Case studies

The case focuses on the diamond retailing industry toward the end of 2008, with the United States in an economic downturn. All diamond retailers are hit by the downturn and are facing a critical look at their strategies. Given the basic performance information on Blue Nile, Zales, and Tiffany, students are asked to consider the strengths and weaknesses of each business model with the goal of understanding business models that are better suited to handling a downturn.

The learning objectives of the case are to (1) understand the link between supply chain structure and financial performance, (2) identify key drivers of supply chain performance and how they affect a firm's ability to respond during periods of strong or weak demand, and (3) develop the alignment between supply chain structure and strategic position for a firm.

This case looks at an important business task: forecasting a new product. The case can be used to teach finance, marketing (new product introduction), and healthcare strategy. The product is one of Amgen's most important new products: denosumab. On the surface, the case is fairly easy; students simply have to do some simple mathematical calculations. However, the challenges of forecasting quickly become apparent; every forecast depends on some critical assumptions, and the answer can vary dramatically.

Highlight the importance of forecasting as a business task. Give students the opportunity to create a forecast, using logical assumptions to generate an answer. Illustrate how dramatically forecasts can vary. Demonstrate why sensitivity analysis and customer understanding are both critical when trying to forecast a new product launch.

EuroPet S.A. was a multinational company operating gas stations in many European countries. There was a growing propensity for supermarkets to attach gas stations to their retail operations, which was developing into a major threat to EuroPet. As a result, in the mid-1990s, the company began to develop and brand its own convenience stores co-located with its gas stations. However, the company was spending much more on advertising the convenience stores than its competitors did. Management now had to decide if the increase in sales attributed to advertising efforts justified the advertising spend by analyzing the market data from one large metropolitan area: Marseille, France.

Students will learn: how to use cross-tabs and other marketing research tools to identify segmentation descriptors; how to analyze data and interpret results; and how these research results could guide new product development and positioning strategies in order to effectively target relevant customer segments.

A senior product manager for a telecommunications company has been asked to propose ideas for generating new revenue from video gamers who use his company's Internet services. The manager has commissioned the development of “experience maps” for three subsegments within the gamer segment. The experience maps, which are reproduced in the case, provide students with an opportunity to generate customer insights based on real qualitative data.

After students have analyzed the case, they will be more comfortable analyzing unstructured consumer insight data with limited direction, as well as with the inductive reasoning necessary to develop marketing insights based on qualitative research results. They will also have a better understanding of how customer insights can drive product development decisions and a greater understanding of experience maps as a consumer research tool

Pharmaceutical company Genzyme has created a new drug, Renvela, which is a phosphate binder designed to be used primarily by patients with kidney failure. Renvela is a slightly different version of Genzyme's highly successful Renagel. Company executives must now decide how best to launch Renvela. Should it replace Renagel? Should it be a premium version of Renagel? Is it worth launching the product at all? The case appears rather simple on the surface, but the questions are challenging to work through.

This case, launched with great success in the 2009 Kellogg Biotech and Healthcare Case Competition, can be used to teach growth strategy and new product strategy. It also provides an introduction to the pharmaceutical industry. Students will be given the opportunity to think critically about the role of innovation, risk, and ethics in healthcare-related firms.

Executives at biotechnology firm Genzyme are debating funding a clinical trial for a new version of a medical device called Synvisc. The trial is expensive and the odds of success are not high, but the upside is substantial. The case presents a common business question: invest or not? The case forces students to think about customer insights, wrestle with a number of complex issues, and evaluate the financials of the decision.

The case is ideal for teaching financial analysis and decision making. It can also be used to teach marketing, new product strategy, and healthcare industry management.

The case focuses on the career of Gil Mandelzis, a former Wall Street investment banker who recognized and seized an opportunity to build his company, Traiana, into a successful services provider for financial institutions in the foreign exchange prime brokerage market. The case describes Mandelzis's history, beginning with his earliest entrepreneurial effort as a Tel Aviv bar owner and continuing through his decision to start Traiana. Time and again, Traiana achieved success only to be undone by unexpected, uncontrollable events. Each time, Mandelzis rebuilt the company from scratch. In one memorable instance--the one that enabled Traiana's ultimate success--Mandelzis abandoned a business plan that had created a $10 million company, fired 40 percent of his employees, and embarked on a brand-new direction. At the time the case is set, Traiana appears poised to grow into a major force in the foreign exchange prime brokerage business. Then Mandelzis receives an offer to buy the company for $164 million. The management team must either accept the offer or assume the risk that Traiana's growth will continue and its value will escalate in the coming years. For a company that has repeatedly seen unexpected events derail management's plans, taking the risk is not easy. The case posits three choices: accept the offer, reject the offer, or seek out other buyers.

Students must determine Traiana's value and advise Mandelzis how to respond to the offer. In determining its value, students learn to consider factors outside the company. The key insight in analyzing this case is understanding that Traiana's value should be seen in terms of its worth to the potential buyer rather than only using typical valuation measures such as current or projected revenues.

In July 2007, Mark-Hans Richer became Harley-Davidson's first chief marketing officer. Its riders were aging, which the company saw as an existential threat. Although Harley-Davidson had a record sales year in 2006 and had maintained a commanding share of the heavyweight motorcycle market for the previous decade, it needed to take new action to sustain its growth.

Richer needed to deliver a new generation of riders and a more diverse customer base, all without losing current Harley-Davidson customers. He also knew that he could not relax: the average tenure of a CMO in 2007 was only 27 months and a complete new product development cycle would take a minimum of four years.

After analyzing the case, students should be able to:

• Recommend marketing decisions for a brand with extremely high loyalty in light of various consumer behavior indicators gleaned from market research

• Understand the power of leveraging existing assets as opposed to innovating new products

• Understand the psychological basis of customer loyalty, including drivers and metrics of loyalty

Recommend marketing decisions for a brand with extremely high loyalty in light of various consumer behavior indicators gleaned from market research

Understand the power of leveraging existing assets as opposed to innovating new products

Understand the psychological basis of customer loyalty, including drivers and metrics of loyalty

This exercise is one in a series intended to help students learn how to perform financial calculations in marketing contexts.

Helmut Schmidt, product manager for Hohner Musikinstrumente GmbH & Co. KG, the world's foremost manufacturer of harmonicas, accordions, melodicas, and ukuleles, was sitting at his desk reviewing his first assignment from the company's senior executive team. Schmidt had been asked to calculate the break-even point for the company's flagship product, the Marine Band harmonica, under a number of different scenarios.

After completing the exercise, students should be able to:

• Calculate unit contribution and margin

• Calculate break-even units and market share

Calculate unit contribution and margin

Calculate break-even units and market share

The Hotel Perennial case puts students in the shoes of Dan Jameson, founder and CEO of a boutique real estate private equity firm called EL Investments (ELI), as he wrestles with the decision of whether or not to acquire the distressed Hotel Perennial, a 194-room hotel on the north side of Chicago, Illinois. When making the investment decision, Jameson (and students) must consider various factors: What is ELI's implicit investment strategy, and what are the firm's core competencies? What are Jameson's goals for growing ELI, and how might the acquisition of the Hotel Perennial fit with those goals? What opportunities and challenges might ELI face if it decides to acquire the hotel? How much would a buyer likely have to pay for the Hotel Perennial to achieve an attractive return? In addition to containing a hotel valuation and modeling exercise, the Hotel Perennial case also exposes students to several real estate industry concepts and terminologies, including those regarding the hotel sector, equity sourcing, and distressed investing. The case material assumes that students have taken an introductory real estate finance course or have relevant work experience.

-Show students how an investment decision can go beyond simply “crunching numbers” and projecting an internal rate of return to include considering an individual's or firm's strategic objectives and core competencies. Students should think through how to