Case studies

Bright Lights is a small non-profit organization in Lincoln, NE offering a summer enrichment program to school aged children. Post 9/11, the organization faces challenges in its efforts to sustain financial resources. With enrollment and course offerings on the rise, funding is more important than ever. At the second to the last meeting of the year at which budgets are established, the Bright Lights' Board of Directors asked the Executive Director, Kathy Hanrath, and the Co-Owner/Director of Education Services, Barb Hoppe, to come up with some alternatives for fundraising top present at the final yearly meeting. Kathy has recently attended some sessions on franchising at a local entrepreneurship conference and would like to explore franchising as an option for Bright Lights growth. Kathy feels that franchising might have the potential to both increase performance and funding. This case focuses on issues associated with the exploration of franchising as a method of distribution and capital acquisition for a social organization. It calls attention to the appropriate situations for franchising, the importance of organizational assessment for franchise readiness, and other legal, economical, and organizational considerations.

The ‘Game’ is really a multi-industry case that aims at developing participants' awareness of the links between firms' strategic choices and the financial structures the choices engender. Participants are provided with Balance Sheet percentages and common ratios for firms in 12 different industries and list of different businesses and asked to match the figures with the kind of business. The goal is for participants to understand how industries' operating models impose certain financial structures.

The case is run as a kind of mystery game but leads to rather sophisticated analysis of industry and business models. The case leads students to a better understanding of the essential concepts of a business strategy course: 1) external analysis by helping students ‘see’ the structures of different industries; 2) making clear the link between the competencies and capabilities needed by firms in their internal environment to successfully compete in their industries by matching the key success factors at work; 3) providing a tangible illustrations of the competencies that must be developed to successfully pilot business strategies like cost leadership and differentiation; and, 4) developing insight into integration and outsourcing strategies and their effects.

A detailed Teaching Note accompanies the case.

East Texas Oxygen (ETOX) delivered high-pressure cylinders of gases such as oxygen and nitrogen to twelve wholly-owned branches scattered throughout East Texas and Louisiana. Employees loaded and unloaded individual high-pressure cylinders off of and onto trailers manually and the firm had never had a related accident. Robert Jenkins had been challenged to decrease the cost of supplying the branches with cylinders and other supplies. He was considering recommending the palletization of delivery operations which required numerous changes within the organization. This case required students to determine the best routing for the delivery truck(s) and to determine whether or not the number of trucks and drivers could be reduced under palletization. Students were then required to do a capital budgeting analysis and make a recommendation of whether or not to palletize.

After decades of successful expansion, The Reader's Digest Association's products were mature. With an average readership age for the flagship Reader's Digest magazine of 50.3 in 2004, efforts to develop new products had so far failed to entice a significant number of younger customers. Following a financial downturn in 1996, positive financial results remained illusive. Several major changes instituted by Thomas O. Ryder, CEO since 1998, including acquisitions, re-capitalization, restructuring and systematic re-engineering of the corporate culture, had proven mildly successful, but RDA, as well as the entire publishing industry, faced a persistent decline in profitability. Could RDA fulfill its stated mission to create “products that inform, enrich, entertain and inspire people of all ages and cultures around the world”, and could it do this by continuing to rely on the 80-year old Reader's Digest magazine?

Ms. Cindi Bigelow, COO and third generation in her family to head the R.C. Bigelow Tea Company, located in Fairfield, CT, believed one strategy to move her business forward would be to attract a younger audience for her product line. Hot tea appeals primarily to women 45+ who typically drink the beverage for its soothing effects. A test market, designed to make hot tea more appealing to a college-age audience, was conducted at a nearby university by a Students in Free Enterprise (SIFE) team drawn from the chapter's membership. Key words: Target audience, market segmentation, demographics, market research, promotion mix, advertising, copy development, media selection.