Case Studies

Beringer Wine Estates Holdings, Inc. 1997

Robert R. Cangemi et al. — Thu, 26 Apr 2007 08:28:04 PDT

The Beringer Wine Estates Company has been expanding its market share in the premium segment of the wine industry through the decade of the 1990s. After operating as a wholly owned subsidiary of the giant Nestle Food Company for about a quarter of a century, the firm was sold in 1996 to new owners in a leveraged buyout.

Students are presented with a number of corporate decisions covering management's decision to "go public" in the late 1990s. Timing issues are critical, as is the pricing of the issue, and the impact of this decision on the firm's cost of capital. Financial strategies, financial forecasting, and the valuation of a private vs. a public firm flow from the case data as well as the use of publicly-traded common stock that could be used as "currency" for enhancing the firm's growth rate and business opportunities.

Whistling Bird Winery

Armand Gilinsky et al. — Wed, 18 Apr 2007 13:56:17 PDT

The Whistling Bird Winery has experienced above-industry-average growth in new revenues over the past five years. Although operating with a heavy debt position, the firm, owned and managed by Laurie Johnson, has developed award winning premium table wines that have been enthusiastically accepted by consumers in the northeastern United States. The firm currently has expansion plans that include grape growing land, expanding capacity at its winery, and increasing its fledgling retail operations. Laurie has quickly realized that private equity funding is her only viable option and is evaluating her position at the winery, from both an owner and a manager perspective. With the cost of equity capital quite expensive, is her current expansion proposal worthwhile?

Sapphire Shop

Raymond H. Lopez et al. — Tue, 17 Apr 2007 13:17:24 PDT

The sapphire shop business is an extension of John Tollison's lifelong avocation towards gemstones in general and sapphires in particular. It is a blend of both decisions concerning the expanding financial strains of the business, with two alternative sources of funds to be analyzed and evaluated, and personal household decisions concerning the entrepreneur's family. Either financial source will expand the firm's ability to purchase additional inventory of gemstones, a key component to growth in sales, profits, and cash flows. However, there are limits to Mr. Tollison's ability to continue these growth initiatives "without giving up his day job." If this decision is made in the affirmative, his household income stream will be reduced, just a few years before college costs will need to be met.

The Globalization of Beringer Blass Wine Estates

Armand Gilinsky et al. — Tue, 03 Apr 2007 13:18:15 PDT

The Beringer Blass Wine Estates Corporation was created by the $1.5 billion purchase of U.S. based Beringer Wines Estates by Australia based Foster's Brewing Group. Each firm, operating independently up to the time of their deal, had expanded in their industries through both internal growth via development of premium wine brands and external growth via acquisitions of new brands. In September, 2002, Walt Klenz, President of the wine operations of the firm, privately contemplated how to guide Beringer Blass towards its strategic goals in an industry that was rapidly consolidating on a global basis.

Wine World Estates

Armand Gilinsky, Jr. et al. — Tue, 03 Apr 2007 13:18:14 PDT

Wine World Estates has been a wholly owned subsidiary of the Nestle Company for a quarter of a century. This rapidly growing business unit has been put up for sale, and Walter Klenz, its CEO, is leading a management inspired leveraged buyout in competition with two other large potential buyers. His challenge is to arrange for a financing package of more than $350 million to successfully achieve his objective.

Disney in Asia, Again

Raymond H. Lopez — Tue, 03 Apr 2007 10:00:44 PDT

This case covers business strategies and financial concepts related to an international investment decision by one of the most well-known global public companies. The Walt Disney Company management team has decided on expansion of its theme park operations onto the Asian mainland. After years of exhaustive study, they have narrowed the decision down to two potential sites, Shanghai and Hong Kong. Analysis of data in the case should enable students to forecast revenues, expenses, and pro forma financial statements for operations at each location. Using discounted cash flow techniques, they should be able to calculate net present values (NPV'S) for each site and critically compare them from the perspective of each operating organization as well as from the perspective of The Walt Disney Company.

Donna Karran International 1996

Lori Bonaparte et al. — Tue, 03 Apr 2007 09:39:33 PDT

This case provides students with an opportunity to study the operations of a rapidly growing firm in the fashion segment of the global apparel industry. In order to finance its rapid growth, the company must explore a variety of financing options, one of which is the decision to take the firm "public." In addition to exploring the costs of different financing alternatives, the implications of moving from private to public ownership are examined and evaluated in the context of the financial markets of the mid-1990s.

Internet-Based Distance Learning

Jack Yurkiewicz — Mon, 02 Apr 2007 12:14:27 PDT

This case teaches project management concepts (traditionally called PERT / CPM) using the more accurate and modern approach via simulation. The case asks students to construct the network precedence diagram to help a fictitious school design an "MBA over the Internet" program. Using a spreadsheet model and simulation ad-in program (such as @RISK or Insight), the simulation tells management what the critical activities are and whether or not the project can be completed by a certain date. Probabilistic calculations can be made from the simulation. Finally, the case shows how the simulation gives superior results compared to the traditional approaches of PERT / CPM.