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In a typical strategy course, growth strategies like mergers and acquisitions (corporate strategy) are introduced in the second half of the course. To analyze the case, students will use strategies such as Porter’s five forces and resource-based view and will discuss why firms pursue mergers as a growth strategy, along with sources of synergies and risks in mergers. Finance theory used includes analyzing a given discounted cash flow analysis and perform a comparable multiples analysis to find the value of a merger target.

The industry and financial information in the case comes from publicly available sources, including company 10K reports, business press reports and publicly available industry reports. The information about Lockheed Martin’s strategy comes from interviews with Peter Clyne, former vice president for Lockheed Martin’s IS&GS division. He then held the same position for Leidos Holding Corp., after the IS&GS division was divested and incorporated into Leidos.

This case is an interdisciplinary case containing aspects of strategy and finance. Lockheed Martin made a strategic move in 2016, to divest its Information Systems & Global Strategies Division (IS&GS), which engaged in government consulting, primarily in the defense and aerospace industries. Lockheed wanted to reassess its decision to divest consulting, given the high growth rates expected in this business, particularly in cybersecurity consulting. On the other hand, if Lockheed decided to maintain its hardware focus, it wanted to expand its offerings. In addition to a strategy analysis, two possible target firms can be analyzed: Fortinet and Maxar.

This case raises a broad set of issues related to the evaluation of M&A transactions across two different industries and corporate strategy, as it relates to strategic fit of the potential targets and LM’s current capabilities. It is appropriate for the core course in strategy at the MBA or senior undergraduate level. It can also be assigned to specialized courses in Mergers and Acquisitions. It is not appropriate for a lower level strategy or finance course, as it requires students to have prior knowledge of basic finance valuation techniques.

The case compares two U.S. Department of Defense (DoD) programs from the 1970s and 1980s: (1) “stealth” combat aircraft, capable of evading detection or engagement by anti-aircraft systems, and (2) precision attack of hardened ground vehicles from “standoff” distances, i.e., far behind the battle lines. Conceived at roughly the same time, motivated by the same strategic challenge, and initially driven by the same DoD organization, stealth combat aircraft progressed from idea to deployment in less than eight years---an astounding pace for a complex military system---while a demonstrated system for standoff precision strike against mobile ground targets was not fully implemented. The case highlights the critical role of the Defense Advanced Research Projects Agency (DARPA), part of the DoD, regarded as one of the most innovative entities in the U.S. federal government.

The case highlights factors that facilitate rapid, successful implementation of radically innovative or disruptive concepts. Students are introduced to the organizational realities facing such projects, including issues of strategic clarity, interdepartmental competition and cooperation, executive leadership, and timing. Comparing the differences in implementation of the two programs in the case reveals issues relevant to any large organization seeking to bring innovative concepts to fruition.

This case presents the “best practices” of a highly successful post-merger integrator that grew from $400 million in 1997, to $1.5 billion in 2000, to $4 billion in 2002. The case focus is on the $4.0 billion IT sector of Northrop Grumman, a company confronting immense change in the rapidly consolidating defense business. This integration is unique in that the product is a complete melding of various companies, systems, leaderships, and cultures of 11 legacy organizations. Not only is the result an organization with a new identity, but also one with new strategic capabilities unavailable to any of the stand-alone legacy companies. A teaching note is available to registered faculty, along with video clips that include footage of weapons systems (e.g., B-2 bomber) and information about the company's PMI process.

This case has three primary objectives. First, it allows students to think through a conceptual cost and benefit analysis associated with the decision-making process in line with basic economic thinking. Students will revisit core concepts of marginal benefit vs marginal cost, the notion of opportunity costs and the role of sunk costs in this type of analysis, while also highlighting the nature of market structure, oligopolies and competition across firms in an industry. The second goal of this case is to consider the role of business ethics in the DC-10 case: specifically, to consider the potential influence of moral awareness and moral disengagement in unethical decisions made by McDonnell Douglas. Students will develop an understanding of these concepts and solidify their learning by applying them to the case and engaging in active discussion. Finally, the third goal of the case allows students to explore organizational culture and specifically offer recommendations for organizations thinking about the link between decision-making, the role of ethics and culture.

The technical reports released by the National Transportation Safety Board along with secondary data such as available public data such as news reports were used to round out the synopsis of the case study.

This case explores the accidents of two McDonnell Douglas DC-10s in the early 1970s at the onset of the jumbo jet race between Boeing, Lockheed and McDonnell Douglas. It explores the series of events during the “Windsor Incident” in 1972 and the subsequent accident over Paris in 1974. It explores the reasons why the cargo door on the DC-10 was faulty and subsequently why the door was not fixed. It examines the interplay of industry suppliers such as McDonnell Douglas and how they interact with oversight authorities such as the Federal Aviation Authority. The Teaching Note focuses on the economic thinking at McDonnell Douglas, behavioral ethics and organizational culture.

This case is best explored over a 90 min session but could be expanded to take up one 3 h session. The authors have used this case format in an undergraduate organizational behavior class, an MBA Leadership and Organizational Change class, and an MBA Economics of Managers class. It works particularly well in the MBA setting, as students with work experience can see the links between the mistakes made by McDonnell Douglas and their workplaces.

On the evening of December 29, 1972, Eastern Air 401 (EA401) was on a routine flight from New York to Miami. Despite EA401 flying one of the most advanced aircraft at the time (the Lockheed L-1011), it crashed in the Florida Everglades killing 101 of its 176 passengers. Drawing from various first-hand accounts (cockpit voice recorder) and secondary evidence (news reports and online sources) of the tragedy, this teaching case provides a detailed account of the key events that took place leading up to the accident. The case describes how the pilots on EA401 were confronted with a simple scenario, a landing gear bulb not working in the cockpit, and through the distraction that ensued made a series of errors. Through many of the quotes in the text, readers gain an understanding of the impressions and perceptions of the pilots, including how they felt about many of the critical decisions and incidents during the last minutes of the flight. The case concludes by highlighting the main findings of the NTSB report.

Depending on individual course objectives, this case can take two or one day to debrief. Specifically, if this case is used in an organizational behavior course, most of the case questions could be discussed in one day. However, if this case is used in a capstone HRM or group dynamics type course on teams and team training and performance, a second day could be used to develop documentation outlining training design or performance evaluation designs.

This case was researched using publicly available sources, including Mercury Systems financial filings and press releases, news stories about the seasoned equity offering, financial information from Bloomberg and industry information from IBISWorld Industry Reports and articles related to seasoned/secondary equity offerings, intangible asset valuation and the use of revolving lines of credit. Quotes are taken from Mercury financial reports and press releases and express the (optimistic) opinions of company executives.

Mercury Systems, a technology company in the aerospace and defense industry, announced a six million share seasoned stock offering in June 2019. This resulted in a 6% stock price decrease. A stock price decrease is a typical event when a firm announces the issuance of new common shares, but with Mercury Systems, there were concerns about how much money the firm needed to fund its strategy of growth through acquisitions. If internally generated funds were not sufficient, should the firm issue debt or have another seasoned equity issue? Students will look at the objectives and success of the most recent seasoned equity issue, determine future funds needs and how the firm should finance these needs.

This case is appropriate for undergraduate and graduate students in corporate finance electives. Typically, topics such as seasoned equity offerings are not covered in introductory courses, so this is recommended for finance electives. Even in advanced finance courses, sometimes there is insufficient time to cover seasoned equity offerings.

Capital structure theory.

The case is meant for teaching and class discussion, and uses only secondary data based on published sources. The interpretation and perspectives presented are based solely on the secondary data.

This paper aims to help current and future managers understand capital structure theory and the various equity and debt finance options available for raising capital. It also examines the financial analysis and strategic management of black swan events. After the class discussion, students will understand how to financially and strategically manage a company during black swan events and also have a deep dive into capital structure analysis of a large company.

MBA/postgraduate/undergraduate courses on corporate finance or advanced corporate finance. Executive/management development programs and short duration Massive Open Online Courses on investment decision-making and advanced corporate finance. MBA/postgraduate/undergraduate courses on corporate strategy and economic environment and planning.

This field-based case describes the approach and decisions used by Harris Corporation's vice president of supply chain management and operations to establish a set of financial benchmarks. It requires students to use those benchmarks to decide what areas need focus to potentially raise the company's financial results and elevate its financial performance through specific actions within its supply-chain group.

Alpha Design Technologies Private Limited (ADTL) was started in 2004 by Colonel H.S. Shankar after his retirement from services in the Indian Army and Bharat Electronics Limited (BEL). Aggressively growing the company from US$0.04m in 2004 to US$100m in 2022, he proved that age was not a barrier to success in entrepreneurship. His aspirations were to gain a greater presence in foreign markets through higher exports. After reading this case study, the students will be able to understand how the defence sector evolved in India and the role of private-sector enterprises; recognise the risks and opportunities in the changing dynamics of defence sector in India; believe that the ideas and capabilities of an entrepreneur increase with relevant previous experiences; appreciate the ambition and managerial capabilities of an entrepreneur even at the age of 60; apply Ajzen’s theory of planned behaviour on the entrepreneurial journey of Shankar and formulate strategies for growth.

Started in the year 2004, ADTL specialises in manufacturing defence-related products. ADTL was cofounded by Shankar, at the age of 60. His experience of working with the Indian Army and BEL in various capacities gave him the proficiency to start a venture on his own after his retirement. The ecosystem in India was favourable for ADTL as the Government opened up the defence sector for private players. Nevertheless, age was not a barrier for this senior citizen to tap the opportunity and work aggressively to grow his venture from US$0.04m in 2004 to US$100m in 2022. By 2023, ADTL had an employee strength of 1,200 including 650 engineers, and they emerged as a market leader in Software Defined Radio space. They manufactured around 200 different products for defence and space. ADTL exported 60% of the defence products to countries such as Israel, the USA and Germany. Moving forward, the dream for Shankar was to make a mark in the defence geography of the world through ADTL, by improving its export volumes and also through strategic alliances.

This case study can be taught to Master of Business Administration/postgraduate degree in management students as a part of the introductory course on entrepreneurship and strategy. This case study can be used specifically to make the students understand the role of private sector in the manufacturing of defence products after the liberalisation policy of the Government of India. The intention was not only to protect the nation from the threat posed by neighbouring countries but also to promote exports of defence products to other countries to improve foreign exchange earnings.

Teaching notes are available for educators only.

CSS 3: Entrepreneurship.

Boeing and Airbus are contemplating entry into very-large-aircraft (VLA) markets. Both firms are convinced the market cannot support two players due to the extremely high R&D costs and the limited (and highly uncertain) state of demand. The key strategic issue is the uncertainty surrounding Boeing's development cost: to what extent would Boeing's experience with the 747 help it reduce the R&D cost of a new VLA prototype? The main point is that Boeing's strategic moves signal its private information, and that this eliminates any first-mover advantage Boeing might have had in this market.

To introduce some of the strategic issues arising in natural monopoly industries in which the winner takes all, and focus on the issues of credible preemption and signaling.