Charles Krusekopf and Rebecca Frances Wilson-Mah
There are a range of business evaluation methods that can be applied to determine the value of a business. Ultimately, the valuation of a business is what someone will pay for it…
Abstract
Theoretical basis
There are a range of business evaluation methods that can be applied to determine the value of a business. Ultimately, the valuation of a business is what someone will pay for it when the sale transaction is completed. When determining the value of their own business, business owners are often influenced by how hard they have worked to start and build up the business, what the business represents and their projections for the future (Hawkey, 2017). This case provides an opportunity for students to consider exit strategy planning and how to establish a fair market price for a business, how to consider the value of good will and, in particular, the value associated with running an environmentally conscious bakery operation. The trend toward environmental responsibility and green practices in the small business community has started to have an impact on the value of small companies (Inc. 2021). Finally, the case raises the issue of the personal values of the owners and the related implication of finding a buyer with similar values and interests for a bakery business.
Research methodology
This case was field researched and the company and individuals are not disguised. One of the authors interviewed the two owners of The Royal Bakery. There were three interviews over a six-month period. The interviews were audio recorded. An ethical review for this research was completed at the co-authors’ institution, and a case release was signed.
Case overview/synopsis
The Royal Bay Bakery presents Dave Grove and Gwen Snyder who, with over 30 years in the bakery business, had started to consider next steps toward retirement. Royal Bay Bakery was profitable and growing. As they prepared to retire and sell the business, they were unsure about how to maximize the value of the business. They also wanted to find a buyer who would recognize and continue their business commitment to environmental and social sustainability.
Complexity academic level
This case may be taught in a class on exit strategies for small family businesses in the context of a small business course. This case is appropriate for both undergraduate seniors and graduate students. The case may be used to help students understand small business valuation, family ownership and exit strategies and environmental practices in small businesses. Instructors may choose to emphasize specific conceptual tools, including SWOT analysis, and business valuation. The case may also be used to reinforce applications of exit strategy for small, family-owned businesses.
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Elina Ibrayeva and Terrence Sebora
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…
Abstract
Case description
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.
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Hope Corman, Kelly Noonan, Nancy E. Reichman and Dhaval Dave
We use postpartum survey data linked to medical records and city-level drug prices to estimate the demand for illicit drugs among pregnant women. We find that a $10 increase in…
Abstract
We use postpartum survey data linked to medical records and city-level drug prices to estimate the demand for illicit drugs among pregnant women. We find that a $10 increase in the retail price of a gram of pure cocaine decreases illicit drug use by 12–15%. The estimated price effects for heroin are lower than for cocaine and are less robust across alternative model specifications. This study provides the first estimates of the effects of drug prices on prenatal drug use and yields important information about the potential of drug enforcement as a tool for reducing illicit drug use among pregnant women.
Joe Anderson, James I. Hilliard, Josh Williams and Susan K. Williams
Josh Williams is a Student at the NAU who has driven buses on campus and wants to improve the transportation on campus. He is convinced that purchasing a new type of bus that is…
Abstract
Synopsis
Josh Williams is a Student at the NAU who has driven buses on campus and wants to improve the transportation on campus. He is convinced that purchasing a new type of bus that is more fuel efficient, has larger capacity, better designed for boarding, and has a longer life is worth the higher purchase cost. He sets out to prove it by creating a discounted cash flow (DCF) analysis. Since many of the estimates for the DCF analysis are uncertain, he decides to perform a Monte Carlo simulation (MCS) analysis. Students are asked to step into Josh’s role and perform the analysis.
Research methodology
Josh Williams was a Student in the authors’ MBA program. Both authors teach in this program and one author was the Advisor for Net Impact and worked with Josh to present his idea to the university administration. The authors have changed a name or two but otherwise, the case describes a real situation in a real organization without disguise.
Relevant courses and levels
The authors have used this case in a first semester MBA-Applied Management course, Decision Modeling and Simulation. Students already have experience with DCF analysis and have been introduced to MCS. With this case, students apply MCS at the conclusion of a three-week module on predictive analytics. Students have run at least two MCS models and have become comfortable with the software. The case would also be appropriate for a senior-level undergraduate course such as business analytics or management science. It might also be useful for other courses that include the MCS modeling technique learning objectives such as project management.
Theoretical bases
This case provides an opportunity for students to perform an MCS analysis. MCS is useful when many of the inputs to a DCF analysis (or any model) have been estimated and the modeler is concerned that the estimates are uncertain and could perhaps be a range of values. MCS can be used to understand the effect of this uncertainty on NPV which in turn may affect the decision. The case could also be used without MCS focusing just on the DCF analysis with deterministic sensitivity analysis.
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Ken Gilleo, Bob Boyes, Steve Corbett, Gary Larson and Dave Price
Polymer thick film (PTF) technology provides the lowest cost, cleanest and most efficient manufacturing method for producing flexible circuits. Non‐contact radio frequency (RF…
Abstract
Polymer thick film (PTF) technology provides the lowest cost, cleanest and most efficient manufacturing method for producing flexible circuits. Non‐contact radio frequency (RF) smart cards and related information transaction devices, such as RFID tags, appear to be a good fit for PTF‐flex. Flip chip also seems well suited for these “contactless” RF transceiver products. Flip chip and PTF adhesive technologies are highly compatible and synergistic. All PTF SMT adhesives assembly methods are viable for flip chip. However, the merging of flip chip with PTF‐flex presents major challenges in design, materials and processing. This paper will compare assembly methods and discuss obstacles and solutions for state‐of‐the‐art flip chip on flex within the RFID product environment.
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Leiza Nochebuena-Evans, Abdullah Al Shoeb and Beau Sauley
This case study is developed from financial reports, regulatory filings and news sources to explore the dynamics and outcomes of the partnership between Evolve Bank & Trust…
Abstract
Research methodology
This case study is developed from financial reports, regulatory filings and news sources to explore the dynamics and outcomes of the partnership between Evolve Bank & Trust (Evolve) and Synapse Financial Technologies, Inc. (Synapse), a bank–fintech arrangement. Evolve’s annual financial statements were analyzed. These documents provided a comprehensive view of the bank’s financial health and the impacts of the fintech collaboration on deposit growth and risk exposure. Financial data related to Evolve’s operations industry were gathered from reliable databases such as those provided by the Federal Deposit Insurance Corporation BankFind Suite. This included performance indicators, competitive pressures and market trends influencing the bank’s strategies and partnership outcomes. Major financial news outlets such as Bloomberg, CNBC, Forbes, S&P Global and other government and industry-specific publications and databases, such as the Board of Governors of the Federal Reserve System, were used to understand the external market conditions and regulatory challenges that arose throughout the partnership between Evolve and Synapse. This multi-source approach ensures that the case study offers a comprehensive analysis of both internal financial performance and the broader market environment in which Evolve during its partnership with Synapse.
Case overview/synopsis
The present competitive environment smaller financial institutions face, coupled with regulatory gaps applicable to both traditional banks and financial technology (fintech) firms, plays a significant role in increasing regulatory scrutiny of bank–fintech partnerships. Evolve strategically positioned itself to capitalize on the growing fintech revolution by forming innovating banking-as-a-service partnerships to extend regulated banking products to millions of fintech customers. Evolve’s most crucial fintech partnership came in 2017 with Synapse. This partnership helped Evolve triple its deposits from $436m to $1.5bn between 2019 and 2023.
Evolve–Synapse’s partnership exposed significant operational, financial and regulatory risks. Synapse’s unilateral revocation of Evolve’s dashboard access prompted Evolve to freeze account activities and revealed an $85m discrepancy between the $180m in customer funds held by partner banks and $265m owed to customers. Over 100,000 Americans were unable to access their accounts, affecting approximately $265m in deposits. Evolve’s overreliance on Synapse to manage fintech relationships left it vulnerable to third-party failures and regulatory scrutiny. This scrutiny highlighted the shortcomings and greater need for regulatory oversight of bank–fintech partnerships.
Did Evolve fail to adequately safeguard customer deposits? It is clear that the bank’s actions and inactions played a significant role in the current crisis. The insufficient regulatory oversight partially explains the inadequate implementation of risk management practices and customer compliance protocols by banks and financial technology firms compromising the financial system’s stability. As of early July 2024, no definitive solution had been reached and is projected that fund distribution will not be completed until October 18, 2024.
Complexity academic level
This case study is suitable for courses focused on financial markets, fintech innovation, risk management and regulatory frameworks within the banking industry. Students studying finance, banking, business administration or regulatory affairs, as well as participants in executive education programs focused on banking innovation or financial services, will benefit. This case is appropriate for courses in Financial Markets and Institutions with a particular focus on fintech and depositary regulation. A course in Money and Banking may also find this case relevant. Before starting, it is assumed that students have already taken foundational finance courses and macroeconomics courses and have a foundational understanding of financial statement analysis.
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Arik Susbiyani, Moh Halim and Animah Animah
This paper aims to examine the effect of the independent board of commissioners and profitability on Islamic social reporting (ISR) disclosure implemented in companies that belong…
Abstract
Purpose
This paper aims to examine the effect of the independent board of commissioners and profitability on Islamic social reporting (ISR) disclosure implemented in companies that belong to the group category of Indeks Saham Syariah Indonesia (ISSI). This study also examined the advanced effect of ISR disclosure as a company strategy to obtain a firm’s value.
Design/methodology/approach
The data of the independent board of commissioners, profitability, ISR disclosure and firm’s value were obtained from the annual reports of companies whose shares belong to the calculation of ISSI, totaling 24 companies. The ISR disclosure was measured using the content analysis method. While the research model used path analysis.
Findings
This study found that the independent board of commissioners directly affects the ISR disclosure while indirectly affects the firm’s value as mediated by the ISR disclosure. This finding indicates that the independent board of commissioners is regarded as capable of protecting investors’ interests from problems that may be incurred from asymmetry information. However, this study failed to prove that profitability directly affects the ISR disclosure.
Research limitations/implications
A list of ISR disclosure items in this research adopted the list developed by Haniffa and Othman, without any additional items. While the measurement of ISR disclosure used the content analysis, therefore there may be subjectivity issues accidentally done while scoring.
Practical implications
This study recommends management of companies which belong to ISSI to optimize their independent board of commissioners because it has been proven in this study that their presence can significantly encourage a more independent, objective and fair climate while one of its main principles is to pay attention to the interests of minority shareholders and other stakeholders. Besides, the findings can be used to increase awareness of the company management about the importance of transparency in managing a company because the ISR disclosure has received positive responses from investors.
Social implications
The findings of this study encourage companies to be more transparent in presenting information. An appropriate disclosure will provide a sense of security so that the investors can account for such earthly issues before Allah SWT, thus their spiritual satisfaction can be achieved.
Originality/value
This paper investigated further the effect of ISR disclosure on firm’s value which has never been performed by previous scholars. The ISR disclosure is a strategy to obtain legitimacy from investors, which was analyzed using the legitimacy theory.
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The purpose of this paper is to examine the question, “should national brand manufacturers produce private labels?”. Anecdotal evidence shows that though this is a common question…
Abstract
Purpose
The purpose of this paper is to examine the question, “should national brand manufacturers produce private labels?”. Anecdotal evidence shows that though this is a common question for managers in different industries and countries, managers and companies react differently to it. As such, there are national brand manufacturers that produce private labels and others whose policy is to produce only branded products.
Design/methodology/approach
This paper examines this question through the construction of a model, focusing especially on the effects of producing private labels on manufacturers' profits when their provision may affect both the consumers' perception of the quality of the private label and the national brand manufacturer's costs.
Findings
The analysis allows for different degrees of competition in the retail market, and for linear and non‐linear pricing.
Practical implications
An important novel practical implication of these results is that national brand manufacturer' gains from producing private labels are increasing with the concentration of the retail market. Another implication derived from our model is that national brand manufacturers should be more enthusiastic about producing private labels when independent manufacturers may produce a good whose perceived quality is closer to that of the national brand.
Originality/value
The results presented in this paper may help managers to identify key variables that may affect the profitability of producing private labels.
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Gerard Dunne, Sheila Flanagan and Joan Buckley
The purpose of this paper is to examine the city break travel decision, and in particular, to develop a decision making model that reflects the characteristics of this type of…
Abstract
Purpose
The purpose of this paper is to examine the city break travel decision, and in particular, to develop a decision making model that reflects the characteristics of this type of trip taking.
Design/methodology/approach
The research follows a sequential mixed methods approach consisting of two phases. Phase One involves a quantitative survey of 1,000 visitors to Dublin. The research distinguishes and compares city break and non‐city break visitor cohorts. Phase Two entails a qualitative analysis (involving 40 in‐depth interviews) that specifically examines the decision making behavior of city break visitors.
Findings
The research shows city break trips to be relatively inexpensive, uncomplicated, and discretionary in nature. The city break travel decision emerges from quite distinct motives where situational factors proved particularly influential. The decision process mostly entailed low involvement / limited problem solving behavior with strong internet usage evident throughout.
Originality/value
The findings show that many traditional decision making models have problems incorporating contemporary travel decisions such as city breaks. This is because such models generally fail to recognize a non‐systematic approach to decision making, where travelers do not necessarily undertake the process in distinctive stages, and where emotional elements are as relevant as functional ones. This study supports the need for a range of models that are reflective of the differences that exist in travel decision making – models that can distinguish the specific nuances and characteristics of particular decision situations.
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Loic Pengtao Li, Biljana Juric and Roderick J. Brodie
The purpose of this paper is to explore the dynamic process of multi-actor engagement by examining how it evolves and spreads in actor networks. The authors challenge the dyadic…
Abstract
Purpose
The purpose of this paper is to explore the dynamic process of multi-actor engagement by examining how it evolves and spreads in actor networks. The authors challenge the dyadic perspective adopted by previous research.
Design/methodology/approach
An abductive theorizing approach uses a longitudinal case study to develop a theoretical framework of the iterative process of multi-actor engagement. The authors draw on the contemporary literature on engagement, service-dominant logic and value propositions.
Findings
The research shows that engagement conditions, via actors’ appraisals, lead to engagement properties and result in engagement outcomes as the new conditions for the next iteration. Changes within this multi-actor engagement process lead the network to evolve over time.
Research limitations/implications
The authors highlight the importance of adopting a dynamic multi-actor perspective of engagement and provide foundations for further research. The use of longitudinal methods that focus on the groups of actors in the evolving network is a key consideration.
Practical implications
There is the need to understand and measure the dynamic process of engagement among different groups of actors within networks in the service context.
Originality/value
This is the first empirical study to explore the dynamics of engagement among multiple actors in the network. This leads to the expansion of Storbacka et al.’s (2016) conceptual work by identifying the iterative nature of the multi-actor engagement process, and new components in the process (i.e. actors’ connections, value propositions and engagement outcomes), as well as clarifying existing ones (e.g. engagement properties and actors’ appraisals).