Case studies

Communication Solutions (CS), a woman-owned business, experienced fast growth at its inception, and then found itself slowing after the mid-2000s recession. The firm provides consulting services, primarily to government agencies. The owners have brought the business to sales of about $10.5 million in 2012, but revenues declined following that peak year because of cutbacks in government spending and founder Jennifer Madison’s detachment from the business. Even though they recognize that it may not be an ideal time to sell, they are tired of running the business and want to sell now, as long as they can pay off their debts.

This case was researched through multiple interviews with Mark and Jennifer, who provided all of the financial data and background. All financial statements given in the case provide actual CS numbers. The name of the company and the names of the owners have been changed, at their request to disguise the company. At the time this case was written, the owners were in negotiation with a potential bidder, and did not want their names or their company name to be used. Market information and information about comparable companies was researched using publicly available financial data bases.

This case has the potential to be used in a variety of classes, depending on what the instructor wishes to emphasize. The author uses the case as a valuation case in a corporate finance class (suitable for undergraduates or MBAs), allowing students practice in discounted cash flow valuation and comparable multiples valuation. It could be used in an investments class which teaches business valuation, particularly in teaching valuation using market multiples. The case could be used in an entrepreneurial finance class. The author uses this case to illustrate the difficulties of business valuation with messy (but real) data.

This case explores small business valuation and exit strategies for founders. Students can put themselves in the position of small business owners who are ready to exit. Students should value the firm using discounted cash flow and multiples valuation, which includes making assumptions about the future growth of the firm. While there is likely to be reasonable agreement on the “as is” valuation, there may be great variation concerning the assumptions and valuations of the company as it could be. Students can discuss (and implement) adjustments made when using large company comparables to value a much smaller company.

This case traces through a 20-year history of a Chinese high-tech company, Maipu Communications Technology Company. Throughout the company’s growth, Maipu adjusted its innovation models in order to ensure that they remained compatible with corporate strategies, resources and external environments. However, as the company grew bigger, it was finding it more and more difficult to meet its innovation goals. Its current innovation model is a market-driven platform + distributed innovation. While Maipu has achieved some success under this model, it is faced with a myriad of challenges during the execution of the model. The key questions raised by this case are whether Maipu’s current innovation model is suitable for the company at this stage and how the innovation model should be adjusted to propel new innovation and growth opportunities for Maipu in this increasingly competitive market.

This case was a field research case. The authors paid three visits to Maipu Communications Technology Company, during which the authors conducted in-depth interviews with Mr Zhao, the Head of Maipu’s R&D and Innovation group, and several senior and functional managers of the company. Follow-up communication via telephone and e-mail was conducted to verify the accuracy of the written case.

This case is well suited for courses in the areas of strategic management, innovation management, high-tech management, entrepreneurship, and international business. The target audiences of the case are primarily MBA students, although this case can also be used in upper-level undergraduate business courses.

The theoretical basis for this case includes the following management theories: strategy formulation and strategy implementation, business-level and corporate-level strategies, enterprise life-cycle, corporate strategies at various stages of growth, patterns of innovation and applications, and implementation of innovation strategies.

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.