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This case concerns the troubles that Euro Disney experienced from the start. Euro Disney claimed that the major cause of its poor financial performance was the European recession and the strong French franc. The timing of the park's opening could not have been more inopportune. If the recession had been the only cause of Euro Disney's problems, the financial restructuring would only need to carry the park forward to better economic times. Only when Europeans began spending freely again would investors learn the answers to some uncomfortable questions: Was the whole idea of Euro Disney misconceived? Were there other fundamental cultural problems that could inhibit the park's success? Would Euro Disney fail to recover even though other European companies did? And, if so, why was the Disney theme-park concept successful in Japan and not in France?

A hedge-fund strategist had two decisions to make. First, what was the path of core euro zone long-term interest rates likely to be over the next year? Was the dramatic decline in German long rates over the past few years an aberration that would soon be reversed, or was it part of the “new normal” that would persist for some time? Second, how would periphery long rates evolve relative to core rates? That is—the spread between long rates in the likes of Greece, Spain, and Ireland and those in Germany—how would they evolve over the next year? Was the dramatic divergence in euro zone long rates likely to persist, or would the coming year see a continuation of the modest reconvergence that has occurred since mid–2012? He knew many factors influenced long-term interest rates; he would have to use his entire toolkit to address this issue. The evidence was in no way clear-cut. Some factors pointed toward lower German rates, some toward higher, some toward a widening of euro zone spreads (even a dissolution of the euro zone as we know it?), and some toward reconvergence.

After experiencing long, multiyear surges and slides in past decades, by summer 2013, the dollar had been range-bound against the euro. In this case, by assessing potential capital flows, students consider whether global currency market trends would propel the dollar higher, or if the past few years were just a pause in a much longer dollar depreciation episode. Suitable for both core and elective MBA courses in global financial markets and international finance, this case explores factors pointing to further euro appreciation and to others favoring the dollar. Sorting through mounds of evidence is necessary before forecasting the exchange rate's likely path. Filtering that evidence requires thinking about FX markets, prospective monetary policies, and past and prospective international capital flows.

In January 2011, during the World Economic Forum's annual meeting in Davos, Switzerland, Jason Sterling, a hedge fund manager, was conducting online research to see if he could trade on any newsworthy information emerging from the summit. Sterling's fund traded primarily in sovereign debt, and he needed to figure out if European leaders would be able to come up with a viable solution to the crisis or whether the debt crisis would lead to the default of several European nations. He knew that if a solution was not found in the coming weeks, the sovereign debt markets could be thrown into turmoil.

In 1989, the Walt Disney Company financed its major European theme park and real estate development using a variety of financing tools and techniques that, when bundled together, amounted to a project financing. The case recounts the details of this financing and invites students to evaluate the financing from various standpoints, including those of the Walt Disney Company, the government of France, European equity investors, and European banks. The resulting opinion about the attractiveness of the project ultimately hinges on beliefs about European market demand for an American-style theme park. The case may be used to exercise students' skills in valuation analysis, to illustrate techniques for financing major real-property projects, and to explore the creation and transfer of wealth in such projects.

This case deals with hedging and risk management in companies. Surya Textiles had significant export revenues in euros and was looking for innovative ways of hedging foreign exchange risk to make their treasury a profit centre. Target Redemption Forward which hedged the euros into dollars was an attractive option which their Chief Financial Officer wanted to try. This instrument was designed to be a net-zero-premium hedging strategy that could provide Surya with monthly hedging rates that were better than market rates. The case analyses the pros and cons of this instrument.

Strategic management, HR Management, Change management, Marketing.

Potential audience. This case will serve to undergraduate students, master level students, in the subjects, entrepreneurship, managing change, marketing, H&R management, strategic management.

The Brunes Company was founded in 1994 by Gerond Cela and his brother, with the goal to provide quality products for bathrooms in the then-emerging Albanian market. During the next few years, it had grown into one of the biggest wholesale and retail chains in Albania, with huge portfolio of goods for home refurbishing. The beginnings were very humble. Armed only with the high school diploma in textile trading, born and raised in an ex-communist country without developed entrepreneurship culture, Gerond set off to Italy, a popular destination for young Albanians who were looking for an opportunity to escape the pitfalls of the post-communist transitional economy. Gerond recognized the huge gap in the market for imported tiles in his home country, so he began importing quality Italian tiles in 1994. Initially, he was doing the wholesale from his truck, due to the lack of retail stores. He focused on increasing customer satisfaction and built the company name as trustful provider of quality goods. This strategy brought him less profit, but his long-term goal was to build the company name and to establish it as a trustful provider of quality goods. In 1999, he bought 18,000 m² (for 50.000 euro) land on the highway Tirana-Durres, 7 km from the city centre, which proved to be extremely worthwhile in the long run because the price of the land had skyrocketed up to ten times during the next decade, due to the economic development of Albania. In 2004, Gerond and his brother epitomized their business idea. They entered the market of home furniture. In 2009, the company expanded further in country towns like Lezha, Saranda and Fier. After two decades of establishing his company as a market leader with approximately 30 per cent of market share, Brunes Company is at the crossroads. On one hand, it is pressured by very stiff competition in the form of their main competitor Delta Home, which succeeded in taking 10-15 per cent of the marketing just in one year. On the other hand, the company has been stagnating for some period without a concrete plan to overcome this problem, as well as without a clear strategy for the future directions of the expansion. To diversify the company’s portfolio, Gerond built a factory for tiling accessories which will cost 8 million Euros and employs about 30 workers.

Specific objectives of the case are as follows: to portray individuals who became successful primary through their leadership abilities, and to examine how their experiences and values contributed to the success of their business; illustrate the impact on operations of an increasingly competitive environment and how this environment affects the need for a change in strategy; identify the challenges of selling luxury goods in a competitive retail environment; to assist students to critically think about diversification strategy; to gain an understanding how to adapt to change; to discuss for issues that must be changed (culture, people, technology, values and philosophy of leadership, marketing, business model), to grow.

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

A secondary research method was used to collect data for this case. The authors have made use of newspaper articles and published articles written by journalists and experts which are available in the public domain.

Instances of celebrity activism such as athlete activism are rising. Social media has amplified the voice of celebrities and given them a personal channel to directly communicate with their fans without any media censorship. The same is true especially concerning endorsement by sports superstars, who now seem to have a mind of their own, independent of the official line of clubs, tournament organizers or sponsoring companies. This case discusses the embarrassment and financial loss faced by soft drinks giant Coca-Cola due to the public snub by football superstar Cristiano Ronaldo during an official press conference of the EURO 2020 championship.

Undergraduate and postgraduate students studying marketing management and brand management courses in business management and commerce streams can use this case. This case can also be used for marketing specialization students at the undergraduate and postgraduate levels.

This case describes the challenges faced by Amul in organising dairy farmers into a co-operative and creating continuous opportunities for value addition. Participants in the case discussion are required to review the developments in the organisation and recommend a strategy for the future.

Family members knew something was very wrong when Adolf Merckle, who had guided the family holding company, VEM Vermogensverwaltung GmbH, through dozens of successful investments, left the house one afternoon in January 2009 and failed to return. That night their fears were confirmed when a German railway worker located Merckle's body near a commuter train line near his hometown of Blaubeuren, about a hundred miles west of Munich. It was no secret that the recent financial crisis had taken a toll on Merckle's investments. He was known in Germany as a savvy investor, but had lost hundreds of millions of Euros after being caught on the wrong side of a short squeeze of epic proportions involving Volkswagen stock. This was not the only large bet against that company's stock. A number of hedge funds, including Greenlight Capital, SAC Capital, Glenview Capital, Tiger Asia, and Perry Capital, lost billions of Euros in a few hours based on their large short positions in Volkswagen's stock following the news on October 26, 2008, that Porsche AG had obtained a large long synthetic position in Volkswagen stock through cash-settled options. In the next two days, this short squeeze produced a fivefold increase in Volkswagen's share price, as demand for shares from hedge funds exceeded the supply of borrowable shares.

This case focuses on the massive equity derivative positions entered into by Porsche in relation to Volkswagen stock and by TCI and 3G in relation to CSX stock. Students will learn how equity exposure can be created without buying stock and without prior disclosure. The role of regulators, courts, and investment banks that facilitate these transactions is also explored.