Case studies

Microsoft employs 90,000 people and its products affect millions of users around the world every day. Developing the next version of Windows or Office is easy for Microsoft, but the company has struggled when it comes to more radical innovation. Intense competition from Google, Apple, and others threatens a business model that has delivered tremendous success over 25 years. This case highlights the strategic challenges facing Microsoft and provides insights into the organizational, leadership, and operational issues that must be addressed in order to define a successful innovation strategy at one of the world's most well-known companies.

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.

This case is an updated version of “Netflix Inc.: DVD Wars” (UVA-M-0763), and was written as a replacement for it.

A financial analyst is asked to appraise the value of Netflix’s stock at a time of unprecedented turmoil for the company. This case introduces customer lifetime value (CLV) as a useful metric for subscription-based businesses.

This case examines the queueing issues caused by the growth in popularity of one of the most visited Hindu temples in the world. On January 2, 2015, Ramesh and Vasantha Gupta visit Tirumala Venkateswara Temple, just a day after some 210,000 people crowded the 2,000-year-old site. The case describes the many enhancements that the temple administrator, Tirumala Tirupati Devasthanams (TTD), has implemented since its management of the temple complex began in 1932. The soaring popularity of the temple, however, has led to safety and comfort concerns for pilgrims. While challenging students to consider additional improvements that might benefit pilgrim throughput rate and time in the temple system, the case highlights the tension TTD must manage between maximizing efficiency and maintaining religious traditions. Additionally, the case demonstrates the importance of perceived waiting times in the management of queues.

In an effort to save his business, Paul Marciano, the owner of Italian family restaurant Maria’s Ristorante, runs a number of experiments focused on improving the customer experience around his target customer segment. These experiments lead to a better understanding about his business and cause him to make specific changes to his business model that ultimately improve things across the board. The experiments are based on research from the academic literature on the use of behavioral variables to manage customer perceptions.

Pancho’s Burritos is a high-end fast-food restaurant located in Charlottesville, Virginia. Due to a recent surge in customers, the lines at the restaurant during peak hours are becoming very long and causing excessive customer waiting. To improve current customer wait times and plan for future growth requirements, Francisco “Pancho” Escoba, the proprietor, wants to get a better understanding of the current operational capacity. The key decision Escoba must make is how to redesign his burrito-making process to increase the capacity and reduce customer wait time.

Suitable for an undergraduate or MBA course, the case can be used in an introductory operations course to teach capacity analysis and queuing. The case provides a relatable and understandable setting for students without an operations background to gain a better grasp of basic course concepts and illustrates how interactions between capacity and queuing affect one another. As an exam or review case it works well because it contains standard process calculations that all students should know how to perform.

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.

The strategic and tactical problems of managing the operations function in a service environment can be examined through the context of the Walt Disney Company (DIS) opening Shanghai Disneyland. The company and its investors were excited about the Shanghai opening for a good reason: demographics. The resort would be located in the Pudong district of Shanghai, easily the wealthiest of all of China’s districts. A massive 330 million people lived with a three-hour driving radius of the resort site, compared with 19.6 million who lived within the same radius at DIS’s most profitable park, Walt Disney World in Orlando, Florida. Still, risks remained. Construction complications had delayed the opening almost a year longer than expected and cost overruns and alterations had increased the final price tag of the project. The Chinese economy had also hit a rough patch following the Chinese stock market slump in the summer of 2015. With the world watching, could the classic Disney theme park experience be delivered with the right cultural balance to appeal to its largely Chinese customers? Could DIS get it right?

At three o'clock in the morning on September 10, 2001, Thierry Hautillac, a risk arbitrageur, learns of the final agreement between Pinault-Printemps-Redoute SA (“PPR”) and LVMH Moët Hennessy Louis Vuitton SA (“LVMH”). After a contest for control of Gucci lasting over two years, PPR has emerged as the winner. PPR and LVMH have agreed for PPR to buy about half of LVMH's stock in Gucci for $94 per share, for Gucci to pay an extraordinary dividend of $7 per share, and for PPR to give a two and a half year put option with a strike price of $101.50 to the public shareholders in Gucci. The primary task for the student in this case is to recommend a course of action for Hautillac: should he sell his 2% holding of Gucci shares when the market opens, continue to hold his shares, or buy more shares? The student must estimate the risky arbitrage returns from each of these choices. As a basis for this decision, the student must value the terms of payment and consider what the Gucci stock price will do upon the market's open. The student must determine the intrinsic value of Gucci using a DCF model as well as information on peer firms and transactions. The student must consider potential synergies between Gucci and PPR and between Gucci and LVMH. The student must assess the likelihood of a higher bid, using analysis of price changes at earlier events in the contest for clues.

In early 2012, an equity analyst, was examining the jet fuel hedging strategy of JetBlue Airways for the coming year. Because airlines cross-hedged their jet fuel price risk using derivatives contracts on other oil products such as WTI and Brent crude oil, they were exposed to basis risk. In 2011, dislocations in the oil market led to a Brent-WTI premium wherein jet fuel started to move with Brent instead of WTI, as it traditionally did. Faced with hedging losses, several U.S. airlines started to change their hedging strategies, moving away from WTI. But others worried that the Brent-WTI premium might be a temporary phenomenon. For 2012, would JetBlue continue using WTI for its hedges, or would it switch to an alternative such as Brent?