Case studies

In 2007, Best Buy was the leading electronics retailer in the United States with more than 941 stores, revenue totaling $31 billion, and a market cap of $21 billion. In 2005, Best Buy had adopted a new business model, culture, and customer-segmentation template called Customer Centricity. This move created volatility in the price of Best Buy stock because of the higher-than-expected employee costs that went with this new way of doing business and the difficulty of executing the old and the new business models simultaneously while the new model was rolled out. Best Buy responded to Wall Street's short-term focus in a myriad of ways. It first asked for investor patience, and stressed the strong operating results achieved in Best Buy stores operating under the new model. But in June 2007, after the stock dropped again, the CEO knew he had to decide whether to open more Best Buy stores, increase the company's dividend, or increase the stock-repurchase program.

This short case could be handed out at the end of class discussion on “J&L Railroad” [UVA-F-1053] in preparation for the following class, or if students are more experienced with hedging and option pricing, the instructor may choose to cover both cases in a single class period. It is the companion case to “J&L Railroad” [UVA-F-1053], and presents more technical issues regarding the hedging problem by requiring students to understand option-pricing principles. The board likes the CFO's hedging recommendations, but it wants a more careful analysis of the bank's prices for its risk-management products: the caps and floors. Besides demanding an understanding of option pricing, this case puts particular emphasis on the calculation and use of implied volatility.

The Home Depot case is a great story. It's about entrepreneurship, growth, CEO leadership, and the dramatic impact, good and bad, a CEO can have on a company's growth culture, strategy, and performance. Home Depot had faced market growth challenges for the last seven years as it tried in numerous ways to reignite its growth engine. The case explores the growth strategies of CEOs Bernie Marcus, Arthur Blank, and Blank's successor Bob Nardelli, a former GE executive. After examining Home Depot's growth history, the case challenges students to devise a growth strategy for the company under a new CEO.

Tiffany & Company was the leading U.S. luxury jewelry brand, generating more than $2.6 billion in revenue through 167 retail outlets globally and from catalogue and Internet sales. For nearly 170 years, Tiffany had managed its brand. In February 2007, a hedge fund, Trian Fund Management LP, announced that it had bought a 5.5% stake in Tiffany, and became its largest shareholder. Trian believed that Tiffany was undervalued and stated that it wanted to help the company “improve its earnings per share by addressing various operational and strategic issues.” In response, Tiffany began to consider different actions to increase shareholder value.

TourAmerica is negotiating a master contract with Voyager Inn International (Bethesda) for hotel rooms during the 1995 tourist season. Issues under consideration include number of rooms during peak, mid-, and off-periods, room rates, breakfast prices, and the cost of ancillary services. While the hotel manager is evaluated on the basis of several criteria, including adjusted daily rates, occupancy rates, and food and beverage profitability, and is also provided with a utility scheme to facilitate trade-offs among the criteria, TourAmerica uses an effective cost per registrant (adjusted for intangibles). These two approaches provide an opportunity to contrast measurement schemes and to justify the use of utility functions. This case is a role-play exercise and must be used in conjunction with “Voyager Inn International” (UVA-QA-0463).

This case, along with its B case (UVA-QA-0865), is an effective vehicle for introducing students to the use of machine-learning techniques for classification. The specific context is predicting customer retention based on a wide range of customer attributes/features. The specific techniques could include (but are not limited to): regressions (linear and logistic), variable selection (forward/backward and stepwise), regularizations (e.g., LASSO), classification and regression trees (CART), random forests, graduate boosted trees (xgboost), neural networks, and support vector machines (SVM).

The case is suitable for an advanced data analysis (data science, machine learning, and artificial intelligence) class at all levels: upper-level business undergraduate, MBA, EMBA, as well as specialized graduate or undergraduate programs in analytics (e.g., masters of science in business analytics [MSBA] and masters of management analytics [MMA]) and/or in management (e.g., masters of science in management [MScM] and masters in management [MiM, MM]).

The teaching note for the case contains the pedagogy and the analyses, alongside the detailed explanations of the various techniques and their implementations in R (code provided in Exhibits and supplementary files). Python code, as well as the spreadsheet implementation in XLMiner, are available upon request.

Prudential Equity Group had downgraded Danaher to underweight status, citing concerns over its inadequate organic growth. By March 2009, its CEO wondered how to keep growing a company that faced changing worldwide economic circumstances, pressure from low-cost competitors, new competitors, flat or declining demand for company products, price increases for certain raw materials, and criticism from market analysts.

This case can be used in management of international business courses to illustrate the analysis of market attractiveness, the importance of fit between firm capabilities and market requirements, and the effects of multimarket competition. It describes the international expansion challenges facing EAC Nutrition, the infant formula division of a Danish conglomerate, in early 2002. Growth in EAC's core markets of Thailand and Malaysia has stagnated and EAC is contemplating three expansion options: entry into India, geographic expansion within China, and product line expansion in existing markets.

This case concerns the troubles that Euro Disney experienced from the start. Euro Disney claimed that the major cause of its poor financial performance was the European recession and the strong French franc. The timing of the park's opening could not have been more inopportune. If the recession had been the only cause of Euro Disney's problems, the financial restructuring would only need to carry the park forward to better economic times. Only when Europeans began spending freely again would investors learn the answers to some uncomfortable questions: Was the whole idea of Euro Disney misconceived? Were there other fundamental cultural problems that could inhibit the park's success? Would Euro Disney fail to recover even though other European companies did? And, if so, why was the Disney theme-park concept successful in Japan and not in France?

This case features a prominent antidumping case in the United States against six of its major foreign shrimp suppliers. The case fits well in a discussion and analysis of the (welfare) consequences of protectionism, the basic case for free trade, and the political economy of protectionism.

The diamond industry has been subject to significant change. There is increased competition from low-wage countries such as India and China, the concern about blood diamonds, and policy issues affecting the viability of trading diamonds. In this case, we study how Antwerp's dominant position in the diamond trade is being challenged and eroded. The case offers a good opportunity to introduce and discuss comparative advantage and relate it to Heckscher-Ohlin type of trade.

John Hume, a veteran game farmer and founder of the Mauricedale Game Ranch in South Africa, was deeply troubled by the record upsurge in black rhino poaching incidents and black-market horn thefts in 2010 and 2011. While the endangered black rhino represented only one segment of Mauricedale's hunting and farming businesses in 2011, the animal's survival was an important component of the ranch's and industry's growth potential in the future. As both a businessman and a rhino advocate, John Hume was contemplating an innovative idea that might help stop the decline of the black rhino: the creation of a market for legalized black rhino hunting. As he pondered the possibilities and alternatives to determine what his next move should be, Hume had several questions on his mind: Was the legalization of the international sale and trade of rhino horns a viable solution? Was it Hume's responsibility to save the black rhino, and was the animal a good investment?

This case describes and analyzes the negotiations surrounding the U.S.–Thailand free trade agreement (FTA) that never materialized. The case offers an excellent opportunity to discuss the complexities of trade negotiations, the welfare analyses of FTAs (with trade diversion and creation), and the growth of FTAs and customs unions (CUs) as opposed to multilateral trade liberalizations.

This case will lead students to a discussion of the causes and effects of hyperinflation. The link with fiscal deficits is explored, and so is the link with societal changes. The particular focus is on the hyperinflation in Zimbabwe under President Robert Mugabe whose government implemented a controversial land redistribution program. The case can be taught with a class experiment—see teaching note.

In this case, a senior business analyst at the online travel agency Trek-ation struggles with the decision of whether to pursue a potentially lucrative idea. Her innovation team had proposed revising the online pricing algorithm in order to use the cookies and other information from customers’ web browser to customize pricing for flights and hotels. Although she wanted to increase revenue for the company and meet her targets, she was also concerned not only about the backlash if this tactic was revealed to the public but also, more importantly, about both the fairness of this practice and the violation of customer privacy norms.

Two recently graduated MBA students are tasked with developing an ad-serving learning algorithm for a mobile ad-serving company. The case illustrates the way in which hypotheses can be tested in an A/B format or “horse race” in order to establish customer preferences and superior profitability. The case was written for a course elective covering hypothesis testing.

Joe Smith, senior director of merchandise management at Beautiful Bags (BB), was about to place a large order for the upcoming winter season. He had to decide how many pieces he should order of each product. But another big question whether BB should source the product from its domestic manufacturing facility, its Chinese suppliers, or some combination of the two given the timing needs, labor costs, minimum order requirements, and BB's expanding product assortment?

The Global Networks Company (GNC), headquartered in Boston, Massachusetts, made its global footprint in India in 1994 by establishing a presence in Bangalore. Although mainly a sales support office, GNC grew name recognition from its contracts with India’s government to help build nationwide networks. Not quite 20 years later, GNC decided to further invest in India and tapped a manager from the Boston office, Jim Notrika, to establish and then manage GNC’s first global software center in Mumbai. Split between Mumbai and Boston, the project team successfully completed several minor projects, but only months into its first major project, the team was struggling to meet deadlines. Blame was being passed in both directions, and when three talented engineers in Mumbai quit, Notrika makes an emergency trip to Mumbai to better understand the problem.

This case describes three common cross-cultural communication obstacles in teams: a preference for direct versus indirect confrontation of problems; a clash of collectivist versus individualistic cultural values related to reporting bad news or giving negative feedback; and different expectations of team leaders based on power-distance values.

In the first case of a two-part series, a strategic finance manager at Wells Fargo with experience installing solar panel systems on bank branches crunches the numbers for a similar project in the Los Angeles area given the uncertain future of a government rebate.

The Vigeo case is used in Darden’s Global EMBA “Business Ethics” course. The case raises the issue of how we determine what constitutes a socially responsible business, and how to apply that idea in a global context. It therefore could also be used effectively in courses in marketing, finance, or global economies and markets.

With a global leadership and sustainability perspective, this field-based case uses Vigeo, a European leader among environmental, social, and governance (ESG) rating agencies headquartered in Paris, to set the stage for an analysis of what it means to be a socially responsible business. It allows for an exploration of decision-making and moral overtones that are often difficult to resolve. The material also lets students explore the idea of global values-are there such things, and if so, what are they? The case opens with a summary of issues that include how CEO Nicole Notat plans to grow the company in 2012. She had to take a strategic view of where the SRI market was going and be prepared. The board had asked Notat to think more strategically about China. Would Vigeo adapt existing services and products to the Chinese market? Would entering an emerging market such as China mean rethinking the business model from the ground up? How would either strategy fit with the company’s overall mission?

This case is also available in French. Contact DBP to obtain the French version.

In this case, the situation is a classic duopoly. Two shipping firms are in a price war over the market for containerized shipping to and from a small Caribbean island. The case presents a table of contributions to both firms as a function of their prices. This table serves as a basis by which the class can explore the concepts of Nash equilibrium, price leadership, and prisoner’s dilemma. It is also available with the case as a student spreadsheet (QA-0355X). See also “Lesser Antilles Lines (B)” (UVA-QA-0641) and “Lesser Antilles Lines (C)” (UVA-QA-0670).

The organizers of a music festival may use video from the Friday concert to create a DVD to sell to those who come to the Saturday concert. Attendance on Saturday is uncertain, as is the percentage of those who attend on Saturday who will buy the DVD. Is this a good project? If so, what number of DVDs should be burned early Saturday morning and offered for sale at that evening’s performance? By that time, Friday attendance is known, as well as whether it rained on Friday, and there is a forecast for whether it will rain on Saturday. Historical information on these variables may help us predict Saturday attendance using multiple regression; together with the results of a marketing survey, such analysis will help us make better purchasing decisions. This case series (see also the B case, UVA-QA-0708) can be used to illuminate a multitude of concepts that are covered in basic decision-analysis courses. The series starts by examining the role of uncertainty in decision-making, proceeds through the estimation of probability distributions from sample data with multiple regression, culminates in the development of a full decision model, and ends with a qualitative and quantitative analysis (with a tornado diagram) of how to add value and reduce risk. Key pitfalls for students are failing to recognize both limits on sales (supply and demand), incomplete reasoning in the determination of the attendance probability distribution, and oversimplifying the full forecast model.

This case presents the dilemma faced by Danville Airlines’ management when one of its best pilots is found to have the inherited gene for Huntington’s disease. Although he inevitably will develop the physically and mentally debilitating disease, the pilot, who has yet to experience symptoms, does not want to step down from his position. Danville Airlines explores the complicated issues of employee rights versus public safety, employee rights to privacy, and genetic testing and its effects on employees and management.