The Batten Institute translates research in the areas of innovation and entrepreneurship into teaching cases and multimedia educational materials. The cases, developed by Darden faculty and Batten Fellows, present the experiences of individuals and organizations that have grappled with complex business issues. Educators have found these materials to be invaluable resources for engaging students and for generating thought-provoking discussions. All of the cases described below are available for purchase through Darden Business Publishing.
Edens & Avant, the largest private owner of neighborhood retail shopping centers in the United States, is a full-service real-estate development and management company involved in the design, construction, leasing, management, and rehabilitation of retail and retail-mixed-use properties. Started by Joe Edens in 1967 and owned primarily by the Edens family, the business has provided financial security for his family and its employees and has made major contributions to the surrounding community. So as Edens tries to decide which of three candidates will be his successor, he knows that his choice is critical and concerns many people.
As a major player in a $200-billion market with only a 15% market share, SYSCO outperforms its industry competition. This execution champion and organic growth winner has figured out how to balance and manage tensions between decentralized entrepreneurial autonomy and centralized controls. But what makes SYSCO different is that its leaders have figured out, on a daily basis, how to keep everyone, from the CEO to the truck driver, focused on the details that count to customers. In 2005, however, the growth of its underlying market had leveled forcing the company to face the challenge of continuing to grow and maintain its margins in a plateauing market.
The president of Precast Concrete Operations (PCO) at C.R. Barger & Sons has grown the division into a leader in the industry. As a result, his former challenges have changed dramatically-from how to save the PCO division to how to duplicate and improve on the results of his growth initiatives. And he now was considering whether to build a new PCO plant to accommodate future growth. The new plant would increase Barger's production capacity allowing it to expand its concrete-production capacity from 40 to 200 cubic yards per day. Students may examine the multifaceted strategy the president used to revitalize the division and decide whether this large new growth investment is justified.
C.R. Barger & Sons, Inc. (Barger) operated two businesses: it installed gas, water, and sewer lines, and it manufactured and sold precast-concrete septic tanks. In 2002, after 35 years as a local supplier of septic tanks, this end of the Barger business had reached a plateau: Barger did not have a distinctive brand or product, and its sales were limited primarily to East Tennessee. Barger was on the verge of closing down its septic-tank business when, in 2004, the founders' grandson assumed leadership of Precast Concrete Operations (PCO). The challenge he faced was how to take a nondistinctive commodity product and turn it into a viable growth business.
Students Helping Honduras (SHH) was a student-founded, student-led nonprofit organization dedicated to helping Hondurans escape from the cycle of poverty. SHH accomplished this by engaging college students in its projects from beginning to end. It operated with a yearly budget, augmented by student fundraisers and a grant from the Sunshine Lady Foundation-the private foundation of Doris Buffett. By the summer of 2008, SHH had three full-time employees living in Honduras and an ambitious business plan: The organization wanted to expand its college chapters, substantially increase its student-volunteer visits and summer service-learning internships, continue its three existing projects, and begin three new ones. Progress was slowed, however, by limited resources-people and money. Having given money to SHH already to partially fund its operating costs for 2008-09, the Sunshine Lady Foundation felt it had served its purpose and would not fund more operating expenses. Faced with this difficult financial reality, the SHH Leadership Team questioned SHH's future. How should it proceed and how should it prioritize its many opportunities?
Defender Direct, Inc., headquartered in Indianapolis, Indiana, was a privately held company that sold and installed ADT security systems and Dish Network Satellite TV to homeowners in the United States. President and CEO Dave Lindsey started the business out of his home in 1998. Under his leadership, Defender experienced an average annual growth rate of 60%, and in 2008 it became one of the largest security and satellite dealers in the Midwest, generating $150 million in revenues. The founder, who was fond of saying that "businesses don't grow--people do," credited the Defender culture for his company's stellar growth.
The Delta Companies (Delta), essentially a sales organization, was forced to morph quickly into a full-fledged healthcare staffing and recruiting business headed by a CEO who was a former baseball coach with no business background. But he knew enough to invest heavily in technology and to continuously look for ways to improve financial information flow to take advantage of Delta's stellar growth that was fueled by a doctor shortage. Part of the company's success was attributed to its culture, which was driven by its employees. By 2008, Delta had moved up 589 spots on the Inc. 5000 list of America's Fastest-Growing Companies. Despite his company's continuing growth, the CEO did not intend to rest on his laurels.
As a major player in a $200-billion market with only a 15% market share, SYSCO outperforms its industry competition. This execution champion and organic growth winner has figured out how to balance and manage tensions between decentralized entrepreneurial autonomy and centralized controls. But what makes SYSCO different is that its leaders have figured out, on a daily basis, how to keep everyone, from the CEO to the truck driver, focused on the details that count to customers. In 2005, however, the growth of its underlying market had leveled forcing the company to face the challenge of continuing to grow and maintain its margins in a plateauing market.
Tiffany & Company was the leading U.S. luxury jewelry brand, generating more than $2.6 billion in revenue through 167 retail outlets globally and from catalogue and Internet sales. For nearly 170 years, Tiffany had managed its brand. In February 2007, a hedge fund, Trian Fund Management LP, announced that it had bought a 5.5% stake in Tiffany, and become its largest shareholder. Trian believed that Tiffany was undervalued and stated that it wanted to help the company "improve its earnings per share by addressing various operational and strategic issues." In response, Tiffany began to consider different actions to increase shareholder value.
In 2007, Best Buy was the leading electronics retailer in the United States with more than 941 stores, revenue totaling $31 billion, and a market cap of $21 billion. In 2005, Best Buy had adopted a new business model, culture, and customer-segmentation template called Customer Centricity. This move created volatility in the price of Best Buy stock because of the higher-than-expected employee costs that went with this new way of doing business and the difficulty of executing the old and the new business models simultaneously while the new model was rolled out. Best Buy responded to Wall Street's short-term focus in a myriad of ways. It first asked for investor patience, and stressed the strong operating results achieved in Best Buy stores operating under the new model. But in June 2007, after the stock dropped again, the CEO knew he had to decide whether to open more Best Buy stores, increase the company's dividend, or increase the stock-repurchase program.
UPS had become a global public company, with a market cap of $74 billion, more than 428,000 employees, $47 billion in revenue, and operations in more than 200 countries. A recognized leader among package-delivery companies, its growth had been above industry averages and had historically been through geographical expansion. In 1998, UPS changed its business model to Synchronized Commerce and adopted a new growth strategy called the Four Quadrant Model, hoping to expand its market space by transforming itself into a logistics-solutions company. But eight years after these changes, UPS was generating only 17% of its revenue from its nonpackage deliveries, with only $2 million of its operating profit coming from the new businesses. In the company's 2006 Annual Report, the UPS chairman and CEO acknowledged the disappointing results and realized that these results required a response to the public market.
The Home Depot case is a great story. It's about entrepreneurship, growth, CEO leadership, and the dramatic impact, good and bad, a CEO can have on a company's growth culture, strategy, and performance. Home Depot had faced market growth challenges for the last seven years as it tried in numerous ways to reignite its growth engine. The case explores the growth strategies of CEOs Bernie Marcus, Arthur Blank, and Blank's successor Bob Nardelli, a former GE executive. After examining Home Depot's growth history, the case challenges students to devise a growth strategy for the company under a new CEO.
Coca-Cola was the world's largest manufacturer and distributor of nonalcoholic beverage syrups and concentrates, selling over $24 billion of products in 2006 in more than 200 hundred countries. It became a high-growth company under Roberto Goizueta who was president and then chairman and CEO from 1980 until his death in 1997. Under Goizueta's leadership, Coca-Cola's market cap grew from $4.3 billion to $180 billion, but since his death in 1997, it has declined to under $115 billion, and for the first time in their long competition Pepsi-Cola has a larger market cap. Coca-Cola needs a blockbuster break-out growth idea to transform it and its culture. Coca-Cola needs to show Wall Street that it is not wedded to its legacy model and that it can be a growth company again.
Tiffany & Company was the leading U.S. luxury jewelry brand, generating more than $2.6 billion in revenue through 167 retail outlets globally and from catalogue and Internet sales. For nearly 170 years, Tiffany had managed its brand. In February 2007, a hedge fund, Trian Fund Management LP, announced that it had bought a 5.5% stake in Tiffany, and become its largest shareholder. Trian believed that Tiffany was undervalued and stated that it wanted to help the company "improve its earnings per share by addressing various operational and strategic issues." In response, Tiffany began to consider different actions to increase shareholder value.