Ivey Publishing

Economics of Strategy

Besanko, D., Dranove, D., Shanley, M., Schaefer, S.,6/e (United States, Wiley, 2013)
Prepared By Eunika Sot,
Chapter and Title Chapter Matches: Case Information
Chapter 1:
The Power of Principles: An Historical Perspective

BUSINESS DEVELOPMENT BANK OF CANADA
Paul Boothe, Alex Jacobs-Hajian

Product Number: 9B14M013
Publication Date: 7/29/2014
Revision Date: 7/29/2014
Length: 5 pages

On January 28, 2009, the president and CEO of the Business Development Bank of Canada is considering the impact of the minister of finance’s announcement in his recent 2009 budget that the bank would offer a new financial product to help auto and heavy equipment dealers suffering through the global financial and economic crisis. A wholly owned Government of Canada Crown corporation, the bank’s mandate is to help create and develop Canadian businesses through financing, subordinate financing, venture capital and consulting services, with a focus on small and medium-sized enterprises. It is expected both to complement private-sector financial institutions and to earn a rate of return on common equity greater than or equal to the government’s average long-term cost of capital. Taken by surprise due to budget secrecy, the president has spent the last two days in conversations with his staff, senior government officials and his board chair. He needs a plan to quickly launch this new and completely unfamiliar line of business while navigating the complex governance and stakeholder environment that BDC faces.

Teaching Note: 8B14M013 (3 pages)
Industry: Finance and Insurance
Issues: New product launch; resource allocation; governance; Crown corporation; Canada
Difficulty: 5 - MBA/Postgraduate



SHAREHOLDER ACTIVISM AT CANADIAN PACIFIC
Jeffrey Gandz, Charles McMillan

Product Number: 9B14M035
Publication Date: 4/23/2014
Revision Date: 4/8/2014
Length: 15 pages

Canadian Pacific (CP), a North American railway company, had recently come under attack from an activist shareholder, Pershing Square Capital Management (Pershing). Pershing had accumulated a 14 per cent shareholding in CP and had recently announced its intention to replace the CP board of directors and its chief executive officer. The case reviews the history of CP, its recent performance relative to Canadian National, and the basis for Pershing's allegations that CP had lagged its competitor in terms of performance and that this was attributable to poor governance and management. The board of CP must decide whether to make concessions to Pershing or risk an all-out proxy battle which it may well lose.

Teaching Note: 8B14M035 (14 pages)
Industry: Transportation and Warehousing
Issues: Corporate governance; strategy; proxy battle; shareholder activism; Canada; United States
Difficulty: 5 - MBA/Postgraduate



THE RISE AND FALL OF AIG
Stephen Sapp

Product Number: 9B12N001
Publication Date: 1/27/2012
Revision Date: 1/27/2012
Length: 13 pages

The Global Financial Crisis (2007-2009) has provided fertile ground for careful consideration of how the financial services industry operates. For many years it had been asserted that markets can self-police so that regulation and careful oversight are not required. The events from the crisis have caused many of the strongest proponents of this view, such as Alan Greenspan (former chairman of the Federal Reserve), to publicly acknowledge the problems with this belief. This case considers the events leading up to and following the bailout of AIG to allow for a discussion of how different internal and external factors contributed to the crisis at AIG, and the importance of studying each of them more carefully to avoid such problems in the future.

Teaching Note: 8B12N001 (8 pages)
Industry: Finance and Insurance
Issues: Financial Risk Management; Leadership; Enterprise Risk Management; United States
Difficulty: 4 - Undergraduate/MBA



FERRO INDUSTRIES — EXPORTING CHALLENGE IN A SMALL FIRM
Justin Paul, Parul Gupta, Shruti Gupta

Product Number: 9B11M115
Publication Date: 1/25/2012
Revision Date: 6/12/2013
Length: 18 pages

This case deals with an exporting challenge faced by Ferro Industries, a small enterprise within the steel industry in India. The company’s manufacturing facility was located in the National Capital Region of Delhi. Ferro’s main products were roll-forming machines, cut-to-length lines, and slitting lines; the company was one of only three firms in the Indian sub-continent catering to the market for such products. This case raises two basic questions in relation to Ferro’s role as an exporter. Firstly, at what stage should an importer have to pay an exporter? Secondly, should the exporter release consignment to the importer before receiving payment? The case illustrates the challenges of exporting and international entrepreneurship for a small firm, taking into account payment risk, product pricing, deal-making strategies, promotional strategy, and client-management strategies. It also addresses the complexities involved in the decision-making process while exporting, as well as outlining various conflict-resolution techniques for closing a deal effectively while considering the appropriateness of taking risks.

Teaching Note: 8B11M115 (8 pages)
Industry: Manufacturing
Issues: Exports; Trade Finance; International Trade Logistics; Global Supply Chain Management; Saudi Arabia; India
Difficulty: 5 - MBA/Postgraduate


Chapter 2:
The Horizontal Boundaries of the Firm

SEARCH ENGINES IN SEARCH OF FAIR PLAY
Veena Keshav Pailwar

Product Number: 9B14M112
Publication Date: 9/29/2014
Revision Date: 9/30/2014
Length: 9 pages

Google’s plan to gear up its flight search service in India by allowing users to compare fares and book tickets made other domestic travel portals in India nervous. There were fears that this development might turn out to be discriminative as Google had the dominant share in Internet search service. Fearing a substantial reduction in their share of the search market, these domestic portals had the option of lodging a complaint against Google with the Competition Commission of India.

Google’s business practices had been challenged and/or come under the scanner of anti-competitive law in many other countries as well. The public in India wondered why Google was involved in such controversies. Why did competing companies fear Google’s business practices? What would be the Competition Commission of India’s stand and how would it help consumers and society in general?


Teaching Note: 8B14M112 (13 pages)
Industry: Information, Media & Telecommunications
Issues: Anti-competitive practice; monopoly; economies of scale; competition law; India
Difficulty: 5 - MBA/Postgraduate



MARUTI SUZUKI INDIA LIMITED: SUSTAINING PROFITABILITY
Ramakrushna Panigrahi

Product Number: 9B14M115
Publication Date: 9/26/2014
Revision Date: 9/10/2018
Length: 10 pages

The passenger car industry in India has witnessed intense competition since the Indian economy’s liberalization in the early 1990s. Although Maruti Suzuki India Limited has been the most dominant player for the last three decades — with many Indians using “Maruti” as a synonym for “car” — it has been unable to raise the prices of its cars over the last ten years due to a price war among rivals. Though Maruti has been a profitable company, rising input costs and poor price maneuverability are making it very challenging for the firm to remain profitable in the future. In 2014, Maruti is contemplating a major investment in a new plant. The chairman of Maruti must determine whether investing in the new plant would reduce costs significantly and help the company remain profitable.

Teaching Note: 8B14M115 (11 pages)
Industry: Manufacturing
Issues: Oligopoly; managerial economics; kinked demand; sticky price; price war; India
Difficulty: 5 - MBA/Postgraduate



PHILIPS-INDAL: THE DEAL FROM HEAVEN? (A)
Koen H. Heimeriks, Ruud Geenen

Product Number: 9B14M018
Publication Date: 4/16/2014
Revision Date: 7/14/2015
Length: 18 pages

Philips’ new venture integration (NVI) department is aware of the fact that many acquisitions turn into “deals from hell” instead of “deals from heaven.” Its post-merger integration specialists have learned that cost synergies are far easier to realize than sales (or growth) synergies. Stimulated by the urge to grow, the NVI department has developed a new methodology called the “sales integration approach” to realize sales (or growth) synergies. It tries to implement this approach during the acquisition integration of Indal, a Spanish lighting company.

The main challenge is presented by the shift in acquisition-integration capability following Philips’ evolved corporate strategy. While historically Philips had a substantive acquisition program, Philip’s new CEO has stressed the need for organic growth and set the stage for a series of medium and small acquisitions. Philips needs to become more customer-centric to increase corporate growth. This has required a focus not just on cost synergies (e.g., economies of scale and increased efficiency), but also on capturing sales (or growth) synergies. Philips-Indal must choose to defend regions in which it has a strong position or target regions where it has a weaker position. Furthermore, Philips’ post-merger integration leader must choose an organizational structure for Philips-Indal and convince Indal’s executive team to adopt the NVI department’s sales integration approach. This case can be used with Lighting Up Philips' Asian Entertainment Activities (B) 9B14M019.


Teaching Note: 8B14M018 (16 pages)
Industry: Manufacturing
Issues: Post-acquisition growth; post-merger integration; growth synergy; new venture integration; Europe; The Netherlands; Spain
Difficulty: 5 - MBA/Postgraduate


Chapter 3:
The Vertical Boundaries of the Firm

INDRAPRASTHA COLD STORAGE LTD: VALUE ADDED STRATEGY IN AN EMERGING MARKET
S.P. Raj, Atanu Adhikari

Product Number: 9B12A055
Publication Date: 2/1/2013
Revision Date: 2/1/2013
Length: 18 pages

This case examines the business strategies available to an Indian company, Indraprastha Cold Storage Ltd. (IPCSL). It has made substantial investments in upgrading its existing cold storage to differentiate itself from the competition based on the premise that by providing superior product quality, it could charge a premium for its value added cold storage service. However, competitors lowered their rates in an attempt to capture even more customers, and IPCSL was concerned about the long-term viability of the business. It must decide on a course of action, taking into consideration the constraints of growing, transporting, storing and selling fruit in India; the asymmetry in price information available to growers and commission agents in the market, coupled with the old-fashioned way of doing business through open and closed auctions; and the costs and benefits of vertical integration between grower and IPCSL.

This case also includes a two-part video which instructors may share with the class. The first part shows the buzz of daily activities in New Subzi Mandi, Azadpur - including market exchanges by open and closed auctions. The second is an interview with Sanjay Aggarwal about the challenges IPCSL faced and his immediate reaction to the crisis. Please refer to the teaching note for details.


Teaching Note: 8B12A055 (14 pages)
Industry: Agriculture, Forestry, Fishing and Hunting
Issues: B2B marketing strategy; pricing strategy; agribusiness; business strategy; India
Difficulty: 4 - Undergraduate/MBA



HON CHUAN GROUP: IN-HOUSE SUPPLIER OF BEVERAGE PACKAGING MATERIALS
Shih-Fen Chen, Chiung-Hui Tseng

Product Number: 9B12M078
Publication Date: 8/13/2012
Revision Date: 8/13/2012
Length: 16 pages

Hon Chuan, a leading producer of polyethylene terephthalate (PET) bottles in Taiwan, has developed a unique production setup to serve its Asian clients. The company has established production facilities at clients’ sites, using its in-house, in-line operation, which has won over beverage companies across Asia. This new operation model allows beverage companies to reap the advantages of outsourcing without incurring any related drawbacks. The beverage companies enjoy the benefits of vertical integration without bearing the associated costs. The case highlights this operational innovation, which helped Hon Chuan grow from a small family-owned business serving mostly Taiwanese clients to a publicly traded company controlling dozens of production plants across Asia.

Teaching Note: 8B12M078 (8 pages)
Industry: Manufacturing
Issues: Outsourcing Relationship; Vertical Integration; Production Setup; Supply Chain Management; Taiwan
Difficulty: 4 - Undergraduate/MBA


Chapter 4:
Integration and Its Alternatives

BHARAT PETROLEUM'S UPSTREAM STRATEGY AND EXPLORATION SUCCESS
Noel Machado, G. Krishnakumar, Sanjeev Pillai, P.V.S.L. Narasimham

Product Number: 9B13M128
Publication Date: 1/14/2014
Revision Date: 2/3/2014
Length: 17 pages

Bharat Petroleum Corporation Limited (BPCL) is an Indian public-sector oil company that features among the Fortune Global 500. The company has historically been in the business of refining and marketing petroleum products. For about 25 years, BPCL operated in a protected environment where it was assured 12 per cent post-tax returns by the Indian government. In 2002, the government stopped guaranteeing returns to its oil companies, and BPCL found that its sales were increasing but its profitability was declining. In response, BPCL ventured upstream into the exploration and production of hydrocarbons. The case is set in 2010, seven years after BPCL adopted a corporate strategy of vertical integration. BPCL’s chairman and managing director assesses reasons for the company’s spectacular success and considers what BPCL should do next.

Teaching Note: 8B13M128 (12 pages)
Industry: Manufacturing
Issues: Corporate strategy; petroleum; oil; energy; vertical integration; public sector; India
Difficulty: 5 - MBA/Postgraduate



CITY FURNITURE AND MATTRESS
W. Glenn Rowe, Bobby Singh-Randhawa, Karin Schnarr

Product Number: 9B11M102
Publication Date: 10/31/2011
Length: 17 pages

The majority owner and general manager of City Furniture and Mattress (CFM) needed to make several decisions that would determine the company’s strategy. CFM had continued to grow in terms of sales, but the general manager and his father, also an owner and manager at CFM, were concerned with profitability and the increasing competition from local and big-box stores. The general manager looked at several options including capital investment, expanding global outsourcing, store network expansion, and vertical integration.

Teaching Note: 8B11M102 (8 pages)
Industry: Retail Trade
Issues: Vertical Integration; Expansion; Improving Profitability; Global Sourcing; Furniture; Small Business
Difficulty: 2 - Intro/Undergraduate



ECCO A/S - GLOBAL VALUE CHAIN MANAGEMENT
Bo Bernhard Nielsen, Torben Pedersen, Jacob Pyndt

Product Number: 9B08M014
Publication Date: 5/29/2008
Revision Date: 5/10/2017
Length: 21 pages

ECCO A/S (ECCO) had been very successful in the footwear industry by focusing on production technology and assuring quality by maintaining full control of the entire value chain from cow to shoe. As ECCO grew and faced increased international competition, various value chain activities, primarily production and tanning, were offshored to low-cost countries. The fully integrated value chain tied up significant capital and management attention in tanneries and production facilities, which could have been used to strengthen the branding and marketing of ECCO's shoes. Moreover, an increasingly complex and dispersed global value chain configuration posed organizational and managerial challenges regarding coordination, communication and logistics. This case examines the financial, organizational and managerial challenges of maintaining a highly integrated global value chain and asks students to determine the appropriateness of this set-up in the context of an increasingly market-oriented industry. It is suitable for use in both undergraduate and graduate courses in international corporate strategy, international management, international marketing, supply-chain management, cross-border strategic management and international business studies in general.

Teaching Note: 8B08M14 (15 pages)
Industry: Manufacturing
Issues: Marketing Management; Operations Management; Global Strategy; Vertical Integration; Value Chain; Competitor Analysis
Difficulty: 4 - Undergraduate/MBA


Chapter 5:
Competitors and Competition

TARGET CANADA
Dante Pirouz, Steven (Sang Kil) Hong

Product Number: 9B14A059
Publication Date: 1/27/2015
Revision Date: 1/27/2015
Length: 15 pages

In 2013, Target Corporation, the fourth-largest retailer in the United States, launched its first international expansion by opening 125 stores in Canada. Senior executives expected that Target Canada stores would generate $1 billion in annual revenue. However, by late 2013, after losses of more than $900 million, it became obvious that the Canadian expansion had failed. As a result of the stores’ underperformance, Target has appointed a new president of Target Canada, who is challenged to turn the Canadian stores around. The new president must analyze the situation and decide on the best strategy to provide the highest return in the short term and the best strategic positioning for the long term.

Teaching Note: 8B14A059 (3 pages)
Industry: Retail Trade
Issues: Big box; launch; Canada
Difficulty: 5 - MBA/Postgraduate



SHOULD KELLOGG'S LAUNCH GLUTEN-FREE PRODUCTS IN INDIA?
Sandeep Puri, Mayank Rawat, Arjit Rawal, Akshay Nangia

Product Number: 9B14A030
Publication Date: 8/12/2014
Revision Date: 8/11/2014
Length: 12 pages

Kellogg’s is exploring the possibility of launching gluten-free Corn Flakes in India. The company must examine the gluten-free market in India and explore strategies for entering this market. Kellogg’s must assess its competitors in India’s growing breakfast cereal market, where a growing economy and increasing health awareness is pushing Indian consumers to look for healthier options. Questions remain whether Kellogg’s should enter the promising gluten-free segment to take advantage of this potential opportunity in India, consumers’ evolving preferences and the current industry trends.

Teaching Note: 8B14A030 (6 pages)
Industry: Manufacturing
Issues: Strategy; new product development; product management; business development; India
Difficulty: 5 - MBA/Postgraduate



SHOULD RANBAXY LAUNCH AN ENERGY CANDY IN INDIA?
Sandeep Puri, Subhajit Bhattacharya, Harsh Ajmera

Product Number: 9B13M107
Publication Date: 11/29/2013
Revision Date: 11/18/2013
Length: 10 pages

This case chronicles the growth and evolution of Revital, the bestselling vitamin and mineral supplement in India. The Indian nutraceutical market was booming, as the growing economy and increasingly demanding job requirements were pushing young Indian consumers to look for products like energy drinks, energy candy and health supplements. Stressful work conditions and lifestyle changes were resulting in an increased incidence of chronic disorders, and more and more consumers were taking nutraceuticals as a preventive measure. No company had launched an energy candy in the Indian market and imported brands were of limited availability. The case explores the possible options for Ranbaxy — one of the largest pharmaceutical companies in India —with brand expansion opportunities for Revital through introducing Revital energy candy. Should Ranbaxy introduce an energy candy in the Indian market? If so, should it be a brand extension of Revital or a new brand altogether?

Teaching Note: 8B13M107 (6 pages)
Industry: Manufacturing
Issues: Branding; market strategy; product management; strategic decision-making; India
Difficulty: 5 - MBA/Postgraduate


Chapter 6:
Entry and Exit

NATIONAL DAIRY: DEFENDING MARKET LEADERSHIP
Subrat Sarangi, Debasis Pradhan

Product Number: 9B15A001
Publication Date: 2/9/2015
Revision Date: 2/6/2015
Length: 11 pages

The head of marketing and sales at National Dairy, a quasi-government co-operative enterprise in the Indian state of Odisha, is hounded by the threat from private milk marketing firms that are attempting to overtake the monopoly position enjoyed by National Dairy for close to three decades. The title company’s field salesforce provides intelligence reports from the market, indicating that National Dairy’s authorized retailers and bulk customers (e.g., tea stall owners and restaurants) were slowly switching to competing brands, lured by attractive schemes and better earnings. National Dairy faced the dilemma of wanting to defend its leadership position and build a sustainable competitive advantage while at the same time continuing to uphold its social obligations towards the farming community in Odisha.

Teaching Note: 8B15A001 (15 pages)
Industry: Retail Trade
Issues: Entry barriers; Porter's five forces; BCG portfolio matrix; India
Difficulty: 5 - MBA/Postgraduate



WALMART'S AFRICAN EXPANSION
Karen Robson, Stefanie Beninger, Sudheer Gupta

Product Number: 9B13M111
Publication Date: 11/19/2013
Revision Date: 11/19/2013
Length: 10 pages

Walmart has decided to expand into Africa through the acquisition of the South African consumer goods retailer Massmart. In doing so, the world’s largest retailer faces significant backlash from South Africa’s largest union. The company must also contend with price-sensitive consumers and a lack of supplier relationships on the African continent. Will Walmart appeal to South African consumers and achieve the volume of sales needed to make its first African presence a success.

Teaching Note: 8B13M111 (9 pages)
Industry: Retail Trade
Issues: Globalization; cross-cultural management; emerging markets; South Africa
Difficulty: 4 - Undergraduate/MBA



TESCO'S FRESH & EASY: LEARNING FROM THE U.S. EXIT
Christopher Williams, Ramasastry Chandrasekhar

Product Number: 9B13M126
Publication Date: 11/26/2013
Revision Date: 12/17/2014
Length: 14 pages

In mid-April 2013, the chief executive officer of Tesco PLC, the world’s third largest global retailer headquartered in London, United Kingdom, must explain to shareholders his decision to close down the operations of the fully owned subsidiary, Fresh & Easy Neighborhoods Market Inc., in the United States. Following a December 2012 strategic review that reported that the subsidiary was not delivering acceptable returns, operations have already been discontinued and a buyer is being sought. Although the focus on fresh food to ameliorate the health care costs of obesity in the United States was a driver for establishing the subsidiary, the effects of the 2008 recession discouraged consumers from paying the higher costs of fresh food. Is exiting the United States the right decision for Tesco? How should the process of exit be managed? Are there any takeaways from the U.S. operations that Tesco can apply elsewhere in its global strategy?

Teaching Note: 8B13M126 (7 pages)
Industry: Retail Trade
Issues: Exit strategy; process management; under-performance; global strategy; United States
Difficulty: 4 - Undergraduate/MBA


Chapter 7:
Dynamics: Competing Across Time

DIVERSEY IN INDIA: THE GROWTH CHALLENGES AND OPTIONS
Sandeep Goyal, Amit Kapoor

Product Number: 9B13M115
Publication Date: 1/10/2014
Revision Date: 1/8/2014
Length: 12 pages

Diversey, a leading global brand in the business-to-business cleaning industry, had entered the Indian market positioned as a total cleaning solution provider to institutional customers. It differentiated itself from the competition with its end-to-end solutions, superior products and service levels, research and development capabilities and value-based pricing. While it had some success in India, it felt that there was a huge untapped opportunity for growth. However, a developing country like India posed several challenges due to its social and cultural differences (e.g., local unorganized competition, customer price sensitivity, complex distribution channels, etc.) versus developed countries. The case provides an opportunity for students to apply a number of conceptual tools (i.e. Porter’s 5 forces analysis, 4C analysis, SWOT analysis, value- chain analysis and the stakeholder power/interest matrix) to analyze the current strategy and identify the best alternatives for Diversey to move forward with its growth objectives.

Teaching Note: 8B13M115 (13 pages)
Industry: Other Services
Issues: Business models; industry transformation; cleaning industry; market building strategy; India
Difficulty: 5 - MBA/Postgraduate



ALLIANCE MANAGEMENT AT FORBES MARSHALL
Naga Lakshmi Damaraju, Harshdeep Singh Chowdhary, Dhruv Khanna, Dhruv Ahuja

Product Number: 9B11M108
Publication Date: 1/24/2012
Length: 20 pages

This case traces the history and growth of Forbes Marshall (FM), a family-owned company in India. FM provides steam engineering and control instrumentation solutions for the process industry. The company has evolved into a leader in process efficiency and energy conservation through technology tie-ups and focused investments in manufacturing and research. Its joint ventures with the world's leading firms enable it to deliver quality solutions in 14 countries. Forbes Marshall's business practices and processes have combined into a unified philosophy of being trusted partners who provide innovative solutions.

Teaching Note: 8B11M108 (10 pages)
Industry: Manufacturing
Issues: Alliance Management; Corporate Strategy; Transaction Cost Economics; Real Options; Value Chain; India; Ivey/ISB
Difficulty: 5 - MBA/Postgraduate



LULULEMON ATHLETICA: CHIP WILSON'S NEW VENTURE (A)
Eric Morse, Ken Mark

Product Number: 9B06M036
Publication Date: 5/12/2006
Revision Date: 9/7/2012
Length: 6 pages

Chip Wilson is trying to decide if he should pursue his current venture, a yoga wear retailing concept or return to being chief executive officer of Westbeach Snowboard, a firm he found two decades ago. This case is the first in a series of seven lululemon athletica cases that focus on decision-making using real-options analysis. Other cases in the series are: 9B06M037, 9B06M038, 9B06M039, 9B06M040, 9B06M041 and 9B06M042.

Teaching Note: 8B06M36 (20 pages)
Industry: Manufacturing
Issues: Decision Support Systems; Decision Theory; Decision Analysis
Difficulty: 4 - Undergraduate/MBA


Chapter 8:
Industry Analysis

SMARTPHONE INDUSTRY IN 2013: SAMSUNG'S DILEMMA
W. Glenn Rowe, Mehdi Hossein Nejad

Product Number: 9B14M075
Publication Date: 6/18/2014
Revision Date: 6/18/2014
Length: 15 pages

In 2013, after years of success, Samsung, a manufacturing conglomerate based in Korea but with offices, research and development divisions and factories worldwide, is established as a global powerhouse in the smartphone industry. But success has revealed opportunities and challenges that need to be addressed as the company navigates the competitive landscape. Samsung has sold more phones than rivals such as Nokia and Apple and is also a major player in the increasingly popular tablet computer market. Given the volatility of the industry and the market, in addition to the dynamic relationships between suppliers, manufacturers, technology providers, application developers and operating systems, Samsung needs to think carefully about its next competitive steps. Specifically, it has to think about one very important issue: should it continue to rely on Google’s Android operating system, or should it seriously consider an in-house software ecosystem?

Teaching Note: 8B14M075 (8 pages)
Industry: Information, Media & Telecommunications
Issues: Industry analysis; competitive strategy; smartphone; strategy formulation; global
Difficulty: 4 - Undergraduate/MBA



EQUINOX ASSET MANAGEMENT: STARTING FRESH
Chuck Grace, Hugh Stewart

Product Number: 9B11N009
Publication Date: 5/30/2011
Length: 10 pages

After a two-year absence from the financial industry, Tom Henne evaluated his options and determined that he could exploit his knowledge of the inner workings of the pension fund business and start a new firm, Equinox Asset Management. Despite claims that many pension funds provided returns that did no more than mirror the average index, Henne believed his fund could beat the market or achieve alpha. He proposed that this success could be had by differentiating the Equinox fund in several ways from the typically large and well-branded funds of banks and insurance companies. Thinking he still had significant time to consider the details, Henne was surprised to receive a phone call from a local company wanting him to do a presentation on Equinox at its offices. Henne had only one week to decide the size of his fund, finalize his fee structure, identify his positioning and marketing strategy, and evaluate an appropriate client base. But most of all, he wondered whether the idea for his fund was even plausible.

Teaching Note: 8B11N009 (5 pages)
Industry: Finance and Insurance
Issues: Industry Analysis; Investment Analysis; Breakeven Analysis; Portfolio Construction; Pension Funds
Difficulty: 3 - Undergraduate



CHINESE FIREWORKS INDUSTRY
Paul W. Beamish

Product Number: 9B11M006
Publication Date: 1/11/2011
Revision Date: 5/4/2017
Length: 13 pages

The Chinese fireworks industry thrived after China adopted the open-door policy in the late 1970s, and grew to make up 90 per cent of the world’s fireworks export sales. However, starting in the mid-1990s, safety concerns led governments both in China and abroad to set up stricter regulations. At the same time, there was rapid growth in the number of small family-run fireworks workshops, whose relentless price-cutting drove down profit margins. Students are asked to undertake an industry analysis, estimate the industry attractiveness, and propose possible ways to improve the industry attractiveness from an individual investor’s point of view. Jerry Yu is an American-born Chinese in New York who has been invited to buy a fireworks factory in Liuyang, Hunan.

Teaching Note: 8B11M006 (16 pages)
Industry: Manufacturing
Issues: Market Analysis; Industry Analysis; International Marketing; Exports; China
Difficulty: 4 - Undergraduate/MBA


Chapter 9:
Strategic Positioning for Competitive Advantage

EDUCOMP: SHAPING EDUCATION IN THE NEW MILLENNIUM
Amita Mital, Sanjay Dhir, Sonjoy Mohanty

Product Number: 9B13M073
Publication Date: 7/31/2013
Revision Date: 8/1/2013
Length: 18 pages

Educomp Solutions Ltd. was established in 1994 with the aim of providing for a customer’s entire education lifecycle, from pre-school to higher education/vocational training, and appropriating value from the same customer multiple times. This strategy, over a period of 17 years, enabled Educomp to become the largest player in the education technology sector in India. Educomp took the organic route to growth, which it achieved largely through acquisitions and alliances. Its flagship brand, SmartClass, brought technology into the classroom with a vast repository of digital modules on every subject. However, in 2012 the government of India proposed changes in its education policy that — along with the country’s economic uncertainty — threatened to erode the competitive advantage that ESL had gained over the years. The CEO of Educomp wondered how he could maintain his organization’s leadership position. He was contemplating a three-pronged strategy that involved 1) expanding into the untapped Indian rural market segment with school learning solutions; 2) creating a virtual learning solution that included open-source content for students; and 3) investing further in research and development in order to develop innovative products to penetrate the Indian education market.

Teaching Note: 8B13M073 (14 pages)
Industry: Educational Services
Issues: Competitive analysis; change trajectory; strategic positioning; core competency; India
Difficulty: 5 - MBA/Postgraduate



KAYTEK: MANUFACTURING HOUSING AND LIVELIHOODS IN HAITI
David Wood, Taylor Sekhon

Product Number: 9B13M040
Publication Date: 3/26/2013
Revision Date: 9/4/2013
Length: 11 pages

After a massive earthquake destroyed many buildings in Haiti in 2011, reconstruction has become a source of opportunity and competition for non-governmental organizations, international business and local companies. The Haitian chairman and CEO of a very successful, multi-million dollar information technology company wants to provide affordable quality housing, especially for the disadvantaged poor, using steel frame technology from his start-up, KayTek. What he has not yet determined is how to get his product to market. He has three options: to keep sales and construction in-house, to outsource, or to franchise in order to create opportunities for young Haitian engineers to become entrepreneurs. Each option has costs, in terms not only of finances and time but also of control of brand quality and accessibility.

Teaching Note: 8B13M040 (12 pages)
Industry: Construction
Issues: Strategic Positioning; New Venture; Competitive Advantage; Sustainable Development; Franchising; Haiti
Difficulty: 4 - Undergraduate/MBA



STARBUCKS
Mary M. Crossan, Ariff Kachra

Product Number: 9A98M006
Publication Date: 5/14/1998
Revision Date: 5/10/2017
Length: 23 pages

Starbucks is faced with the issue of how it should leverage its core competencies against various opportunities for growth, including introducing its coffee in McDonald’s, pursuing further expansion of its retail operations, and leveraging the brand into other product areas. The case is written so that students need to first identify where Starbucks competencies lie along the value chain, and assess how well those competencies can be leveraged across the various alternatives. It also provides an opportunity for students to assess what is driving growth in this company. Starbucks has a tremendous appetite for cash since all its stores are corporate, and investors are betting that it will be able to continue its phenomenal growth, so it needs to walk a fine line between leveraging its brand to achieve growth while not eroding it in the process. This is an exciting case that quickly captures the attention of students.

Teaching Note: 8A98M06 (13 pages)
Industry: Accommodation & Food Services
Issues: competitiveness; industry analysis; growth strategy; core competence; coffee
Difficulty: 4 - Undergraduate/MBA


Chapter 10:
Information and Value Creation

ORGANIC GROWTH AT SONNENTOR
Dietmar Sternad

Product Number: 9B15M031
Publication Date: 2/27/2015
Revision Date: 2/27/2015
Length: 15 pages

The entrepreneur and founder of Sonnentor, an organic food production company, has grown his business by focusing on unusual strategic and operative choices. Sonnentor emphasizes socially and environmentally responsible behaviour in all its actions and has built its business on fair partnerships with employees, suppliers and other partners. The case highlights the role of “embedded sustainability” in the success of the business and presents the challenge of transferring the founder’s unique business philosophy, both to other domains and to a new managerial generation.

Teaching Note: 8B15M031 (12 pages)
Industry: Manufacturing
Issues: CSR; social responsibility; sustainability; corporate values; Austria
Difficulty: 5 - MBA/Postgraduate



COMEDY NIGHTS WITH KAPIL: MAINTAINING VALUE CREATION
Neeraj Pandey, Gaganpreet Singh

Product Number: 9B14A056
Publication Date: 9/22/2014
Revision Date: 9/22/2014
Length: 5 pages

By the end of its first season in spring 2014, “Comedy Nights with Kapil” had become India’s top rated comedy television serial in the nonfiction category. Each episode invited celebrities from Bollywood or sports teams as guests to promote their upcoming movies or ventures. The show had developed its target market and had entered the maturity stage of its business life cycle. What might be future value creation business strategies for the show to sustain its audience engagement and ratings? The intent to telecast once a week rather than twice a week upset the broadcasting channel, Colors TV. How would this change impact value creation for all the stakeholders?

Teaching Note: 8B14A056 (8 pages)
Industry: Arts, Entertainment, Sports and Recreation
Issues: Pricing; television; value creation; business life cycle; comedy; television; India
Difficulty: 5 - MBA/Postgraduate



UPS AND HP: VALUE CREATION THROUGH SUPPLY CHAIN PARTNERSHIPS
Mark O. Lewis, Arun Rai, David Forquer, Dan Quinter

Product Number: 9B07D002
Publication Date: 2/26/2007
Length: 14 pages

This case is about managing large supply change outsourcing relationships over time. The focus is on the challenges service providers and their customers face as they seek to continually find new sources of value as the relationships change. Emphasis is placed on issues related to coordinated capabilities across functional boundaries, information sharing and developing information technology readiness.

Teaching Note: 8B07D02 (5 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Relationship Management; Outsourcing; Innovation
Difficulty: 5 - MBA/Postgraduate


Chapter 11:
Sustaining Competitive Advantage

SUITSUPPLY: EXPANDING INTO CHINA?
Tania Habimana, Lukas Held, Julija Babre, Willem Hulsink

Product Number: 9B14M105
Publication Date: 12/11/2014
Revision Date: 11/25/2014
Length: 11 pages

Suitsupply was founded in 2000 in Amsterdam, the Netherlands. The vertically integrated company made its breakthrough in the Dutch suit market, a market highly saturated by up-market luxury brands and a few lower-end and low-quality brands, by offering bespoke high-quality suits at accessible prices. Through using provocative marketing techniques, challenging retail regulations and laws, and educating consumers on overpricing by its competitors, Suitsupply had successfully expanded to the United States, the United Kingdom, Italy, Germany, Belgium, Lithuania and Belarus by 2012.

With the Western market conquered, the founder of Suitsupply picked up a new challenge: China. The rise of the Chinese economy had introduced a new subset of Chinese consumers: the “nouveau riche” — consumers exclusively attracted to expensive international brands to demonstrate their newfound wealth and luxurious lifestyle. With this in mind, the founder wondered how “accessibly priced” Dutch suits would be perceived in this market. Would Suitsupply’s provocative approach to marketing and its audacity in the face of retail regulations and laws be sufficient to pierce the market of conservative, government-controlled China?


Teaching Note: 8B14M105 (8 pages)
Industry: Retail Trade
Issues: Fashion; apparel; emerging markets; market entry; China; The Netherlands; Global
Difficulty: 5 - MBA/Postgraduate



OLEUM RESOURCES
David Wood, Tom Hansen, Jack Hansen, Shane Parkhill

Product Number: 9B12D019
Publication Date: 9/7/2012
Revision Date: 5/31/2013
Length: 15 pages

This case introduces students to the value chain of the oil and gas industry in Canada. Through examining the current position and future plans of a small, independent oil and gas exploration company, they will discover the challenges of growing through acquisition and the risks associated with expanding beyond a company's core competencies. The case includes an overview of the industry, the history of Oleum Resources Ltd., and the opportunities it has to revise its business strategy by expanding into the innovative but risky ASP technology. The company's first two options entail not only investing considerable capital but also hiring highly specialized personnel. However, the third option, to stay the course, may mean facing losses and investor unhappiness.

Teaching Note: 8B12D019 (9 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Value Chain; Sustainable Advantage; Oil and Gas; Market Conditions; Canada
Difficulty: 3 - Undergraduate


Chapter 12:
Performance Measurement and Incentives

VALJIBHAI STONES
Debashis Sanyal, Smita Mazumdar

Product Number: 9B14N009
Publication Date: 4/17/2014
Revision Date: 4/17/2014
Length: 11 pages

Valjibhai Stones, a supplier of quality stone chips in India, has been approached by a multinational company that needs a reliable supplier of quality stone chips for the next eight years. Accepting the order would require a capacity expansion to produce high-quality aggregate solely for the multinational company and at the cost of foregoing all of its existing business. If the offer is accepted, the company would earn substantial revenue for eight years, but would then need to seek fresh business in a highly competitive market.

Teaching Note: 8B14N009 (14 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Strategic cost management; cost of capital; investment decision; return on investment; economic value added; India
Difficulty: 5 - MBA/Postgraduate



WE ARE SO SORRY: SEDANG PRESTIGE RESORT
Jim Kayalar

Product Number: 9B12M019
Publication Date: 3/15/2012
Revision Date: 3/13/2012
Length: 11 pages

Looking back on the disastrous vacation of an American couple in Indonesia, this case shows how a globally branded North American hotel chain disregarded the basic tenets of maintaining their global brand promise, ignored generally accepted customer service standards, failed to instigate delivery failure recovery, and leveraged firm-specific capabilities to maximize shareholder wealth. The reaction of the local manager at the Indonesian hotel and adaptation of the value proposition are told from the perspective of the vacationing couple that experienced the diluted brand firsthand.

Teaching Note: 8B12M019 (12 pages)
Industry: Accommodation & Food Services
Issues: Subsidiary Operations; Hotel Management; Performance Measurement; Customer Service; Indonesia
Difficulty: 4 - Undergraduate/MBA



PAEDIATRIC ORTHOPAEDIC CLINIC AT THE CHILDREN'S HOSPITAL OF WESTERN ONTARIO (B)
Mary Gillett, Kellie Leitch

Product Number: 9B10D001
Publication Date: 1/25/2010
Revision Date: 4/23/2010
Length: 6 pages

The director of the Paediatric Orthopaedic Clinic (the Clinic) at the Children's Hospital of Western Ontario has a better understanding of the process flow and bottlenecks at the Clinic and also has ideas for some possible solutions. The director can turn her thoughts to addressing a recurring issue raised by the hospital's management - how the Clinic's performance should be measured. The director pondered the mission of the hospital, which was to improve access to patient care and patient safety while sustaining the hospital's ability to deliver patient care into the future. She knew the Clinic was also committed to this mission, and she was prepared to evaluate the performance of the Clinic against this mission. Once again, the monthly executive meeting was looming, and the director wanted to be in a position to present a framework for her clinic's performance evaluation. This case is suitable for introducing the concept of performance measurement in a non-profit setting as well as the pitfalls associated with collecting the information. This is a follow-up case to Paediatric Orthopaedic Clinic at the Children's Hospital of Western Ontario (A), product # 9B08D001.

Teaching Note: 8B10D01 (5 pages)
Industry: Health Care Services
Issues: Non-Profit Organization; Accountability; Performance Measurement
Difficulty: 4 - Undergraduate/MBA


Chapter 13:
Strategy and Structure

BEYOND THE BORDER
Paul Boothe

Product Number: 9B14M009
Publication Date: 7/11/2014
Revision Date: 7/3/2014
Length: 8 pages

In February 2011, the senior associate deputy minister of Industry Canada was appointed as the Canadian prime minister’s personal representative to the bi-national team charged with developing the “Beyond the Border Action Plan” to both improve security and streamline cross-border commerce and travel between Canada and the United States. He was immediately faced with a range of decisions on how to proceed — whom to consult, which Canadian team members to hire, which of many possible priorities to pursue in discussions with his U.S. counterparts and which steps to take to manage a complex process involving a multiplicity of large and powerful Canadian government departments and agencies as well as private sector interests. While he didn’t yet have strategies to address these issues, he knew that he would have to formulate them rapidly. Both the prime minister and the U.S. president had made clear their desire to move quickly — ideally, an action plan was to be in place within six months.

Teaching Note: 8B14M009 (4 pages)
Industry: Public Administration
Issues: Organizational structure; strategic management; accountability; public service; stakeholder analysis; Canada
Difficulty: 4 - Undergraduate/MBA



AZZA FAHMY JEWELLERY: EXPAND LOCALLY OR INTERNATIONALLY?
Marina Apaydin, Hend Mostafa, Mariam Mohamed Sherin, Mariam Ali Mobarak, Amal Mohsen Fahmy, Dina Sameh Labib

Product Number: 9B13M098
Publication Date: 3/31/2014
Revision Date: 3/27/2014
Length: 7 pages

This is the second case in the Azza Fahmy series. This case and the three others in this series (9B13M097, 9B13M099 and 9B14M023) can be used together or on a standalone basis.

This case series features a female Egyptian entrepreneur who faces the challenge of developing her self-titled jewellery brand. In this case, the entrepreneur realizes the importance of having a clear organizational structure with different departments and a clear chain of authority. As a result, she hires her daughter as the managing director to take on the responsibility of developing a mission, vision and explicit organizational structure. This restructuring allows the company to grow further, which leads the entrepreneur to consider her opportunities in the international market.


Teaching Note: 8B13M098 (10 pages)
Industry: Other Services
Issues: Internationalization; institutionalization; alliances; Egypt
Difficulty: 4 - Undergraduate/MBA



ARLA FOODS - MATCHING STRUCTURE WITH STRATEGY
Jean-Louis Schaan, Ramasastry Chandrasekhar

Product Number: 9B13M112
Publication Date: 10/30/2013
Revision Date: 10/30/2013
Length: 17 pages

In early 2013, the head of business development and commercial operations of Arla Foods, a dairy enterprise focused on Northern European markets, is examining, in the light of a new five-year strategy, alternatives to the existing organization structure. His dilemma is to determine the best structure that can deliver the strategy, which is focused on renewed international expansion. The new structure must support the company's strategy in relation to both the existing core markets in Northern Europe and also the growth markets of the future in countries of Asia and Africa. It must ensure that Arla Foods has the right competitive stance in individual markets, which vary widely in terms of customer buying habits and retail formats. It must also ensure regular innovation of dairy categories developed from local resources and marketable globally.

Teaching Note: 8B13M112 (9 pages)
Industry: Retail Trade
Issues: Strategy implementation; organization structure; innovation; globalization; key success factors; customer focus; United States.
Difficulty: 5 - MBA/Postgraduate



SIRIUS XM RADIO CANADA
David Wood, Craig Dunbar

Product Number: 9B11N026
Publication Date: 12/8/2011
Length: 16 pages

On April 11, 2011, the merger between Canadian Satellite Radio Holdings Inc. (the parent company of XM Canada) and SIRIUS Canada Inc. received the approval of CRTC (Canadian Radio-television and Telecommunications Commission). This was the last obstacle standing in the way of the president and CEO of the new organization. The president had had plenty of time to prepare for this merger since it was first announced in November of 2010. However, with only a few months before the implementation plan was to go into place, the president was once more reviewing the proposal that he had prepared. The merger of XM Canada and SIRIUS Canada was not going to be easy. Both organizations had been fierce competitors, but it was clear that their survival was dependant on a successful merger. The president’s plan had to consider the make-up of the management team, the consolidated marketing strategy, operations and information systems integration, and how all of this was to be financed.

Teaching Note: 8B11N026 (18 pages)
Industry: Information, Media & Telecommunications
Issues: Mergers & Acquisitions, Capital Structures; Organizational Structure; IT and Operations Integration; Marketing Strategy; Canada
Difficulty: 4 - Undergraduate/MBA


Chapter 14:
Chapter 14: Environment, Power and Culture

EARTHWEAR FACE & BODY: COMMUNICATING CORPORATE CULTURE (A)
Mary Weil, Julia Cutt

Product Number: 9B14C045
Publication Date: 10/15/2014
Revision Date: 10/28/2014
Length: 9 pages

By the spring of 2014, the founder of EarthWear Face & Body is in desperate need of part-time employees to help run her successful skin care retail business, which she runs out of her home in North Battleford, Saskatchewan. After eight years of hard work, she has turned her part-time hobby making all-natural skin care products into a thriving business. She sells her products online, through retail stores, at craft and trade shows and at the Saskatoon Farmers' Market. But her successful business has become too much work for her to manage on her own. A failed attempt to bring on a part-time employee made it clear that she needs to develop a targeted recruitment strategy. How can she effectively communicate her corporate culture to attract the best candidates? See supplement 9B14C046.

Teaching Note: 8B14C045 (7 pages)
Industry: Retail Trade
Issues: Corporate culture; human resources; communication; Canada
Difficulty: 3 - Undergraduate



INVICTUS: INTRODUCING LEADERSHIP COMPETENCIES, CHARACTER AND COMMITMENT
Gerard Seijts, Jeffrey Gandz, Mary M. Crossan

Product Number: 9B14C016
Publication Date: 3/18/2014
Revision Date: 4/4/2018
Length: 5 pages

Business schools have done an admirable job of teaching competencies, and many business organizations have defined the framework of competencies that are required to be successful in the institution. However, much less attention has been spent on leadership character and the importance of commitment to the leadership role. There is no consistent understanding among executives about what character means, despite a concurrence that it is important. The movie Invictus portrays Nelson Mandela in his first year as the first black president of the newly desegregated South Africa as he persuades not only both black and white populations to support the national rugby team in its effort to win the World Cup but also the players themselves. It provides a truly brilliant illustration of not only the competencies required to lead but also the leadership character and commitment that are needed to lead during trying times.

Teaching Note: 8B14C016 (17 pages)
Industry: Public Administration
Issues: leadership development; character; competencies; commitment; South Africa
Difficulty: 4 - Undergraduate/MBA



GENERAL MILLS CANADA: BUILDING A CULTURE OF INNOVATION (A)
J. Robert Mitchell, Ken Mark

Product Number: 9B14M015
Publication Date: 1/24/2014
Revision Date: 5/1/2015
Length: 6 pages

The president of General Mills Canada wants to build a culture of innovation in his firm. Prior to a senior management meeting in 2010 to review the company’s plans for 2011 and beyond, he met with the vice-president of Human Resources and asked him to provide feedback and suggestions about what the organization could do to change its corporate culture. A conservative organization with a collegial atmosphere where consensus and support were essential to moving projects ahead, General Mills Canada had developed an analysis-based, detail-oriented culture that was not necessarily conducive to innovation. This case provides an opportunity to engage in a discussion about the uncertainty faced by senior management in terms of specifically how to build a culture of innovation. While the senior leaders know they want to build a culture of innovation, the real question is how they should go about doing this. Also available is supplement case 9B14M016.

Teaching Note: 8B14M015 (20 pages)
Industry: Manufacturing
Issues: Culture; innovation; change management; marketing; human resources; Canada
Difficulty: 5 - MBA/Postgraduate



RESEARCH IN MOTION: SINCERELY, A RIM EMPLOYEE (A)
Jana Seijts, Paul Bigus

Product Number: 9B12C020
Publication Date: 4/24/2012
Revision Date: 5/3/2012
Length: 14 pages

On June 30, 2011, Research in Motion (RIM) co-CEOs Jim Balsillie and Mike Lazaridis unexpectedly found themselves facing serious public scrutiny, not from competitors, market analysts, or consumers, but from one of their own senior executives. In an attempt to have their voice heard, an anonymous senior-level RIM employee addressed an open letter to both Balsillie and Lazaridis; however, the letter was sent to the online technology news provider Boy Genius Report (BGR). In a year during which RIM already faced pressures from a dwindling market share, failed product attempts, and a sinking stock price, Balsillie and Lazaridis needed to figure out how to respond to the claims of the letter publicly, but more importantly how to communicate to RIM employees internally.

Teaching Note: 8B12C020 (8 pages)
Industry: Information, Media & Telecommunications
Issues: Communications; Leadership; Corporate Culture; Employee Attitude; Organizational Behaviour; Uncertainty; Smartphones; Canada
Difficulty: 4 - Undergraduate/MBA



CEO DECISION-MAKING AT PRAIRIE HEALTH SERVICES
Valerie Wallingford, Sharon Gritzmacher

Product Number: 9B11M063
Publication Date: 8/11/2011
Length: 3 pages

This case focuses on a significant problem faced by county-owned Prairie Health Service’s administrators: What could be done to reduce multiple billings and other redundancies among the four divisions of the organization? The administrators’ goal was to implement an integrated records management system that would streamline the registration and billing processes for patients, thereby increasing efficiency and timeliness, as well as reduce financial losses. While this was a fiscally responsible goal for the organization, the records management software package selected by the CEO was inadequate for the task. Rather than listen to the recommendations of his division administrators who had spent considerable time researching potential software, the CEO seemed to be basing his selection decision on the personal relationship he had developed with sales representatives from one of the software firms.

Teaching Note: 8B11M063 (7 pages)
Industry: Health Care Services
Issues: Management Behaviour; Records Management Software; Board/management Relations; Ethics
Difficulty: 3 - Undergraduate