Search results

January 27, 2005, was an extraordinary day for Gillette's James Kilts, the show-stopping turnaround expert known as the “Razor Boss of Boston.” Kilts, along with Proctor & Gamble chairman Alan Lafley, had just orchestrated a $57 billion acquisition of Gillette by P&G. The creation of the world's largest consumer products company would end Kilts's four-year tenure as CEO of Gillette and bring to a close Gillette's 104-year history as an independent corporate titan in the Boston area. The deal also capped a series of courtships between Gillette and other companies that had waxed and waned at various points throughout Kilts's stewardship of Gillette. But almost immediately after the transaction was announced, P&G and Gillette drew criticism from the media and the state of Massachusetts concerning the terms of the sale. Would this merger actually benefit shareholders, or was it principally a wealth creation vehicle for Kilts?

To understand the factors that persuaded shareholders of both P&G and Gillette to merge their companies, the valuation metrics involved in determining the merger consideration, compensation packages for key managers, and the politics (internal, local government, and regulatory) that impact major mergers.

Learning outcomes are as follows: understanding the difference between brand identity and brand image; applying various segmentation tools; understanding the appeal of the aspirational brand and its consequence on private and public consumption; exploring the strategic options available to a brand facing a brand appropriation; exploring the pros and cons of opposing a brand appropriation; and developing a plan for the implementation of this strategy.

This case will help students understand the difference between the brand identity that the brand owners intend and the brand image that consumers actually perceive.

This case is designed to be used in marketing management, brand strategy or consumer culture course. Specifically, the case is designed for college seniors or master students with basic strategic marketing training. It should provide the basis of discussions on the topics of brand management, consumer culture, brand portfolio management, international marketing, repositioning strategy, brand architecture, brand equity, brand assets, brand appropriation and consumer relationships with brands.

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 8: Marketing

International business, emerging markets, strategy.

Year 3 and 4 university level.

Kevin, an Indian citizen living in Oman, is the founder and president of Quality Tailors, Textiles, and Embroidery (QTTE). He is faced with a number of questions, including whether or not to establish a new division, in what direction to take the three existing divisions, and how to work with an organization culture that is resistant to change and reluctant to make decisions without his involvement. Perhaps, most pressing is the fact that the company's sponsor is demanding increased payments, since under Omani law, a foreign-owned company must have an Omani sponsor who is entitled to a share of the profits and, in the extreme, can take over ownership and control of the business.

Upon completing this case, students will practice:

• identifying and using proper tools (5-forces, SWOT, VRINE) to analyze the external and internal environments of the company;

• identifying key issues in the case, both long- and short-term;

• identifying feasible alternatives and evaluating each alternatives for its feasibility, pros, and cons; and

• proposing an implementation plan with a time line.

identifying and using proper tools (5-forces, SWOT, VRINE) to analyze the external and internal environments of the company;

identifying key issues in the case, both long- and short-term;

identifying feasible alternatives and evaluating each alternatives for its feasibility, pros, and cons; and

proposing an implementation plan with a time line.

Teaching notes.

Online stores sell thousands of products and services. Despite all care, mistakes can occur. These mistakes can have severe implications for the seller. A contract once formed is normally binding on the parties. The seller gets bound to sell at the mistaken price. Can an online seller get out of the contract on the ground that the price was a mistake? The only court judgement on the theme is Chwee Kin Keong v. Digilandmall.com Pte Ltd, a judgement of the Singapore High Court. With reference to the judgement, the case explores pricing mistakes by online stores.

ESPE, the market leader, is a medium-sized German manufacturer of precision dental impression materials competing in a shrinking market. To grow the business, ESPE invests substantial resources in innovative impression materials and associated distribution mechanisms. Squeezed by the shrinking market, the competition is increasingly using the proprietary channels (dispensing mechanisms) and brand equity (trademark) of ESPE to maintain their market share. There is a potential infringement. Explores how ESPE is organized to execute on the options imbedded in its IP rights.

To provide students with an understanding of how to use brands and trademarks in conjunction with trade secrets, patents, and other forms of IP in mature markets to build and maintain innovation-based competitive advantage.

In 2007 Conseco's CEO, C. James Prieur, faced a complicated set of problems with his company's long-term care (LTC) insurance subsidiary, Conseco Senior Health Insurance (CSHI). CSHI faced the threat of congressional hearings and an investigation by the U.S. Government Accountability Office, triggered by an unflattering New York Times article alleging that CSHI had an unusually large number of customer complaints and was denying legitimate claims. This threat came in addition to broader systemic problems, including the fact that the entire LTC industry was barely profitable. What little profitability existed was dependent on the goodwill of state insurance regulators, to whom the industry was highly beholden for approvals of rate increases to keep it afloat. Furthermore, CSHI had unique strategic challenges that could not be ignored: First, the expense of administering CSHI's uniquely heterogeneous set of policies put it at a disadvantage relative to the rest of the industry and made rate increases especially necessary. Second, state regulators were negatively predisposed toward Conseco because of its notorious reputation and thus were often unwilling to grant rate increases. Finally, CSHI was dependent on capital infusions totaling more than $1 billion from its parent company, Conseco, for which Conseco had received no dividends in return. Faced with pressure from Conseco shareholders and the looming congressional investigations, what should Prieur do? Students will discuss the available options in the context of a long-term relationship between Conseco and state insurance regulators. Prieur's solution to this problem proved to be innovative for the industry and to have far-reaching consequences for CSHI's corporate structure.

After reading and analyzing this case, students will be able to: evaluate the impact of a regulatory environment on business strategy; and assess the pros and cons of various market strategies as well as recommend important non-market strategies for a firm in crisis in a highly regulated industry.

Flying J was a family-owned company that operated travel plazas, oil refineries, a bank for trucking companies, and other related businesses. In early 2009, Crystal Call Maggelet, the majority shareholder and new CEO of Flying J, was tasked with saving the company founded by her father in 1968. In the intervening forty years Flying J had grown from four gas stations to a vertically integrated $18 billion company. Declining crude oil prices, decreased cash reserves, and multiple internal challenges forced most Flying J subsidiaries to file for bankruptcy protection. This came as a surprise to the company's lenders, suppliers, customers, and employees, who did not know the company was in trouble until it was unable to meet payroll just days before Christmas 2008.

Maggelet was determined not only to return her family's company to profitability but also to repay all of Flying J's debts, retain as many of the firm's 12,000 employees as possible, and avoid compromising employees' savings (e.g., 401K retirement accounts). All of the company's advisors told her it could not be done. They thought a more likely outcome would be paying creditors nine cents on every dollar owed. If that happened, Maggelet's family's holdings would be almost entirely wiped out according to the “priority of claims” rules in bankruptcy, and the family would end up with only 1.2 percent of a restructured Flying J.

However, to the surprise of its advisors and creditors, Flying J paid its debts in full, mostly by cutting operating costs before selling assets. The family was left with a smaller, but still very profitable company.

After students have analyzed the case they will be able to:

• Determine governance issues in family-owned businesses

• Identify the pursuit of growth as a typical cause of bankruptcy

• Understand why cash flow accounting is more important than GAAP accounting

• Grasp how huge variations can occur when calculating enterprise valuations of distressed businesses

• Understand the differences among law, governance, and ethics

Determine governance issues in family-owned businesses

Identify the pursuit of growth as a typical cause of bankruptcy

Understand why cash flow accounting is more important than GAAP accounting

Grasp how huge variations can occur when calculating enterprise valuations of distressed businesses

Understand the differences among law, governance, and ethics

Jefferson County was in a financial crisis as the commissioners faced a decision concerning whether the County should file for bankruptcy. The County was under an EPA mandate to update an outdated and overrunning sewer system. Estimates to do the work ranged from $250 million to $1.2 billion. The situation led to graft, corruption, bribery and illegal activities. More than 20 people were prosecuted in association with the illegal activities involved in financing and construction of the sewer system and four of the five commissioners were sentenced for their involvement in the corruption. Five new commissioners were elected and had to determine what to do after the down-grade of the County's bonds and warrants; the reduced revenues; and the corruption had put the County in a situation where funds were not available to continue to operate the County and provide services to its citizens. Should they declare bankruptcy or choose other paths open to them?

Data sources – this case is based on field research and interviews with a commissioner, court documents and from many other public sources. Extent of disguise – the case is not disguised.

The case can be used in graduate or upper division undergraduate courses in accounting, strategy, public administration or finance. There are several topics in the case that could be addressed: governance; economics, government and political issues, ethics, accounting, financial instruments, and strategy.

The case begins with newly appointed chairman and interim CEO Garo Armen dwelling on the significant issues that Elan Corporation, an Irish pharmaceutical company, faces. Its share price has plummeted 96% after accusations of accounting fraud and the discontinuation of an important clinical trial due to the drug's severe side effects. As a result, Elan faces insolvency. About $2 billion in debt that could no longer be satisfied in stock will soon mature, and there are questions regarding the company's structure and various operating concerns. Armen is also concerned about the ethical consequences of the company's failing and thus not being able to develop potentially life-saving medicines. Armen must decide what the nature of Elan should be moving forward and what strategy it should adopt. The operational and financial issues discussed in the case are complicated by Elan's status as an Irish company with significant international operations. The case closes with Armen reflecting on the decisions he has made—which students should critique and suggest alternatives to—as well as an open decision on choosing a successor CEO.

1. Crafting a vision and strategy for a newly streamlined organization and implementation 2. Balancing the complexities of an international corporation in a turnaround situation 3. Quantitatively identifying the probability, advantages, and disadvantages of bankruptcy 4. Succession planning decision making 5. Responding to fraud accusations 6. Managing a distressed workforce and retaining key employees

South Africa had formally introduced a policy of inflation targeting (IT) in February 2000. By December 2001, the governor of the South African Reserve Bank, after reading the latest statistics, was concerned with the disappointing economic data. Economic activity had slowed drastically, to the point that the country appeared to be heading for a recession. The gloomy statistics forced the governor to consider whether the country had pursued the right policy. Persistently high unemployment, one legacy of the apartheid era, meant that South Africa did not have the luxury of waiting for new policies to bear fruit. With the inflation forecast to exceed the mandated target, the governor would have to tighten monetary policy, which would further restrict investment. Was it is time for South Africa to change course?