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Fingerhut, based in Minnetonka, Minnesota, is a direct-marketing company that sells a smorgasbord of consumer goods through an array of specially targeted catalogs. In November 1996, an article in the Star Tribune, a major Minneapolis newspaper, drew attention to a class-action lawsuit pending against Fingerhut that suggests the firm made its profits by exploiting the poor. Several civil rights groups rallied around the suit and submitted amicus curiae in favor of the litigation. The case illustrates issues in ethics and management communication. Discussions focus on the constituencies. Is Fingerhut exploiting its customers or providing them with an affordable method of obtaining valued consumer goods on credit? Do retailers have a duty to offer products at reasonable prices? Are the high interest rates reasonable given the risk? What are the options: pawn shops, rent-to-own? What is the profile of the typical Fingerhut customer? Discussions also focus on the issues communicating to the constituencies. How much damage will the lawsuit do to Fingerhut's image as an ethical, socially conscious company? What communication strategies can the firm employ? Should it react to the lawsuit? What should it tell its employees?

The theoretical linkages are with dynamic nature of PESTEL analysis, Porter’s five forces, resource-based view of the firm and characteristics of an entrepreneur.

The names of the institutions and individuals involved have been disguised. However, the material facts of the case are authentic.

This case discusses strategy in the context of a crisis situation in a small business. JTH Inc. was a computer subcontract manufacturing (SCM) firm serving the New England region of the USA. The influx of international competition (mainly from China) due to recession led to significant challenges for JTH and the SCM industry. JTH was struggling and the situation was further complicated by the founder’s (Robert Maxwell) personal and emotional situation. Robert had to decide whether to keep the business running, close it down, merge with/be acquired by a competitor, innovate the business model or do something else.

This case is designed to target undergraduate students of Strategic Management; it may also include Entrepreneurship students. It should most probably be taught in the first half of the course after concepts such as PESTEL, Porter and resource-based view of the firm have been taught.