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In the fall of 2014, Chad Kartchner, senior manager of marketing and product management at Honeywell Aerospace (HA), pondered how technology could transform the way aircraft were maintained. He had heard a lot of buzz about cognitive analytics, an artificial intelligence term referring to the use of computer models and algorithms to simulate human thought through self-learning systems, data mining, pattern recognition, and natural language processing. The sheer volume of parts and the time-sensitive nature of repairs in the aviation industry made it complicated to identify problems and address them quickly.

Kartchner contemplated the options for updating HA's ground-based maintenance system. Should he emulate HA's state-of-the-art on-board system for an entire aircraft or try something new? Emulating the on-board system, which HA developed internally, would be an easy sell to leadership given internal buy-in and satisfaction with the on-board system, but he contemplated new approaches because he did not want to overlook rapidly emerging technologies. The latter could include crowdsourced features that leveraged the abundance of knowledge among HA's customers' technicians or a cognitive analytics approach. Even if he could persuade leadership to try a new cognitive analytics approach, should HA partner with an established entity or work with a relatively unproven startup who promised lower cost, better features, and quicker turnaround to develop a new system?

Students will step into the shoes of Kartchner as he leads the internal discussion on whether and how to tap into the benefits of cognitive analytic solutions for Honeywell Aerospace and its customers.

Towers Watson (TW) has always conducted its own research into alternative approaches to market cap investing. A senior investment consultant with TW, impressed by a recent presentation by the CIO of Research Affiliates (RA) about an innovative investing concept called the “Fundamental Index methodology,” thinks it might be an important innovation in applying nonmarket cap approaches. But he has some concerns about the approach and whether or not it would be appropriate for TW's clients who depend on the firm to keep them on the cutting edge of institutional investing.

In mid-1992, Christine Olsen, the chief financial officer (CFO) of this large CAD/CAM equipment manufacturer, must decide on the magnitude of the firm's dividend payout. A subsidiary question is whether the firm should embark on a campaign of corporate-image advertising and change its corporate name to reflect its new outlook. The case serves as an omnibus review of the many practical aspects of the dividend decision, including (1) signaling effects, (2) clientele effects, and (3) finance and investment implications of increasing dividend payout.

In late 2019, Dr. Hiroaki Kitano, the president and director of research at Sony Computer Science Laboratories (Sony CSL), had decided he would be stepping down from his position soon. Sony CSL, a small blue-sky fundamental research facility funded by Sony, had always operated on the strength of the trust between Sony's CEO and the lab's director. Sony had been hands-off in its management, leaving Kitano to hire, fire, fund, and evaluate the lab's researchers and project portfolio at his own discretion. Now that he was stepping down, however, he worried that Sony CSL could not withstand his departure. Kitano wanted to make a transparent plan for the organization's future before he handed off Sony CSL to his successor. That plan involved three key decisions. First, what should be the optimal structure and governance of Sony CSL? Should it maintain its independence and autonomy, or should it align more closely with Sony's business priorities? Second, how could Sony CSL scale its impact on Sony and society at large, given its small size? Finally, should Sony CSL establish some standard methods of measuring project success and strength of the portfolio? In making these decisions, Kitano wanted to ensure that he preserved the unique culture that had allowed Sony CSL to pursue path-breaking research and innovation.

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.

Technology projects are inherently risky; research shows that large IT projects succeed as originally planned only 28 percent of the time. Building flexibility, or real options, into a project can help manage this risk. Furthermore, the management flexibility of options has value, as the downside risk is reduced and the upside is increased. The case is based upon real options analysis for an enterprise data warehouse (EDW) and analytic customer relationship management (CRM) program at a major U.S. firm. The firm has been disguised as Global Airlines for confidentiality reasons. The data mart consolidation or EDW marginally meets the hurdle rate for the firm as analyzed using a traditional net present value (NPV) analysis. However, different tactical deployment strategies help mitigate the risk of the project by building options into the project, and the traditional NPV is expanded by the real option value. Students analyze the different deployment strategies using a binomial model compound option Excel macro, and calculate the volatility using Monte Carlo analysis in Excel. A step-by-step tutorial is provided to teach students how to accomplish the real options analysis for a simplified project, and this tutorial is easily generalized by students to the case scenario. In addition to the tactical options, the case also has the strategic growth option of analytic CRM. Students must therefore analyze both the tactical and strategic growth options and make a management recommendation on funding the project and also recommend an optimal deployment strategy to manage the project risk.

The case teaches real options for technology projects. Students learn how to calculate real option values, where the key input of volatility is obtained by Monte Carlo analysis in Excel. Students also learn that the real option value is “real,” resulting from active management mitigating the risk of the project and improving the upside. Most important, students understand the difference between tactical vs. strategic growth options and the important management issues to consider.

The case is a continuation of the series of articles, written in the form of a case, that focus upon various issues relating to case research, writing and teaching with cases. In this article Professor Moore and the other fictitious characters, confront the difficulties that he had experienced grading student case analyses. In discussing the situation with his department chair Gloria Gorham he learns much about the origins of grading and the various methods of evaluating student work. At a later date other colleagues, Chris Anderson and Dave Berger, are brought into the discussion expressing their views and providing rubrics for use in grading student case analyses.

Established in 2010, Mellower Coffee has 40 exquisite chain stores and three branches, namely Mellower Coffee Sales, Mellower Business Management and Shanghai Mellower Roasting Factory. Positioned as a premium coffee brand in China, Mellower Coffee has realized the integrated operation and management of the whole industrial chain from raw coffee trade, roasting factory, coffee retail products, specialty coffee chain, office coffee to coffee academy. It has a vision to attract and cultivate more and more coffee lovers by constant innovation coffee culture promotion.

EuroPet S.A. was a multinational company operating gas stations in many European countries. There was a growing propensity for supermarkets to attach gas stations to their retail operations, which was developing into a major threat to EuroPet. As a result, in the mid-1990s, the company began to develop and brand its own convenience stores co-located with its gas stations. However, the company was spending much more on advertising the convenience stores than its competitors did. Management now had to decide if the increase in sales attributed to advertising efforts justified the advertising spend by analyzing the market data from one large metropolitan area: Marseille, France.

Students will learn: how to use cross-tabs and other marketing research tools to identify segmentation descriptors; how to analyze data and interpret results; and how these research results could guide new product development and positioning strategies in order to effectively target relevant customer segments.

Marketing

The case is suitable for MBA/MS students.

The famous Taj Mahal Palace and Towers became the centre of one of the most deadly terrorist attacks in the Indian sub continent on the night of 26 November 2008, which became famous as “26/11”. Terrorists created havoc shooting guests on sight and throwing grenades. The attacks lasted for three days but all of the four terrorists who entered Taj were killed. The terrorists had killed 160 people across Mumbai. Of these, 36 died at the Taj Mahal Palace and Towers, Mumbai. The dead included 14 guests, most of whom were foreign nationals. However, due to the selfless and extraordinary behavior of the employees and the staff of Taj, many guests were saved. They put forth an extraordinary example justifying the Indian code of conduct towards guests, “Atithi Devo Bhav” meaning “Guest is God”. In spite of knowing back exits and hiding spots, the employees did not flee, instead helping guests. The employees' behavior during the crisis saved the lives of nearly300 guests. This gesture of Taj employees was much talked about, but it was amusing even for the management to explain why they behaved in that manner. The condition of Taj after the attacks was so disastrous that it would have been profitable to leave the hotel as it was rather than reopening it. This, however, would have dented the Taj brand as a whole, as well as the spirit of all employees and staff who had behaved bravely. Taj started its restoration and reopened a part of the Taj Mahal Palace and Towers on 21 December 2008. It became operational by August 2010. The case provides an opportunity to closely examine employee behavior in an extreme crisis situation, and the possible reasons and motivation behind such exceptional behavior which ultimately helped to sustain the Taj brand. However, the scope of the case can also be extended to illustrate recovery efforts typical to service industries.

The case is designed to enable students to understand: the employees role in service delivery; the service profit chain; the relationship between profitability, customer loyalty, employee satisfaction and loyalty, and productivity; service failure; service recovery; and the service recovery paradox.

Teaching notes are available. Please consult your librarian for access.