Established in 2007, JD Capital was able to quickly gain a strong foothold in the Chinese private equity (PE) market by massively investing in pre-IPO deals and taking advantage of the high valuation offered by the ChiNext Board. JD Capital has engaged in a "factory-style" operational model. The firm has approximately 60 branch locations across China with more than 300 employees, where each local office is responsible for local deal sourcing and for strengthening communications with local governments, banks, and securities firms. Chinese private equity market has experienced drastic changes since 2012. The issuance of new IPOs slowed down and was later suspended, the opportunities for exit have greatly narrowed, and the raised funds have rapidly decreased. JD Capital's early success had enabled it to obtain a large portfolio of deals, most of which are pre-IPO projects, the slowdown and suspension of IPOs imposed serious exit challenges. Can JD Capital's past investment strategy and business model continue to be effective? Is listing on the New OTC Board a lifesaving solution? As China's capital market has become more mature, how should JD Capital transform itself to stay competitive in the industry?
This technical note introduces the key concepts and methodologies of accounting for intercorporate investments, which occur when one company acquires the equity or debt of another company. The accounting basics are discussed for three investment categories: (1) passive investments, where little or no influence is present; (2) investments in associates, where significant influence is present and (3) investments in subsidiaries, where control is present. The note addresses the equity method of accounting for associates. For subsidiaries, the note discusses the notion of control, the allocation of a purchase price and recognition of goodwill, consolidation and goodwill impairment.
A well-reputed innovative technology company had introduced a new operating system and two new smartphone devices with the goal of turning around the company's slumping hardware sales. Despite positive product reviews in the media, the models did not sell as well as expected. Consequently, the lower demand led to impairment of inventory and supply commitments at various times throughout the following fiscal year. At the end of the fiscal year, the task facing the company's chief financial officer was deciding whether or not further impairment was required. Because this decision came at a time of significant uncertainty about the company's future in the competitive marketplace, the task also involved considering the impact of a potential adjustment on the company's financial statements and on shareholder confidence.
The note, while not intended to be historically comprehensive, explores the regulation of international trade from the period after World War II to developments in 2010, focusing on shifts in trade theory and policy as well as economic benefits and disadvantages associated with trade liberalization. The note also discusses the advantages and disadvantages of multilateral vs. bilateral or plurilateral agreements, as the latter become more common in arrangements between trading partners.
In 2014, a well-reputed innovative technology company had introduced a new operating system and two new smartphone devices with the goal of turning around the company’s slumping hardware sales. Despite positive product reviews in the media, the models did not sell as well as expected. Consequently, the lower demand led to impairment of inventory and supply commitments at various times throughout the following fiscal year. At the end of the fiscal year, the task facing the company’s chief financial officer was deciding whether or not further impairment was required. Because this decision came at a time of significant uncertainty about the company’s future in the competitive marketplace, the task also involved considering the impact of a potential adjustment on the company’s financial statements and on shareholder confidence.
This technical note introduces the key concepts and methodologies of accounting for intercorporate investments, which occur when one company acquires the equity or debt of another company. The accounting basics are discussed for three investment categories: (1) passive investments, where little or no influence is present; (2) investments in associates, where significant influence is present and (3) investments in subsidiaries, where control is present. The note addresses the equity method of accounting for associates. For subsidiaries, the note discusses the notion of control, the allocation of a purchase price and recognition of goodwill, consolidation and goodwill impairment.
This case illustrates different growth strategies in the pharmaceutical industry. R&D management is a critical component of growth strategies, and the case demonstrates the importance of using a holistic framework for R&D when expanding the firm's business footprint. The case serves the purpose of comparing organic and inorganic growth strategies, and identifying the steps that are critical for the execution of these strategies.
This case illustrates different growth strategies in the pharmaceutical industry. R&D management is a critical component of growth strategies, and the case demonstrates the importance of using a holistic framework for R&D when expanding the firm's business footprint. The case serves the purpose of comparing organic and inorganic growth strategies, and identifying the steps that are critical for the execution of these strategies.
When Dr. John Kitzhaber became Oregon's Governor in January 2011, the state faced a reported $2 billion deficit in the state's Medicaid budget. Consequently, Kitzhaber, working in partnership with his top health policy advisors and an array of stakeholders, undertook a multi-year effort to transform the state's Medicaid delivery system. At the time, that system consisted of separate managed care organizations for different kinds of providers; but in July 2012 the state unveiled its first coordinated care organizations (CCOs), local "umbrella" groups that would bring together an area's health care providers in a single managed care setting. The case details the effort to design, implement, and begin to evaluate CCOs. After providing background on the history of health care reform in Oregon and the recent passage of the federal Affordable Care Act, it overviews the effort to bring together an array of local stakeholders to develop a blueprint for CCOs, the subsequent focus on gaining approval for CCOs from the state legislature and federal government, and finally the process of implementing CCOs and beginning to gauge their impact. The case concludes in March 2015 when Governor Kitzhaber resigned amid concerns about the state's efforts to establish Cover Oregon, the organization set up to create the state's health insurance exchange under the federal Affordable Care Act.
In July 2013, more than 150 negotiators from the European Union and the United States converged in Washington, D.C. to begin crafting what could become the world's largest free trade agreement-the Transatlantic Trade and Investment Partnership (TTIP). Billed as a transformational trade accord, the TTIP would go beyond tariffs to cut non-tariff barriers, expand trade in services, streamline regulatory standards, and incorporate trade elements to suit a rapidly evolving global economy. American and European leaders had pushed for the TTIP in the hope that it would provide a much-needed boost to struggling American and European economies, which were mired in recession and high unemployment since 2008, and buckling under rising competition from China. But the negotiators, faced a sobering reality, "the reason we have not had a trade agreement like this between ourselves in the last several decades isn't because nobody thought of it," said Michael Froman, United States Trade Representative. "It's because there have always been issues that have tripped us up." Under intense political pressure and rising public scrutiny, will the negotiating teams be able to reduce trade barriers between the two economic giants? This case explores how in the absence of multilateral trade liberalization, regional trade agreements are becoming increasingly popular. With an in-depth account of the political and technical challenges in negotiating a mega regional accord, the case questions if political will or the need for economic growth can overcome longtime barriers to deeper trade integration.
Matthew Bellows founded Yesware, a Boston-based tech startup, to solve a problem that he'd encountered as a Sales Manager: sales people hate entering data, rarely do it accurately, and almost always input data that can't be synthesized in a way that is useful for the manager. Together with a friend, he developed software to solve this problem-while also working towards the goal of founding a company that would be "the best place to work." But as the company grows past $5m in annual revenue, Bellows faces challenges balancing the dual goals of continuing to scale the company and adhering to the values established for the company.
What is resilience, and how is a company's resilience measured? Scholars define organizational resilience as the ability to not only survive a hardship, but also to emerge stronger and better prepared to face new challenges in the future. All businesses experience adversity, but relatively few are able to transform these experiences into a catalyst for growth. Members of resilient organizations are also hopeful and confident in their abilities to cope with hardship and view challenges as opportunities to make their organizations better. This case includes the stories of four Virginia companies that employed different strategies for overcoming difficult situations, as told by the current leaders of these businesses. Taken together, these stories provide a range of examples of different approaches to leading through and learning from adversity.
Erik Osmundsen, CEO of Norsk Gjenvinning (NG), had initiated a program to strengthen corporate governance, eliminate corruption and improve compliance, and as a result the company had experienced a turnover of almost half of its top 70 line managers and strained relations with several competitors and the waste management industry association. Osmundsen had relentlessly pushed an agenda that involved transforming and professionalizing the waste management industry to mitigate instances of corruption and other crimes. Osmundsen was convinced that his turnaround strategy and change management process would be effective. Having brought employees on board, he was planning to relentlessly engage customers, regulators, and security agencies to drive transformational change within the industry. It was still unclear though how fast customer demand for robust compliance programs would affect the competitive dynamics. How should NG go about convincing its customers? What could NG learn from companies in other industries that have relied on customer support to shift to responsible business practices? Did competitors that maintain non-compliant practices have an Achilles heel that NG could exploit? To what degree should NG drive change on its own in order to achieve customer differentiation vs. collaborate with competitors to bring the whole industry on board? What other mechanisms existed to level the playing field if NG did not succeed in convincing the customers?
Hasn't everyone at some point felt as if the universe was conspiring against his or her success? This case narrative tracks the story of Emmett Taylor, an operations manager for a bottling company, as a snow and ice storm bears down on his southeastern U.S. plant. Taylor is already plagued by stress caused by all facets of his life-family, work, and personal health-and this storm is no exception. The story offers an opportunity to discuss time, energy, and priority management; individual behavior from a type-A personality; work-life balance; organizational behavior; and leadership. This case is a suitable substitution for the classic best-selling Darden case "John Wolford" (UVA-OB-167).
When Ashmark Corporation's largest supplier, Red Star Castings (Red Star), was forced to declare bankruptcy, Ashmark had to develop and implement a contingency plan, while also appeasing its customers, who were growing increasingly impatient for their parts to arrive. Since Red Star closed, Ashmark had been late on 200 units of production due to missing components. Although this figure represented less than 1 per cent of the company's total monthly shipments, things were likely to get more difficult, especially with the loss of key employees due to the stressful situation. In addition, the new supplier was having trouble bringing the tooling online, there were delays in the qualification and testing process, and the modest amount of inventory built up in advance of the bankruptcy had diminished. As Ashmark looked to move forwards, it would need to develop a much better sense of how to manage supply chain risk.