In March 2020, the German online travel experience platform GetYourGuide faced an abrupt drop in revenues in the wake of the COVID-19 pandemic. Prior to the drop, the company had been thriving, grown from a simple idea thought up by a group of friends in a student dormitory into a market-leading company in the travel experience industry with a valuation of over US$1 billion (a "unicorn" start-up) and more than 600 employees across fifteen global offices. Co-founder Johannes Reck and his team needed to determine a path forward-but how to prioritize responses to the crisis? What would the impact of any responses be on the company's longer-term strategy? And how could the responses be aligned with the company's values, which centred on entrepreneurial vision and commitment to employees? Whichever action plan was chosen, decisions would have to be made swiftly.
Opened in January 2021, the medical centre of the Chinese University of Hong Kong (CUHK), CUHK Medical Centre (CUMC), was a non-profit teaching hospital wholly owned by the university. In December 2022, Professor Hong Fung, the executive director and chief executive officer, knew that the CUMC board of directors would soon be asking how he was going to ensure that the privately operated CUMC would remain financially sustainable while still achieving its mission and vision-offering quality healthcare services at affordable and transparent package prices-and returning all surpluses from healthcare services to the hospital to support its future development and the CUHK Faculty of Medicine's research and teaching.
Buoyed by the success of Le BockAle, originally a micro-client, WIPTEC president Martin Ball believed he could benefit greatly from serving a wide range of micro-, small, medium, and large clients at his company's new distribution centre in Longueuil, Quebec. Because of their large order volumes, his medium and large clients were already generating substantial revenues for WIPTEC. While micro- and small clients did not generate similar revenues, Ball reasoned that if they could capture untapped marketplaces, they would experience exponential growth, and if he supported them during their growth phase, he would be rewarded with much higher business volumes. Ball had thus pledged to provide local businesses with the logistical support they needed to grow, but traditional warehousing principles were not flexible and scalable enough to handle the resulting product variations and fluctuations in order size. He had therefore asked his project manager to work with the system integrator to choose one or more technologies that could integrate micro-clients and improve existing processes to reduce service costs for existing clients. The system integrator had shortlisted a few person-to-goods (PTG), goods-to-person (GTP), and automation sortation technologies and submitted them to the project manager for further discussion.
Dr. Zhang, CEO of Super Quantum, an AI-driven hedge fund, is considering an investor's request to withdraw their funds as the markets experience volatility. Should he pull the investor's funds?
Founded by a formerly incarcerated job seeker, Honest Jobs' mission is to be the hub where people with criminal records come to build careers and employers come to find great talent. Honest Jobs faced early challenges as a two-sided platform for justice-involved job seekers and employers, but by 2022, the organization had partnered with 1,200+ employers and supported 40,000+ job seekers who were reintegrating with society. As 2023 approached, founder and CEO Harley Blakeman looked to raise a Series A round to supplement the $3M+ that had been raised in prior rounds. The decision Blakeman faced was whether to pursue impact-oriented VC firms or traditional firms and how much money to raise given hiring needs and expansion plans.
This case examines the history of prominent Egyptian-based social enterprise SEKEM from its foundation in 1977 until the COP27 conference held in Sharm El-Sheikh in 2022. Led by father and son team Ibrahim and Helmy Abouleish, SEKEM turned desert into farmland using biodynamic methods under the influence of Anthroposophy, which originated with Rudolf Steiner in the early twentieth century. As the firm made profits, the case explores how it invested in schools and other cultural institutions, and in 2012 opened the Heliopolis University for Sustainable Development. The final section discusses the role of agriculture in causing climate change and Helmy Abouleish's belief that biodynamic agriculture can offer a real solution to combating the climate crisis. The case enables a debate about how values-driven firms can add societal and ecological value, and about the appropriate boundaries between such firms and public policy.
Dr. Zhang, CEO of Super Quantum, an AI-driven hedge fund, is considering an investor's request to withdraw their funds as the markets experience volatility. Should he pull the investor's funds?
Recent research shows that rather than engaging in comprehensive decision-making, CEOs may be better off relying on heuristics simple rules of thumb that require little information and analysis. Often based on direct learning experiences, heuristics are used consciously and deliberately, and frequently result in superior decision outcomes.
Xiaomi was a famous Chinese consumer electronics and intelligent manufacturing business group. Since Xiaomi announced its entry into the intelligent electric vehicle industry on March 30, 2021, the topic of its boundary-spanning car manufacturing had attracted wide attention. Could Xiaomi seize the cusp of new energy vehicle development and grab a piece of the pie in this fiercely competitive market? Compared with other players with different backgrounds and strengths in this industry, had Xiaomi missed the best time window to enter? In order to become a top seller, how should Xiaomi position its new energy vehicles and design its competitive strategy? Could Xiaomi easily transfer its existing advantages and resources to its new business?
In 2023, executives with ReMo Energy (founded 2020) were deciding which size ammonia plant to build as their first project. Their innovative model produced ammonia - useful for making fertilizer and for energy storage - from renewable energy, and they had received funding from a prominent environmentally-conscious venture capital fund. However, they needed more funding to build their first plant. Smaller plants were less efficient, but bigger plants were riskier, and different potential funders had different priorities. The case prevents three size options for ReMo's first plant, with a detailed model of how various present and future factors - the price of ammonia, power supply, taxes, and more - affect risk and return.
This case highlights Wärtsilä's significant role in the decarbonization journey of the energy and marine sectors. Despite the difficult financial situation and challenging market dynamics - Wärtsilä was active in industries that relied heavily on fossil fuels with little potential for future growth - CEO Hakan Agnevall took a bold decision to convert threats into opportunities and use decarbonization as a vehicle to transform the company. His vision was to turn the company into a leader in sustainable solutions. The ambitious goal set by Agnevall presented Wärtsilä with numerous challenges. The industries in which the company operated were undergoing disruptive changes, but the transition to sustainable alternatives would take decades. Both the energy and maritime industries were characterized by long-term investment cycles and a certain conservatism in terms of adopting new technologies. One of the major hurdles faced by Agnevall was timing. Wärtsilä already had a portfolio of green technologies ready to be offered to customers, but the market demand for these solutions was not yet fully established. The transition to green solutions would require time. As the industry gradually transformed, Wärtsilä understood that it would take several years before the company could fully benefit from its new strategy and investments in green technologies. Balancing the long-term strategic commitment to decarbonization with the need to address short-term financial imperatives and satisfy shareholders was a critical challenge. Wärtsilä was making long-term investments in various green technologies, but the uncertainty surrounding which technology would eventually prevail added to the complexity of the situation.
In this third article in a series of four, the researchers behind the 2023 MIT Sloan Management Review-BCG Artificial Intelligence and Business Strategy Big Ideas research project explore how using AI to refine KPIs leads to smart KPIs that are forward-looking and encourage organizational alignment. They define three types of smart KPIs and provide practical advice to help leaders use AI-enriched KPIs to increase strategic alignment.
In March 2023, the co-founder of Rangoli Group of Institutes, Prahar Anjaria, was contemplating expanding his educational venture across the country. Founded in 2009 in Vadodara, Gujarat, India, the organization was a successful and award-winning preschool chain. The company was focused on imparting holistic learning with high moral, ethical, and pedagogical insight, as well as giving back to society through various social and cultural settings. With an evolving educational marketplace and new government regulations, Anjaria was wondering if this was the right time to expand across the country. What would be the impact of national expansion? How could he be sure to retain the core educational philosophy that made Rangoli Group of Institutes unique?
The Gurmukh Singh Technology (GST) group, based in Ludhiana, Punjab, India, manufactured high-precision machined parts and sheet-metal components for various industries and sectors such as agriculture and horticulture. Revenues of the group had dipped substantially in 2018 due to non-receipt of payments from some customers, and the situation was compounded by the onset of the COVID-19 pandemic and the consequent lockdowns in 2020 and 2021. In January 2022, the managing director and head of marketing was planning a restructuring drive with the intention of doubling revenues and increasing the profitability of the group by 50 per cent over the next five years. He had to decide whether to reframe the group's business-to-business marketing strategy and, if so, in what respect. How should he segment customers and select the most appropriate segments? How could he incentivize these customers to buy his company's products rather than those of competitors? What should be the value proposition of the company?
Two months after his January 1, 2021, appointment as chief executive officer (CEO) of NewCo, the code name for the soon-to-be spun off managed infrastructure services portion of International Business Machines Corporation (IBM), Martin Schroeter was faced with the daunting prospect of creating a distinct strategy and identity for a huge company in a very short time frame. Announced on October 8, 2020, by IBM's CEO, Arvind Krishna, NewCo was a high-stakes strategic move to "create value through focus" and "increased agility to focus on evolving customer needs and delivery excellence." Once spun off, NewCo would immediately become the world's leading managed infrastructure services provider, with US$19 billion in revenue, 90,000 employees, and 4,600 customers, including more than 75 per cent of the Fortune 100 across 115 countries. With the spinoff expected to be complete by the end of 2021, Schroeter had only a few months to craft a strategy, recruit a leadership team, define a new identity for the company, ensure a "strong strategic relationship" with IBM, and bring thousands of customers and tens of thousands of employees into NewCo. Success required many pieces to come together rapidly and seamlessly. Schroeter was unsure how best to address these challenges. All he knew was that failure was not an option and that time was short.
The farmer producer company (FPC) Sahyadri Farmer Producer Company Ltd. (Sahyadri Farms) commenced with a mission of safeguarding fair compensation to the small landholding farmers of India in exchange for their produce and hard labour. Sahyadri Farms was a market leader in grape exports, especially to Europe, but when export freight charges shot up dramatically due to the unprecedented COVID-19 pandemic in 2020, the company was forced to enter into the domestic market to survive. The company's domestic business, Sahyadri Supply Chain Company Ltd., had very high operating costs compared to those of local intermediaries, who operated without the same professionals, standardized logistics, or software. The company was rigorously partnering with young innovators to incorporate technologies like blockchain into the agricultural sector, and it needed a new business model. However, as a company in a low-profitability sector with jobs that were not lucrative and were situated in remote locations, it faced challenges in attracting and retaining the young talent it needed to support the growth of an increasingly complex business in the domestic market.
In 2020, the tuition and coaching industry in India was severely hit due the COVID-19 pandemic and subsequent nationwide lockdowns. With physical classes suspended, many private tutors and coaching institutes closed their businesses. Teachers and educators found limited options for conducting classes online, and it was challenging to manage and monitor teaching-related activities. Founded in May 2020, Teachmint, the Bengaluru-based education technology (edtech) start-up, provided a one-stop edtech infrastructure solution for teachers, educators, and institutes. With a focused business-to-business model, Teachmint grew leaps and bounds in its first year of operations. The company had begun international expansions by partnering with edtech companies in Southeast Asia and the Middle East. However, Teachmint's chief executive officer was debating whether it was the right time to go global or whether his company should focus on the Indian edtech market, which was competitive and featured several large players.
In 2006, two entrepreneurs founded Fugumobile Co. Ltd., a digital marketing agency based in Shanghai, China. The company grew organically in China by adapting to the evolving trends in digital marketing. In May 2021, the founders were facing a dilemma and had to choose between two options for sustainable and profitable growth of their company. The first option was to reach an extensive client base by continuing to deliver standardized services at affordable prices, which offered the company modest growth and profitability. The second option was to offer customized services at a premium price, which was more rewarding but would require recruiting experienced workers with a proven track record for selling and delivering high quality customized services, who were typically employed by large agencies and demanded significantly high salaries. The two founders had to decide which path to take.
Sunil Koshy considered himself a "passionpreneur;" after quitting a well-paid job as a software engineer, he chased his passion for singing and founded From Mug to Mike (FMTM), a start-up that helped amateur singers polish their singing skills. Stemming from Koshy's passion, FMTM had evolved into a business venture with viable products, services, and a scalable business model. To scale up FMTM, Koshy needed to decide whether the business should take a geography- or a product-led route.