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Company turnaround, General Management.

Executive education, MBA.

This is a four-part case study in which the case of a company turnaround emerges as the students work through a series of decision-making processes. In teaching the case, the students would only be given Part A to begin with, about which they need to make decisions as to what they would do, as preparation for the first part of the lecture. After that has been discussed, they are provided with the second part which tells them what in fact happened in the situation and leads them to the next decision point, and so on. The case deals with an entrepreneur hearing about a business that has gone insolvent; it then tracks the process from investigating the small manufacturing and sales company through the various stages of its subsequent remarkable turnaround to the point where the protagonist was voted Entrepreneur of the Year in South Africa. It covers the period 2007 to 2012 and includes the annual financial statements.

Following are the expected learning outcomes: an understanding of the broad range of management competencies; an understanding of how to turnaround a small organisation; and to experience group-based decision-making.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 11: Strategy.

The Beringer Wine Estates Company has been expanding its market share in the premium segment of the wine industry in the 1990's. After operating as a wholly owned subsidiary of the giant Nestlé food company for almost a quarter of a century, the firm was sold in 1996 to new owners, in a leveraged buyout. For the next year and a half, management and the new owners restructured the firm and expanded through internal growth and strategic acquisitions. With a heavy debt load from the LBO, it seemed prudent for management to consider a significant rebalancing of its capital structure. By paying off a portion of its debt and enhancing the equity account, the firm would achieve greater financial flexibility which could enhance its growth rate and business options. Finally, a publicly held common stock would provide management with another “currency” to be used for enhancing its growth rate and overall corporate valuation. With the equity markets in turmoil, significant strategic decisions had to be made quickly. Should the IPO be completed, with the district possibility of a less than successful after market price performance and these implications for pursuing external growth initiatives? A variety of alternative courses of action and their implications for the financial health of the Beringer Company and the financial wealth of Beringer stockholders are integral components of this case.