Case studies

In 2007 Conseco's CEO, C. James Prieur, faced a complicated set of problems with his company's long-term care (LTC) insurance subsidiary, Conseco Senior Health Insurance (CSHI). CSHI faced the threat of congressional hearings and an investigation by the U.S. Government Accountability Office, triggered by an unflattering New York Times article alleging that CSHI had an unusually large number of customer complaints and was denying legitimate claims. This threat came in addition to broader systemic problems, including the fact that the entire LTC industry was barely profitable. What little profitability existed was dependent on the goodwill of state insurance regulators, to whom the industry was highly beholden for approvals of rate increases to keep it afloat. Furthermore, CSHI had unique strategic challenges that could not be ignored: First, the expense of administering CSHI's uniquely heterogeneous set of policies put it at a disadvantage relative to the rest of the industry and made rate increases especially necessary. Second, state regulators were negatively predisposed toward Conseco because of its notorious reputation and thus were often unwilling to grant rate increases. Finally, CSHI was dependent on capital infusions totaling more than $1 billion from its parent company, Conseco, for which Conseco had received no dividends in return. Faced with pressure from Conseco shareholders and the looming congressional investigations, what should Prieur do? Students will discuss the available options in the context of a long-term relationship between Conseco and state insurance regulators. Prieur's solution to this problem proved to be innovative for the industry and to have far-reaching consequences for CSHI's corporate structure.

After reading and analyzing this case, students will be able to: evaluate the impact of a regulatory environment on business strategy; and assess the pros and cons of various market strategies as well as recommend important non-market strategies for a firm in crisis in a highly regulated industry.

In March 2007 C. James Prieur, CEO of insurance provider Conseco, was faced with a crisis. The front page of the New York Times featured a story on the grieving family of an elderly woman who had faithfully paid for her Conseco long-term care (LTC) policy, only to find that it would not pay her claims. Her family had to pay for her care (until her recent death), which unfortunately resulted in the loss of the family business. The family was now very publicly pursuing litigation. For a company that depended on thousands of employees, investors, and independent agents who sold the insurance plans, this reputational risk was a serious threat. On top of this immediate crisis, all signs in the industry were pointing to the fact that the LTC business itself was not viable, yet over the years Conseco had acquired a number of LTC insurance providers. Students are asked to analyze not only what Prieur’s priorities should be in addressing the immediate crisis but also the risks inherent in the LTC industry and how this might affect Conseco’s success as a business moving forward

After reading and analyzing the case, students will be able to:

• Analyze the risks in the long-term care insurance industry

• Distinguish the various types of risk that caused a company’s crisis and recognize the potential for contagion

• Brainstorm how the risks faced by Conseco could have been avoided or better contained

• Recommend the first steps C. James Prieur and the Conseco leadership team should take to rectify the New York Times article crisis

Analyze the risks in the long-term care insurance industry

Distinguish the various types of risk that caused a company’s crisis and recognize the potential for contagion

Brainstorm how the risks faced by Conseco could have been avoided or better contained

Recommend the first steps C. James Prieur and the Conseco leadership team should take to rectify the New York Times article crisis

Change is hard for all but perhaps more difficult for school leaders and other nonprofit organizations. The role that culture plays in a mission-driven organization can often be an impediment to change. This case uses a unique education institution, St. Martin dePorres School of the Cristo Rey Network, to illustrate the importance of culture in implementing change. It demonstrates how leaders can articulate a vision and create a strategy to change an organization and move toward success. The case focuses on the leadership team of Principal Mike Odiotti and Assistant Principal Judy Seiberlich and how they used cultural change as the key driver to school success. That success was defined by improved academic performance, greater accountability for students, teachers and staff and stronger empowerment of constituents. It includes an overview of how the school's leadership team used data to drive decision making. This case is ideal for MBA students, executives in nonprofit management or school leadership and can be used to illustrate change management, nonprofit leadership, culture change, mission-driven strategy or school leadership. It addresses critical issues that organizations face and provides tools and tactics that can be applied to mission-driven enterprises.

Understand the role culture plays in creating change in an organization Gain an appreciation and comprehension for the relevance of shaping culture when implementing a vision Recognize norms guide people's behavior in organizations. Learn to identify the norms that promote positive cultures and those that create toxic environments Learn how to diagnose organizational culture using the “Iceberg Model” Build a repertoire of skills needed to successfully change and shape an organization's culture

Change is hard for all but perhaps more difficult for school leaders and other nonprofit organizations. The role that culture plays in a mission-driven organization can often be an impediment to change. This case uses a unique education institution, St. Martin dePorres School of the Cristo Rey Network, to illustrate the importance of culture in implementing change. It demonstrates how leaders can articulate a vision and create a strategy to change an organization and move toward success. The case focuses on the leadership team of Principal Mike Odiotti and Assistant Principal Judy Seiberlich and how they used cultural change as the key driver to school success. That success was defined by improved academic performance, greater accountability for students, teachers and staff and stronger empowerment of constituents. It includes an overview of how the school's leadership team used data to drive decision making. This case is ideal for MBA students, executives in nonprofit management or school leadership and can be used to illustrate change management, nonprofit leadership, culture change, mission-driven strategy or school leadership. It addresses critical issues that organizations face and provides tools and tactics that can be applied to mission-driven enterprises.

Understand the role culture plays in creating change in an organization Gain an appreciation and comprehension for the relevance of shaping culture when implementing a vision Recognize norms guide people's behavior in organizations. Learn to identify the norms that promote positive cultures and those that create toxic environments Learn how to diagnose organizational culture using the “Iceberg Model” Build a repertoire of skills needed to successfully change and shape an organization's culture

AstraZeneca is preparing for the launch of Crestor, the company's first entrant in the enormous and fast-growing statin category. The team responsible for the product launch is considering how best to bring Crestor to market. Should AstraZeneca simply follow the example set by Pfizer with the exceptionally successful launch of Lipitor? Or should the company instead launch Crestor as a niche product?

To teach new product strategy for both emerging and established categories, and competitive strategy.

Describes the winning formula at Neiman Marcus that has made it the No. 1 luxury retailer in the United States in terms of sales per square foot and profitability. Highlights Neiman Marcus' efforts to define who its customers are and are not and to achieve superior focus on its customers by aligning location, price, service, and merchandise to fulfill these customers' every need. Describes ways in which Neiman Marcus prevents typical silo behavior between merchandising and selling and how it ensures that the right merchandise gets to the right customer, despite the challenge of doing this in 36 micromarkets.

To show how a company integrates two strong high-performance functions—merchandising and sales—to get the right merchandise to each customer in more than 30 diverse selling locations while consistently providing exceptional customer service.

This case looks at a new start-up company, d.light Design, as it was seeking to go to market in India with its solar-powered LED lamps in 2009. Sam Goldman, founder and chief customer officer of d.light, was in New Delhi, India; his business-school friend and co-founder Ned Tozun was in China, the site of the company's manufacturing plant.

One of the key decisions Goldman and Tozun needed to make was whether d.light should focus on just one distribution channel in India, or multiple channels. The startup had limited capital, so it needed to get the distribution question right to generate revenue quickly.

The case thus combines an entrepreneurial problem with an emerging-market, or bottom-of-the-pyramid, channel design challenge. This case does not focus on product design or manufacturing challenges but rather on questions of:

• The constraints d.light faced in creating an aligned distribution channel. These constraints can have legal, environmental, and/or managerial foundations

• Demand-side misalignments in the channel structure that will occur if d.light chooses one or another of the considered channels in the case, namely, (a) the RE (rural entrepreneur) channel, (b) the village retailer channel, or (c) the centralized shops channel

• • What mix of channels—or what single channel—d.light should focus on in the Indian market

• • The financial return possible based on d.light's current cost structure and overhead expenditures in India

The constraints d.light faced in creating an aligned distribution channel. These constraints can have legal, environmental, and/or managerial foundations

Demand-side misalignments in the channel structure that will occur if d.light chooses one or another of the considered channels in the case, namely, (a) the RE (rural entrepreneur) channel, (b) the village retailer channel, or (c) the centralized shops channel

• What mix of channels—or what single channel—d.light should focus on in the Indian market

• The financial return possible based on d.light's current cost structure and overhead expenditures in India

• Assess channel benefit demand intensities for chosen target market segments

• Assess channel alignment constraints that can limit the channel designer's ability to optimize the channel to meet identified end-user demands for channel benefits

• Use these ideas to defend a choice of one or more possible channel structures as appropriate parts of a company's overall channel system

• Analyze financial opportunity in this situation, given cost parameters and possible market penetration estimates

Assess channel benefit demand intensities for chosen target market segments

Assess channel alignment constraints that can limit the channel designer's ability to optimize the channel to meet identified end-user demands for channel benefits

Use these ideas to defend a choice of one or more possible channel structures as appropriate parts of a company's overall channel system

Analyze financial opportunity in this situation, given cost parameters and possible market penetration estimates

Tel Aviv–based Diskit Khartsan Ltd. sold sprays, traps, and netting to combat Blatta lateralis, the Israeli flying cockroach. The insect, slightly over one inch (2.54 cm) long and capable of flying short distances, was noisy, unsightly, and posed a risk of food contamination. Every heat wave brought more infestations, and consumers across the Mediterranean armed themselves with Diskit's HLH™ brand products.

HLH products generated nearly two-thirds of Diskit's annual revenues. During periods of low demand, local retailers resisted devoting significant shelf space to the bulky products, which meant that during periods of high demand stockouts occurred frequently and Diskit lost sales. To address this problem, the company had implemented a trust receipts program that raised prices for retailers by 3 percent but allowed them to take Diskit products onto their balance sheets without payment until the products were sold.

After analyzing and discussing the case, students should be able to: • Understand the relationship between a firm's credit policy and its product market strategy • Explain the effect of growth on firms' strategy when product market strategy is capital-intensive • Understand how exogenous change in the market's structure affects firms' product market strategy and, consequently, its inventory and credit policie

The Disney Crisis Exercise is not revealed here because it is entirely an in-class experience; students should not have access to any details prior to the exercise. Complete information is available to instructors in the teaching note. In this real-time exercise, student teams will advise Disney how to respond to a crisis precipitated by vocal and well-organized influence groups that threaten its brand as part of their advocacy on behalf of social causes. The crisis occurs against a backdrop of dynamic industry and company changes, many of which have important consequences for Disney.

After completing this exercise, students should be able to:

“Driving Strategic Change at the Junior League (A)” describes a troubled organizational environment. Challenges included a dissatisfied membership, declining membership numbers, a large diversity among local leagues, and limited resources to meet the organization's overall objectives. The case describes a “participatory roadmap” approach, drawing on the insights of comprehensive research, and highlights a strategic-change approach that focuses on participation and local-level flexibility.

The (B) case examines how the Association of Junior Leagues International (AJLI) took initial steps to implement the participatory roadmap. Through a purposeful messaging strategy that involved many targets and various modes of communication, AJLI leaders sought to influence and inform active members, sustainers, and their local leaders. Further, through the use of design teams, AJLI gained deep insight into the ways that implementation might vary across local leagues. Finally, these design teams enabled AJLI to make initial gains in membership and develop a cross-league learning community.

After reading and analyzing the (A) case, students should be able to:

• Describe the challenges of leading organizational change in a federated membership nonprofit

• Appraise different forms of data to determine the types of changes needed in a large-scale nonprofit transformation

• Identify ways to unfreeze the organization, encouraging individual members' readiness for change

• Formulate a plan for collaborative, large-scale organizational transformation, as opposed to a coercive strategy

Describe the challenges of leading organizational change in a federated membership nonprofit

Appraise different forms of data to determine the types of changes needed in a large-scale nonprofit transformation

Identify ways to unfreeze the organization, encouraging individual members' readiness for change

Formulate a plan for collaborative, large-scale organizational transformation, as opposed to a coercive strategy