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Robert Davidson, pricing manager for Tupelo Medical, was concerned about the variability in price paid for its top-selling product, the Micron 8 Series blood pressure monitoring system. Using historical transaction data, Davidson must determine the appropriate price floor. Setting a price too high risked the loss of a large number of customers, putting the company at substantial risk due to the importance of the product. Setting a price too low would impact Davidson's ability to meet the stated objective of increasing margins by 3 percent. He wondered what the optimal price floor would be and what the expected profits would be for that new price floor. Additionally, the company's business varied considerably by geographic region, account size and account type. As a result, he needed to consider whether it made sense to set a single price floor or whether he could improve profits by allowing some variability in the price floor by customer segment.

• To illustrate how one can build a data-driven pricing model to study the tradeoff between margin and probability of winning a sale in a B2B market

• To quantify the value from implementing a price floor with a B2B sales force

• To demonstrate the incremental value of implementing a price floor that varies by customer segment.

To illustrate how one can build a data-driven pricing model to study the tradeoff between margin and probability of winning a sale in a B2B market

To quantify the value from implementing a price floor with a B2B sales force

To demonstrate the incremental value of implementing a price floor that varies by customer segment.

This case gives students the opportunity to explore the concept of organizational status as a competitive asset. CEO Noura Abdullah of Saudi furniture retailer Aura founded her company as a middle-market furniture and home goods store offering affordable yet design-savvy products. By many accounts, both tangible and intangible, Aura had been a success. By late 2014, Aura had drawn considerable attention from several high-status Saudi wedding planners and media outlets, including Harper's Bazaar Interiors, Elle Decor, and Martha Stewart Weddings. This attention yielded unusually strong conversion rates (the percentage of visitors to the store who made a purchase). Foot traffic, on the other hand, remained unexpectedly low, leading Abdullah to wonder whether the high-status affiliations had unintentionally signaled to mid-market consumers that they would not be able to afford Aura's products, keeping such customers away. Students will decide, along with Abdullah, how to handle this unique “problem” as Aura enters a growth phase to other Saudi and Middle Eastern markets.

This case provides comprehensive coverage of a firm's decision to undertake an IPO and the process of going public. The case follows the sequence of events from the company's incorporation in 1999 through the completion of an IPO in September 2005. In addition to raising capital, the TRX IPO case also includes consideration of another motivation for going public. At the time of its incorporation in November 1999, TRX attempted to go public but in the ensuing dot-com collapse, the IPO was never completed. In response to the failed IPO, TRX president and CEO, Trip Davis, turned to strategic investors to raise $20 million in a note convertible into equity at $11 per share. Although Davis had hoped the strategic investors would provide guidance and business opportunities for TRX, they never materialized. By 2004, he had come to believe that the largest strategic investor, Sabre, Inc., was not working in TRX's best interest. Thus, the IPO is motivated by a twofold purpose: to raise money and to provide for a strategic reorganization of the firm's ownership structure.

Following are the learning outcomes: to understand how the tools and frameworks of strategic analysis can be applied to understand the evolution of value creation and capture in the FMCG industry; to analyze the core competencies of a company and understand their relevance in this fast-changing industry; to understand how to evaluate the pros and cons of a certain strategy and business model; and to develop strategic recommendations.

The case series traces the developments in China’s FMCG industry from the early 2010s to 2017, in general, and the efforts of Beijing WinChannel Software Technology Co., Ltd. (WinChannel) and its affiliated company, Huixiadan, in their attempt to apply new digital technologies to transform the traditional trade channel, in particular. The decision point of Case A, in early 2015, is how WinChannel can help improve the reach and efficiency of the traditional trade channel and wonders if the emerging online/mobile B2B FMCG platforms are the right solution for the increasingly digitized FMCG retail industry in China. The decision point of Case B, at the end of 2017, is how could Huixiadan’s business model be sustainable and what it should do to withstand the competitive threats even as it tries to exploit opportunities in the traditional FMCG industry in China.

It can be used with MBAs, EMBAs and senior executives.

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.

This case was primarily researched using academic research papers, industry reports (Egg Industry Center and others), and finance databases including Standard and Poor’s Capital IQ. Regarding the cost and investment budgets, the case relies mainly on an experiment conducted by the Coalition for Sustainable Egg Supply, updated by the authors of this case.

Eggs produced by cage-free birds, while more expensive than conventionally produced eggs, are gaining in popularity among consumers who want only eggs that are produced more humanely. A number of major distributors, including Whole Foods, McDonalds and Starbucks have pledged to sell only cage-free produced eggs by 2025. Several states including California, Oregon and Michigan have passed laws limiting conventional egg production. The case provides costs and industry information and needed to project free cash flows and risk-adjusted opportunity cost of capital and perform break-even capital budgeting analysis of the two egg production alternatives.

This case is appropriate for graduate corporate finance courses. It is particularly appropriate for agribusiness finance courses. A preliminary exercise was used during the fall 2018 in a land grant university, just after the “Prevention of Cruelty to Farm Animals Act,” also known as Proposition 12, was passed in California in favor of cage-free egg production. The exercise was revised and used in the fall 2019 in the same class. This extended version of the case, was classroom tested in the fall 2020 in an agribusiness finance graduate class, with agricultural economics and business students enrolled.

Ontela, a technology start-up company, has introduced an innovative service called PicDeck that improves the mobile imaging experience for wireless subscribers. Ontela sells PicDeck to wireless carriers, who in turn private-label the service to their subscribers. Ontela must decide which customer segments it should target for the service and how to create a positioning strategy and a marketing communication plan to promote it. It must also consider the value proposition of the PicDeck service for wireless carriers (its direct customers), who need to be convinced that the service will lead to higher monthly average revenue per user (ARPU) and/or increased subscriber loyalty. Part A of the case provides qualitative information on customer personae that represent different customer segments. Students are asked to develop a targeting and positioning strategy based on this qualitative information. Part B provides quantitative data on customer preferences that can be used to identify response-based customer segments, as well as demographic and media habits information that can be used to profile the segments. Students are asked to revise their recommendations based on the additional quantitative data.

The case reinforces the principles of data-driven customer segmentation, discusses the appropriate criteria for selecting segments, and provides a deeper understanding of the benefits and drawbacks of different approaches to identifying and evaluating segments. The case illustrates how the results of data-driven segmentation may run counter to approaches that rely on “gut feel” or qualitative information alone.

Ontela, a technology start-up company, has introduced an innovative service called PicDeck that improves the mobile imaging experience for wireless subscribers. Ontela sells PicDeck to wireless carriers, who in turn private-label the service to their subscribers. Ontela must decide which customer segments it should target for the service and how to create a positioning strategy and a marketing communication plan to promote it. It must also consider the value proposition of the PicDeck service for wireless carriers (its direct customers), who need to be convinced that the service will lead to higher monthly average revenue per user (ARPU) and/or increased subscriber loyalty. Part A of the case provides qualitative information on customer personae that represent different customer segments. Students are asked to develop a targeting and positioning strategy based on this qualitative information. Part B provides quantitative data on customer preferences that can be used to identify response-based customer segments, as well as demographic and media habits information that can be used to profile the segments. Students are asked to revise their recommendations based on the additional quantitative data.

The case reinforces the principles of data-driven customer segmentation, discusses the appropriate criteria for selecting segments, and provides a deeper understanding of the benefits and drawbacks of different approaches to identifying and evaluating segments. The case illustrates how the results of data-driven segmentation may run counter to approaches that rely on “gut feel” or qualitative information alone.