Case | HBS Case Collection | November 2009 (Revised November 2010)

Miracle Life, Inc.

by Lauren H. Cohen and Christopher J. Malloy

Abstract

Miracle Life is a firm with a unique setup and organizational structure. Specifically, it is a network marketing firm, also known as multi-level marketing (MLM) firm, which utilizes a large distributor base and depends on this individual distributor base to sell its products, giving explicit incentives for these individual distributors to both sell its products and sign up other distributors. The case gives students the opportunity to take the basic framework of Discounted Cash Flow (DCF) Analysis and apply it to two unique perspectives of an identical problem. The students will then use this DCF approach to rationalize observed stock prices, connecting the two, and further reconcile how a company's future plan for growth, and the plausibility of this plan, has implications jointly for DCF and stock prices.

Keywords: Finance; Cash Flow; Stocks; Growth and Development Strategy; Product Marketing; Distribution; Organizational Structure;

Citation:

Cohen, Lauren H., and Christopher J. Malloy. "Miracle Life, Inc." Harvard Business School Case 210-039, November 2009. (Revised November 2010.)