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The application of activity based costing (ABC); calculating the cost of a CNC Process using ABC; designing a pricing strategy.

The case can be used in the following courses: MBA program with specialisation in finance (to teach students the application of costing in services sector); MBA program in general management (to highlight the concept of activity based costing and its application); and under an elective course on management control systems in MBA programs (to highlight the strategy to determine price effectively).

The case highlights the application of activity based costing in arriving at cost and finally leading to development of price to be charged by KK Metals. The company wishes to compute the activity based cost of CNC process and develop the selling price for 194 precision turning services scientifically as opposed to the present strategy of being a price taker, largely on the basis of what essentially is prevalent in the local market within which KK Metals operates. The case gives an insight to numerous control variables that the management can consider while pricing its services.

The case can be used to understand management concepts such as ABC, pricing and the role of efficiency in business processes. It can be used to: teach complexities involved in identifying activity driver(s) in case of ABC as far as application to service sector is concerned; help understand the use of costing as an effective tool in pricing strategy of the company; and help students realize the significance of inputs used for calculating per hour cost.

Teaching notes are available. Consult your librarian for access.

Learning outcomes are eliminating usual options for a turnaround, understanding how organizations can respond to adverse industry /market changes through cost and productivity management, managing strategic cost control turnaround deployed across a company, turning a huge threat into an opportunity and the role of leadership in driving strategic cost management and importance of internal communication and buy-in for a successful implementation.

Ashok Leyland Ltd. is the 2nd largest manufacturer of commercial vehicles in India, the 4th largest manufacturer of buses in the world and the 12th largest manufacturer of trucks globally. Vinod Dasari joined this company in 2005, and since 2011, he has been the MD and CEO of the company. This case is about restaging of this company that commenced in the year 2013 when the company was heading toward a loss for the very first time in its 65 plus years of history. Ashok Leyland was heaving under its own weight, saddled with overheads, grappling with intense competition from old and new players and struggling to become agile and meet the new challenges in the market. A potential loss of up to Rs 750 crores (US$123m) looked inevitable. The challenges were that major structural changes were required and the company needed not only a transformational change but also a surgery. The company had to come up with savings of Rs 750 crores (US$123m) annually to avoid making losses. The projection of 54,000 unit sales volumes be achieved. Internal communication and buying in by all employees. This case outlines the path chosen by Dasari to restage, turn around, overcome the challenges and deal with employee resistance.

This study is applicable for MBA programs in business strategy, strategic marketing, international marketing and BBA programs in business strategy, strategic marketing and international marketing.

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.

The case briefly describes the history of Electronic Data Systems (EDS) under Ross Perot and GM before turning to the beginning of a tumultuous decade in the late 1990s. As the turn of the century approached, EDS made critical strategic missteps such as missing opportunities in the Internet space, overlooking the onset of client-server computing, and failing to obtain major Y2K-related projects. The company attempted a turnaround by replacing the CEO with Dick Brown, whose leadership helped streamline the sprawling company. Despite initial successes, Brown's tenure ultimately ended in failure, due largely to his failure to recognize the growing Indian market and his willingness to buy business at the expense of the company's margin. The disastrous multibillion-dollar Navy & Marine Corp Intranet contract typified the type of high-profile transactions that Brown pursued, often boosting EDS's stock price in the short term while eroding its cash flow short term and its profitability over the long term. EDS management went through several stages of the turnaround process: the blinded phase, the inactive phase, and the faulty action phase, until Michael Jordan replaced Brown as CEO and enacted a three-tiered operational, strategic, and financial turnaround.

EDS's near-decade of turnaround efforts takes students through every phase of the turnaround process and demonstrates that even initially successful turnaround efforts can become distracted, rendering them ineffective. The case will show both a failed turnaround and a subsequent successful one, while adding an international component with respect to EDS's overlooking an important, growing Indian market.

Bottom of the Pyramid (BOP); social innovation and business modeling.

Undergraduate and graduate level management/business school students. It can be taught in marketing management and entrepreneurship/innovation courses.

LifeSpring Hospitals Pvt. Ltd is an expanding chain of hospitals that provide high quality health care to lower-income women and children across Andhra Pradesh. It is a 50-50 equity partnership between Hindustan Latex Ltd and the Acumen Fund. LifeSpring has demonstrated exceptional management principles, some of them being the most innovative and attractive ones. The entire focus of LifeSpring is on one particular niche: maternal care. Some argue about its strategy of not adopting diversification, but LifeSpring has proved its point by actually turning out to be a profitable business. The strategy of focusing on one niche has led to reduction in cost in terms of specialized doctors and the range of equipment needed to serve. Adding to the strategic strength of LifeSpring, its operations (management) is perfectly aligned with the organization's vision and quality is achieved via highly standardized procedures for maternal care service.

This case will cover two important aspects of BOP and social innovation. MBA students will investigate an innovative business model and apply their analytical skills to analyse the sustainability of the model.

Teaching notes and exercise for class-based discussion.

This case draws upon the literature on appropriate leadership behaviors that Yahoo’s Founders or CEOs could have adopted. It discusses the process of environmental analysis that would have an impact on Yahoo!’s strategy. It discusses and depicts the levels of environmental analyzes that Yahoo! as a firm ought to have undertaken in mapping its competitive environment. Further, this case discusses transformational leadership factors and those behavioral traits that exemplify each of these factors. Finally, the four elements of aspiration in discussing future firm direction are identified. These include an appropriate vision translated into a clarifying mission reflected in specific objectives grounded in explicit value statements.

This case is based on secondary data sources that include official company records, online reports and commentary, newspaper reports, public interviews and books. All such information has been appropriately referenced.

Yahoo!, in its 22 years of existence, has demonstrated remarkable tumult. It has witnessed a succession of six CEOs, exhibited a roller coaster trajectory in its stock price and, for the most part of its existence, played “catch-up” with its strategic competitors. It has also struggled to define its core purpose, its industry category and its very essence of being. In early 2016, CEO Marissa Mayer announced that Yahoo! would be willing to sell its core internet business and that its board would “engage on qualified strategic proposals.” However, the board also reiterated that turning around Yahoo! to prosperity continued to remain a top priority. What went wrong, so terribly wrong, with Yahoo! in an otherwise lucrative industry? Does Yahoo! suffer from a fundamental, essential malaise which, if addressed, could restore it to wealth and vibrancy? This case focuses on the period 1994, the inception of Yahoo!, to early 2016. The acquisition of Yahoo! by Verizon, completed in 2017, is not to be considered for purposes of this case study.

This case is particularly suited to be taught in a capstone strategic management course for MBA/Master’s level business students, after they have been exposed to core courses in Marketing, Business Law, Accounting, Supply Chain, Corporate Finance. It may also be taught in an advanced strategy course for undergraduate business students, typically in their final year of study. Finally, this case can be used to teach senior management in executive management programs.

Tom Gould, an entrepreneur, had been operating Treadwell’s Ice Cream, a small ice cream restaurant since 2000. Treadwell’s Ice Cream had been preparing its financial statements under cash basis. Tom Gould turned over all his receipts, both personal and business expenses, to his bookkeeper who entered them into QuickBooks. At tax time, his tax accountant excluded non-qualifying expenses from the tax filing. Periodically, Tom met with his bookkeeper to determine the results of operations and financial position at the end of that period of time. Most of Treadwell’s transactions were easily recognized by Tom, who preferred to pay all expenses by cash rather than credit. However, the bookkeeper had not been separating operating from non-operating activities, and had been using multiple accounts to record the same or similar costs. Therefore, the current income statement and balance sheet were not appropriately categorized and organized. In addition, since the bookkeeper was not a tax account, business expenses had been mixed with Tom Gould’s personal expenses on the income statement. There were no adjustment to the income statement after the tax accountant identified non-qualifying expenses when preparing tax filing. As Tom and his wife were considering turning over more day to day operations to his son and hiring a non-family member as a manager to help his son, he would need the books to provide an accurate picture of the business.

Primary source materials included interviews with the owner, Thomas Gould, his son, Michael Gould, and their Accountant, Tom Mallas. Secondary source materials included monthly and annual financial data from QuickBooks (monthly data are available upon request but are not relevant to the case discussion). Other secondary source materials included geographic, economic, industry, and competitors’ information.

This case is well suited for an introductory level undergraduate financial accounting course, after accrual accounting and accounting information systems (accounting cycles) have been introduced. When analyzing this case, students will apply concepts and principles of financial statement preparation. The case is also appropriate to serve as a review of accrual accounting, and of income statement and balance sheet preparation at the beginning of an intermediate level financial accounting course. Students can be asked to reformat the income statement from the single-step format to the multiple-step format. By working through financial statements with common errors found in small businesses, students can practice identifying these errors, thus providing a review of the various sections of the income statement and prepare students for more in-depth discussions of each section. In a tax course, this case can stimulate discussions on non-qualifying expenses and common shortcomings in small business accounting.

Segmentation, business impacts of decision making, hotel management.

Undergraduate Business or Finance.

The sales manager at a Caribbean hotel wonders whether to accept a large block booking at a discount rate from a group participating in an international sporting event. Do the promised publicity benefits justify the risk of turning away guests from higher paying segments?

The case should: highlight the potential for conflicts when customers from different segments with different needs and expectations find themselves in close contact with each other; identify the trade offs that may have to be made when acceptance of a large block booking might displace regular customers; and calculate the incremental financial impact of revenues from new business less revenues forgone when capacity limitations mean that some traditional business will have to be turned away to accommodate the block booking.

Teaching notes.

Learning outcomes are as follows: Students will be able to demonstrate the need to understand the uncertainty faced in a crisis; demonstrate how dynamic capabilities allow an organisation to respond effectively in a time of crisis and deep uncertainty; explore how strong dynamic capabilities are required to maintain continuity of operations by enabling a shift in the current business model; and evaluate methods of mobilising resources to address needs and possible opportunities presented in a crisis.

Gordon Institute of Business Science (GIBS), a South African-based business school and the one of the top ranked business schools in Africa, faced a crisis in the midst of the COVID-19 pandemic. With the announcement of a national lock down, under strict conditions, and the immediate closure of the GIBS campus, the Academic Programmes had to radically shift their mode of delivery to enable students to continue with their respective programmes. When the situation was further exacerbated by the breaking of the undersea cable, the Executive Director of Academic Programmes, Professor Louise Whittaker faced the difficult decision on what to do next. The case illustrates the need for strong dynamic capabilities to foster organisational agility and to respond effectively in times of deep uncertainty or crises.

The case is positioned at a postgraduate level and would be ideal as a teaching case for business students on a Master of Business Administration programme, a specialised Master in Philosophy programme or selected executive education programmes for general managers or senior executives.

Teaching Notes are available for educators only.

CSS: 11 Strategy.

Upon completion of this case study, students will have learned to identify and analyze pending organizational failure, based upon company data. They will have formulated a business strategy (either cost leadership, differentiation or focus), as well as propose process improvements to cope with changing macroeconomic factors, costs, supplier conditions, and especially talent management and retention. Students will practice the logical organization of information, articulating the key facts and assumptions underlying their solutions. They will practice communicating with a possibly hostile executive team, to whom they defend their proposal based on its merits.

This case recounts the recent history of the XT Beauty, a fictionalized but real company headquartered in Moscow, selling professional cosmetics, electrical instruments and equipment for beauty salons in St. Petersburg, and other cities in Russia. XT Beauty enjoyed successful growth until the onset of the 2014 economic crisis when consumer purchasing power plummeted. Students consider both the obstacles and opportunities presented by an emerging Russian market, customer behavior in a recession, managing sales talent, the leadership style of women, as well as key operational, and financial issues as the company react to a deepening economic crisis in an uncoordinated manner. The case is an introduction to the Russian business culture and operational environment. It focuses not only on challenges but also the opportunities in the anti-cyclical market for beauty products.

Master’s students in international business, human resources, operations and MBA candidates.

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 1: Accounting and Finance

In 2017, it was a challenge to assess the future of global trade. It was an open question whether the US financial crisis and the recession that it triggered would mark a turning point for the liberal post–World War II world order. If one looked toward Europe, China, Latin America, and Japan, there was a flurry of activity. New trade agreements were being completed and pursued. In Washington, DC, on the other hand, President Donald Trump seemed set on ripping apart and/or renegotiating any trade deal the United States was ever part of.

This case explores Trump's opinions and emerging policy stance on trade, bilateralism, and the global economy, among others. It also gives an overview of the World Trade Organization (WTO) and the General Agreement on Tariffs and Trade (GATT) and asks whether the Trump presidency would constitute a major challenge to the WTO and what it stood for in 2017.