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In January 2012, Ellen Kullman, CEO and chairman of DuPont, must decide whether to retain or sell the company's Performance Coatings (DPC) division. This is an introductory case on valuing a leveraged buyout. The case focuses on a publicly listed corporation's decision to divest a large division and asks students to compare the division's value if it remains under DuPont's control or is sold to an outside party. The transaction size of approximately $4 billion is too large for potential strategic buyers in the industry, making private equity (PE) firms the most likely bidders. The case provides a base-case adjusted present value (APV) model of DPC as a stand-alone company and gives students specific assignments to adjust it to reflect the division's potential value under PE ownership (e.g., EBITDA growth, multiple arbitrage, and increased leverage).

The case is designed to illustrate and discuss the differences between a public company's valuation based on unlevered free cash flows and a PE sponsor's valuation based on residual (levered) cash flows.

This case has been successfully taught in a second-year elective course covering entrepreneurial finance and private equity and in an advanced undergraduate course on corporate finance. It is appropriate for use in classes on private equity, advanced corporate finance, or deal valuation.

Management, Strategy, International business.

Undergraduate or Graduates.

This case is suitable for students of international business and strategy at the advanced undergraduate-level or introductory masters-level courses. It can be used for organizational design, brand management and business-to-business management classes. It may be of interest to practitioners in the Middle East and North African (MENA) markets looking at managing cross-functional teams.

On completion of utilizing the case study as an exercise, students should be able to develop the following. Case-specific skills: Critically examine the importance of the international business and strategy in the Middle East and demonstrate this by analyzing real-regional/-examples using complex theoretical frameworks; identify examples of best practice and explain the dynamics toward international business and strategy with reference to a range of theoretical models and apply these in a meaningful way to the MENA region. Discipline-specific skills: Synthesize and critically evaluate a corpus of academic literature and government reports on international business and strategy; link international business and strategy concepts and theories to real-regional/world examples. Personal and key skills: Reflect on the process of learning and undertake independent/self-directed learning (including time management) to achieve consistent, proficient and sustained attainment; work as a participant or leader of a group and contribute effectively to the achievement of objectives in the field of international business and strategy.

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

The case study “Maruti Suzuki – toward cleaner mobility” has been written keeping in view the requirements in the field of strategic management. The key learning objectives are as follows:• Analysis of business environment.• Product development strategy – creating market segment to gain competitive advantage by leveraging available organizational capabilities.• Strategic decision-making – understanding strategic decision-making process in a complex and highly competitive business scenario.

Maruti Suzuki, a leader in Indian automotive market with around 50% market share in passenger cars, was likely to face intense competition because of disruption by electric vehicles. As electric vehicles adoption was increasing globally in developed countries, automotive companies shaped their strategy accordingly to stay relevant. Maruti Suzuki was yet to be ready with electric vehicles and approached this space differently than other competitors. However, with Indian Government pushing toward cleaner mobility, it was yet to be seen how the company would manage to comply with legislations and compete effectively in marketplace. Indian Auto major, Maruti Suzuki, was on the edge to decide future strategy on electric vehicles to sustain its leadership position. The Indian automotive sector was going through the transformation where auto original equipment manufacturers were bringing electric vehicles and supporting policies from government likely to accelerate its adoption. Maruti Suzuki was striving to counter the competition with available resources to create competitive advantage in changing environment and continue to remain profitable with leadership position in Indian automotive market. The company had successfully maintained its leading position over three decades and transformed the automotive space with its strategies ahead of the curve. Now the company was standing at crossroads with regard to future technology on cleaner mobility. Mr Bhargava had to decide whether to throw the hat in EV ring or wait for other alternate technology disruption.

Management studies and executive development programs.

Teaching notes are available for educators only.

CSS 11: Strategy

1. To analyze the various business models and choose the best model to contribute maximum profit to the company.2. To understand the importance of customer management with the help of the Net Promoter Score in the food retail context.3. To develop customer loyalty strategies and implement them to improve customer management?

39 Bakers, a multi-outlet bakery chain in Jammu, India, is run by its founder Gagan. 39 Bakers, through its retail outlets across the Jammu region, offers a variety of products, ranging from bakery items that include blends of Indian and Italian cuisines, offering more than 1000 stock keeping units (SKUs). Through its high-quality offerings at an affordable price range, the brand has carved a niche in the hyper-competitive bakery market of the Jammu region. Gagan, has closely seen the Jammu market and customer preferences and strongly perceived that the customers in the Jammu region are very price sensitive. Thus, he has always been very reluctant to increase the prices of his product offerings at 39 Bakers. He has always believed that any drastic price rise may lead to immediate dissatisfaction and customer churn and therefore has not increased the prices at 39 Bakers for two years in a row. While this decision of Gagan paid off in terms of its popularity and recognition as one of the highly recommended bakery chains among customers, it drastically impacted the bottom line (i.e. profitability) at 39 Bakers, especially in the year 2020–21. Getting popularity at the cost of dipping profitability made Gagan rethink his decision to be protective of price increases at 39 bakers. How can he measure customer satisfaction and loyalty? Which loyalty strategies will work for the huge customer base of Jammu? Should he change his business model from B2C to B2B? How can loyalty be established? How can he manage his existing and loyal customers through price increases?

The case study is suitable for undergraduate and postgraduate courses in Marketing Management and Retail Marketing. The case study’s focus can be on the importance of pricing, business model evaluation, customer management analysis, customer loyalty, Customer Loyalty analysis, and net promoters score. The case can also be useful to entrepreneurs and regulators.

Teaching notes are available for educators only.

CSS 3: Entrepreneurship.

At the end of this case study, students should be able to identify issues relating to the external and internal environment of a business; explain how traditional marketing differ to social media marketing strategy and how digital marketing could be applied for frozen food company, identify alternatives to address the production capacity issue and challenges of contract manufacturing; identify and discuss measures that a company could adopt to effectively manage the working capital; apply various business management tools, concepts and theories in different decision-making settings – tools or concepts such as Porter’s five forces, SWOT analysis, PESTEL; and use analytical and logical skills through problem solving.

This case presents Khir, CEO of Mamart Food, facing several challenges in the post Covid-19 pandemic. Mamart Food is a SME manufacturing company located in Peninsular Malaysia. It competes in a frozen food industry. The case highlights the turbulence which Khir had to face due to the production capacity issue. He had the dilemma of balancing between the opportunity to boost sales and the capacity to meet demand. The dilemma emerged during the Movement Control Order in place and was expected to continue in the post MCO period. Quite a number of frustrated stockists over the unmet demand have started to aggressively voice out their dissatisfaction. Seeing the growing number of complaints, Khir had to act fast. Being the CEO, Khir must resolve the tension between Suliana, the production manager and Hisham, the sales and marketing manager. Failing which, it could be detrimental to the survival of Mamart Food. The most effective strategy for Mamart Food therefore needs to be formulated immediately.

This case is designed mainly for final year students in Accounting or Business undergraduate programmes.

Teaching notes are available for educators only.

CSS 11: Strategy.