. The issue

facing the managing director of the UKsubsidiary is whether to continue withthe project in the face of resistance fromHQ, or stop.

UK, Switzerland; Pharmaceutical; Large;1993-1994

MultinationalSubsidiaryEntrepreneurship


802-015-1PHARMA UK (B): PROPOSAL TO THEEUROPEAN MARKETING BOARD

Birkinshaw, JLondon Business School

This is the second of a two-case series(802-014-1 and 802-015-1). This casefocuses on the European MarketingBoard of Pharma, and the decisionwhether to approve expenditure on theUK’s subsidiary’s transdermal technologyor not.

UK, Switzerland; Pharmaceutical; Large;1993-1994

MultinationalSubsidiaryEntrepreneurship


9-386-019R&R

Stevenson, HHMossi, J


Outlines alternative mechanisms forgetting into business. Shows the meansby which an experienced entrepreneurcan gain control over the necessaryresources in order to lower the fixed costsof business entry. Provides a mechanismfor discussing the role of experience,credibility, and contacts in thedevelopment of a non-business venture.

New York; $3 billion sales; 1984Capital costsEntrepreneurshipDevelopment stage enterprises

18 ppField research5-386-160 (4pp)5-389-029 (6pp)

Entrepreneurship

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9B08M054THE ASCENDANCE OF AIRASIA:BUILDING A SUCCESSFUL BUDGETAIRLINE IN ASIA

Lawton, TDoh, J


In September 2001, Tony Fernandes lefthis job as vice president and head ofWarner Music’s Southeast Asianoperations. He reportedly cashed in hisstock options, took out a mortgage onhis house, and lined up investors to takecontrol of AirAsia, a struggling Malaysianairline. Three days later, terroristsdestroyed the World Trade Center.Despite the negative aftermath of the 9-11 attacks, by 2003, AirAsia haddemonstrated that the low-fare modelepitomized by Southwest and JetBlue inthe United States, and by Ryanair andeasyJet in Europe, had great potential inthe Asian marketplace. Now, Fernandeshad to make plans to ensure that AirAsiamaintained its momentum whileconsidering the influx of new entrantsinto the low-fare segment of the airlineindustry in Asia.

Asia; Air transportation; Medium; 2001-2008

International businessCompetitive strategyStrategic positioningEntrepreneurial business growth

16 ppField research8B08M54 (8pp)

806-050-1THE MORAL COMPASS: VALUES-BASED LEADERSHIP AT INFOSYS

Kets de Vries, MFAgrawal, AFlorent-Treacy, E

INSEAD

This case delves into the operationaldetails of values-based leadership. Itaddresses core issues including: (1) howdo visionary leaders set directions andclear and visible values for the firm? (2)how do they measure performance and(3) how do they balance the needs of allstakeholders? It explains how: (1) thefounding entrepreneurs stimulatedinnovation; (2) how knowledge andcapabilities at Infosys are built from topdown and bottom up; (3) howsustainability is ensured through aleadership system; and (4) how strategies

for continued growth are deployed. Itanalyses the way behaviour and cultureinfluence the course of anentrepreneurial organisation’sdevelopment. The teaching objectivesare to discuss and understand leadershipchallenges, including: (1) the charismaticand architectural roles of a leader; (2) thecreation and maintenance of integratedvision, values and performanceexpectations; (3) the creation of anenvironment that encourages ethicalbehaviour and high performance; (4) theidentification of strategies for growth -specifically management of innovationand its link to leadership; and (5)transition in entrepreneurial start-ups -passing on the founders’ values in thenext phase in the organisation’s life cycle.

India; Information technology; 52,000employees, US$18 billion marketcapitalisation; 2006

Leadership valuesRole modelsEntrepreneurshipIndiaInformation technology (IT)Indian leadership stylesBusiness ethics


9-803-096ZIPCAR: REFINING THE BUSINESSMODEL

Hart, MMRoberts, MJStevens, JD


Zipcar is a start-up organized around theidea of ‘sharing’ car usage via amembership organization. This casedescribes several iterations of the Zipcarbusiness model and financial plan. Theseiterations include a very early version anda version developed just prior to thelaunch of the business, as well as datafrom the first few months of operations.Students are called on to analyze theunderlying economics and businessmodel for the venture and to discoverhow these assumptions are holding upas the business is actually rolled out. Theteaching purpose is to understand thenotion of a business model and uniteconomics and flow through the impactof actual operating results.

Boston, MA; Car and truck rental industry;Start-up, $1 million revenues, 5employees; 1999-2000

Business modelsBusiness plansEntrepreneurshipFinancingGrowth strategyLogosOperating costsWireless technologiesWomen in business

20 ppPublished sources5-804-060 (17pp)5-805-152 (10pp)

Entrepreneurship

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9-104-071ACCOUNTING FRAUD AT WORLDCOM

Kaplan, RSKiron, D


The principal players in WorldCom’saccounting fraud included CFO ScottSullivan, the General Accounting andInternal Audit departments, externalauditor Arthur Andersen, and the boardof directors. The case provides sufficientdetail to allow for a full discussion of thepressures that lead executives andmanagers to ‘cook the books’, theboundary between earnings smoothingor management and fraudulentreporting, the role for internal controlsystems and internal audit to prevent orrapidly detect accounting fraud, theexpectations about governanceprocesses performed by externalauditors and the board of directors, andthe pressure and consequences whenmiddle managers follow orders that theyknow are wrong. Written from the publicrecord, the case contains numerousquotes from an individual involved in theWorldCom fraud that were reported bythe Investigative Committee and WallStreet Journal articles about several ofthe individuals caught up in the situation.

United States; 60,000 employees, grossrevenue: $30 billion revenues; 1999-2002

Organizational behaviorAccounting policiesAccounting proceduresFinancial statementsFinancial accountingAuditingBankruptcyLeadershipCorporate governanceBoard of directorsFraudEthicsOrganizational culture


9-794-080BITTER COMPETITION: THE HOLLANDSWEETENER COMPANY VERSUSNUTRASWEET (B) Supplement

Brandenburger, ACostello, MKou, J


Supplements the (A) case.

CompetitionPatentsStrategy formulation


710-030-1BLUE MONDAY

de Bettignies, HCButler, C

China Europe International BusinessSchool

Alex, an expatriate sales director for thenew Chinese subsidiary of amultinational pharmaceutical companyis concerned about the poor sales figures.Frustrated with his sales team he tries tounderstand why. One of the sales reps,Anita, speaks openly about the cause ofthe company’s failing market share andexplains that local competitors paydoctors financial kickbacks and that thereis no way around to do business in thatindustry in China. Alex knows that this isagainst the code of conduct and he hasto take a position to motivate his team.

China; Pharmaceutical; MNC; 2009Leadership and valuesChinaCorruptionChange managementEthics and valuesCode of conductKickbacksCultural conflict


707-009-1BUSINESS ETHICS AND GOVERNANCEISSUES AT HP: THE PRETEXTINGCONTROVERSY

Gupta, VPerepu, I

IBS Center for Management Research

The case examines the business ethicsand governance issues relating to thepretexting controversy that engulfed USbased Hewlett Packard (HP) during thesecond half of 2006. Though the civilclaims arising out of the controversywere settled, it raised several other issuespertaining to invasion of privacy, identitytheft, and using pretexting to obtainconfidential information. When the boardof directors at HP found that highly

confidential information that wasdiscussed among the board memberswas being reported in detail by the press,an investigation was initiated. Theinvestigation was carried out by a teamconstituted by; Patricia Dunn, the thenChairperson of the board. During theprobe, it was found that Keyworth, one ofthe directors was responsible for theinformation leaks. The matter wasreported to the board, and one of theDirectors, Tom Perkins resigned from theboard, to express his displeasure aboutthe way the investigation was carried out.He asked the HP board to disclose thedetails of the investigation process. HPadmitted that pretexting was used toobtain the information about the sourceof leaks. This led to a series ofinvestigations by several governmentalagencies and the Attorney General ofCalifornia on the illegal methods used byHP to carry out the probe. As a result ofthese investigations, Dunn and four otherpersons were indicted and the companypaid $14.5 million to settle civil claims.The case is structured to enable studentsto: (1) understand the business ethicsissues arising out of the pretextingcontroversy at HP; (2) examine thecorporate governance issues relating tothe pretexting controversy at HP; (3)study the investigation processemployed by HP to find the source ofconfidential information leaks; (4)examine the illegal / unlawful methodsused during the investigations; and (5)analyse the implications of the pretextingcontroversy at HP. The case is aimed atMBA / PGDBA students and is intendedto be part of the business ethics andcorporate governance curriculum. Theteaching note includes the abstract,teaching objectives and target audience,teaching approach, assignmentquestions, feedback of case discussion,references and suggested readings. Itdoes not include an analysis of the case.

US; Computer hardware; Very large;2005-2006

Hewlett Packard (HP)Pretexting controversyCivil lawsuitCorporate governance practicesLegal and ethical standardsIntellectual property rightsIdentity theftCorporate ethicsPrivacy rightsProtection of confidential businessinformationStandards of business conductKona I


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Kona IIThe HP WayCode of ethicsHP’s values


9-394-060CONFLICT ON A TRADING FLOOR (A)

Badaracco Jr, JLUseem, J


A junior salesperson on FirstAmericaBank’s trading floor is assisting a topsalesperson, Linda, on a deal to financethe construction of a new cruise ship forPoseidon Cruise Lines. While the terms ofthe deal are being worked out, he realizesLinda has taken advantage of thePoseidon executives’ unfamiliarity withcomplex financial structures to build anoutrageously high profit margin into thedeal. When the executives becomesuspicious of the prices FirstAmerica isquoting, Linda asks the protoganist tosend them an intentionally misleadingfax so that the deal will not be held up.Holding the personal belief that ‘before ablind man you shall not put a stumplingblock’, he does not know if he can bringhimself to send the information.

New York, NY; Securities and investing;1986

Commercial creditEthicsForeign exchangeValues


9-394-061CONFLICT ON A TRADING FLOOR (B)Supplement

Badaracco Jr, JLUseem, J


Supplements the (A) case. Must be usedwith: (9-390-060) ‘Conflict on a TradingFloor (A)’.

Commercial creditEthics

Foreign exchangeValues


707-007-1‘ECOMAGINATION’ AT WORK: GE’sSUSTAINABILITY INITIATIVE

George, SSRegani, S


General Electric Company was one of thelargest conglomerates in the world, witha turnover of nearly $150 billion in thefiscal year 2005. The company hadinterests in several areas, broadlyclassified into six core business unitscovering industrial systems,infrastructure, media, health care,consumer finance and commercialfinance. In May 2005, GE launched asustainability programme called‘Ecomagination’, aimed at making thecompany a more responsible corporatecitizen by balancing its economic, socialand environmental objectives, andcreating products that would meet theenvironmental challenges of the future.This case discusses the events that led tothe launch of Ecomagination at GE. Itdescribes briefly the reasons for GE’s poorcorporate reputation on environmentalissues in the past, and the factors thatprompted the company to clean up itsimage in the early 2000s. The case goeson to describe the vision and objectivesof Ecomagination in terms of the benefitsGE expected from it. It also describes thecompany’s public relations exercise tocreate awareness about Ecomaginationamong consumers andenvironmentalists. The results of the firstyear of Ecomagination, which GEreleased in the form of its first‘Ecomagination Report’ in May 2006, arealso given. The case concludes with acommentary on the implications ofsustainability to GE as well as othercompanies, in the light of ever-increasingenvironmental challenges. The case alsoquestions whether GE, which was one ofthe biggest corporate polluters in theworld, would be able to extend thescope of Ecomagination to make it acompany-wide initiative in the future.The teaching objectives of this case are:(1) to understand the importance ofenvironmental consciousness and

sustainable objectives to large globalbusinesses, especially in the businessscenario of the early 2000s; (2) toexamine the issues in implementingsustainability initiatives in a business; (3)to appreciate the importance of layingout clear and measurable goals inpursuing sustainable objectives; (4) tostudy the challenges in integratingcompanies’ social and environmentalobjectives with their business targets; (5)to understand the importance of topmanagement support in ensuringcommitment towards any new project;and (6) to understand the role thatbusinesses can play in creatingawareness about sustainability amongconsumers and political decision-makers.This case is meant for MBA / PGDBMstudents and is designed to be part ofthe ethics and social responsibilitycurriculum. The teaching note includes:(1) the abstract; (2) teaching objectivesand methodology; (3) assignmentquestions; (4) analysis; (5) feedback ofcase discussion; and (6) suggestedreadings and references.

USA; Diversified; Large; 2005-2006EcomaginationCorporate sustainabilityGeneral Electric Co‘Green is Green’Kyoto ProtocolCarbon controlsGlobal warmingWTO (World Trade Organisation)Eco-friendly productsGreenOrder IncRenewable energy sourcesPublic relationsClean technologiesEmission controlsEnvironment Protection AgencyPCB (polychlorinated biphenyls)contamination


JBEE1-1CS1FROM GRACE TO DISGRACE: THE RISEAND FALL OF ARTHUR ANDERSEN

Smith, NCQuirk, M

NeilsonJournals Publishing

In June 2002, Arthur Andersen LLPbecame the first accounting firm inhistory to be criminally convicted. Therepercussions were immense. From aposition as one of the leading


12

professional services firms in the world,with 85,000 staff in 84 countries andrevenues in excess of $9 billion, Anderseneffectively ceased to exist within a matterof months. Although Andersen’sconviction related specifically to a chargeof obstructing justice, public attentionfocused on the audit relationshipbetween Andersen and its major client,Enron Corporation, particularly theactions (and inactions) that had allowedEnron to post spectacular year-on-yearearnings and profit growth. As well asexamining events leading up to thedemise of Andersen, the case provides anopportunity to consider the broadercontroversy over accounting andcorporate governance practices and,more generally, the pressures foundwithin organisations that can fosterunethical conduct. The case wasprepared from public sources. This casehas been peer reviewed by the editorialboard of the Journal of Business EthicsEducation (JBEE). This case was previouslynumbered 704-040-1.

Accounting ethicsAuditingConflicts of interestNormative ethicsEthical decision makingCorporate governanceAuditor role and responsibilities

24 ppPublished sourcesJBEE1-1TN1 (12pp)

9-399-110GUARANTY TRUST BANK PLC NIGERIA(A)

Paine, LSHogan Jr, HF


Fola Adeola, the CEO of Nigeria’sGuaranty Trust Bank and one of itsfounders in 1991, is considering whatshould be done to maintain the bank’soriginal vision and vitality in the face of itsrapid growth and success in themarketplace. Known for its high ethicalstandards, the bank is planning toexpand inside and outside Nigeria.Among Adeola’s concerns is what to doabout employees’ insistence onunderpaying their personal income taxes- a practice he regards as inconsistentwith the bank’s mission of being a rolemodel for society. A rewritten version ofan earlier case.

Africa, Nigeria; Banking; 600 employees,$200 million revenues; 1996-1998

AfricaBankingBusiness and societyBusiness conditionsCorporate cultureCorporate responsibilityDeveloping countriesEthicsLegal aspects of businessOrganizational development

15 ppField research

9-906-414IKEA’S GLOBAL SOURCINGCHALLENGE: INDIAN RUGS ANDCHILD LABOR (A)

Bartlett, CADessain, VSjoman, A


Traces the history of IKEA’s response to atelevision (TV) report that its Indiancarpet suppliers were using child labor.Describes IKEA’s growth, including theimportance of a sourcing strategy basedon its close relationships with suppliers indeveloping countries. Details thedevelopment of IKEA’s strong culture andvalues that include a commitment ‘tocreate a better everyday life for manypeople’. Describes how, in response toregulatory and public pressure, IKEAdeveloped a set of environmentalpolicies that grew to encompass arelationship with Greenpeace and WorldWildlife Fund (WWF) on forestmanagement and conservation. Then, in1994, Marianne Barner, a newlyappointed IKEA Product Manager, issurprised by a Swedish televisiondocumentary on the use of child labor byIndian carpet suppliers, including somethat supply IKEA’s rugs. She immediatelyimplements a strict policy that providesfor contract cancellation if any IKEAsupplier uses child labor. Then Barner isconfronted by a German TV producerwho advises her that he is about tobroadcast an investigative programdocumenting the use of child labor inone of the company’s major suppliers.How should she react to the crisis? Howshould the company deal with theongoing issue of child labor in the supplychain?

India, Sweden; 90,000 employees, US$1.2billion revenues; 1995

Crisis managementPublicityDeveloping countriesInternational managementInternational operationsEthicsSocial enterpriseHuman resources managementValuesBusiness growthOutsourcingSuppliersSocial responsibility


9-906-415IKEA’S GLOBAL SOURCINGCHALLENGE: INDIAN RUGS ANDCHILD LABOR (B) Supplement

Bartlett, CADessain, VSjoman, A


Supplements the (A) case. An abstract isnot available for this product.

Crisis managementPublicityDeveloping countriesInternational managementInternational operationsEthicsSocial enterpriseHuman resources managementValuesBusiness growthOutsourcingSuppliersSocial responsibility


708-041-1INNOCENT DRINKS: VALUES ANDVALUE

Brown, RGrayson, D

Cranfield School of Management

The first part of this case deals with thedevelopment and testing of a newbusiness idea - market research, writtenbusiness plan, credibility of start-up team


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- enabled by raising £230,000 throughbusiness angel financing, in return for20% equity. The second part examinesthe company’s development of an openmanagement style, its responses toenvironmental and social issues(responsible entrepreneurship), the wayit built customer confidence in the brandand resisted early equity marketfloatation or trade sale. A further issue ishow to preserve the integrity andauthenticity of a brand whoseconsumers feel themselves part of theinnocent family, with a stake in theproduct, and are anxious to protect it.The case highlights: (1) the importance ofproving opportunity through goodmarket research and consumer; (2)maintaining majority equity shareholding in the hands of theentrepreneurs by reducing the start-upcapital needed through sub-contractingexpensive manufacturing to provensupplier(s); (3) generating favourablemedia publicity via low cost shoestringand viral marketing (labels, cause relatedmarketing, vans, jazz concerts, website,blog); (4) responsible entrepreneurshipthrough proactive management ofenvironmental, social and ethical issues;

and (5) the role of challenger brands, andthe risks and opportunities when suchsustainability-based brands associatewith global brands are controversial fortheir environmental and/or socialimpacts. At the end of the case, innocentfaces an immediate issue: with rapidgrowth in turnover and employeenumbers in the UK and Europe, and afterthe furore caused by the company’sdecision to sell in branches ofMcDonalds, what further steps shouldthe management team take to ensurethat its brand’s reputation survives intact?

Soft drinks; 250+ employees; 1998-2008SustainabilitySmall businessCorporate responsibilityEntrepreneurshipChallenger brandsViral marketingBrand identitySustainability strategyCorporate valuesEntrepreneurs exiting theirbusiness


708-027-1MANFOLD TOY COMPANY:CORPORATE GOVERNANCE ANDETHICS FOR DIRECTORS ANDPROFESSIONALS

Goo, Svan den Berg, J

Asia Case Research Centre, TheUniversity of Hong Kong

This case was written for the ‘Ethics - TheCore Value of Leadership’ forum (2007)organised by Hong Kong’s IndependentCommission against Corruption.Attended by over 200 directors of listedcompanies, the forum aimed to educatedirectors of listed companies on issues ofethics and corporate governance. Set onthe eve of a friendly takeover, theManfold case introduces a wide variety ofethical and corporate governance issuesfaced by the (independent) directors,accountant, company secretary andmanagement of the company.

Hong Kong, China; Consumer goods;2007

EthicsDirectorsListed companyIndependent non-executivedirectorINEDCompany secretaryAccountantCPA (coalition provisional authority)Corporate governanceInsider dealingBribeTakeoverAudit committeeConflict of interest


709-018-1MARKS & SPENCER: THE BUSINESSCASE FOR PLAN A

Spitzeck, HCranfield School of Management

Marks & Spencer (M&S) is one of the UK’sleading retailers, with over 21 millionpeople visiting M&S stores around thecountry every week. On the 15th ofJanuary 2007 The Independentpublished an article titled ‘M&S to go


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carbon neutral in £200 million greeninitiative’ announcing the now famousM&S Plan A. This initiative is an ambitiousenvironmental strategy incorporating100 commitments in five key areas: (1)climate change; (2) waste management;(3) sustainable raw materials; (4) fairness;and (5) health. Plan A includes aims forM&S to become carbon neutral, send nowaste to landfill, be a fair trading partnerand help customers to live healthierlifestyles. The Plan A strategy announcedin January 2007, envisaged that all these100 targets would be realised by 2012,and would require an investment of £200million. This strategy goes to the core ofM&S’s identity. As the economicdownturn impacts on retail business,Richard Gillies, head of Plan A, is asked tocreate a business case for the differentinitiatives forming Plan A to moveforward. Students are asked to analysePlan A initiatives on their business valueand to present their findings.

UK; Retail; 2,000 factories, 20,000 farms,250,000 employees, sales 2007-2008 £9billion, profit £1 billion; 2008-2009

Corporate responsibilitySustainabilityEthicsBusiness caseCrisisReputationBusiness in societyWasteSupply chain


708-058-1SUSTAINABLE DEVELOPMENTINITIATIVES AT BHP BILLITON

Chakraborty, BGovind, S


BHP Billiton Limited and Plc was theworld’s largest diversified naturalresources company. The case discussesthe sustainable development policy ofthe company. It also discusses the health,safety, environment and community(HSEC) management standards andguide to business conduct that thecompany developed to implement itssustainable development policy. Thecase details some of the initiatives taken

by BHP Billiton to address issuesconcerning HSEC at its operations. Thecase also mentions some of the criticismsagainst the company regarding HSECissues. The teaching objectives of thiscase are: (1) to understand the concept ofthe HSEC management standards; and(2) to learn about HSEC managementinitiatives in practice, by analysing BHPBilliton’s initiatives in this area. This case ismeant for MBA / PGDBM students and isdesigned to be part of the businessethics / corporate social responsibilitycurriculum. The teaching note includes:(1) the abstract; (2) teaching objectivesand methodology; (3) assignmentquestions; and (4) feedback of casediscussion. It does not contain an analysisof the case.

Global; Natural resources; Large; 2001-2008

BHP BillitonSustainabilitySustainable development policyHealth, safety, environment andcommunity (HSEC) managementEnvironmental initiativesSocial and community initiatives



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9-201-028AIRBUS A3XX: DEVELOPING THEWORLD’S LARGEST COMMERCIAL JET(A)

Esty, BKane, M


In July 2000, Airbus Industries’supervisory board is on the verge ofapproving a $13 billion investment forthe development of a new super jumbojet known as the A3XX that would seatfrom 550 to 1,000 passengers. Havingsecured approximately 20 orders for thenew jet, the board must decide whetherthere is sufficient long-term demand forthe A3XX to justify the investment. At thetime, Airbus was predicting that themarket for very large aircraft (VLA), thoseseating more than 500 passengers,would exceed 1,500 aircraft over the next20 years and would generate sales inexcess of $350 billion. According toAirbus, it needed to sell 250 aircraft tobreak even and could sell as many as 750aircraft over the next 20 years. This caseexplores the two sets of forecasts andasks students whether they wouldproceed with the launch given the size ofthe investment and the uncertainty inlong-term demand.

France; 2000Capital expendituresValuationBusiness government relationsProject financeProduct positioningProduct developmentCorporate strategyDemand analysis


9-293-128AMERICAN BARRICK RESOURCESCORP: MANAGING GOLD PRICE RISK

Tufano, PSerbin, JD


Managing the risk of changing prices ofgold is central to the business strategy ofAmerican Barrick Resources Corp., one ofNorth America’s largest and mostsuccessful gold mining firms. The casecontrasts this firm’s hedging policies withthose of its rivals that do not hedge anddetails the wide range of hedgingproducts (gold loans, forwards, options,

spot deferred contracts) used to manageprice risk. In 1992 the management ofAmerican Barrick is pleasantly surprisedby unexpected new gold finds, but thisnew production places demands on thefirm’s hedging program and tests thefirm’s commitment to hedging whenprices of gold and of many hedgingvehicles are unattractive.

North America; Gold mining; Large,employees 1,730, $540 million revenues;1992

HedgingMiningRisk managementSecurities


9-197-047ARCH COMMUNICATIONS GROUP INC

Palepu, KGSrinivasan, S


The market values Arch differently fromanalysts’ values. Students are asked toevaluate the investment potential ofArch’s stock based on industryfundamentals and analysts’ forecasts.

Communications equipmentTechnologyValuationCompany, stock valuation


9-104-044CAJA ESPANA: MANAGING THEBRANCHES TO SELL (A)

Martinez-Jerez, FDe Albornoz, R


Juan Luis Rojas, Commercial PlanningManager of a Caja de Ahorros (savingsbank), faces the challenge to motivatethe branches to sell more long-termmortgages and ponders whether to usetransfer prices to achieve his objective.

Spain; Banking industry; 2,700employees, 200 million eurodollars; 2003

BranchesCommercial bankingIncentivesOrganizational designPerformance measurement

Sales managementTransfer pricing


9-198-048CITIBANK: PERFORMANCEEVALUATION

Davila, ASimons, RL


Citibank has introduced a new,comprehensive performance-scorecardsystem. A regional president struggleswith a tough decision: how to evaluatean outstanding branch manager who hasscored poorly on an important customersatisfaction measure. This case provides ascoring sheet to be completed by thereader and an explanation of theramifications of the decision for thebusiness’s strategy.

United States; Banking; 1996BankingControl systemsIncentivesPerformance appraisalPerformance measurementStrategy implementation


9-187-081CODMAN & SHURTLEFF, INC:PLANNING AND CONTROL SYSTEM

Simons, RLHarvard Business Publishing

Detailed description of the planning andcontrol systems in use at Johnson &Johnson. Focuses on the actions ofmanagers in one subsidiary in revisingbudget targets. Illustrates intensivestrategic planning and financial planningprocess in a large, decentralizedcompany. Includes interviews with thepresident and senior executivesconcerning benefits of the system. Raisesissue of the role of formal control systemsin decentralized organizations.

Massachusetts, New Jersey; Health care;Fortune 500, 75,000 employees; 1986

BudgetingControl systemsDecentralization


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Planning systemsStrategic planning


9-197-085COMPAGNIE DU FROID, SA

Simons, RLDavila, A


The owner of an ice cream companymust evaluate the performance of threeregional businesses. To do the analysis,students must flex the budget byseasonal temperature; calculate revenue,volume, price, and efficiency variances;analyze the effects of transfer prices; andcalculate return-on-investment. Inaddition, the owner considers how to setstrategic boundaries and how tocompensate his managers.

France; Gross revenue: $34 million; 1996Return on investmentProfitability analysisVariance analysisBudgetingPerformance measurementIncentives


9-200-069DEBT POLICY AT UST INC

Mitchell, MHarvard Business Publishing

UST, Inc is a very profitable smokelesstobacco firm with low debt compared toother firms in the tobacco industry. Thesetting for the case is UST’s recentdecision to substantially alter its debtpolicy by borrowing $1 billion to financeits stock repurchase program.

Connecticut; 4,765 employees, grossrevenue: $1.4 billion revenues; 1999

Capital structureDebt managementLong term financingTaxation


9-295-059DIVIDEND POLICY AT FPL GROUP, INC(A)

Esty, BSchreiber, CF


A Wall Street analyst has just learned thatFPL (the holding company for Florida’slargest electric utility) may cut itsdividend in several days despite a 47-yearstreak of consecutive dividend increases.In response to the deregulation of theelectric utility industry, FPL hassubstantially revised its competitivestrategy over the past several years. Theanalyst must decide whether a change individend policy will be a part of FPL’sfinancial strategy in this deregulatedenvironment.

Florida; 12,400 employees, $5.3 billionrevenues; 1994

DividendsFinancial strategySecurities analysisDeregulationElectric powerCorporate strategy


9A98N001HUANENG POWER INTERNATIONALINC: RAISING CAPITAL IN GLOBALMARKETS

Foerster, SRWhite, JKarolyi, A


Huaneng Power International (HPI), anindependent power producer in thePeople’s Republic of China (PRC), is in theprocess of executing a global equity issueto raise funds for the construction of newpower plants. The company is planningto list the new shares through anAmerican Depositary Receipt programon the New York Stock Exchange. Thecompany has recently reduced the priceof the issue due to poor marketconditions and investor resistance to theprice range stated in the preliminaryprospectus. HPI’s management mustdecide whether the new offer price andchoice of listing exchange is reasonablein light of recent market events and thepolitical, economic, social andtechnological environment in the PRC.

China; Electric, gas and sanitary services;Large

FinanceInternational financeInitial public offeringsValuation

26 ppPublished sources8A98N01 (20pp)

UVA-F-1353NIKE, INC: COST OF CAPITAL

Bruner, RFChan, J


This case is intended to serve as anintroduction to the weighted averagecost of capital (WACC). Although the casealready provides a WACC calculation, ithas been intentionally designed tomislead students. As such, their task is toidentify and explain the ‘mistakes’ in theanalysis, which are designed to highlightconceptual issues regarding WACC andits components that are oftenmisunderstood by students.

US; Investment management; 2001Cost of capitalInvestment analysisValuation

8 ppPublished sourcesUVA-F-1353TN (5pp)

9-299-004PENELOPE’S PERSONAL POCKETPHONES

Gompers, PAHarvard Business Publishing

Provides students with an opportunity touse simple real options analysis to value astartup. Penelope Phillips is decidingwhether to start a company to makewireless phones. Students get experienceusing traditional discounted cash flowvaluation and a real options approach.

Entrepreneurial financeEntrepreneursEntrepreneurshipReal optionsValuation



17

9-287-057RJ REYNOLDS INTERNATIONALFINANCING

Kester, WCAllen, WB


Reynolds must source a substantialportion of the financing of its Nabiscoacquisition in offshore bond markets.Morgan Guaranty has proposed ayen/dollar dual currency Eurobond thatcould be hedged into dollars. Thisstructure is compared to EurodollarBonds, Euroyen Bonds, and EuroyenBonds swapped or hedged into dollars.

United States; Capital markets; Fortune500, $13 billion sales; 1985

BondsCapital marketsCurrencyHedgingInternational finance


107-032-1‘THE MANCHESTER UNITEDBUCCANEERS?’: MALCOLM GLAZER’SACQUISITION OF MANCHESTERUNITED

Moeller, SOsayimwese, O

Cass Business School

This case looks at the colourful takeoverof the world’s most famous sports brand -Manchester United Football Club - byMalcolm Glazer in 2005. Glazer, theowner of an American football team, theTampa Bay Buccaneers, began hispurchases of Manchester United in 2003and launched a hostile bid in 2004. Withstrong support from loyal fans,Manchester United resisted the takeover.This case shows the defensivetechniques used by its board and theiradvisors. It shows Glazer’s actions tothwart those defences. In addition, itcovers the financing used by Glazer inthis highly leveraged deal and includesdetailed financial statements and stockprice movements. Regulatory issues inthe UK City Code are also covered in thecase.

UK; Football; £160 million turnover; 2004-2005

FootballAcquisitions

TakeoverHostile acquisitionsAcquisition financingManchester United Football ClubDefenceSports finance


9-204-033VALUING A CROSS-BORDER LBO:BIDDING ON THE YELL GROUP

Desai, MAVeblen, MFNotarnicola, P


A team of private equity investors mustvalue the leveraged buyout of a YellowPages business that operated in both theUnited States and the United Kingdom.In the process, they must wrestle withissues of how to conduct cross-bordervaluations and how to value a stablecash-cow business along with a growthbusiness. The case analyzes theeconomics and incentives of carriedinterest and compares different valuationmethods - Capital Cash Flow and FreeCash Flow. The teaching purpose is tounderstand the core elements of cross-

border valuation in the setting of aleveraged buyout. In the process,students must employ exchange rates,decide among betas, and translate valuesfrom two mature, developed economiesto arrive at a bid. Students must conductthis valuation in a private equity settingwith the idiosyncrasies of a leveragedbuyout, including the economies ofcarried interest.

Equity capitalFinancial strategyInternational businessInternational financeLeveraged buyoutsMergers and acquisitionsUnited KingdomValuation



18

ecch Case Awards are presentedannually to recognise worldwideexcellence in case writing and toraise the profile of the casemethod of learning. The Awards(formerly the European CaseAwards) have been presentedsince 1991.

Overall winnerApple Inc. in 2010David B Yoffie and Renee KimHarvard Business School(see page 35 for abstract)

Further details can be found at thefront of this bibliography (page iii)or at www.ecch.com/caseawards

ecch case awards 2011

409-015-1AITKEN SPENCE HOTEL HOLDINGSPLC OF SRI LANKA: SUSTAINABLETOURISM AS COMPETITIVE STRATEGY(B): HERITANCE KANDALAMA

Beng Geok, WBuche, I

Asian Business Case Centre

This is the second of a two-case series(309-051-1 and 409-015-1). In 1992, whenAitken Spence Hotel Holdings PLC(ASHH) of Sri Lanka announced itsintentions to build a tourist resort set in aregion with several ancient archeologicalsites and rich in natural biodiversity, thelocal communities, as well asenvironmentalists were apprehensiveabout the negative impacts of thedevelopment on the region. In response,the resort developers embarked onsustained and ongoing environmental,social and community developmentprogrammes to preserve the physicalenvironment, benefit the surroundingcommunities and involve local residentsin the operations of the resort. By 2008,Heritance Kandalama was a recipient ofmany international awards forenvironment management and socialand community development. It was thefirst Asian hotel to receive Green Globe21 certification in 1999. The resort alsoraised the profile of its parent company,ASHH, as one of the Asian pioneers ofsustainable tourism. This case examines:(1) the environment management andsocial and community developmentstrategies and programmes at HeritanceKandlama; (2) the emergence of anorganisational culture anchored onsustainable development; and (3) humanresources practices that engendered andreinforced employees’ commitment toimplement sustainable tourism practices,and strong employee support forHeritance Kandalama’s customer servicedelivery model.

Sri Lanka; Hospitality and tourism; 1992-2008

Sustainable tourism in an AsiancontextEnvironment management andsocial and communitydevelopment strategyOrganisational cultureHuman resources (HR) practicesand service delivery model


404-083-1HELEN RAMSAY: A MEDIATIONATTEMPT

Manzoni, JFBarsoux, JL

INSEAD

Two reasonable people, a boss and asubordinate, find each other ‘impossibleto handle’. Through their descriptions ofeach other’s behaviour we realise thatthey are in a self-perpetuating dynamic.An attempted intervention by thehuman resource manager not only failsto resolve the situation; it actually makesit worse. The teaching objectives are asfollows: (1) to illustrate how cognitivebiases can trigger very different takes onthe same ‘reality’; (2) to discuss themanagement of ‘lower performers’; (3) toincrease awareness of the vicious circlesin which bosses and ‘lower performers’get caught; and (4) to discuss the role ofhuman resources in intervention andprevention. This case replaces ‘HelenRamsay (A) & (B)’ (403-038-1 and 403-039-1).

No specific location (English-speakingcountry); Division of a multinationalcompany

Human resources managerBoss behaviourSubordinate performanceManagement and leadershipMotivation and expectationsSelf-fulfilling prophecyPygmalion effectCommunicationConflict and mediationCognitive biasesLabellingSelective attentionAttributionsHR (human resources) systems, fairprocess and feedbackVicious circles


9-404-087HEWLETT-PACKARD: CULTURE INCHANGING TIMES

Beers, MKhurana, RWeber, JB


HP had been a highly successful andrespected company for decades. It waswell known for its company culture andmanagement practices - the HP way -

which emphasized both profits andpeople. Changing markets, strongcompetitors, and the growth of itscomputer business, however, batteredthe company in the mid-1990s. To turnthings around, HP hired Carly Fiorina, thefirst outsider to lead the company.Describes Fiorina’s strategy and theimpact of decisions she made withrespect to the acquisition of Compaq andHR policies on HP’s venerable culture andperformance.

140,000 employees, $55 billion revenues;1993-2003

Organizational behaviorComputersAcquisitionsLeadershipHuman resources managementOrganizational cultureOrganizational change


IMD-4-0282IKEA: PAST, PRESENT, AND FUTURE

Denison, DLief, C

IMD

Ingvar Kamprad’s childhood experiencesinformed his approach not only tofurniture retailing, but more broadly tolife. In the hard scrabble farmlands ofsouthern Sweden, IKEA Group’s founderbecame convinced of the value of hardwork, personal responsibility and forgingone’s own path. His company did not justproduce profits but rather served a largerand higher purpose in society. It broughtstyle, value and a better life to many.IKEA’s products were not destined foronly wealthy customers who could afforddistinctive and contemporaryfurnishings. But rather they wereintended for the global everyman. Howto be IKEA in nations and among peoplewho were decidedly different was thedilemma. IKEA had to stay IKEA. Butallowing lessons learned in foreignmarkets to impact and improve thecompany appeared to be very much inline with its philosophical foundations.One thing was not in doubt - it would bea high-stakes balancing act. The learningobjectives are to: (1) examine how acompany steeped in its own national andcorporate culture adapts whenexpanding into divergent foreignmarkets; (2) to analyseinternationalisation strategies employed


19

by successful firms; (3) how to stay true toa company’s core values in the face ofmultiple challenges; and (4) balancingincongruity, such as the need forflexibility and also the need forconstancy.

Sweden, Global; Furnituremanufacturing, retailing; $27 billion inrevenues 2007; 1950s to present financialyear

ExpansionInternationalisationNew market entranceKnowledge transferEmerging marketsRetailing


499-021-1LINCOLN ELECTRIC IN CHINA

Galunic, CBjorkman, I

INSEAD

This case looks at how Lincoln Electric,the US-based company renowned for itscompensation scheme, tried toimplement its human resource policiesglobally, and particularly in China. Theobjective is to expose readers to some ofthe difficulties and myths of pushingwell-worn ideas overseas. The case endsoff with an important question regardingthe company’s future, one that dependson its overseas strategy, of which HR iskey.

China, USA, Europe; Manufacturing;1998-1999

CompensationCross-cultureInternational expansionChinaIncentives


403-065-1MULTICHOICE AFRICA: MANAGINGTHE QUEUE

Bendixen, MBeswick, C

Wits Business School - University of theWitwatersrand

It was late on a Tuesday afternoon at thebeginning of March 2003. Eddie Moyce,

Call Centre Manager for MultiChoiceAfrica, a multichannel television platform,was examining the results of some recentmarket research that had been presentedthat day. The research had shown thatwhile customers who had phoned thecall centre were generally satisfied withthe service they received, they weredissatisfied with the length of time it tookfor their calls to be answered. The callcentre was strategically important inbuilding and maintaining relationshipswith MultiChoice customers and thecompany’s senior management hadreacted strongly to this finding. They hadasked Moyce to investigate thepossibility of improving the responsetime from the current 80:30 to 80:20 oreven 90:10. What would the impact ofreducing response times be? Would it bepossible to reduce response times whilestaying within budget? Managementhad recently imposed severe austeritymeasures on the company, evenreducing the call centre’s budget in thelast two years.

South Africa; Call centre; Medium; 2003Queuing theoryCall centre management

6 ppField research

9-400-087REBIRTH OF THE SWISS WATCHINDUSTRY - 1980-92 (A)

Tushman, MRadov, DB


The Swiss watch industry has beendevastated by new entrants from Asia inthe low-and mid-priced watch segments.Japanese and Hong Kong firms haveused quartz technology to lower costsdramatically. Nicolas Hayek, President of aSwiss consulting firm, is asked to helpdesign a new strategy and structure forthe two Swiss giants, ASUAG and SSIH,which have decided to merge. ErnstThomke, Managing Director of ASUAG’smanufacturing arm, also figuresprominently. The case outlines optionsfor the positioning of the new,inexpensive Swatch brand as well as anumber of other flagship Swiss brands.Focuses on alignment of strategy withthe structure of the new company. Topicsto address include the management ofchange and the formulation of a detailedaction plan to make the new companysucceed.

15,000 employees; $1 billion revenues;1980-1983

Management of changeOrganizational structureProduct developmentStrategy implementationSwitzerlandTechnological change


408-083-1RICHARD MURPHY AND THE BISCUITCOMPANY (A)

Jarrett, MIngram, K


This is the first of a two-case series (408-083-1 and 408-084-1). This case describesthe successful journey of organisationalrenewal and change for a food companyfacing a changing world of consumertastes and fierce competition. The firstpart of the case shows how traditions, astrong founding leader and a previouslysuccessful operational formula can leadto a competency trap and organisationalinertia. The main part of the case focuseson the years 2002-2006, the challenges ofmanaging change and the role of a newMarketing Director, Richard Murphy. He istasked with making the company marketorientated over its current model ofproduction schedules and efficiencies.The case reveals the important role ofunderstanding and tackling resistance tochange, managing multiple and diversestakeholders, engaging customers andpersonal resilience in leading change.The case also highlights that changetakes time and that paying attention topolitical and social networks is asimportant as the content of the changeitself.

UK; Food retail; 2,000 employees; 2002-2006

Change managementResistance to changeOrganisational politicsStakeholder managementOrganisational networksManaging your bossInfluencing othersOrganisational renewal



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9-498-054ROB PARSON AT MORGAN STANLEY(A)

Burton, MDHarvard Business Publishing

Rob Parson was a star producer inMorgan Stanley’s Capital Marketsdivision. He had been recruited from acompetitor the prior year and hadgenerated substantial revenues sincejoining the firm. Unfortunately, Parson’sreviews from the 360-degreeperformance evaluation process revealedthat he was having difficulty adapting tothe firm’s culture. His Manager, Paul Nasr,faces the difficult decision of whether topromote Parson to Managing Director.Nasr must also complete Parson’sperformance evaluation summary andconduct Parson’s performance review.The teaching purpose is to exploremanagerial problems associated withperformance appraisal and performancemanagement.

Corporate cultureHuman resources managementInterpersonal behaviorInvestment bankingManagement of professionalsOrganizational behaviorPerformance appraisal


410-029-1SONY CORPORATION: FUTURETENSE?

Perepu, IGupta, V


Sony, the Japan-based multinationalconglomerate, is one of the leadingmanufacturers of consumer electronicsdevices and information technologyproducts. Sony was responsible forintroducing path breaking products likethe Walkman, the Discman, and thePlayStation gaming console, amongothers. But in the late 1990s, it lost itsleadership position in many product linesin which it was operating. Analystsattributed this to the silo cultureprevailing in the organisation. Each of thedepartments functioned like differentfiefdoms, hardly co-operating with eachother, even when it was necessary.Moreover, Sony’s growing complacencyled to its failing to recognise the growing

popularity of new technologies anddigital products and the companychoosing to stick to its proprietaryformats. Sony was caught off-guard andtried to revive itself under the guidanceof its first non-Japanese head HowardStringer, who took over as the CEO in2005. For a couple of years, Sonyappeared to be on the path to revival.However, for the fiscal year ending March2009, the company reported a loss.Sony’s failure to bring out innovativeproducts in spite of having the requiredcompetencies was one of the mainreasons for the company’s problems, andanalysts attributed it to the existingculture in the company. In February 2009,with the aim of addressing the issue of itssilo culture, Stringer announced areorganisation that involved changes inthe organisation structure. Through thisreorganisation, he sought to transformSony into an innovative and agilecompany. However, it remains to be seenwhether the reorganisation can bringSony out of its problems. The case aims toachieve the following teachingobjectives: (1) to examine the challengesfaced by Sony in a competitive globalbusiness environment; (2) to understandthe importance of organisational culturein effectively executing an organisation’sstrategy; (3) analyse how Sony can makeits products competitive and fosterinnovation; (4) examine the efficacy ofthe reorganisation program initiated byStringer in turning around Sony andsolving its problem relating to the siloculture; and (5) analyse other measuresthat need to be taken by Stringer torestore the profitability of Sony. The caseis intended for MBA/PGDBA students andcan be used in human resourcemanagement as well as strategy andgeneral management curriculum. Thedetailed teaching note includes theabstract, teaching objectives andmethodology, assignment questions,feedback of case discussion, additionalreadings and references, and an analysisof the case. This case was the first prizewinner in the 2009 John Molson MBACase Writing Competition.

Japan; Consumer electronics; Very large;2005-2009

Sony CorporationOrganisational restructuringReorganisationSilo CultureOrganisation structureHoward StringerCross-functional teamsOrganisation chart of Sony

InnovationLeadershipCo-ordination among productdivisionsCorporate communicationCorporate cultureConnectEmpowerment


HR1ASOUTHWEST AIRLINES (A)

O’Reilly III, CAPfeffer, J

Stanford Business School

In 1994 both United Airlines andContinental Airlines launched low costairlines within an airline, to compete withSouthwest Airlines. From 1991 until 1993Southwest had increased its market shareof the critical West Coast market from26% to 45%. This case considers howSouthwest had developed a sustainablecompetitive advantage and emphasizesthe role of human resources as a lever forthe successful implementation ofstrategy. This case asks whethercompetitors can successfully imitate theSouthwest approach.

Southwest United States; Airlines; 12,000employees, $2.2 billion revenues; 1994

Human resources managementStrategyStrategy implementationOrganizational behavior

27 ppField research

409-047-1TATA CONSULTANCY SERVICES OFINDIA (B): BUILDING AN OFFSHORE ITSOFTWARE OUTSOURCING HUB INCHINA

Beng Geok, WBuche, I

Asian Business Case Centre

This is the second of a two-case series(409-046-1 and 409-047-1). In 2006, TataConsultancy Services Ltd articulated its‘near market’ strategy and announced anew service delivery model - GlobalNetwork Delivery Model (GNDMTM),underlining the global scale of itsbusiness operations. According to CEOand Managing Director, S Ramadorai, TCS’


21

goal for its 55 delivery centres around theworld was to collaborate on projects forthe delivery of IT services, working on a‘follow-the-sun model’, giving customersthe same experience of certainty andconsistency, whether the service wasdelivered in Chennai, China or Chile.When fully implemented, GNDMTMimplied the setting up of large-scaleoperations in China, and medium-sizedoperations in South America (Brazil) andEastern Europe (Hungary). In 2002, TCSestablished operations in China,following multinational clients who weresetting up large-scale operations there.By February 2007, TCS China employednearly 800 IT consultants and servedmore than 25 clients in the Asia Pacificregion. TCS’ goal was to build the Chinaoperations into the company’s secondglobal delivery centre after India. To givethe initiative a kick-start, it had to increaseits workforce strength in China to 6,000by 2010 / 2011. In April 2008, given thetight supply of IT talent in China, TCSfaced major challenges in talentacquisition and development. Whatshould TCS do to meet its manpowertarget in China for 2010 / 2011?

China; Computer software and services;2002-2008

Near market strategyTalent acquisition anddevelopment in ChinaService delivery framework


400-002-1THE HOUSE THAT BRANSON BUILT:FROM COUNTER-CULTURE TOCORPORATE CULTURE

Kets de Vries, MFDick, R

INSEAD

This case provides an opportunity toexplore the person-organisationinterface. From a developmental point ofview, it examines the making of anentrepreneur. The case also allows for anexploration of the vicissitudes ofleadership. It looks at effective leadershipin the context of a high performanceorganisation, and finally, incitesdiscussion about planning for the futureof an entrepreneurial organisation, inparticular the use of brand to enter new,unrelated markets. The case focuses onleadership in a creative, entrepreneurial

organisation. Virgin has made manybrilliant moves and weatheredspectacular setbacks. The case offersinsight into these and othermanagement issues that have come tothe fore in Virgin’s history. Among themare: (1) the transition fromentrepreneurial to more conventional,‘systematic’ management; (2) theformulation of strategy for, and themanagement of, rapid growth aroundstretching of a brand, particularlyexpansion into unrelated areas andexpansion overseas; (3) the managementof strategic alliances; (4) thedevelopment of a corporate culturecentered around youth and informality;(5) a preference for promotion of insiderswho ‘fit’ rather than outside candidates;(6) the management of creativity; and (7)the transition from a private enterprise toa public company and back again toprivate.

Great Britain; Entertainment, airline;Large; 1968-2000

Richard BransonVirginEntrepreneursLeadershipBrand managementVenture capital firm


407-079-1VIVIENNE COX AT BP ALTERNATIVEENERGY (A)

Ibarra, HHunter, M

INSEAD

A team led by Vivienne Cox, ExecutiveVice President for Gas, Power, andRenewables, identifies and launches anew business, BP Alternative Energy (AE).Investing on this scale in a ‘green’ powerbusiness was a radical departure for BP.The case was designed to teach whatleaders do to create change andinnovation. It illustrates how Cox guidedthe emergence of a vision for AE, got keystakeholders on board and set in placeconditions for a highly motivated team. Italso illustrates how leadership styleaffects change processes.

UK; Oil; Large; 2005LeadershipCorporate entrepreneurshipInnovation

Corporate social responsibilityWomen and leadership


9-498-045WOLFGANG KELLER ATKONIGSBRAU-TAK (A)

Gabarro, JJHarvard Business Publishing

Raises issues concerning: (1)performance evaluation; (2) performanceappraisal; (3) managing ineffectiveperformance; and (4) conflicts inmanagement style. A rewritten version ofan earlier case. May be used with:(R0401H) ‘What Makes a Leader? HBRClassic’.

Europe; Beer; Mid-size, US$100 millionsales

BeveragesHuman resources managementLeadershipManagement stylesPerformance appraisalSuperior and subordinate



22

9B03E019BUSINESS INTELLIGENCE STRATEGYAT CANADIAN TIRE

Haggerty, NRMeister, D


Canadian Tire Corporation consists of fivemain business groups: a large retail chainproviding automotive parts, sports andleisure and home products; a financialdivision; a petroleum division; a specialtyautomotive parts division; and a retailerof casual and work wear clothing. Theinformation technology group is facedwith developing an implementation planfor the development of a businessintelligence infrastructure and businesscapability at Canadian Tire Retail.Concurrent to this initiative is thedevelopment and implementation of aninformation technology strategy forCanadian Tire Corporation, which placesa number of programs on the priority list,with business intelligence seen as a highpriority item for which the organizationcan score some quick win businesssuccess.

Canada; General merchandise stores;Large; 2003

Information systemsKnowledge based systemsInformation system designBusiness intelligence

15 ppField research8B03E19 (6pp)

9-301-099CISCO SYSTEMS ARCHITECTURE: ERPAND WEB-ENABLED IT

Nolan, RLPorter, KAkers, C


In a seven-year process, Cisco built itsstrategic I-Net. Beginning in 1994, Ciscocompletely replaced its back-officelegacy systems. At that time, thecompany standardized Internetprotocols. In addition, the companyshifted strategic focus from IT back-officeapplications to front-office applications.After ERP (enterprise resource planning),the company spent the next two yearselectronically connecting withcustomers. A rewritten version of twoearlier cases. A consolidated version ofthe Cisco Systems ERP and Cisco SystemsWeb-enablement cases. Designed to be

taught in one class session (if two classsessions are available, it is recommendedthat Cisco ERP Systems be used for onesession followed by Cisco Systems Web-enablement). May be used with: (9-301-154) ‘The Ten Components of a StrategicI-Net’.

San Jose, CA; Information technology (IT)industry; 2000-2001

ERPInformation technologyTechnological change


909-002-1DIARY OF AN IT PROJECT LEADER: ACASE STUDY ON PROJECTMANAGEMENT LEADERSHIP

Pendse, PHWelingkar Institute of ManagementDevelopment & Research

This case is about the challenges faced indevelopment and deployment of a largemanufacture resource planning (MRP) II /enterprise solution for Major InsulatorsLtd, a leading insulator manufacturingcompany in India. The case has beenpresented in the form of a diary of aproject manager - wherein he narrateshow the project unfolds on a week byweek basis. Participants are able to findparallels to the situations described in thecase in their own work area. Afterdiscussing issues and possible solutions /best practices, the case expects theparticipants to work out a fresh projectplan, including a profit and loss accountfor the project. The purpose of the case isto sensitise / highlight to participants: (1)the issues faced in managing large ITdeployments; (2) project managementand leadership behaviours for thesuccess of IT projects; (3) the businessand monetary implications of projectrelated decisions; and (4) the breadth anddepth of thought required whileplanning a project. The case has beensuccessfully used for training: (1) projectleaders, project managers, transitionmanagers; (2) business analysts andfunctional consultants; (3) seniordevelopers and domain experts makinga transition to the above roles; and (4)students of MBA, MCA, MSc / BSc(computer science / IT) etc. The case canbe used in workshop mode for half-day(discussion only) to full-day (including

new project plan preparation) under anyof the following situations: (1) softwaredevelopment companies or end user ITdepartments; (2) companies at any levelof maturity as per the capability maturitymodel framework; and (3) any large ITapplication in any domain.

India; IT in manufacturing / MRP II / ERPimplementation; Any medium-sizedmanufacturing company; Post 2000

Project leadershipEnterprise systemsManufacture resource planning(MRP) IIEnterprise resource planning (ERP)solutionsProject managementIT project managementProject leadership behavioursBusiness analysisIssues in software projects


9B10E011GOOGLE IN CHINA (B)

Compeau, DFang, YYin, M


The case describes the circumstancessurrounding Google’s reconsideration ofits China strategy. Google officiallyannounced in January 2010 that itsChinese website, Google.cn, experiencedcyber attacks from within China. Googlefurther announced that, as a result, it haddecided to reconsider its approach toChina, including the option of acomplete exit from the Chinese market.The case presents Google’s performancein China, the details of the cyber attackand the heated public discussionfollowing Google’s announcement.Students are asked to consider actionsthat Google should take and thecorresponding, underlying rationale.

United States, China; Miscellaneousservices; Medium; 2010

Ethical issuesManagement in a globalenvironmentInformation systemsGovernment and business



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903-036-1IT OUTSOURCING AT OLD MUTUAL

Duffy, NBeswick, C

Wits Business School - University of theWitwatersrand

It was almost three years since the SouthAfrican subsidiary of the London-listedfinancial services organisation, OldMutual (OMSA), had signed aninformation technology infrastructureoutsource contract with ComputerSciences Corporation (CSC). Thus far, thecontract had worked out well for bothcompanies and the relationship betweenthem was good, but the two groupswere about to enter a new phase in theagreement. OMSA was CSC’s firstoutsourcing contract in South Africa. Thefocus during the first three years hadbeen on establishing the relationshipbetween the two companies andbedding down systems and procedures.CSC had consciously not looked for newbusiness, so that its attention would notbe divided. Now the organisation wantedto expand and take on other clients. Infact, CSC had just signed a contract witha large retail organisation, which it wouldservice using the infrastructure it hadtaken over from OMSA. As DoreenBuultjens, head of group technologyservices at OMSA, considered thesedevelopments, she was concerned thatuntil now, CSC had delivered the requiredservice levels only because OMSA hadbeen its exclusive focus in South Africa.Would she have to change the way inwhich the contract was managed, orcould it continue as it was?

South Africa; Financial services; Large;2002

IT outsourcing implementation

23 ppField research

909-018-1KNOWLEDGE MANAGEMENTINITIATIVES AT IBM

Gupta, VPerepu, IGovind, S


This case examines the knowledgemanagement (KM) practices at IBM. Thecompany’s KM initiatives date back to theearly 1990s, when the company wasreorganised under Louis Gerstner. Beforethat, the company was running as silos

due to which information sharing waslimited. Then, Gerstner includedinformation sharing as one of theparameters in the performance appraisalsystem to determine compensation.IBM’s initial efforts in managingknowledge focused on providinginformation about co-workers and workto enable reuse of the same. This effortstarted with the asset reuse programme,which was formalised as the IntellectualCapital Management programme. Thenext stage in the evolution of KM at IBMwas communities of practice, which wereself-organised communities, throughwhich employees with similar jobfunctions and interests came together.IBM used several tools like K Portal, ICMAssetWeb, On Demand Workplace, BluePages, Collaboration Forums, to capture,share and manage knowledge. The caseconcludes by examining the challengesIBM faced in its KM journey. This case isdesigned to enable students to: (1)understand the importance ofknowledge management in enhancingthe competence of an organisation; (2)study the tools and techniques used byIBM to capture and disseminateknowledge; (3) examine the role playedby top management to develop aknowledge management framework inan organisation; and (4) evaluate theways in which reuse of knowledge canbe encouraged in an organisation. Thiscase is meant for MBA / MS students aspart of the information technology /knowledge management curriculum.The teaching note includes: (1) theabstract; (2) the teaching objectives andmethodology; (3) assignment questions;(4) feedback of the case discussion; and(5) additional readings and references.The teaching note does not contain ananalysis of the case.

USA; Information technology; Very large;1994-2009

IBMKnowledge managementLearning organisationInformation sharingWikisIntellectual Capital ManagementProgrammeCommunities of practiceK PortalICM AssetWebOn demand WorkplaceBlue PagesCollaboration ForumsKnowledge networks

Knowledge cafeKnowledge cockpit


906-010-1MULTIASISTENCIA ON THE INTERNET (A)

Busquets, JFundacion ESADE

This is the first of a three-case series (906-010-1 to 906-012-1). Multiasistencia wasfounded in Spain in the early 1980s,creating the Comprehensive ClaimsManagement Service (CCMS). The firmoffered this outsourcing service to 100corporate clients, including financialinstitutions, insurance companies andretail chains, accessing a market ofapproximately 9 million end users. Theservice is offered either as part of a fullycomprehensive household insurancepolicy or as a customer loyalty service inthe highly competitive financial andinsurance markets in Spain, the UK andFrance. The group assists its Europeanservice users from an InternationalControl Centre located in the outskirts ofMadrid, which receives their calls anddeploys jobs to its Trade Professional (TP)Network. Case (A) focuses on theproblem with quality in the year 2000 asa symptom of a non-scalable operatingmodel. The founder decided to take onnew executives to put the neededchanges into effect. The dilemma facingthe new management team waswhether or not to radically change thefirm’s operating model based ontelephone contacts - transforming itsmain business - and placingMultiasistencia on the Internet. Case (B)shows how the firm reinvented itself bytransforming the CCMS and the TPnetwork co-ordination model. Case (C)describes the change in corporate clientrelationships by stressing the value ofinformation management. The case alsodescribes a project developed with BBVASeguros, one of Multiasistencia’s mostimportant corporate clients.

Spain, UK, France; Insurance, repairservices; 200 million euros; 2000-2004

Organisational changeRe-engineering with ICTs(information and communicationstechnologies)Business networksBusiness growthLeadership


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InternetMobile systemsWeb services

17 ppField research

908-024-1OFFSHORING AND INNOVATION ATGLOBALCO: NEGOTIATING A WIN-WINSTRATEGY FOR THE OUTSOURCINGRELATIONSHIP

Barrett, MCambridge Judge Business School

In recent years, the evolution of IToffshoring relationships has been markedby a gradual shift away from theirtraditional focus on low cost and labourarbitrage. Instead, with the relationshipevolving to new levels of globalcollaboration, the perceived role ofvendors is shifting to one of partnershipand as a key source of innovation. Thiscase examines the challenges andopportunities of a multinational firm andits Indian vendors in developing itsoffshoring relationship over time. It alsoraises the crucial question as to how keyIndian and North American firms cantransition their offshoring relationship toone of partnership driving businessinnovation.

India, North America; Telecoms; 60,000employees; Mid-1990s to mid-2000s

OffshoringInnovationOutsourcing relationshipNegotiationsPartnershipCompetitive advantage

10 ppField research

9A98E036OHIO POLYMER INC

Bell, PCRichard Ivey School of Business

Ohio Polymer is about to negotiate acontract with ProBut Hydrocarbon, Incfor the purchase of ethylene gas. Thecontract will require Ohio to purchase afixed daily quantity of the gas at a setprice per ton. Ohio Polymer’s seniormanagement is looking for advice onhow much gas they should try to obtainand what price they should be willing topay. (A model is available for use with thiscase, product ‘7A98E036’.)

USA; Chemicals and allied products;Large

SimulationNegotiationManufacturing capacitySpreadsheet application

6 ppPublished sources8A98E36 (5pp)

910-003-1OPEN SOURCE INNOVATION ATMOZILLA CORPORATION

Gupta, VPrasad, VN


This case examines the open sourceinnovation process at MozillaCorporation, the company thatintroduced the second most popularinternet browser - Firefox. The casebegins explaining the way Mozilla cameinto existence. Later, it discusses themanner in which the company managedits various projects that had an activecontribution to the developingcommunity, both in strategic decisionmaking and project execution. The casealso discusses in detail, the marketingefforts of Mozilla to promote the opensource software products. The caseconcludes by providing a glimpse intothe future prospects of the company andthe competition it faces. The teachingobjectives of this case are to: (1)understand the open source innovationprocess at a software company; (2)identify the kind of leadership required tomanage open source projects; and (3)recognize the nuances of marketingopen source software products. This caseis designed for MBA / PGDBM studentsand is meant for the knowledge,information and communication systemscurriculum. The teaching note includesthe abstract, teaching objectives andmethodology, assignment questions,feedback of the case discussion, andadditional readings and references. Itdoes not contain an analysis of the case.

US; IT - software; Large; 2002-2010Mozilla CorporationFirefoxOpen source innovationSoftware developmentProject managementNetscape communicationsOpen source communityMozillazine.comMozilla value network

SeaMonkeySoftware release cycleUser-perceptible performancemetrics


9-398-008PROVIDIAN TRUST: TRADITION ANDTECHNOLOGY (A)

McFarlan, FWDailey, M


A major trust company attempts toimplement a major software systemwhile simultaneously reengineeringbusiness processes. Providian Trust, apreviously non-IT intensive organization,has to completely reposition itsmanagement of technology to deal withIT’s new strategic role in the company.The case illustrates how the appropriateuse of IT framework can illuminate riskand suggests appropriate courses ofaction.

United States; 4,000 employees, 470million revenues; 1995-1996

TrustsProject managementInformation systemsInformation and technologyComputer systems


9-806-165SKYPE

Coles, PAEisenmann, TR


Presents eBay’s rationale for its $2.6billion acquisition in late 2005 of Skype, afast growing voice-over-Internetprotocol (VoIP) provider. DescribesSkype’s history, technology, businessmodel, and competition, as well asgovernment regulation of VoIP services.The teaching purpose is to examine aplatform that exploits proprietarynetwork effects based on point-to-pointconnectivity; to assess options forstimulating the growth of such aplatform; to explore the pros and cons ofinteroperating with rival platforms; to


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illustrate a standalone, focused platform’svulnerability to ‘envelopment’ byadjacent platforms offering bundleservices; and to assess synergies to anestablished corporation from acquiring ahigh-tech startup.

Telecommunications; 200 employees,$200 million revenues; 2004-2006

AcquisitionsBrowsersBusiness modelsEntrepreneurshipEnvironmental regulationsNetworksWeb-enabled application


9A98E040SUPERIOR GRAIN ELEVATOR INC

Bell, PCRichard Ivey School of Business

The manager of port facilities for SuperiorGrain Elevator, Inc in Thunder Bay,Ontario, must decide whether toconstruct a third wharf at a cost of $1.5million. Superior Grain Elevator, Inc hasjust negotiated a grain sale to Poland thatwill increase the number of shipmentsfrom the Thunder Bay facility. A MicrosoftExcel model is available for use with thiscase, product ‘7A98E040’.

Canada; Water transportation; MediumSimulationRisk analysisSpreadsheet applicationComputer applications

5 ppPublished sources8A98E40 (7pp)

903-034-1TESCO.COM: A RARE PROFITABLEDOTCOM

Mukund, AIBS Center for Management Research

The case describes the evolution ofTesco.com (the on-line selling arm of theUK’s number one retailing companyTesco), into the world’s number one on-line grocery seller by 2003. It explains therationale behind Tesco’s decision in themid-1990s to sell groceries through theInternet. Detailed information is providedon the strategies adopted by thecompany to make the business a success.These include its unique ‘pick-in-the-stores’ model, delivery excellence,inventory management, customerservice and website management.Thereafter, the case studies the outcomeof these strategies and comments onTesco.com’s alliance with the US- basedretailer Safeway in 2001. Lastly, the caseexamines the possible pitfalls forTesco.com in 2003, and briefly discussesits future prospects. The case isstructured to enable students to: (1)study the nature of the on-line groceryretailing business and examine thegrowth of Tesco.com as a leadingcompany in the early 2000s; (2)understand the rationale behind a brick-and-mortar market leader company inthe retailing industry deciding to opt forbuilding an on-line sales channel; (3)examine Tesco.com’s unique businessmodel and comment how and why itwas superior to the traditional on-linegrocery retailing model (the one adoptedby Webvan and others); (4) appreciatethe importance of distributionexcellence, inventory management andsuperior customer service in running anon-line retailing business successfully;and (5) understand the imperatives ofextending a successful domesticbusiness model into the internationalarena and the potential dangers andbenefits of doing so. The case is aimed atMBA/PGDBA students and is intended tobe part of the knowledge, informationand communication systemsmanagement curriculum. The teachingnote does not contain an analysis of thecase.

United Kingdom, US, South Korea; On-line grocery retailing; Large; 1996-2003

TescoTesco.comOn-line grocery retailingUK retailing industryInventory management

Customer servicePick-in-the-stores modelWebvanSafewayPeapod15 pp

Published sources903-034-8 (4pp)

906-039-1TISCALI (D): PROJECT MANAGEMENT

Sampietro, MCanato, APennarola, F

SDA Bocconi

This is the fourth of a four-case series(306-476-1 and 906-037-1 to 906-039-1).The case object is the management ofthe Tiscali UNIT project, which broughtabout information systems unification ona European level. In particular, the caseinvestigates the initial phases of theproject and focuses on the organisationalaspects and its management, rather thanthe methodological part of projectmanagement. The decision-makingsubjects are the Chief Executive Officer(CEO) of Tiscali, Renato Soru, and theChief Information Officer (CIO) of thecompany, Salvatore Pulvirenti. The actiontrigger consists of the explicit request ofTiscali’s Managing Director and CEO,(Renato S) who, after a noteworthy seriesof takeovers on the European market, hasasked his managers (and especially hisCIO) to elaborate a proposal that wouldallow Tiscali to undertake an integrationprocess among the various companies.The setting is initially Cagliari (Italy), butthe action also takes place in variousEuropean countries. The time span isfrom March 2001 to August 2002. Thiscase (complemented by the teachingnotes) can be used in stand-alone modebut is best complemented by ‘Tiscali (B):UNIT Project: European IS Integration’(306-476-1), which describes thepremises for the UNIT project. In addition,there are two other cases which describeTiscali’s experience, ‘Tiscali (A): AnInternet Service Provider betweenService and Technology’ (306-476-1) and‘Tiscali (C): Management Consultingduring IS Implementation’ (906-038-1).

Europe; Telecom, Internet; Large; 2001Project managementIS (information systems)implementation



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9-502-030AQUALISA QUARTZ: SIMPLY ABETTER SHOWER

Moon, YHerman, K


Harry Rawlinson is Managing Director ofAqualisa, a major UK manufacturer ofshowers. He has just launched the mostsignificant shower innovation in recenthistory: the Quartz shower. The showerprovides significant improvements interms of quality, cost, and ease ofinstallation. In product testing, the Quartzshower received rave reviews from bothconsumers and plumbers alike. However,early sales of the Quartz have beendisappointing. Rawlinson is now facedwith some key decisions about whetherto change his channel strategy,promotional strategy, and the overallpositioning of the product in the contextof his existing product line.

United Kingdom; Manufacturingindustries; £8 million revenue; 2001

Consumer behaviorConsumer marketingDistribution channelsMarket entryMarket positioningMarketing strategyProduct developmentProduct introductionProduct positioning


9-504-048BURBERRY

Moon, YHerman, KKussmann, EPenick, EWojewoda, S


In 2003, Rose Marie Bravo, Burberry’s CEOis debating how to maintain the currencyand cachet of the brand across its broadcustomer base, while entering newproduct categories and expandingdistribution. In the past five years, thebrand has become one of the hottestluxury brands in the world. But Bravonow faces a number of key decisions,including: (1) which new productcategories to enter; (2) how to deal withthe appropriation of the brand bynontarget customers; and (3) how

prominent the company’s famed ‘check’pattern should be in its advertising andclothing.

United Kingdom; Fashion; 2003AdvertisingBrand managementFashionMarket positioningMarket segmentationMarketing strategyProcess analysisTarget markets


503-082-1FORD KA: THE MARKET RESEARCHPROBLEM (A)

Christen, MSoberman, DChung, SWCothier, G

INSEAD

This is the first of a three-case series (503-082-1 to 503-084-1). In response tochanges in the European small carmarket and the success of the RenaultTwingo, Ford decided to launch a newsmall car, the Ford Ka. Before GillesMoynier can get to the specifics of themarketing strategy to launch the Ford Ka,he needs to decide how to segment themarket and who to target. The marketresearch firm has conducted a series ofstudies among potential small car buyersand now the data must be analysed andinterpreted. This case series introducesstudents to strategic, conceptual andinformation issues of marketsegmentation and target selection - thecore concept of marketing theory. Themodular nature of the case allows theinstructor to focus either on individualissues or on the process of marketsegmentation and marketing strategydevelopment. The market research dataenables students to get unique ‘handson’ experience in dealing with marketresearch data and a wide range ofstatistical tools (cross-tabulations, clusteranalysis, multi-dimensional scaling,regression analysis). An Excel spreadsheet‘503-082-9’ is available free of chargewhen the teaching note is purchased.

France; Automobiles; Large; 1996MultimediaCD-ROMInteractive exercise

Market researchMarketing strategyAttitudinal segmentationCluster analysisMDSQualitative data interpretationAutomobilesQuantative data analysisMarketing processMarket segmentation

26 ppField research503-082-0 (s/w)503-082-8 (21pp)

503-083-1FORD KA: THE MARKET RESEARCHPROBLEM (B)

Christen, MSoberman, DChung, SWCothier, G

INSEAD

This is the second of a three-case series(503-082-1 to 503-084-1). In response tochanges in the European small carmarket, Ford decided to launch a newsmall car, the Ford Ka. Before GillesMoynier can get to the specifics of themarketing strategy to launch the Ford Ka,he needs to decide how to segment themarket and who to target. The marketresearch firm has conducted a series ofstudies among potential small car buyersand now the data must be analysed andinterpreted. This case series introducesstudents to strategic, conceptual andinformation issues of marketsegmentation and target selection - thecore concept of marketing theory. Themodular nature of the case allows theinstructor to focus either on individualissues or on the process of marketsegmentation and marketing strategydevelopment. The market research dataenables students to get unique ‘handson’ experience in dealing with marketresearch data and a wide range ofstatistical tools (cross-tabulations, clusteranalysis, multidimensional scaling andregression analysis).

France; Automobiles; Large; 1996Market segmentationMarket researchMarketing processMarketing strategyAttitudinal segmentationQuantitative data analysisCluster analysisMultidimensional scaling (MDS)

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Qualitative data interpretationAutomobiles

11 ppField research503-082-0 (CD-ROM)503-082-8 (21pp)

IMD-5-0543INNOVATION AND RENOVATION: THENESPRESSO STORY

Kashani, KMiller, J

IMD

The case traces the development of theNespresso System in a 100%-ownedaffiliate deliberately placed outside ofNestlé’s main organisational structure. Ithighlights the team’s successes andchallenges in creating a new, small, nichesegment in the mature coffee marketand its prospects for growing thebusiness from SFR150 million to SFR1billion within the next decade. A radicaldeparture from most Nestle lines ofbusinesses targeted to the mass market,the Nespresso story offers provocativelessons about innovation in large, highlystructured organisations.

Switzerland, Global; Coffee, food; CHF150million annual revenue in 1999; Autumn1999

InnovationNew product developmentMarketing a new concept to upscaDirect marketingNestle

24 ppField researchIMD-5-0543-T (22pp)

IMD-5-0395MEDIQUIP SA®

Kashani, KIMD

The case describes the selling activities ofa sales engineer with respect to a keyaccount. The loss of the order for a CT-Scanner provides the background foranalyzing the dynamics of the buyingsituation and the salesman’s handling ofit. The issues raised are: Who are the castof characters influencing the buyingdecision? What seems to motivate them?What sales strategy would beappropriate.

Germany; Medical diagnostic equipmentCorporate buyingIndustrial selling


9-505-038PRODUCT TEAM CIALIS: GETTINGREADY TO MARKET

Ofek, EHarvard Business Publishing

Lilly and ICOS are preparing for thelaunch of a new drug, Cialis, to competeagainst Viagra. To position against theincumbent firm Pfizer, which developedand markets Viagra, and othernewcomers into the erectile dysfunctionmarket, they must determine how bestto segment the market and which targetmarket to focus on. The marketing planshould take advantage of Cialis’s medicalprofile. In particular, they must payspecial attention to the communicationstrategy to patients, physicians, andpartners. The analysis, plan, and actionshould take into account extensivemarket research and recent competitivedevelopments.

2002Communication strategyMarket researchMarketing planningProduct positioningMarket segmentationTarget marketsCompetition


505-098-1RED BULL: THE ANTI-BRAND BRAND

Kumar, NTavassoli, NLinguri Coughlan, S


Founded in Austria in 1984, Red Bull wascredited with creating the energy drinkscategory. In 2004, the worldwide energydrinks category was worth 2.5 billioneuros and Red Bull commanded a 70%market share. Sold in over 100 markets,Red Bull was the market leader in theUSA as well as in 12 of the 13 WestEuropean markets where it was present.

Central to Red Bull’s success was the useof word-of-mouth or ‘buzz’ marketing.Through its sponsorship of youth cultureand extreme sports events, it developeda cult following among marketing-waryGeneration Y-ers, (18- to 29-year olds)who perceived it as an anti-brand. Whileit purported to be a sports drink, Red Bullwas mostly sold in clubs and bars as analcohol mixer, where its caffeine doseshelped revive clubbers into the earlymorning hours. By playing onassociations with energy, danger andyouth culture, Red Bull carefullycultivated its mystique, which earned itnicknames like ‘liquid cocaine’. Thecompany used additional non-traditionalmarketing techniques, such as consumereducation teams who drove aroundhanding out free cans of Red Bull tothose in need of energy, and studentbrand managers who promoted theproduct on university campuses. In 2004,Red Bull found itself at a crossroads,challenged with defending its marketshare. It faced a maturing market and anonslaught of competitive brands, someof them promoted by beverage industrygiants such as Coca-Cola and Pepsi,others as private labels by mass retailerssuch as Asda (part of Wal-Mart). Red Bullneeded to determine whether it wasoutgrowing its anti-establishment status.As a mature brand, it needed to assesswhether the time had come to transitionto a more traditional marketingapproach. But this raised a criticalquestion: would this move toward amore mainstream approachfundamentally destroy Red Bull’s anti-brand mystique?

Europe, USA; Energy drinks; 1.26 billioneuros sales; 1982-2004

Buzz marketingDistributionGrowthBrand buildingGuerilla marketingEnergy drinksIntegrated marketingcommunicationsAdvertisingProduct-life cycleNon-traditional marketing


Marketing

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510-077-1RENOVA TOILET PAPER: AVANT-GARDE MARKETING IN ACOMMODITIZED CATEGORY

Bart, YChandon, PSweldens, SSeabra de Sousa, R

INSEAD

Renova, a Portuguese toilet papermanufacturer, is battling to survive in astagnant, commoditised marketdominated by international giants andprivate labels. To grow and remainindependent, CEO Paulo Pereira da Silvais considering three options: (1) privatelabel manufacturing; (2) new functionalinnovations, and (3) launching a blacktoilet paper. What should he do? Andhow should the chosen strategy beimplemented? In exploring thechallenges facing small players instagnant commodised categories whereinternational giants and private labelsdominate, this case provides detailedinformation on consumer behaviour,competition, and the company(including the brand and pastcommunication campaigns). It accountsfor the success of private labels andexplains when it makes sense to producefor a private label. It illustrates the key roleof marketing and branding, showinghow Renova differentiated on hedonicand symbolic benefits in a category thatwas thought to be hopelesslycommoditized.

Disposable paper; 2005-2010MarketingBrandPrivate labelLuxuryConsumer goodsBlue OceanInnovationAdvertising


IMD-5-0688SAURER: THE CHINA CHALLENGE (A)

Ryans, AIMD

This is the first of a two-case series (IMD-5-0688 and IMD-5-0689). In December2003 the management team at SaurerTwisting Systems (STS) was facingincreasing competition in the critically

important Chinese market. Localcompetitors in China were undercuttingthe price of Saurer’s CompactTwister,which was manufactured in China, byover 50%. The company was consideringthe introduction of a lower cost machinetargeted at Chinese and Asian customers,who would not buy its high costmachine. Margins were likely to besignificantly lower on the new machine,and the new machine might cannibalisetheir high end product. If the STS teamdid decide to introduce the newmachine, it would have to make somedifficult decisions about positioning,pricing, naming the product, and salesstrategy. It was also not clear how theirChinese competitors would respond tothe proposed new product.

China, Germany; Textile machinery; 1.7billion euros; December 2003

ChinaLow-cost competitionMarketingStrategy

20 ppField research

9-504-016STARBUCKS: DELIVERING CUSTOMERSERVICE

Moon, YQuelch, JA


Starbucks, the dominant specialty-coffeebrand in North America, must respond torecent market research indicating thatthe company is not meeting customerexpectations in terms of service. Toincrease customer satisfaction, thecompany is debating a plan that wouldincrease the amount of labor in the storesand theoretically increase speed-of-service. However, the impact of the plan(which would cost $40 million annually)on the company’s bottom line is unclear.

United States; 60,000 employees, grossrevenue: $3.3 billion revenues; 2002

Market researchProfitabilityCustomer retentionCustomer service


IMD-5-0604TETRA PAK (A): THE CHALLENGE OFINTIMACY WITH A KEY CUSTOMER

Kashani, KShaner, J

IMD

This is the first of a four-case series (IMD-5-0604 to IMD-5-0607). The (A) case ofthis series describes a failed attempt tosell new packaging machinery to a keyItalian customer facing declining salesand profits in its milk business. Tetra Pak’sanalysis leads them to propose a newproduct strategy that is summarilyrejected by the customer. The case raisesthe issue of Tetra Pak’s strategy in theItalian milk market and the wisdom of itsproposed customer strategy. The broaderquestion is whether the company isserving the best interest of its keyaccounts.

Italy and international markets;Packaging systems; 7 billion Euros, 22,000employees; 2000-2002

Industrial marketingKey account marketingCustomer orientationValue chain marketingCustomer satisfaction surveysMarketing implementationManagement of change


504-009-1UNILEVER IN BRAZIL (1997-2007):MARKETING STRATEGIES FOR LOW-INCOME CONSUMERS

Chandon, PPacheco Guimaraes, P

INSEAD

Unilever is a solid leader in the Braziliandetergent powder market with an 81%market share. Laercio Cardoso mustdecide: (1) whether Unilever shoulddivert money from its premium brands totarget the lower-margin segment of low-income consumers; (2) whether Unilevercan reposition or extend one of itsexisting brands to avoid launching a newbrand; and (3) what price, product,promotion, and distribution strategywould allow Unilever to deliver value tolow-income consumers withoutcannibalising its own premium brandstoo heavily. This case deals with thequestion of whether marketing andbranding create value for really poor

Marketing

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consumers. It can therefore be used in anMBA, executive education orundergraduate core course on marketingmanagement to illustrate the value ofmarketing and the marketing approach,or in a brand management course toexplore the frontiers of branding. Thiscase can also be used in a consumerbehaviour course to examine themotivations and decision-makingprocess of low-income consumers.Alternatively, it can be used in a globalmarketing or global strategy andmanagement course to study the waymultinational companies adapt theirstrategy to compete in emergingcountries.

Brazil; Home and personal care; US$56billion; 1996-2004

MarketingBrandingLow-income consumersPovertyNew product introductionBreak-even analysisAdvertisingPricing

23 ppField research504-009-8 (34pp)504-009-9 (s/w)

IMD-5-0751VALUE SELLING AT SKF SERVICE (A):TOUGH BUYER CONFRONTSSTRATEGY

Kashani, KDuBrule, A

IMD

This the first of a three-case series (IMD-5-0751, IMD-5-0752 and IMD-5-0756).Faced with growing competition andcommoditisation of its core aftermarketbusiness for industrial bearings, SKFdevelops a sales tool to document,measure and guarantee its customersfinancial benefits from the use of itsreplacement products and relatedservices. The strategy is based onjustifying premium unit prices that leadto a lower total cost and an attractivereturn on investment for the customer.However this strategy is not likely toimpress Steelcorp, an important end userof bearings buying upwards of $12million annually. A new procurement VPis asking suppliers of bearings, includingSKF, to submit to on-line reverse auctionwhere the lowest unit price is likely towin big orders. SKF senior management

is considering a response to Steelcorp’sinvitation which is supported by thecompany’s distributor but opposed bythose inside the company whocommitted to value selling and total costpricing. The students are to resolve thedilemma and make a decision whether toparticipate in the auction or refuse to doso and risk losing potentially big ordersduring recessionary market conditions.Learning objectives: The case can beused for the following learningobjectives: (1) demonstrate themechanics of value (total cost) pricingand the strategic logic of it; (2) show thelimitations of value pricing (eg in face ofprocurement strategies targetingreduction in per unit cost of goodspurchased); (3) illustrate howcommoditisation can be fought backunder certain conditions; (4) provideinsights on how industrial buying-sellingand distribution work and the trendsreshaping both; (5) practice role play andnegotiation with a key customer; and (6)introduce the concept of reverse auctionin industrial procurement.

Global, US; Industrial bearings; US$8.2billion

Value pricingIndustrial sellingIndustrial distributionChannel conflictCommoditisationNegotiationReverse auctionAfter sales serviceIndustrial marketingKey account management

12 ppField research

9-504-028VIRGIN MOBILE USA: PRICING FORTHE VERY FIRST TIME

McGovern, GJHarvard Business Publishing

Dan Schulman, the CEO of Virgin MobileUSA, must develop a pricing strategy fora new wireless phone service targetedtoward consumers in their teens andtwenties, many of whom are believed tohave poor credit quality and unevenusage patterns. Contrary to conventionalindustry wisdom, Schulman is convincedthat he can build a profitable businessbased on this underrepresented targetsegment. The key is pricing. Schulman iscurrently debating three pricing options:(1) adopting a pricing structure that is

roughly equivalent to the major carriers;(2) adopting a similar pricing structure,but with actual prices below the majorcarriers; or (3) coming up with a radicallydifferent pricing structure. With respectto the third option, Schulman isconsidering various alternatives,including a reliance on prepaid (asopposed to post-paid) plans and thetotal elimination of contracts.

United States; Telephone industry; 200employees, $5.2 billion revenues; 2002

Market segmentationPricingPricing strategyTarget marketsTelecommunications


Marketing

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9-694-046BARILLA SPA (A)

Hammond, JHHarvard Business Publishing

Barilla SpA, an Italian manufacturer thatsells to its retailers largely through third-party distributors, experienced widelyfluctuating demand patterns from itsdistributors during the late 1980s. Thiscase describes a proposal to address theproblem by implementing a continuousreplenishment program, under which theresponsibility for determining shipmentquantities to the distributors would shiftfrom the distributors to Barilla. Describessupport and resistance within Barilla’sdifferent functional areas and within thedistributors Barilla approached with theproposal.

Italy; 7,000 employees, $2 billionrevenues; 1990

Order processingDistribution planningLogisticsSuppliers


UVA-OM-0836BEAU TIES LTD OF VERMONT

Weiss, ENShepherd, S


Bill Kenerson, the owner-operator of aretail bow-tie business, faces twodecisions. The first is whether to bringproduction of bow ties in-house. Thesecond concerns his telephone-order-entry system. Students must calculatethe capacity of the production facilityand determine the appropriate staffingplan for telephone operators.

Middlebury, VT; Retail; $0.75-1.0 million;1996

Capacity planningEntrepreneurshipMake, buy, or leaseQueuingSmall businessWaiting-line analysisAgency managementDiverse protagonist

12 ppField researchUVA-OM-0836TN (1pp)

600-003-1DRAGONFLY: DEVELOPING APROPOSAL FOR AN UNINHABITEDAERIAL VEHICLE (UAV)

Loch, CHDe Meyer, AKavadias, S

INSEAD

IACo is an aerospace company,developing UAVs (Uninhabited AerialVehicles). The case describes the projectof developing a bid for a large contractunder severe time pressure. The casediscusses project planning for rapid time-to-market. The case discusses projectmanagement problems occuring duringthe development of a new product. Themain objectives are to illustrate: (1) thedifferent ways of representing projectactivities; (2) the traditional projectmanagement techniques (CPM, GanttChart); (3) extensions of the critical pathapproach (to account for timeuncertainty, loops and rework); and (4)how to focus improvement efforts.

UK; Aerospace; 19999 ppPublished sources600-003-8 (23pp)

606-043-1EBAY® CUSTOMER SUPPORTOUTSOURCING

Newman, SGrikscheit, GVerma, RMalapati, V

David Eccles School of Business

The case addresses an extremely criticaland timely subject. Offshore outsourcingis hotly debated today in business andpolitical circles, driven by the unrelentinggrowth of technology and the globaleconomy. The ubiquitous nature of theeBay name adds to the appeal of thecase. The authors believe it will be rare tofind students in university classroomstoday who have not bought or soldsomething on eBay and who have notbeen aware of the impact of outsourcingdecisions on careers and communities.The case provides insights into eBay’sunique on-line business model, exploresthe critical role of customer service inrapidly growing on-line enterprises, andstimulates in-depth discussion of theissues managers working in customerservice face when making outsourcingdecisions. The case is set in late 2004

when the operations director isscheduled to present a new ‘three-tiered’outsourcing strategy to the seniormanagement team lead by ChiefExecutive Officer Meg Whitman. Inaddition, at the last minute anunanticipated and largely untriedapproach to outsourcing is introduced inresponse to a question posed by eBay’svice president of global customersupport. ‘If we are to continueoutsourcing, and even considerexpanding it, why should we keeppaying someone else to do what we cando for ourselves’? The question, andrelated issues, provides the stimulus forstudents to reflect on and analyse thedetails of the strategy involving: (1) a100% increase in volume; (2) outsourcingpotentially sensitive risk-related inquiries;(3) the addition of a second vendor; and(4) the viability of a back-out plan, as wellas the growing concerns among seniorexecutives about outsourcing altogether.Finally, students are challenged toevaluate a hybrid strategy for eBay towork with a third party vendor to ‘Build,Operate, and ultimately Transfer’, or ‘BOT’facilities to eBay. This case was sponsoredby the Indiana University CIBER CaseCollection.

United States, International; eCommerce,service sector; Large corporation; 2004

Customer serviceOffshore outsourcingCustomer relationshipmanagementCustomer satisfactionService operationseBayManaging risk and fraudMetrics and benchmarksOn-line auctionsOutsourcing strategiesOutsourcing and technologyOutsourcing vendor selectionTrust and safetyService performance improvement


9-906-417ESTERLINE TECHNOLOGIES: LEANMANUFACTURING

Nolan, RLBrown, KAKumar, S



31

Robert Cremin Raises the issue of theappropriate role of IT in leanmanufacturing. Most largemanufacturing companies haveimplemented ERP IT systems to supportlean manufacturing practices. The Kerryplant of Esterline Technologiesattempted an ERP implementation andthen terminated it. Now the Kerry plant isrevisiting the appropriate use of IT in anenvironment of highly innovative leanmanufacturing.

Washington; 7,500 employees, $800million revenues; 2006

InnovationInformation and technologyERPToyota production system


606-012-1IDEO: SERVICE DESIGN (A)

Sosa, MEBhavnani, R

INSEAD

This is the first of a two-case series (606-012-1 and 606-013-1). This case describeshow IDEO adapts its famed innovationprocess (developed to design newproducts) to the particularities of servicesand their design. The case seriesdescribes four service design projects toshow how IDEO has developed andcodified a series of design methods,which constitute a toolbox from whichteams can pick and choose dependingon the innovation project. The case studyaims to: (1) reinforce the notion of thefive-step innovation process that can beused for any design project, whether it isa service or a product. (The five steps ofthe IDEO process are: (i) observe; (ii)synthesise; (iii) generate ideas; (iv) refine;and (v) implement); (2) highlight thedifferences between product and servicedesign, and the subtle differences in therespective processes; (3) introduce thenotion of IDEO methods as a set ofinterchangeable tools to be usedaccording to the type of project beingworked on, and identify when is it best touse them; and (4) introduce the conceptof knowledge brokering and examinethe ways in which the transfer ofknowledge is carried out across adistributed organisation. This case waspreviously numbered 605-031-1.

USA, UK; Consulting (transportation,banking, telecommunications, healthcare); 300+ employees; 1999-2005

Innovation managementNew product and servicedevelopmentBrainstormingPrototypingKnowledge brokering


602-010-1MARKS & SPENCER AND ZARA:PROCESS COMPETITION IN THETEXTILE APPAREL INDUSTRY

Pich, MVan der Heyden, LHarle, N

INSEAD

This case was written to illustrate theimportance of business process design asa basis for competition in the textileindustry. The case illustrates theimpressive performance of Zara, the newfashion player from Spain, which hasinnovated in process design so as todeliver new collections in its stores with alead-time of 5 to 7 days. The moretraditional approach in textile retailing isillustrated here by Marks and Spencer(M&S), the well-known UK retailer.

Notwithstanding M&S’s currentproblems, the case does not fall into anoverly simple comparison between ayoung, innovative competitor and anageing glory. The authors have taughtthis case both in executive education andin the MBA core class on process andoperations management. There are fourimportant concepts that we typicallystress, more or less, depending onpedagogical objectives: (1) newsvendorlosses in the textile industry; (2) the roleof postponement in final design; (3) the‘lean enterprise’ aspect of Zara; and (4)process competition and innovation,embedded in technology evolution.

UK; International, retail, textile apparel;Large; 1998-2001

Process competitionOperations managementSupply chainRetail apparelDelayed customisationTime-based competitionNewsboy modelInnovation

17 ppPublished sources602-010-8 (37pp)602-010-9 (s/w)


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OSA1RED BRAND CANNERS

Wilson, RBStanford Business School

Presents a simple example of aproduction planning problem amenableto analysis using linear programming.

California; Canning; 1965Production planning


KEL026SEVEN-ELEVEN JAPAN CO

Chopra, SKellogg School of Management

Discusses the structure of the Seven-Eleven Japan supply chain in terms of itsfacilities network, inventorymanagement, distribution, andinformation.

Japan; Retail industry; 2000DistributionInformation managementInventory managementOperations managementSupply chain optimizationTransportation

14 ppPublished sourcesKEL027 (3pp)

9-695-022SPORT OBERMEYER, LTD

Hammond, JHRaman, A


The case describes operations at askiwear design and merchandisingcompany and its supply partner.Introduces production planning forshort-life-cycle products with uncertaindemand and allows students to analyze areduced version of the company’sproduction planning problem. Inaddition, it provides details aboutinformation and material flows that allowstudents to make recommendations foroperational improvements, includingcomparisons between sourcing productsin Hong Kong and China.

United States, Hong Kong, China; Apparelindustry, ski; 100 employees, $32.8 millionrevenues; 1992

ApparelDemand analysisForecastingInternational operationsProduction planningSourcingSupply chain


607-009-1TALENT DRYCLEANERS

Velamuri, SOjadi, FAnyakora, C

Lagos Business School

This case allows students in postgraduate and entrepreneurial classes toexplore the all-important concepts ofbottle necks in managing serviceoperations. It details the capacities of thevarious sub-processes and uses somecost data to analyse the break-evenpoint, capacity utilisation and the allimportant service parameter ofturnaround time in a typical dry-cleaningservice. It also outlines what to do toimprove the entire process and examinesthe economies of the business if theowner-manager is desirous to move outof the present location and up to thenew emerging locations in Lagosmetropolis. The teaching note includesthe teaching strategy covering one hourfifteen minutes of the session and notjust the solution set of data.

Lagos, Nigeria; Services; SmallEntrepreneurshipProcess flow analysisBreak-even analysisMarketing issuesService management


9-693-019TOYOTA MOTOR MANUFACTURING,USA, INC

Mishina, KHarvard Business Publishing

On 1 May 1992, Doug Friesen, Managerof assembly for Toyota’s Georgetown,Kentucky, plant, faces a problem with theseats installed in the plant’s sole product- Camrys. A growing number of cars aresitting off-line with defective seats or aremissing them entirely. This situation isone of several causes of recent overtime,yet neither the reason for the problemnor a solution to it is readily apparent. Asthe plant is an exemplar of Toyota’sfamed production system (TPS), Friesen isdetermined that, if possible, the situationwill be resolved using TPS principles andtools. Students are asked to suggest whataction(s) Friesen should take and toanalyze whether Georgetown’s currenthandling of the seat problem fits withinthe TPS philosophy.

Kentucky; 4,000 employees, $1-5 billionrevenues; 1992

International operationsProcess analysisQuality controlProduction controlsSuppliers


9-607-129WESTIN HOTELS AND RESORTS:OPERATIONS OF A LIFESTYLEEXPERIENCE

Frei, FXDev, CSStroock, LM


Westin Hotels and Resorts adopted anew ‘lifestyle’ brand strategy whichprovided guests with a new serviceexperience. The dilemma Westin facedwas how to operationally build a brandthat delivered consistent service onintangible values.

Hotel industry; 145,000 employees,US$5.9 billion revenues; 2000-2006

MarketingOperations managementServices

17 ppField research


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603-002-1ZARA

Ferdows, KGeorgetown University

Domiguez Machuca, JAUniversity of Sevilla

Lewis, MWarwick Business School

The case offers an illustration of a fast-response global supply, production, andretail network. In 2002 Zara, operatingout of La Coruna in north-west Spain, wasthe only retailer that could delivergarments to its 507 stores in 33 countriesin just fifteen days after they weredesigned. Its unique systems for productdesign, order administration, production,distribution and retailing were behindthis astonishing capability. Itsunconventional approach providesinteresting opportunities for discussionand learning. The case is quite popularwith executives, MBA’s andundergraduate business students. It canbe used in a remarkably wide range ofcourses - from a core operationsmanagement course to electives focusedon international operations, operationsstrategy, global logistics, distribution,retailing, as well as in specialised andgeneral executive programmes. Theteaching note includes severalphotographs from Zara’s operations in LaCoruna, and the appendices are availableas PowerPoint files as the teaching notesupplement ‘603-002-9’. This case was thewinner of the 2003 Indiana UniversityCenter for International BusinessEducation and Research (CIBER)-sponsored Production and OperationsManagement Society (POMS)International Case Competition. This casewas sponsored by the Indiana UniversityCIBER Case Collection.

Spain and global; Fashion apparel; Largemultinational; 2002

Global supply chainDesign-product-distribution-retailintegrationFast-response networksFashion retailingQueuing and inventory modelsManufacturing-marketing interfaceTime-based competitionMechanising

15 ppField research603-002-8 (21pp)603-002-9 (s/w)

9-604-081ZARA: IT FOR FAST FASHION

McAfee, APSjoman, ADessain, V


In 2003, Zara’s CIO must decide whetherto upgrade the retailer’s IT infrastructureand capabilities. At the time of the case,the company relies on an out-of-dateoperating system for its store terminalsand has no full-time network in placeacross stores. Despite these limitations,however, Zara’s parent company, Inditex,has built an extraordinarily well-performing value chain that is by far themost responsive in the industry. The casedescribes this value chain, concentratingon its operations and IT infrastructure.

Spain; 32,000 employees, gross revenue:$4 billion revenues; 2003

Vertical integrationOperationsInformation systemsInformation and technologyProductionComputer networksSupply chain management



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9-796-128AFRICAN COMMUNICATIONS GROUP

McGahan, ACoxe, D


Describes the opportunities thatconfront the African CommunicationsGroup, an entrepreneurial organizationthat plans to introduce a wireless pay-phone system in Tanzania. Provides afoundation for the analysis of valuecreation and of value capture. Thepossibility of entry by other companies,the presence of a large supplier, anduncertainties about demand all createimportant tradeoffs for the new venture.Used in an advanced course incompetition and strategy to introduce aframework for evaluating a new businessbased on existing technologies. Principalconcepts include value creation andcapture, competitor analysis, supplierevaluation, and financial forecasting.

AfricaCompetitionDecision analysisEntrepreneurshipIndustry structureTelecommunications


9-710-467APPLE INC IN 2010

Yoffie, DBKim, R


On April 4, 2010, Apple Inc launched theiPad, the company’s third majorinnovation released over the last decadeunder its iconic CEO Steve Jobs. Apple’sstrategy of shifting its business into non-PC products had thrived so far, driven bythe smashing success of the iPod and theiPhone. Yet challenges abounded.Macintosh sales in the worldwide PCmarket still languished below 5%. Growthin iPod sales was slowing down. iPhonefaced increasing competition in thesmartphone industry. And would Apple’slatest creation, the iPad, take thecompany to the next level?

California; 36,800 employees, grossrevenue:$43 billion; 1976-2010

TechnologyStrategic planning

Market positioningCompetition


IMD-3-0873EASYJET: THE WEB’S FAVOURITEAIRLINE

Kumar, NRogers, B

IMD

Stelios Haji-Ioannou, the 32-year-oldChief Executive Officer and founder ofeasyJet airlines, achieved profitability forthe first time in 1999, almost 4 years afterlaunching his London-based low costcarrier. The concept behind easyJet was‘to offer low cost airline service to themasses’, and the airline accomplished thisby adopting an efficiency-drivenoperating model, creating brandawareness, and maintaining high levelsof customer satisfaction. A key issue inthe case is whether the airline willcontinue to grow and survive in thehighly competitive low cost segment ofthe market. In 2000, Stelios was anxiousto try his hand at launching otherbusinesses, so he started a chain ofInternet cafes. Some questioned whetherStelios would be able to successfullytransfer his low cost business model toInternet cafes. Undeterred, Stelios movedahead with his plan to createeasyEverything, with the belief that hecould make a profit by encouragingcustomers to surf the Internet, send e-mail and shop on-line. Instructors shouldnote that ‘easyJet’ is the first case in aseries that includes ‘easyEverything: TheInternet Shop’ (IMD-3-0874) and‘www.easyrentacar. com’ (IMD-3-0875).

Europe; Airline; 1,000 employees, US$125million turnover; 2000

Marketing strategyIndustry analysisService management


302-058-1EVEN A CLOWN CAN DO IT: CIRQUEDU SOLEIL RECREATES LIVEENTERTAINMENT CASE B

Kim, WCMauborgne, RBensaou, BMWilliamson, M

INSEAD

This is the second of a two-case series(302-057-1 and 302-058-1). Cirque duSoleil very successfully entered astructurally unattractive circus industry. Itwas able to reinvent the industry andcreated a new market space bychallenging the conventionalassumptions about how to compete. Itvalue innovated by shifting the buyergroup from children (end-users of thetraditional circus) to adults (purchasers ofthe traditional circus), drawing upon thedistinctive strengths of other alternativeindustries, such as the theatre, Broadwayshows and the opera, to offer a totallynew set of utilities to more mature andhigher spending customers. The caseseries is designed to serve a variety ofpurposes in the value innovation andcreating new market space teachingmodule of an MBA strategy course orexecutive education programme. Thecase series can be equally usedindividually in a standalone module onvalue innovation or as part of a sequenceof three to four sessions. In bothinstances, the instructor can best use it tocover the following topics: (1) the valueinnovation logic (as compared toindustry and competitive analysis); (2) theconcept of value curve; and (3) the sixpaths analysis for creating new marketspace. A video called 'The Evolution ofthe Circus Industry' is available for freefaculty download atwww.blueoceanstrategy.com.

Canada, USA, Europe; Entertainment,circus; 2001

Circus and live entertainmentindustryValue innovationStrategyBlue Ocean StrategyCreating new market spaceRedefining industry boundariesCompetition



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301-056-1FORMULA ONE CONSTRUCTORS:COMBINED CASE

Jenkins, MCranfield School of Management

This is a revised and combined version ofthe Formula One Constructors case series(399-001-1 to 399-004-1 and 303-094-1).This case is used to address the issues ofachieving competitive advantage in ahighly competitive, technological andinternational context. The introductionoutlines the competitive nature ofFormula 1 and the fact that this is anindustry of sophisticated multi-millionpound organisations competing at thehighest international level. The case thenfocuses on a constructor who achievedsustained competitive advantage in aparticular period. The case is used toillustrate a number of principles relatingto the resource-based view of strategy,such as defining sources of competitiveadvantage; the problems of imitationand appropriation of key resources; andthe idiosyncratic and path-dependentnature of sources of advantage.

Global; Motorsport, Formula One; Large;1950-2003

Sustained competitive advantageResource based viewCore competenceDistinctive capabilities

StrategyFormula 1F1


9-399-150GE’s TWO-DECADETRANSFORMATION: JACK WELCH’SLEADERSHIP

Bartlett, CAWozny, M


GE is faced with Jack Welch’s impendingretirement and whether anyone cansustain the blistering pace of change andgrowth characteristic of the Welch era.After briefly describing GE’s heritage andWelch’s transformation of the company’sbusiness portfolio of the 1980s, the casechronicles Welch’s revitalization initiativesthrough the late 1980s and 1990s. Itfocuses on six of Welch’s major changeprograms: The ‘Software’ Initiatives,Globalization, Redefining Leadership,Stretch Objectives, Service BusinessDevelopment, and Six Sigma Quality.

United States; 293,000 employees, $100billion revenues; 1981-1998

LeadershipChange managementOrganizational developmentBusiness policyExecutivesOrganizational cultureCorporate strategyOrganizational changeConglomeratesImplementing strategy


9-384-049HONDA (A)

Pascale, RChristiansen, E


Describes the history of Honda MotorCompany from its beginning through itsentry into and subsequent dominance ofthe US market. The history is explainedprimarily in terms of strategic factors andquoted from two sources: an earlier caseand Boston Consulting Group report onthe motorcycle industry. Should be usedwith Honda (B).

Japan, United States; Motorcycles; Large;1948-1974

Business policyCompetitionCorporate strategyJapanLearning curvesMotorcycles

9 ppPublished sources5-386-034 (7pp)5-704-022 (27pp)

9-384-050HONDA (B)

Pascale, RChristiansen, E


Describes the history of Honda MotorCompany from its beginning through itsentry into and subsequent dominance ofthe US market as seen through the eyesof Honda executives. The history ofHonda’s successful entry into the USmarket is viewed as highly adaptive andfraught with error and serendipity. Honda


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(A) and (B) are designed to be usedtogether to contrast two differing viewsof major events in a company’s history,both of which are important for a generalmanager to understand.

Japan, United States; Motorcycles; Large;1948-1974

Business policyCorporate strategyJapanManagement of changeManagement stylesMotorcycles

9 ppField research

9-798-063LEADERSHIP ONLINE (A): BARNES &NOBLE vs AMAZON.COM

Ghemawat, PBaird, B


Describes the attempt of a traditionalretailer, Barnes & Noble, to counter thechallenges posed by an Internet-basedstart-up, Amazon.com.

United States; 20,000 employees, $2billion revenues; 1996-1997

CompetitionInternet


9-396-357MCKINSEY & COMPANY: MANAGINGKNOWLEDGE AND LEARNING

Bartlett, CAHarvard Business Publishing

Describes the development of McKinsey& Co as a worldwide managementconsulting firm from 1926 to 1996. Inparticular, it focuses on the way in whichMcKinsey has developed structures,systems, processes, and practices to helpit develop, transfer, and disseminateknowledge among its 3,800 consultantsin 69 offices worldwide. Concludes byfocusing on three young consultantsoperating in each dimension of the firm’sorganization - the local office, theindustry practice, and the firm’scompetence center. Managing director,Rajat Gupta, wonders if the changes hehas made are sufficient to maintain the

firm’s vital knowledge developmentprocess.

6,000 employees, $1.8 billion revenues;1996

InnovationBusiness policyKnowledge managementKnowledge transferManaging professionalsMultinational corporations


IMD-3-1334NESTLÉ’S GLOBE PROGRAM (A): THEEARLY MONTHS

Killing, PIMD

This is the first of a three-case series (IMD-3-1334 to IMD-3-1336). All three casescan be taught in a half-day session. ChrisJohnson has been given the task ofinitiating and managing the world’slargest SAP roll out. The scope is global,the time frame for completion is fiveyears. The cost is estimated at SFr 3billion. Chris has to move to Switzerlandand start building an organisation andgetting Nestle ready for a new way ofmanaging the business. This casedocuments his first months in his newjob and lays out the early challenges.

Global; Food and beverage; Large; 2000Change managementSAPProject management


IMD-3-1335NESTLÉ’S GLOBE PROGRAM (B): JULYEXECUTIVE BOARD MEETING

Killing, PIMD

This is the second of a three-case series(IMD-3-1334 to IMD-3-1336). This shortcase continues the GLOBE story and isintended as an in-class handout to beused during the discussion of the (A)case. It documents some of the GLOBE-related discussion at Nestlé’s July 2000Executive Board meeting, which raisesfresh issues for Chris.

Global; Food and beverage; Large; 2000Change management


IMD-3-1336NESTLÉ’S GLOBE PROGRAM (C):‘GLOBE DAY’

Killing, PIMD

This is the third of a three-case series(IMD-3-1334 to IMD-3-1336). This finalcase in the GLOBE series is setapproximately 18 months after the B-case. The setting is a meeting of Nestlé’smarket heads who are participating in adaylong event to bring them up to dateon the progress of GLOBE. The morninghas been difficult for Chris Johnson - fullof criticism - and the question is how heshould handle the afternoon.

Global; Food and beverage; Large; 2001Change management

4 ppField research

302-057-1THE EVOLUTION OF THE CIRCUSINDUSTRY (A)

Kim, WCMauborgne, RBensaou, BMWilliamson, M

INSEAD

This is the first of a two-case series (302-057-1 and 302-058-1). Cirque du Soleilvery successfully entered a structurallyunattractive circus industry. It was able toreinvent the industry and created a newmarket space by challenging theconventional assumptions about how tocompete. It value innovated by shiftingthe buyer group from children (end-usersof the traditional circus) to adults(purchasers of the traditional circus),drawing upon the distinctive strengths ofother alternative industries, such as thetheatre, Broadway shows and the opera,to offer a totally new set of utilities tomore mature and higher spendingcustomers. The case series is designed toserve a variety of purposes in the valueinnovation and creating new marketspace teaching module of an MBAstrategy course or executive educationprogramme. The case series can be


37

equally used individually in a standalonemodule on value innovation or as part ofa sequence of three to four sessions. Inboth instances, the instructor can bestuse it to cover the following topics: (1)the value innovation logic (as comparedto industry and competitive analysis); (2)the concept of value curve; and (3) the sixpaths analysis for creating new marketspace. A video called 'The Evolution ofthe Circus Industry' is available for freefaculty download atwww.blueoceanstrategy.com.

Canada, USA, Europe; Circus; 2001Circus and live entertainmentindustryValue innovationStrategyBlue Ocean StrategyCreating new market spaceRedefining industry boundariesCompetition


305-308-1ZARA: RESPONSIVE, HIGH SPEED,AFFORDABLE FASHION

Kumar, NLinguri Coughlan, S


In 1975, the first Zara store was opened inLa Coruna, in Northwest Spain. By 2005,Zara’s 723 stores had a selling area of811,100 m2 and occupied privilegedlocations of major cities in 56 countries.With sales of 3.8 billion euros in financialyear 2004, Zara had become Spain’s best-known fashion brand and the flagshipbrand of 5.7 billion euros holding groupInditex. Inditex’s stock market listing in2001 had turned Amancio Ortega, itsfounder and a self-made man, into theworld’s 23rd richest man, with a personalfortune that Forbes magazine estimatedat US$12.6 billion. Zara strived to deliverfashion apparel, often knock-offs offamous designers, at reasonable costs toyoung, fashion-conscious city-dwellers.Zara used in-house designers to presentnew items of clothing to customers twicea week, in response to sales and fashiontrends. Thus the merchandise of anyparticular store was fresh and limited. Toproduce at such short notice requiredthat Zara maintain a vertically integratedsupply chain that distributed the clothesthrough a single state-of-the-artdistribution centre. Unlike its

competitors, 70-80% of Zara garmentswere manufactured in Europe. In 2005,Pablo Isla was appointed the new InditexChief Executive. With plans to double thenumber of its stores by 2009, the rapidpace of growth was necessitatingchanges. First, Zara had opened a seconddistribution centre to increase capacity.Second, expanding into more distantmarkets meant that the number of itemscarried had increased to 12,000. WouldZara’s business model be able to scaleup? Or would the resulting complexitycompromise its speed advantage? WouldPablo Isla be able to maintain the focusthat Zara had established?

Global; Retail; 3.8 billion euros; 1975-2005

Brand managementNew product developmentSupply chainInternational businessRetailingVertical integrationScalabilityBusiness modelsValue chain analysisOutsourcingSegmentationStaples vs fashionPrivate labelGross margin return on investment(GMROI)Atmospherics



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