FIRSTCOMP (A)
Lee Gremillion, Capella University
Case Objectives and Use
The case illustrates political aspects of information systems development, in which a clash over a
systems project mirrors a deeper divide between principals over the culture and control of the
firm. One of two founding partners in a workers’ compensation insurance company is pushing
forward to transform the company through the innovative use of information technology; the
other partner appears neutral, but tacitly encourages surrogates to continuously attack the project.
How does a non-technical executive protect his and his staff’s vision from the criticism of the
systems group which refuses to accept the value of their project? How can he be sure that their
criticism is not justified? The case was written for business school undergraduate, M.B.A., or
M.S. courses in information technology management or systems development to serve as a basis
for discussion of people and organizational aspects of the application delivery process.
Case Synopsis
Luke Yeransian, one of the two partners who had founded and now ran FirstComp knew that the
browser-based system under development could transform the company and solidify their
position in the niche they occupied. FirstComp already was one of the few insurers that actually
made a consistent profit in the brutally competitive workers’ compensation insurance industry.
By carefully limiting themselves to risks they could analyze and mitigate, and by focusing on
smaller employers that the big insurers overlooked, FirstComp had developed a rapidly growing
volume of business. Now their information systems had to be overhauled to keep up with the
ever-increasing workload.
Unfortunately, FirstComp’s systems group was not supporting Luke in this effort, but was
actively trying to sabotage the new browser-based front office system project. This system,
which was being designed by members of Luke’s staff with a consulting firm’s help, seemed to
be an obvious winner. The first, limited-function release had significantly improved front office
operations. Functionality under development promised to drastically change both FirstComp’s
front office and they way it interacted with agents in the field. Yet the systems group in general,
and the head of systems in particular, complained and criticized continually about the design of
the system, the way the project was being run, the expenditures, and the risk involved. Luke
knew he had to do something, but since systems reported to his partner, not him, he had to plan
his steps carefully.
The author developed the case for class discussion rather than to illustrate either effective or ineffective handling of
the situation. The case, instructor’s manual, and synopsis were anonymously peer reviewed and accepted by the
North American Case Research Association (NACRA) for its annual meeting, October 7-9, 2004, Sedona, AZ. All
rights are reserved to the author and NACRA. © 2004 by Lee Gremillion. Contact person: Lee Gremillion, School
of Business, Capella University, 222 South 9th Street, Minneapolis, MN 55402, 612-659-5424,
lgremillion@capella.edu
HEWLETT PACKARD:
THE MERGER WITH THE COMPAQ CORPORATION
Isaac Cohen, San Jose State University
Case Objectives and Use
The case is written in such a way that helps students analyze the results of the merger. Because
of its visibility, scope, and rapid growth, the computer/IT industry is well suited for teaching
strategic mergers. Students should first realize that HP’s problems were rooted in the company’s
inability to challenge IBM’s technological leadership, on the one side, and Dell’s cost leadership,
on the other. Students should then identify the advantages and disadvantages of the merger from
HP viewpoint. They should next examine the results of the merger, and compare these results
with the initial projections made by both the critics and advocated of the merger. An Additional
objective of the case is to have students evaluate the role played by HP CEO Fiorina before,
during, and after the merger with Compaq.
This is a case that is suitable for teaching Strategy and Business Policy at the undergraduate or
graduate levels. Because HP markets are truly global, and because HP facilities are located in
many countries, the case could also be used for teaching International Business. Furthermore,
the case could be used effectively for teaching Technology Management and/or High
Technology Management.
Case Synopsis
Hewlett Packard (HP) and the Compaq Corporation had been arch rivals for nearly twenty years,
dominating large segments of the computer industry. In 2002, the rivalry ended. HP bought
Compaq in a $19 billion merger deal – the largest ever undertaken in the computer industry.
The case focuses on the merger. It begins with the history of Compaq and HP as told within the
framework of the evolving computer industry. It explores Carly Fiorina’s tenure as HP CEO, her
decision to purchase Compaq, and her fight with the Hewlett and Packard families over the
merger.
Moving on to the outcome of the merger, the case, first, pays careful attention to the integration
of the two companies together. It then reviews the results of the merger during its first two years
(2002-2003), emphasizing the merger’s achievements and opportunities. Finally, the case
discusses disappointments, challenges, and concerns HP faced as a consequence of the merger.
The author developed the case for class discussion rather than to illustrate either effective or ineffective handling of
the situation. The case, instructor’s manual, and synopsis were anonymously peer reviewed and accepted by the
North America Case Research Association (NACRA) for its annual meeting, October 7-9, 2004, Sedona, AZ. All
rights are reserved to the author and NACRA. © 2004 by Isaac Cohen. Contract Person: Isaac Cohen, Department
of Organization and Management, COB, San Jose State University, One Washington Square, San Jose, CA 95192
408-924-3567, cohen_i@cob.sjsu.edu
MORPHING FROM DIAL TONE TO INTEGRATED DIGITAL SERVICES
Jiten V. Ruparel, Otterbein College
Case Objectives and Use
The case shows how a small central Ohio phone company was able to select a relatively obscure
technology and use it to overcome its limitations of size and resources to retain and please its
customers in the face of an onslaught of a telecommunications giant in an industry that was
coping with the transformational change brought about by deregulation. The case highlights
decision making and technology evaluation and new service roll-out under conditions of rapid
change. The case underscores the benefits of strategic resilience, flexibility and agility. It also
shows that repeated strategic renewal is going to be the need of our times. Commercially
available technology only confers an arbitrage opportunity- a short lived competitive advantage
that can be emulated. The case was written for a senior undergraduate business policy/strategy
class and for an MBA information management class.
Case Synopsis
John Wilson of Horizon Telecom ( www.horizontel.com) was faced with a price war from
Philadelphia based Adelphia Communications- a national cable service operator that had targeted
small Midwest telecom companies for their customers by a price war or by acquisition. It seemed
like a no-contest. However Horizon Chillicothe Telephone(HCT) reacted in a totally unexpected
manner. In a space of five years (1996 to 2001), this small rural telephone company was able to
transform itself from a conservative analog phone company into a provider of modern
integrated digital phone, cable TV and high speed internet access. It gave its customers a simple
to buy, simple to use and simple to understand service at $74 per month. This value proposition
could not be matched by anyone in the industry. It is a success story that needed to be told.
The cold reality of course is that HCT now has to renew itself again to cope with the next round
of technology enabled services such as high definition TV, video games and wireless access.
Fierce competition that is shaping up for digital services to the individual customer. This is its
current challenge.
The author developed the case for class discussion rather than to illustrate either effective or ineffective handling of
the situation. The case, instructor’s manual, and synopsis were anonymously peer reviewed and accepted by the
North American Case Research Association (NACRA) for its annual meeting, October 7-9, 2004 at Sedona, AZ. All
rights are reserved to the author and NACRA. © 2004 by Jiten V. Ruparel. Contact person: Jiten Ruparel,
Department of Business Accounting and Economics, Otterbein College, Westerville, Ohio 43081-1006,
jruparel@otterbein.edu
NANOSCALE: A SMALL GLIMPSE AT THE FUTURE OF TECHNOLOGY
Jeffrey Katz, Bret Covert, Leslee Murphy, Bonnie Wetta & Ken Williams
Kansas State University
Case Objectives and Use
This case study seeks to teach students how to identify issues and challenges faced by a
technology company during innovation and commercialization, conduct an analysis of industry
and company strategic issues, and to more carefully understand how firms in high velocity
industries are able to develop sustainable long-term strategies. The case and Instructor’s Manual
are designed to facilitate a thorough analysis of SWOT, Porter’s Five Forces, the value chain,
and levels of strategic decision-making for evaluating this case and forming conclusions about
long-term strategies focused on the success of NanoScale Materials, Inc. The case includes a
seven minute video that may be used to give students a richer sense of nanoscale products and
generate interest in analyzing the challenges facing NanoScale. Additional readings suggested in
the Instructor’s Manual may be used to assign an in-depth analysis and/or presentation
comparing NanoScale’s implemented strategies to those discussed in the suggested readings.
Case Synopsis
Based on research that began in the 1970’s, NanoScale Materials, Inc. was able to take a
university developed technology from inception to commercialization in an emerging industry.
Nanotechnology has been around since WWII. However, one particular scientist-entrepreneur,
Dr. Kenneth Klabunde, developed processes that advanced the technology far beyond its
previous applications. Originally based out of a university research lab, Klabunde was granted
multiple patents on proprietary processes that eventually allowed him to obtain financing in
order to advance the developed technology through various phases of commercialization. In
1995 Klabunde partnered with a regional business development center to form Nantek, which
eventually became NanoScale Materials, Inc. Working out of a local business incubator
NanoScale’s R&D and marketing efforts enabled the firm’s product offerings and staff to grow
to a point where a new facility was necessary. NanoScale Materials, Inc., like the industry that
developed at the same time, was at a crossroads. The firm’s products were currently
differentiated from competitors, but the management team knew the rapid advancement of
technology could eventually lead to selling a commodity product. With sales achieving a near
break-even point, NanoScale’s management team was faced with the dilemma of where to go
next. Should they deviate from their current strategy which focused heavily on research and
development, or should they shift their strategy toward the development and sales of
differentiated products?
The authors developed the case for class discussion rather than to illustrate either effective or ineffective handling of
the situation. The case, instructor’s manual, and synopsis were anonymously peer reviewed and accepted by the
North American Case Research Association (NACRA) for its annual meeting, October 7-9, 2004, Sedona, AZ. All
rights are reserved to the authors and NACRA. © 2004 by Jeffrey Katz, Brett Covert, Leslee Murphy, Bonnie
Wetta, and Ken Williams. Contact person: Jeffrey Katz, College of Business Administration, 101 Calvin Hall,
Kansas State University, Manhattan, Kansas 66506, 785-532-7451, jkatz@ksu.edu
THE IMPACE OF E-COMMERCE INDUSTRY TURMOIL ON AMAZON.COM:
A STRATEGIC PERSPECTIVE
Russell Casey, Clayton State University/University of Phoenix
William Carroll, University of Phoenix
Case Objectives and Use
The case conveys how Amazon.com weathered the storm that left many dot.com retailers in the
breakdown lane of the information superhighway because they did not have the experience
necessary to run a successful e-commerce enterprise, or lacked a viable business model. What
does it take to be a profitable large-scale online retailer? This case provides a history of
Amazon.com’s evolving business model and an analysis of the online retailing environment to
provide the backdrop for strategy analysis and development. The case is intended for use in
either undergraduate or graduate courses in strategic management, strategic marketing, or ebusiness.
Case Synopsis
Internet retailers face intense competition due to the large number of competitors, ease of entry,
low switching costs, and the strength of existing multi-channel retailers. In order to survive, it is
critical that online retailers create a sustainable competitive advantage in their e-commerce
strategy and plan for long-term strategic positioning. This case uses an analysis of
Amazon.com’s strategy to develop an understanding of the e-commerce competitive
environment and the importance of building a sustainable competitive environment to create
value for the firm, its customers, and its shareholders.
Jeff Bezos launched Amazon.com in 1995 with much fanfare as the first mover in large scale
internet retailing. His commitment to building long-term value for shareholders through offering
the lowest prices on the largest selection of products and a quality shopping experience took the
company from a modest start-up in 1995 to a multi-billion dollar e-commerce platform and
department store with its first profitable year in 2003. During the years 2000 and 2001 many
dot.com retailers met their demise when the stock marketed corrected while Amazon.com took
advantage of its first mover position to gain market share, achieve revenue growth, and build
brand awareness. However, many currently question Amazon.com’s ability to generate longterm profitability through continued price slashing, free shipping and massive product offering
expansion.
The authors developed the case for class discussion rather than to illustrate either effective or ineffective handling of
the situation. The case, instructor’s manual, and synopsis were anonymously peer reviewed and accepted by the
North American Case Research Association (NACRA) for its annual meeting, October 7-9, 2004, Sedona, AZ. All
rights are reserved to the authors and NACRA. © 2004 by Russell Casey and William Carroll. Contact person:
Russell Casey, Clayton State University, 5900 North Lee Street, Morrow, GA 30260, 770-961-3453,
russellcasey@mail.clayton.edu