Case studies

This case is intended to be part of a first-year MBA marketing course, or a second-year elective in advertising, integrated marketing communications, market research, or marketing analytics. The case provides students with examples of two real advertising experiments and the challenges involved in executing the experiments. It allows for a discussion of the need for advertising experiments, and also, at a more general level, the need to measure the return on marketing. Biases surrounding the field experiments allow for a discussion of the problems with establishing a causal relationship between advertising and sales.

Set in 1999, this case allows students to put themselves in the positions of both Airbus and Boeing as Boeing considered how to respond to Airbus's decision to announce its plans to proceed or not with the $10 billion development of the world's first commercial superjumbo jet, the Airbus A3XX. Boeing was considering a development effort to “stretch” its 747 jumbo jet into a larger superjumbo version, the 747-X. At the time, the two companies’ widely available 20-year forecasts for jumbo- and superjumbo-jet demand were particularly divergent. In light of this very public “agreement to disagree,” Boeing could pursue several alternatives, all of which were related to Airbus's decision about whether or not to develop the A3XX. This case presents an opportunity for students to make a real downstream decision. It was prepared as a final exam for an introductory decision analysis course involving subjective probability assessment, decision tree modeling, simulation, real options, and game theory. In the analysis of this case, a student is expected to utilize ideas from all five of these areas.

This case raises the question: How does a company reasonably estimate and record entries for uncollectible trade receivables, and under what circumstances are receivables written off as uncollectible? The required accounting transactions for the case involve estimating a receivables allowance both as a percentage of sales and as a percentage of accounts receivable and making specific account judgments under the direct write?off method. The subjective issues involve analyzing and assessing a company's methods of collection and accounting for bad debts.

This case describes the evolution of an entrepreneur's venture-capital fund-raising from seed-stage financing through later-round efforts. The case focuses on where the “action” is in venture finance: the exploitation of social capital by an entrepreneur and investors. Much of the teaching materials on venture finance focus on the economics of financing; while these materials provide useful information about the mechanics of valuation and how to structure venture-capital agreements, they miss the social side of venture-capital investing. The case illustrates the theoretical concept that social capital (i.e., a person's relationship to other people in society) influences venture finance. The case can be used in a class on entrepreneurship or venture finance.

Students act as outside analysts attempting to determine how Alfin will finance its expected growth based on sales of antiwrinkle cream.

While preparing a financial forecast, the newly promoted CFO of a small and profitable but financially constrained ready-mix concrete company must choose between renegotiating debt obligations, postponing long overdue capital improvements that will prevent more costly future repairs, or reducing the dividend payment to a parent company that just recently purchased the firm.

After having negotiated major financial and operating decisions with its parent company, the CFO of this small ready-mix concrete subsidiary is asked to provide a valuation of the subsidiary. A one-year forecast of financial statements is provided along with information on long-term operating expectations and capital costs. This otherwise straightforward valuation exercise is enhanced by (1) the need to select between the parent- or comparable-firm costs of capital, (2) sufficient guidance to perform an illuminating sensitivity analysis, and (3) a sufficiently clear and rich context in which to illustrate the linkages between operating and financing choices. A teaching note and instructor and student Excel spreadsheets are available.

Madison Kryswada, director of alumni relationships at State University, assembled a 123-school data set to explore, in her words, “the drivers of alumni giving rate. ” The alumni giving rate contributed 5% to the increasingly important U.S. News & World Report rankings of U.S. colleges and universities. Wanting to understand the relationship between this variable and school characteristics, Kryswada gave her assistant a list of four well-formed questions to answer.

This case is used in Darden's FY Finance course, but it would be appropriate in any course introducing firm valuation. The case examines the 2012 decision by American Greetings (AG) to repurchase shares. Students can build a simple model of the company's future cash flows and derive an implied value. Because the company is arguably in a state of maturity or decline, a discussion of steady-state economics is particularly germane.

Set in September 1992, this exercise provides teams of students the opportunity to negotiate terms of a merger between AT&T and McCaw Cellular. AT&T, one of the largest U.S. corporations, was the dominant competitor in long-distance telephone communications in the United States. McCaw was the largest competitor in the rapidly growing cellular-telephone communications industry. Prior to the negotiations, AT&T had no position in cellular communications. This case and its companion (F-1143) are designed to allow students to be assigned roles to play. The case may pursue some or all of the following teaching objectives: exercising valuation skills, practicing strategic analysis, exercising bargaining skills, and illustrating practical aspects of mergers and acquisitions.