Case studies

Bed Bath & Beyond (BBBY) had no long-term debt on its balance sheet. Although many analysts considered BBBY's balance sheet a strength that permitted greater flexibility, some commented on the risks of its growing cash balance. These concerns raised questions about BBBY's capital structure. In early 2004, interest rates were at an all-time low, making it an attractive time to consider issuing debt and executing either a share repurchase or a one-time special dividend. Provides a few capital structure proposals for students to analyze.

This case features Bel-Brand's efforts to position its flagship brand The Laughing Cow in the United States. The challenges in this case are twofold. First, choose a viable position for a brand after a period of high growth following the South Beach Craze. The difficulty here is that the initial driver of the brand's position, the South Beach Craze, an environmental factor, is dwindling and is not sustainable. Second, the brand was receiving pressure from global stakeholders to try to unify the positioning in the United States with the global brand positioning. These are both challenges that were faced by the marketing team and raised in the case.

This case can be used to teach the following topics: 1) Developing a sustainable positioning. This case gives students the valuable experience of making a positioning choice and supporting the rationale for the positioning chosen. Furthermore, it demonstrates how a brand maintained a position after the initial support/argument for that position has dwindled or disappeared. 2) Managing global versus local positioning. The case also showcases a real life example of where positioning in the United States was extremely misaligned from the global positioning of the brand, and how the brand responded to this. 3) Write a positioning statement. One important exercise that students could be asked to do is write a positioning statement and become more familiar with concepts such as point-of-parity (POP), point-of-difference (POD), and reason-to-believe (RTB).

The director of equipment finance at Burlington Northern Railroad Company must decide if a leveraged-lease proposal is acceptable. The case emphasizes the importance of the lessee's tax status to the value of the lease and how the perception of residual value affects the valuation for both the lessee and lessor. To value the lease properly, the student must identify the relevant cash flows and the appropriate discount rates for those flows.

How does a mature business develop new growth markets, assuming it already has new products? That was the challenge facing The Coca-Cola Company and its global system of bottlers in the 2000s when demand for its core line of carbonated soft drinks flattened. The Australian bottler, Amatil, pinned its hopes on energy drinks, a fast-growth, youth-oriented category that was capturing headlines and share away from traditional products. To wrest control from the upstart brands that originated them, Amatil was targeting the retail context where young people congregated and formed their preferences, in pubs, nightclubs, healthclubs, and sporting events. This international case explores the challenges encountered when a mature company with considerable distribution assets, well-honed systems, and entrenched operating procedures attempts to sell into an underserved retail channel with requirements quite unlike those of the company's mainstream buyers. How does it attract market interest? How does it develop new routes-to-market without undercutting the cost efficiencies and delivery value that have earned it dominant position elsewhere? How does it win over what could be its core customers of the future without alienating today's faithful? These are just some of the questions that Amatil management was determined to solve.

Understand issues related to retail channel strategy development in fast-changing international consumer markets, and the challenges of adapting legacy routes-to-market systems to changing consumer demands.

Acting as chief financial officer (CFO), students try to determine how Coleco can fend off creditors. Coleco is in default on its loans and is in a negative equity position.

This case examines a company that rents and leases computers. The primary objective of the case is to provide a scenario where students can see the link between operational flow measures such as inventory, throughput, and flow time and financial flows. The case presents a scenario where a firm sees financial performance worsen even though sales increase. A link between the operational measures and financial flows allows students to understand the causes.

To provide a scenario that shows the link between operational flow measures such as inventory, throughput, and flow time and financial flows.

This case examines the exchange rate risk of a U.S.-based manufacturer of women's luxury shoes that has recently introduced its product in Japan. Students are asked to evaluate the extent of the firm's exposure to currency risk and whether hedging via forward contract or currency option is advisable.

In January 2012, Ellen Kullman, CEO and chairman of DuPont, must decide whether to retain or sell the company's Performance Coatings (DPC) division. This is an introductory case on valuing a leveraged buyout. The case focuses on a publicly listed corporation's decision to divest a large division and asks students to compare the division's value if it remains under DuPont's control or is sold to an outside party. The transaction size of approximately $4 billion is too large for potential strategic buyers in the industry, making private equity (PE) firms the most likely bidders. The case provides a base-case adjusted present value (APV) model of DPC as a stand-alone company and gives students specific assignments to adjust it to reflect the division's potential value under PE ownership (e.g., EBITDA growth, multiple arbitrage, and increased leverage).

The case is designed to illustrate and discuss the differences between a public company's valuation based on unlevered free cash flows and a PE sponsor's valuation based on residual (levered) cash flows.

This case has been successfully taught in a second-year elective course covering entrepreneurial finance and private equity and in an advanced undergraduate course on corporate finance. It is appropriate for use in classes on private equity, advanced corporate finance, or deal valuation.

This case is used in Darden's Supply-Chain Operations elective. The field-based case gives supply-chain educators the ability to teach the newsvendor model with pricing under a capacity constraint using real-life decisions. By 2005, Eastman Chemical Company, based in Tennessee, had created a new specialty plastic, Tritan, which demonstrated heat resistance and durability properties that might allow Eastman to compete in the lucrative polycarbonate plastics market. Development of this product was a major breakthrough for both Eastman and the broader chemical industry. The Eastman specialty plastics team had to contend with numerous challenges, however, before producing Tritan at full scale. First, Eastman had to commercialize a completely new material that only had been produced in the lab; second, the team had to develop a supply chain to manufacture a new component (monomer) and a new product (polymer) simultaneously; and finally, it had to analyze market entrance options given capacity constraints. Thus, the specialty plastics team faced several dilemmas: who should the initial launch partners be, given Eastman's limited manufacturing capacity, and how aggressively should Eastman price Tritan, given that price would drive demand in the launch markets and in new markets?

This case examines a set of expansion options for a successful Internet luggage retailer, with a particular emphasis on the operational complexities.