Introduction to the Large-Scale Investment (LSI) Course at Harvard Business School

Benjamin C. Esty

Background Note | HBS Case Collection | October 2003 (Revised February 2004)

Introduction to the Large-Scale Investment (LSI) Course at Harvard Business School

Abstract

Introduces students to the Large-Scale Investment (LSI) course taught at Harvard Business School. LSI is a case-based course about project finance that is designed for second-year MBA students. The course is about project finance, which involves creation of a legally independent project company financed with equity from one or more sponsoring firms and nonrecourse debt for the purpose of investing in a capital asset. In 2001, project-financed investment reached $217 billion worldwide. The LSI course describes what project finance is, why it creates value, and how to structure deals. In doing so, the course helps to sharpen and deepen students' understanding of corporate finance. This note describes the course's key themes, structure, and content. Additionally, there is a brief synopsis of each case study. The cases are available individually from Harvard Business School Publishing.

Keywords: Value Creation; Project Finance; Investment; Projects;

Format: Print

23 pages

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Citation:

Esty, Benjamin C. "Introduction to the Large-Scale Investment (LSI) Course at Harvard Business School." Harvard Business School Background Note 204-093, October 2003. (Revised February 2004.)

Case | HBS Case Collection | February 2018 (Revised March 2018)

Sandlands Vineyards

Benjamin C. Esty and Gregory Saldutte

Approximately 80% of the wineries in the U.S. break even or lose money. An even greater percentage lose money on an economic basis (i.e., after a charge for the cost of equity). Tegan Passalacqua is a successful, young, Californian winemaker who specializes in making “old vine” wine (i.e., wine from vines that are at least 60 and up to 100+ years old). By day, he is the head winemaker at Turley Wine Cellars, a leading Zinfandel producer. In his spare time, however, he runs his own winery called Sandlands, which produces premium wines using historic, out-of-favor grape varieties such as Carignane, Mataro, and Chenin Blanc. Despite the odds, Sandlands appears to be succeeding. The question is why and whether his performance is sustainable. The case is set in December 2017 as Passalacqua was deciding whether to buy a building and develop a winery at a cost of up to $500,000. Because he already owns an old vine vineyard, and has limited resources, he must decide if this is the right investment to make next.

Keywords: wine; winery; vineyard; competitive advantage; market attractiveness; Porter's 5 Forces; capital investment; industry attractiveness; Vertical Integration; entrepreneurship; performance analysis; Napa Valley; Agriculture; Entrepreneurship; Business Strategy; Competitive Strategy; Competitive Advantage; Vertical Integration; Segmentation; Food; Supply Chain; Industry Structures; Five Forces Framework; Retail Industry; Food and Beverage Industry; United States; California; Napa Valley;

Citation:

Esty, Benjamin C., and Gregory Saldutte. "Sandlands Vineyards." Harvard Business School Case 718-438, February 2018. (Revised March 2018.) View Details

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Approximately 80% of the wineries in the US breakeven or lose money. An even greater percentage lose money on an economic basis (i.e., after a charge for the cost of equity). Tegan Passalacqua is a successful, young, Californian winemaker who specializes in making “old vine” wine (i.e., wine from vines that are at least 60 and up to 100+ years old). By day, he is the head winemaker at Turley Wine Cellars, a leading Zinfandel producer. In his spare time, however, he runs his own winery called Sandlands which produces premium wines using historic, out-of-favor grape varieties such as Carignane, Mataro, and Chenin Blanc. Despite the odds, Sandlands appears to be succeeding. The question is why and whether his performance is sustainable. The case is set in December 2017, as Passalacqua was deciding whether to buy a building and develop a winery at a cost of up to $500,000. Because he already owns an old vine vineyard, and has limited resources, he must decide if this is the right investment to make next.

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Introduction to the Large-Scale Investment (LSI) Course at Harvard Business School

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