Abstract

Andres Galindo is a young Colombian from an upper-middle class family in Bogotá. With his brother Carlos serving as the sole importer in the country for the top American brand Electra Sportswear, Andres sets out to create a chain of retail stores located in high end shopping districts. Understanding that his legally imported goods (due to 40-120% import tariffs) were at a dramatic cost disadvantage to openly marketed illegally imported brands and counterfeit labels, Andres decides to approach the problem as a retailing and marketing challenge by adding value through the retail sales process.

By 2005 Andres has fourteen stores, and a new challenge. Electra has decided to cut out the middle man—Carlos—and have Andres import the product directly. This ought to lower margins, but it’s a big step. Most important, though, is crafting a growth strategy for his company in the face of unfair competition and a relatively small target population.

The case should be positioned near the end of a New Business course—after the initial cases that are funded by the 4Fs and immediately before the formal venture capital case. It could also be used in a Growing Businesses course, or an International Business course.

Topics:, Entrepreneurship as a career choice, finding and shaping an opportunity, sports clothing retailing, wholesale purchasing and retail pricing, importing, competing against black market and illegal imports, hiring and maintaining a retail workforce, family members as partners and employees, funding, managing a multi-city expansion, manufacturing partnerships and supplier relationships, inventory systems and software, government regulations and licensing, growth strategies, keeping a low profile in a dangerous country.

Teaching Objective
To present a framework for opportunity assessment, shaping and growth in a culturally specific context outside of the United States.

Abstract

Lenta is a cash and carry retail business located in St. Petersburg, Russia. At the time of the case, it was operating nine stores and generating over $500 million in gross sales. The case is set at the end of 2005, after a very successful year. Lenta’s founder and CEO, Oleg Zherebtsov, is faced with a dilemma. Where does he take Lenta from here?

This case teaches strategy, entrepreneurship, risk assessment and corporate culture all within the emerging business environment of the Russian Federation. This case is best suited toward the end of a strategy course or part of a capstone course at either the undergraduate or graduate level.

The case requires the students to consider how their choices and decisions affect multiple disciplines within a corporation. If Lenta decides to continue to grow, there are financing issues that have to be faced. Also, where is Lenta going to find the additional employees needed to staff and manage the new stores? Can they find people who will be committed to Lenta’s corporate culture, as noted by its Mission Statement and Values? If Lenta expands outside of St. Petersburg, what operational and distribution issues do they face and how do they establish a brand name and image in their new market?

In addition the case introduces the nuances associated with operating in a dynamic emerging market where the best decision that may exist in a market like the United States is not the best decision within the Russian market. Students need to be aware of the idiosyncrasies of operating in a business environment that is likely different from their own.

Abstract

Was Premier, Inc., a hospital GPO, guilty of ethical conflicts of interest? Premier was a group purchasing organization (GPO) for more than 200 affiliated not-for-profit hospitals and health care systems in the United States. A series of investigative articles in The New York Times, beginning in March 2002, charged Premier with multiple conflicts of interest. Among its allegations, the newspaper argued that seller-paid fees; investments by Premier and its executives in vendors; and investments by vendors in Premier-sponsored equity funds, research institutes, and conferences all biased the selection process for medical products and services. As a result, Premier did not always choose items of the best quality or value for its affiliated hospitals. Moreover, The Times charged, new products – particularly those developed by small firms – were effectively locked out, suppressing medical innovation and hurting patient care. Richard A. Norling, CEO, and other top executives of Premier faced the difficult task of formulating an effective response to the charges raised by The New York Times. The (B) case is an epilogue to the (A) case. It describes Premier’s decision to hire an independent ethics consultant, the process it established to direct his work, and the major recommendations made by the consultant. This case received the Emerson Center Award for the Outstanding Case in Business Ethics for 2004. It is suitable for upper-division undergraduate, graduate, and executive education courses in business ethics, leadership, business and society, and healthcare administration.

Abstract

Was Premier, Inc., a hospital GPO, guilty of ethical conflicts of interest? Premier was a group purchasing organization (GPO) for more than 200 affiliated not-for-profit hospitals and health care systems in the United States. A series of investigative articles in The New York Times, beginning in March 2002, charged Premier with multiple conflicts of interest. Among its allegations, the newspaper argued that seller-paid fees; investments by Premier and its executives in vendors; and investments by vendors in Premier-sponsored equity funds, research institutes, and conferences all biased the selection process for medical products and services. As a result, Premier did not always choose items of the best quality or value for its affiliated hospitals. Moreover, The Times charged, new products – particularly those developed by small firms – were effectively locked out, suppressing medical innovation and hurting patient care. Richard A. Norling, CEO, and other top executives of Premier faced the difficult task of formulating an effective response to the charges raised by The New York Times. The (B) case is an epilogue to the (A) case. It describes Premier’s decision to hire an independent ethics consultant, the process it established to direct his work, and the major recommendations made by the consultant.

This case received the Emerson Center Award for the Outstanding Case in Business Ethics for 2004. It is suitable for upper-division undergraduate, graduate, and executive education courses in business ethics, leadership, business and society, and healthcare administration.

Abstract

This note on Peru is intended as a brief introduction to graduate and undergraduate students in the cultural, political, and economic background of Peru from its independence to 2002. It can be used as supporting reading in teaching the case: “Lucchetti,” BAB104 and as material to support a country and national business systems analysis. The note offers a wealth of background economic data on Peru.

In mid-2002, Alejandro Toledo had been president of Peru for just about a year, and things weren’t going well. His popularity was falling and his political capital was dwindling. A major bone of contention was his plan to continue the policy of his predecessor, the charismatic, enigmatic and energetic Alberto Fujimori, to privatize state-owned enterprises (SOEs).

Fujimori held office for ten years and had pursued strong policies, using his Presidential powers to their fullest. He had ended a guerrilla insurgency, reduced the fiscal deficit, and opened Peru’s economy both internally and to global influences. After decades of political instability, democratic institutions seemed to be establishing themselves. Many economic indicators were good - GDP was rising, inflation was very low, and the currency was stable. However, half of Peru’s population still lived in poverty, and Peru still resembled its underdeveloped neighbor Bolivia more than it did prosperous Chile.

The fiscal deficit had begun growing again in the late 1990s. Fujimori had had the benefit of applying SOE sales to the budget, but many transactions had questionable aspects, and transparency was lacking. After he left office suddenly and under suspicious circumstances, privatizations were subjected to much more scrutiny and opposition. With the deficit growing, a delay in expected privatization income would make Toledo’s budget situation worse.

Abstract

This case chronicles the experience of Lucchetti, a Quinenco subsidiary, as it expanded from its historically strong domestic stronghold into Peru.

Lucchetti, a pasta company, had grown to the point where there was no room to expand in the Chilean market. The Peruvian market, however, looked extremely promising. Thus in 1996 Lucchetti Peru was born.

By late 2003, however, the new state-of-the-art pasta plant was being liquidated. The management of the company was considering whether Lucchetti should leave the Peruvian market altogether and absorb a $150 million write-off or, alternatively, to continue and build a new plant to take advantage of what was left of the Lucchetti market share, even though it would require a considerable additional investment. Had this been a case of a good strategy plagued by Murphy’s Law “everything that can go wrong will go wrong?” Was there something they should have known or some point where the team members had made the wrong decision? The lesson to be gleaned from this failed Peruvian venture remained unclear and they wanted to apply those lessons to future domestic and international expansion in this and other ventures.

This case is intended for use in graduate and executive courses in international strategy and country analysis. It places the corporate expansion into a multi-national context and encourages students to consider strategy from the broader context of the Peruvian national business, political, and economic systems.

The case is best taught in combination with case # BAB105: “Peru 2002: The Fujimori Effect” which offers the broader background material on the Peruvian business and political environment.

Abstract

After restructuring Scott Paper with a 34% reduction in head count and successfully selling the company to Kimberly Clark, Al Dunlap is hired as CEO by Sunbeam. This case describes the management principles of this corporate turnaround expert and his actions at Sunbeam.

Abstract

Forthcoming

Abstract

While the president of Grand Circle Corporation, a tour operator, had been pleased with its performance to date, the industry was reeling from the events of September 11. GCC was still profitable, yet customer deposits for upcoming trips were down significantly from the year before. He was unsure whether he could take GCC to the next level and reach the one billion dollar top line target. Did he have the right structures and processes in place?

1. Product Scope: How many destinations should they offer for 2002? Which product types should they focus on: GCT, OAT, Cruise, River Cruises, or VBT?
2. Customer Scope: Which segments should they focus on? How should they market to them?
3. Pricing: What pricing approach should they take for 2002?
4. Gaps: What gaps did they need to close to reach their $1 billion sales goal in 5 years.

This case includes information and background on the US Tour Operator Industry in 2001. It is targeted for use in both graduate and undergraduate classes in strategic management, but is also appropriate for courses in hospitality and marketing. For those who wish to use a separate industry note, please use “The US Tour Operator Industry in 2001,” BAB121.

Abstract

Forthcoming

Abstract

MWH was striving to become a global leader in water/environment, energy and infrastructure sectors through an expanding set of services, products and construction capabilities by leveraging its global position and knowledge management concepts. As this concept was evolving, it needed to continuously show value back to staff, managers, and the company as a whole. MWH executives wanted to continue to expand KM usage across geographic and business divisions.
The protagonist of this case, Vic Gulas, had recently expanded his responsibilities to include leading the human resources (HR) and information technology groups. By leading the IT, HR, and KM groups, he could devise strategies to address both the technology and social aspects of knowledge management. However, given limited resources and the time pressures to continue to show results, he was confronted with several potentially competing strategies to pursue. Gulas’ decision on which course of action to take would determine the role KM would play at MWH in the future.

Abstract

Jim Poss’s enterprise, Seahorse Power Company (SPC), was an engineering start-up that encouraged the adoption of environmentally friendly methods of power generation by designing products that were cheaper and more efficient than twentieth-century technologies. Jim was sure that his first product, a patent-pending solar-powered trash compactor, could make a real difference.

After funding the product development and testing, by May of 2004, the Seahorse Power Company had a total of six team members. They had all been given an equity stake in exchange for their part-time services. Jim was seeking funding to allow him to take the business to the next level with a larger production run with reduced component costs and increased production efficiencies.

The case chronicles the evolution of the company and places Jim at the critical juncture of deciding how best to deal with potential investors and funding alternatives.

Abstract

DayOne opened for business in January 2001. The first store, located in San Francisco, provides products and services to pre-natal and post-natal parents and their babies; it was an immediate success with customers. Now Andrew Zenoff, founder and CEO, wants to grow his venture into a national chain of DayOne centers providing essential services, products, and community to first-time parents, but has not yet raised the money he needs. This is Andrew’s second startup.

Abstract

USA Golf Holidays is a five-year-old business specializing in customized vacations for golfers. Its 2003 revenue was $5.8 million with a loss of $225,000. The CEO (and founder) is planning the next stage for the company. He hopes to build on USA Golf Holidays competencies and grow the company to grow the company’s revenue to approximately $50 million by 2007. Issues he is considering are whether to expand beyond golf vacations; how to use information technology to improve the company’s operations; how to raise money to fund the growth strategy; and whether he is right person to lead the company in it next phase.

Abstract

This case is positioned as the first high–potential startup in a new ventures course to increase the understanding of what constitutes a high–potential company that attracts professional venture capital. But it's not a "perfect" high potential, so it gives students an opportunity to spot its deficiencies. The case that should immediately follow Neverfail Computing in a course is SolidWorks (BAB068), which is an almost "perfect" high–potential startup.
As a financing case, Neverfail Computing links 4F (Founders, Family, Friends, and Foolhardy) funding and formal venture capital. Neverfail Computing has a proven team, with a proven lead entrepreneur, in an exciting market niche in a rapidly growing technology, RAID (Redundant Arrays of Independent Disks) hot–pluggable, fault–tolerant, SCSI (Small Computer System Interface, pronounced “skuzzy,” and used in a sentence as, “Basically, Neverfail sold SCSI drives.”), hard–drive disk arrays. It is the kind of high–potential venture that attracts venture capitalists.