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Jim Keyes, CEO of Dallas-based Blockbuster Inc., was facing the biggest challenge of his career. In March 2010 Keyes was meeting with Hollywood studios in an effort to negotiate better terms for the $1 billion worth of merchandise Blockbuster had purchased the year before. In recent years, Blockbuster's share of the video rental market had been sharply decreasing in the face of competitors such as the low-cost, convenient Redbox vending machines and mail-order and video-on-demand service Netflix. While Blockbuster's market capitalization had dropped 47 percent to $62 million in 2009, Netflix's had shot up 55 percent to $3.9 billion that year. The only hope for Blockbuster, as Keyes saw it, was to shift its business model from primarily brick-and-mortar physical DVD rentals to increased digital and mail-order video delivery. In Keyes's favor, the studios were more than willing to provide him with that help. Hollywood wanted to see Blockbuster win the video-rental wars. Consumers still made frequent purchases of DVDs at its store—purchases which were much more profitable for studios than the rentals that remained Blockbuster's primary business. Blockbuster had made efforts at making its business model more nimble, but the results had been disappointing, and its debt continued to skyrocket. By the end of 2009, the company's debt had climbed to $856 million, its share of the $6.5 billion video rental business had fallen to 27 percent, and its revenues had tumbled 23 percent to $4.1 billion.

The objective of this case is to discuss how different business models and supply chain structures impact the financials of the firms in the DVD rental business. In particular, the goal is to convey that the characteristics of the movie (recent/big hit or old/eclectic) affect whether it is best rented from a centralized or decentralized model. In addition, as streaming gains market share, the impact will be different for movie types and business models.

Entrepreneurship.

The case can be pitched to undergraduate and postgraduate students and is applicable especially in cases when lecturers want to teach an introduction to entrepreneurship.

This case study is about Xoliswa Tini and how she started Xoliswa Tini Properties, an emerging and growing player in the South African property industry. This case seeks to be used not only by commerce students but also by those outside this subject discipline. The motivation here being that entrepreneurship is not restricted to a specific subject discipline. The case profiles how an ordinary person from humble beginnings becomes an important player in an industry that she may have been excluded from based on her gender and race. This case can be used specifically to motivate and inspire students on the importance and processes that accompany the entrepreneur. The case can be used within an academic setting to teach undergraduate and postgraduate students. Outside the academy, individuals training in the area of entrepreneurship can use the case in their facilitation.

To facilitate the case study participant in: understanding the lived experience of an entrepreneur from how they started to key high and low highlights on the entrepreneurship journey; providing an analysis of the role of the micro- and macro-environment in influencing the entrepreneur’s journey and their decisions; appreciating the difficulties the entrepreneur faces in establishing their journey and the strategies used to deal with such difficulties.

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 3: Entrepreneurship.

The primary learning objectives/outcome of case discussion is to apply design thinking principles to design innovative and socially responsible strategies that promote financial sustainability for organizations serving unique societal needs. The secondary learning objectives/outcome of case discussion is to gain a deeper appreciation for the potential social impact of their innovative ideas and understand the complexities and ethical considerations in social entrepreneurship, especially when working with individuals with special needs.

The case study describes the challenge facing Anil Kumar Kundra, the founder and trustee of Autism Ashram and Autism Guardian Village in Hyderabad and Gujarat, an organization that provides shelter and care for individuals with autism and residential facilities for their parents. Autistic individuals often lack social skills and may face challenges in reading, writing and communicating. In addition, they may experience behavioral issues, making it difficult for them to obtain employment or run their own ventures, resulting in a lifetime financial dependency on their guardians. In August 2023, Kundra, in pursuit of sustainability, aims to empower autistic individuals in the ashram to attain financial independence. He envisions Autism Ashrama as a self-sustaining entity, no longer dependent on contributions from parents. The dilemma facing Kundra is the need to identify innovative ideas that will enable these autistic individuals to contribute to revenue generation. The challenges faced by autistic individuals in their day-to-day lives make Kundra’s decision-making complex. While he acknowledges the challenge, he firmly believes that a handful of transformative ideas can bring about a revolutionary shift in the ecosystem for autistic individuals, rendering this business model truly sustainable. The case study invites students to help Kundra identify innovative ideas using design idea techniques, such as the Stanford d.school model.

This take-home assignment is suitable for both undergraduate and postgraduate students and is designed to explore the integration of sustainable business practices and design thinking in a real-world context.

Teaching notes are available for educators only.

CSS 7: Management science.

The case study aims to provide students with an understanding of the challenges a business faces when operating in India. In conclusion of this study, students should be able to know why franchising is such a common way of delivering services to end users, describe the “place” decisions of physical channels, and be familiar with the strategic and tactical location considerations and devise a growth strategy to expand the business.

Situated at Tito’s Lane in North Goa, Tito’s was the discotheque founded by Tito Henry D’Souza in 1971. The company offered restaurant, concert space and nightclub services to music and party lovers from diverse locations. Ricardo D’Souza and David D’Souza (both brothers) spearheaded the business. Ricardo understood the growth of markets and the factors driving the growth in India. The key factors driving the Tito’s and pub, bar, café and lounge business in India were rising disposable incomes among Indians, nightlife parties by young individuals and preference for quality food and alcoholic beverages among the customers. By seeing the opportunities in 2022, Ricardo considered expanding its business across India. How should Ricardo move to expand its business and offerings? What strategies should they devise for the growth of the business?

This case study is designed for use in undergraduate programs like Bachelor of Business Administration. It is ideal for strategy and services marketing. Theoretical frameworks like the Ansoff matrix are suitable for analyzing the case study to understand the growth of the business.

Teaching notes are available for educators only.

CSS 8: Marketing.

At the dawn of the twenty-first century, Boeing and Airbus, the leading manufacturers of large aircraft, were locked in a battle for market share that drove down prices for their new planes. At about the same time, the two industry heavyweights began developing new aircraft families to address the future market needs they each projected.

Aircraft take many years to develop, so by the time the new planes made their inaugural flights, significant changes had occurred in the global environment. First, emerging economies in the Asia-Pacific region and elsewhere were growing rapidly, spawning immediate and long-term demand for more aircraft. At the same time, changes to the market for air travel had created opportunities for new products. These opportunities had not gone unnoticed by potential new entrants, which were positioning themselves to compete against the market leaders.

In October 2007, the Airbus superjumbo A380 made its first flight. The A380 carried more passengers than any other plane in history and had been touted as a solution to increased congestion at global mega-hub airports. Four years later the Boeing 787, a smaller long-range aircraft, was launched to service secondary cities in a point-to-point network.

The case provides students with an opportunity to analyze the profit potential of the global aircraft manufacturing industry in 2002 and in 2011. Students can also identify the actions of participants that weakened or intensified the pressure on profits within the industry.

Audio format (.mp3 file) available with purchase of PDF. Contact cases@kellogg.northwestern.edu for access.

This case study is developed using secondary sources, including newspapers, periodicals and academic references.

This case study examines the challenges of a market leader in a changing industry and how that leader might respond. Growth was becoming exceedingly difficult for Netflix due to various external forces. For a company that relied on radical innovation to reinvent the video market industry and gain market dominance, Netflix appeared to be focusing on protecting its market position through strategies designed to reinforce its existing strengths and assets. Could Netflix maintain its leadership position and reignite growth by pursuing a reinforcement strategy, or was it time for another reinvention?

This case was written for strategic management classes at the graduate and undergraduate levels. The case was classroom tested with undergraduate business students in a strategic management course and masters-level organizational leadership students in a strategic innovation and change management course.

Undergraduate.

This case deals with a Zambian entrepreneur named Frank Ngambi who had developed several lodges in Ndola and Lusaka, Zambia. His original intention had been to build lodges that would provide inexpensive lodging for domestic travelers. That strategy had succeeded, and the lodges had been so successful that Frank had been able to increase the size of his lodges in both cities. However, by the summer of 2015, Frank had decided to seek the patronage of international travelers. He knew that this change in strategy would be difficult to achieve. After analyzing one of his competitors, the Intercontinental Hotel in Lusaka, he realized that he needed to increase his product offerings and also offer outstanding customer service. One problem in attaining that goal was the fact that there was very little training for human resources involved in the hospitality industry in Ndola where two of his lodges were located. Another problem he faced was figuring out how to market his lodges to international travelers, as he had never sought that segment of the market before.

At the conclusion of the case discussion, the student should be able to apply Michael Porter’s General Business-Level Strategy to the present and anticipated strategies for the FATMOLS Lodges; to identify tactics that would apply to a low cost leadership strategy; to identify tactics that would apply to a differentiation strategy; to discuss reasons tourism has increased in Zambia in the twenty-first century; to analyze the financial strategy used in developing the FATMOLS Lodges; and to develop a plan for moving a company from a low-cost leadership strategy to one of differentiation.

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.

After a successful run for many years as a resilient consumer electronics giant, Best Buy was under intense pressure at the end of 2014. Even as competitors like Circuit City melted away, Best Buy had been able to withstand the onslaught of online behemoth Amazon and discount retailers like Target and Walmart. However, its competitive position was threatened as online shopping became more popular, particularly among millennial customers.

With a new leadership team, Best Buy had recently undertaken bold initiatives to expand and refine its online presence and position itself for success. These initiatives had produced encouraging results, but Best Buy needed to do more to stem the loss of market share to Amazon and to become more relevant to millennial customers. To address these challenges, Best Buy approached the Kellogg School of Management to solicit ideas from student teams by sponsoring a Business Challenge competition. The teams came up with several strategic initiatives. Best Buy needed to evaluate these initiatives on two criteria: First, how well did these initiatives leverage Best Buy's privileged physical assets (stores, salespeople, and Geek Squad services staff) to create a winning customer experience? Second, how effective would these initiatives be in attracting and retaining millennial customers?

This case was a real-life situation faced by the author. Names were changed, so students would not know that the author was the protagonist. The case had been developed over several years as a capstone to the capital budgeting section of an MBA finance course and an advanced undergraduate course.

Trey and Lauren Gallo were considering the purchase of a vacation condo that also generated rental income. The current owners were willing to sell at a lowball offer of $605,000 as the pandemic entered its 13th month. The Gallos felt they needed to act fast to get this deal. However, the risks were extraordinary, as the pandemic had reduced rental income by 50% and borders had just recently closed. The case provides all data needed to compute rental revenues, capital expenditure, operational expenditures and financing costs. Students are expected to compute the NPV and IRR of free cashflows. Students will compute and evaluate the cost of capital using the condo’s projected debt structure, a choice of several proxy betas and a project risk premium. The case also uses extensive sensitivity analysis. This case differs from corporate capital budgeting problems because it evaluates both levered and unlevered cashflows, and the cashflows include savings from personal use. The case has been successfully used in MBA finance courses and advanced undergraduate finance courses. The case can be used as a capstone case for capital budgeting or a comprehensive exam in undergraduate, MBA and executive programs. The case questions can also be spread throughout a course to cover the topics of financial statement forecasting, free cash flows, capital budgeting, cost of capital and sensitivity analysis.

Earlier versions of this case have been used in an advanced undergraduate corporate finance course and MBA finance courses. The case is generally used as a capstone to the material on capital budgeting. Students should have already covered material on financial statements, loan cashflows, levered and unlevered cashflows, CAPM, proxy betas, weighted average cost of capital, NPV and IRR. This case is also appropriate for courses in real estate finance and personal finance.

Strategic management.

Upper-level undergraduate courses or introductory MBA courses.

The need to diversify the financial risks of his scrap metal business based in Georgia led Levan to invest in a diamond trading company in the UAE. He agreed to be a sleeping partner and provide the capital to Kewon, a diamond specialist with a wealth of experience in the field, in their joint attempt to build an international network of diamond trade. Despite several difficulties faced on the way, their company seemed to generate stable returns for more than five years. Yet following the surprising discovery of multiple organizational inconsistencies, Levan decided to end the partnership with Kewon and establish his own retail jewelry store to be managed by the members of his family. Ultimately, he was confronted with two important decisions regarding both his jewelry business and the diamond company in which he had previously invested a significant amount of capital. The decisions he was about to make were of critical importance for the future of these companies and the people who managed them. By walking readers through a series of triggering events, this case offers the opportunity to evaluate the effectiveness of managerial actions through the application of various strategic management tools and frameworks.

Upon completion of this case study analysis, students should be able to: estimate the complexities associated with the management of a partnership-based venture in the context of emerging markets; perform a detailed diagnosis of an entrepreneurial venture, applying relevant strategic management tools and techniques; evaluate the effectiveness of managerial actions and decisions at different stages of the organizational lifecycle; and demonstrate the importance of the strategic adaptation of organizations through the deployment of viable decision-making skills.

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.