Case studies

The case delves into the significant factors contributing to the steep decline of Sintex shares, examining both external and internal factors. Internally, the primary drivers were the expansion plan, the demerger decision, financial mismanagement and the delayed and inadequate integration of Information Technology (IT) into the business.

Sintex, a prominent private sector company listed in the Indian stock markets, operated in the textile and plastics sectors. However, in 2017, Sintex underwent a demerger into two separate entities: Sintex Industries Limited (SIL) and Sintex Plastics Technology Limited (SPTL). While SIL focused on textiles, SPTL dealt with plastics. However, soon after the demerger, the share prices of both companies began plummeting, leading to significant losses for investors. This case investigates the reasons behind this decline through a step-by-step analysis.

This case is suitable for postgraduate students pursuing an MBA, MMS and executive programs such as PGDBM and PGDM, with a specialization in business strategy. It is also beneficial for participants in management development programs (MDPs) designed for higher level executives. Additionally, the case can serve as training material for executives undergoing strategic role training within an organization. It is recommended to teach the case toward the end of the course, where the instructor can provide a summary of the previous classes’ teachings.

CCS7: Management Science

Tom Gould, an entrepreneur, had been operating Treadwell’s Ice Cream, a small ice cream restaurant since 2000. Treadwell’s Ice Cream had been preparing its financial statements under cash basis. Tom Gould turned over all his receipts, both personal and business expenses, to his bookkeeper who entered them into QuickBooks. At tax time, his tax accountant excluded non-qualifying expenses from the tax filing. Periodically, Tom met with his bookkeeper to determine the results of operations and financial position at the end of that period of time. Most of Treadwell’s transactions were easily recognized by Tom, who preferred to pay all expenses by cash rather than credit. However, the bookkeeper had not been separating operating from non-operating activities, and had been using multiple accounts to record the same or similar costs. Therefore, the current income statement and balance sheet were not appropriately categorized and organized. In addition, since the bookkeeper was not a tax account, business expenses had been mixed with Tom Gould’s personal expenses on the income statement. There were no adjustment to the income statement after the tax accountant identified non-qualifying expenses when preparing tax filing. As Tom and his wife were considering turning over more day to day operations to his son and hiring a non-family member as a manager to help his son, he would need the books to provide an accurate picture of the business.

Primary source materials included interviews with the owner, Thomas Gould, his son, Michael Gould, and their Accountant, Tom Mallas. Secondary source materials included monthly and annual financial data from QuickBooks (monthly data are available upon request but are not relevant to the case discussion). Other secondary source materials included geographic, economic, industry, and competitors’ information.

This case is well suited for an introductory level undergraduate financial accounting course, after accrual accounting and accounting information systems (accounting cycles) have been introduced. When analyzing this case, students will apply concepts and principles of financial statement preparation. The case is also appropriate to serve as a review of accrual accounting, and of income statement and balance sheet preparation at the beginning of an intermediate level financial accounting course. Students can be asked to reformat the income statement from the single-step format to the multiple-step format. By working through financial statements with common errors found in small businesses, students can practice identifying these errors, thus providing a review of the various sections of the income statement and prepare students for more in-depth discussions of each section. In a tax course, this case can stimulate discussions on non-qualifying expenses and common shortcomings in small business accounting.

Republic Electric is faced with the need to engage in a systematic process of evaluating vendors for its just-in-time manufacturing. The case gives students the opportunity to think through the process for vendor selection in the context of real-world constraints for a specific organization, to become acquainted with the Delphi technique for developing consensus, to gain hands-on experience with linear averaging, to engage in calculations of value indexes, and to recognize the marketing implications of effectively evaluating vendors. A key takeaway for students is the fact that vendor selection decisions are multifaceted and will vary among organizations depending on each organization’s particular strategic needs, operational constraints, and human judgment.

The case is based upon a consulting assignment with the company that is represented by Republic Electric. The experience was gained first-hand by one of the authors.

This case is targeted at undergraduate students in marketing, materials management, supply chain management, and purchasing, but can work well in a variety of business courses in which supply chains or the development of evaluation tools is studied, to include graduate classes.

The concept of vendor assessment is well developed in the literature and represents a pragmatic, but often neglected, step in the practice of choosing suppliers.

Located in the Mid-Atlantic region of the United States, Eastern Truss Company produced trusses used in construction of both large warehouses and custom homes. This case presents the student with the opportunity to analyze the critical factors associated with the decision of whether Eastern should adopt a new production technology and whether cash flows from reduction of temporary workers will cover adoption coasts. The student must evaluate the decision to adopt the production technology through the lens of operations management tools. This case is appropriate for undergraduate business studies in the field of operations management.

Case study.

Undergraduate operations management.

Controladora Comercial Mexicana, a Mexican retailer, had successfully managed the bankruptcy process and was ready to emerge from its problems, primarily caused by speculation and excessive debt, and begin operations anew. Was the restructured Comerci capable of regaining its position as a premier retailer, and more importantly, was the firm capable of repaying the high level of debt that it carried following bankruptcy reorganization? How strong was the reorganized firm? Had Comerci truly left its problems behind in bankruptcy court, or would history repeat itself? How could Comerci raise funds needed for growth – through additional debt? Though asset sales?

This case was researched using publicly available information, including the company's financial statements, bankruptcy filings, news stories about the bankruptcy and financial data bases (e.g. ISI Emerging Markets, Economática, Capital IQ, etc.) to obtain information about the competitors and from financial analysts.

This case is intended for advanced undergraduate or MBA electives in finance. Students should have a basic understanding of valuation and financing before attempting this case. The case could also be used in a corporate finance or banking class to illustrate bankruptcy and credit risk, or could be used in an international business class to illustrate the differences between USA and international bankruptcies.

In January, 2015, Chipotle stopped serving pork at a third of its 1,800 restaurants due to its discovery that a pork supplier was not meeting Chipotle's “Food with Integrity” standards. This case examines the trade-offs Chipotle faced in maintaining its focus on sustainable ingredients as the chain grew rapidly. Demand for healthier ingredients by others in the industry and scalability problems in sustainable agricultural production suggested that supply shortages and higher prices were likely threats to Chipotle's continued rapid growth. Could Chipotle maintain its commitment to “Food with Integrity” when the supply of sustainable foods failed to meet demand or should the company just buy available ingredients regardless of farming methods?

This case was developed from both secondary and primary sources. The secondary sources included industry reports, company annual reports, news reports, social media sites and company websites. Primary sources included video interviews with Chipotle executives (available on the company's website) and visits to Chipotle restaurants in several cities. This case has been classroom tested with MBA students in a capstone course and with undergraduates in a strategic management course.

This case was written for use in Strategic Management classes at the undergraduate and MBA levels. The focus of the case aligns well with discussions of competitive advantage, firm performance and business level strategy. The case also has application in discussions regarding implementation of strategy. Instructors that choose to emphasize sustainability strategies could assign this case to explore trade-offs between profitability, sustainability and growth. Additionally, the case could be used in supply chain management courses.

This case utilizes a stakeholder analysis approach to examine the trade-offs between sustainability initiatives, growth and performance. The resource-based model of VRIO is used to analyze the firm's competitive advantage.

Cutts Floral Distributors, founded in 2004 by Dave Lambe, was a floral wholesaler in Lincoln, Nebraska. The firm became a top wholesaler in the Lincoln area and had expanded its delivery range (all accessed by the company's hand delivery system) up to 100 miles outside of Lincoln. The company credited its success to the expertise of its founder, a professor of horticultural entrepreneurship, and to the company's commitment to customer service. Dave Lambe came to believe that Cutts had exhausted the local market and began looking for growth opportunities within driving distance. Proposed locations for expansion included Kansas City (MO/KS), Denver (CO), and St Joseph (MO). The case provides an in-depth look at Cutts, its competitive advantages, and strategy as the firm faced a critical decision, made more difficult by the uncertainties of the economic recession. This case encourages students to think critically in order to answer the case's central questions: “Should Cutts expand? If so, where?” The complexity of an expansion decision and the multitude of factors that may influence an entrepreneur's decision to expand are illustrated throughout the case.

Dean Adams was given notice to develop an online program with the School of Business Administration as a prototype of online education for the rest of the University. A major task which faced the Dean involved working with University information technology (IT) staff and faculty to choose a learning management system (LMS) to support the online program. After talking with the Chief Information Officer at Seacoast University and appointing a committee made up of IT staff and faculty, the Dean was presented with the committee's recommendation that focussed on two major decisions: first, choosing the LMS product for the University, and second, choosing to locate the LMS product and server either on-campus or off-campus. In the course of considering whether or not to accept the committee's recommendations, Dean Adams weighed the evaluations and justifications as outlined by the committee in the context of Seacoast University's IT situation.

The case presents a financing dilemma at a fast growing, Brazilian construction company. The growing demand for residential and commercial real estate in Brazil, coupled with the capital intensive nature of the industry generates the need for a considerable external financing. The students are invited to take the perspective of the financial manager and evaluate three financing alternatives – an issue of debentures, a seasoned equity offering, and a capital-raising ADR offering. In their evaluation and final recommendation students need to consider the implications of each of the financing alternatives on firm value, equity risk, cost of capital, financial leverage, issuance costs, and ownership structure. The case also presents a valuable opportunity to discuss the interdependence between the institutional development of an economy and the development of its capital markets.

This case illustrates the tax implications of a movie produced in a foreign country that resulted in a loss. Teaching opportunities include the application of tax rules to a Schedule C business loss and a resulting net operating loss (NOL) deduction, the consideration of hobby and passive activity losses, the tax treatment of funds received in a divorce settlement, and how an individual might handle a possible IRS examination. Students are asked to prepare a revised Form 1040 for the movie business loss and the individual NOL deduction based on evidence provided in the case. Sufficient information is provided in the case to identify audit “red flags” in a tax return. Using the tale of an actual movie production in a foreign country and its consequent tax implications can provide an attractive alternative to teaching tax accounting rules that are often considered by students as “dry”.