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  • December 2003 (Revised October 2014)
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Alusaf Hillside Project

By: Kenneth S. Corts and John R. Wells
  • Format:Print
  • | Language:English
  • | Pages:11
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Abstract

The aluminum industry has suffered from long periods of depressed prices and profits interspersed with relatively short-lived price and profit peaks. The case investigates why this has occured, focusing on the decision Alusaf must make on whether to invest in a major new facility in the face of depressed aluminum prices. Courseware provides cost data on all the facilities in the industry to develop a supply curve. It also provides a supply and demand model that allows students to investigate: the drivers of average industry profitability and relative profitability of individual players in it; the impact of changes in demand over the economic cycle on the price of metal; the impact of different elasticities of demand on price and profitability; the impact of oligopolistic pricing on industry profitability; the impact of adding capacity on industry profitability; and the ability of a firm to preempt the aluminum market. A rewritten version of an earlier case.

Keywords

Decision Making; Business Cycles; Financial Crisis; Metals and Minerals; Financial Strategy; Investment; Price; Profit; Demand and Consumers; Industry Structures

Citation

Corts, Kenneth S., and John R. Wells. "Alusaf Hillside Project." Harvard Business School Case 704-458, December 2003. (Revised October 2014.)
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Related Work

    • December 2003 (Revised October 2014)
    • Faculty Research

    Alusaf Hillside Project

    By: Kenneth S. Corts and John R. Wells
Related Work
  • Alusaf Hillside Project By: Kenneth S. Corts and John R. Wells
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