Merck is known for its commitment to investing in basic R&D. Are Merck's long-term investments justifiable when the firm faces extreme earnings pressure?
In April 2009, Perdigão was contemplating the acquisition of Sadia and a merger of the two companies. The intended share-swap transaction between two of Brazil's biggest food companies would allow Perdigão to dramatically grow its domestic and international market share, and become one of the world's largest players in the food production industry, while driving up profit margins by benefiting from synergies. However, Sadia had a huge short and long debt that it was unlikely to be able to service. Students must determine whether Perdigão should acquire Sadia, the basis of the proposed share exchange, and assess whether the resulting debt burden of the combined companies is manageable.
Goli Vada Pav Pvt. Limited (GVPPL) identified an opportunity to brand one of Mumbai's favourite fast foods - the vada pav. GVPPL's founders saw a huge opportunity in the Indian fast food industry, which was highly unorganized and largely serviced by small-time local vendors. There was a need in the market for a hygienic, branded product and Goli Vada Pav was created to fill this void. GVPPL broke the stereotype of unhygienic, manhandled vada pav. Its strategy for success was built on the four-point formula for a high-quality product, with value for money and efficient delivery to customers. The absence of a hygienic, branded product in the Indian fast food industry contributed to the initial success of GVPPL. This case series illustrates an entrepreneur's ability to identify and exploit a market opportunity. It details challenges faced by GVPPL in the competitive dynamics of the Indian fast food industry. These cases further question the viability of GVPPL's business model as one of the founders aspired to expand to the national and international markets. Would he be successful in strategizing GVPPL's future growth?
In April 2011, Vithal Gambhir, the marketing director of Vibhava Chemicals, an entrepreneurial venture and leader in the black phenyl category in the home cleaning agents (HCA) market in South India, was faced with a marketing challenge. A slew of multi-national corporation (MNC) brands in the emerging new category of specialty cleaning agents had eroded Vibhava’s share of the traditional black phenyl category by 50 per cent over the previous eight years. The marketing efforts of the MNCs had also led to a gradual transformation of the HCA market, expanding and segmenting it in terms of applications (e.g. floor-cleaning agents and toilet-cleaning agents) and benefits (e.g. disinfecting, cleaning, and deodorizing). As a result, Vibhava’s leading brand, “Black Belt” black phenyl disinfectant, had begun losing ground in the market. Vibhava had successfully responded to this decline by launching Ozone, a pine-oil-based floor cleaner, in 2003. Positioned as an herbal, eco-friendly, deodorizing floor cleaner, Ozone had managed to avert Domex, the leading MNC brand of disinfecting floor cleaner. However, during the last couple of years Domex had been available in many variants serving many segments and the market had become flooded with both MNC and established Indian brands. While the sale of Ozone rose in absolute terms, Vibhava’s share in the growing home cleaning market dropped from 25 per cent in a predominantly traditional product market in the 1990s, to 11 per cent in the transformed market of 2010. Gambhir now faced the daunting challenge of meeting an ambitious sales target of INR 1 billion for 2011-2012, which was double the sales of the previous year.
The world had changed as a result of the terrorist attacks on September 11, 2001. Canada was engaged in the Afghanistan War, and the first casualties were being felt. It was November 28, 2005, as Rene LaRose, the director general of Defence Research and Development Canada (DRDC) Toronto, sat in his office preparing for an all-staff briefing the following day. He knew that for his research institute to remain relevant and be a major contributor to the emerging needs of the Canadian Forces and national security in this rapidly changing landscape, a major transformation of his centre was required. The Canadian Forces was undergoing its own metamorphosis under its new Chief of Defence Staff, General Rick Hillier, and DRDC Toronto needed to be in synch with this development. LaRose had spent several years trying to convey the message that profound changes at DRDC Toronto were needed — changes that were as much cultural as they were structural. The sense of urgency was now acute with Canada at war, and DRDC Toronto was poised to embark on a major organizational alignment program.
In August 2010, SKS Microfinance became India’s (and South Asia’s) first publicly traded microfinance institution with a stock exchange listing. A share in the company was offered at INR 985 and it commenced trading at INR 1,036, reaching INR 1,404 within a month. However, that was the extent of the good news as far as the company and its shareholders were concerned. Things began to unravel rapidly. The initial public offering of shares was seen as the initiation of a conflict between the interests of the company’s shareholders and the poor rural borrowers it was expected to serve. Further, the company fired an arguably successful chief executive officer due to “inter-personal issues” within days from the end of the post-listing 40-day silent period. Matters were aggravated when 30 women who happened to be microfinance borrowers committed suicide within a span of 45 days, 13 of whom were reported to have been SKS members. The provincial government in the state of Andhra Pradesh, the hub of microfinance activity in the country, brought out an ordinance that effectively curbed microfinance lending and recovery operations. By May 2011, the Reserve Bank of India, the country’s banking regulator, had issued a notification placing caps on interest rates and margins and specifying minimum tenures for relatively larger loan sizes. Was this the end of the microfinance movement in India?
Goli Vada Pav Pvt. Limited (GVPPL) identified an opportunity to brand one of Mumbai’s favourite fast foods — the vada pav. GVPPL’s founders saw a huge opportunity in the Indian fast food industry, which was highly unorganized and largely serviced by small-time local vendors. There was a need in the market for a hygienic, branded product and Goli Vada Pav was created to fill this void. GVPPL broke the stereotype of unhygienic, manhandled vada pav. Its strategy for success was built on the four-point formula for a high-quality product, with value for money and efficient delivery to customers. The absence of a hygienic, branded product in the Indian fast food industry contributed to the initial success of GVPPL. This case series illustrates an entrepreneur’s ability to identify and exploit a market opportunity. It details challenges faced by GVPPL in the competitive dynamics of the Indian fast food industry. These cases further question the viability of GVPPL’s business model as one of the founders aspired to expand to the national and international markets. Would he be successful in strategizing GVPPL’s future growth?
Nokia has dominated the mobile handset business for over 20 years. But as mobile technologies evolves and the consumer focus shiftsfrom handset design towards software and content platforms, it creates an opportunity for new players, such as RIM, Apple and Google, to enter the market and challenge Nokia's position. This case examines the competitive situation in the mobile ecosystem and Nokia's attempt to redefine itself as an 'internet company' in 2008.
Huntington University was a distinguished not-for-profit academic institution in the United States whose endowment grew from $7 billion to nearly $20 billion over the course of a decade. The funds prompted a variety of development projects. New funds, new buildings, and new programs brought with them new people, and Huntington was in a period of growth and change on all fronts. As administrative headcount grew dramatically from 6,800 to over 10,000, Singletary launched a major initiative to develop the University's most promising managers through effective instruction and feedback. Among the attendees were Rita Torres, Dieter Kopp, and Marilyn Malkin. They were excited to be among the select group of Singletary Management Program participants, and were eager to receive expert teaching and peer guidance on how they could improve as managers.
The Singaporean software company Lan-Ray attempted to enter the prepaid cash card (PCC) business in China. Equity funds were sourced to acquire Protection Communications Network (PCN), a payment intermediary in Quanzhou, China, with a vast payment network that could be instrumental to the success of the PCC business. However, PCN would need to demonstrate profitability before it could obtain the licence to run the PCC business.<br><br>Together, Lan-Ray and PCN ventured into the mobile phone campus e-card business, which was initially thought to be able to help PCN achieve profitability in the short run. However, the campus e-card business did not prove to be as profitable as expected. At the same time, the acquisition of PCN by Lan-Ray was problematic, as PCN was unwilling to transfer shares to Lan-Ray. How could Lan-Ray’s CEO finish the acquisition of PCN and make the campus e-card business profitable?
Vegemite is an iconic Australian breakfast spread and is often seen as a quintessential Australian product. This case focuses on Kraft's decision to revitalize brand performance through the introduction of a brand extension. Drawing on extensive social media analysis of brand image, the brand team led by Simon Talbot identified a gap in the market for a line extension involving a blend of Vegemite and Kraft's other iconic brand, Philadelphia Cream Cheese. Following a high profile campaign involving a competition to name the new extension Talbot's team chose the name iSnack 2.0 for the new product. The case starts two days after the public unveiling of this name and subsequent nationwide backlash against it. Talbot needs to consider whether to continue with the brand name or change it in light of the public outcry.
In August 2010, SKS Microfinance (SKS) had become India's (and South Asia's) first stock-market listed and publicly traded microfinance institution (MFI). A share in the company was offered at INR 985 and it commenced trading at INR 1,036, a small premium to start with but eventually reaching INR 1,404 within a month. Unfortunately, that was the extent of the good news as far as the company and its shareholders were concerned. Things then began to unravel rapidly. The initial public offer (IPO) of shares was seen as the initiation of a conflict between the interests of the company's shareholders and the poor rural borrowers it was expected to serve. Further, the company fired an arguably successful chief executive officer due to "inter-personal issues" within days from the end of the post-listing 40-day silent period. Matters were aggravated when 30 women who happened to be microfinance borrowers ended their lives within a span of 45 days, 13 of whom were reported to have been SKS members. The provincial government in the state of Andhra Pradesh, the hub of microfinance activity in the country, brought out an ordinance effectively curbing microfinance lending and recovery operations, and, by May 2011, the Reserve Bank of India, the country's banking regulator, had issued a notification placing caps on interest rates, margins and specifying minimum tenures for relatively larger loan sizes. Was this the end of the road for the microfinance movement in India?
In February 2011, David Blair, CEO of Catalyst Health Solutions, was considering another acquisition. Catalyst was already the fastest-growing pharmacy benefit management company in the United States, and Blair had his eye on a subsidiary of Walgreen Co., the second-largest retail drugstore chain in the country. Walgreen Co. was focusing its corporate strategy on the retail business and had just purchased 258 Duane Reade pharmacies in New York for over $1 billion. Walgreen Co.'s subsidiary, WHI, managed pharmacy benefits and was a relatively small part of the overall company, contributing less than 2% of its bottom line. Might Walgreen Co. be interested in selling WHI?
This is the third in a series of lecture notes which, if tied together into a textbook, might be entitled "Practical Regression." The purpose of the notes is to supplement the theoretical content of most statistics texts with practical advice based on nearly three decades of experience of the author, combined with over one hundred years of experience of colleagues who have offered guidance. As the title "Practical Regression" suggests, these notes are a guide to performing regression in practice. This technical note explains how to choose predictor variables to include in regression. The note begins by explaining the many virtues of parsimony. Sometimes analysts include predictors simply because they are in the available data. Including such "junk" predictors increases the chances of obtaining confusing or misleading results. The note also explores multicollinearity, a favorite topic in some statistics classes that is rarely a problem in real world empirical work. The note concludes by explaining how to work with groups of related variables and describes how to implement the partial F test for joint significance.
The Harvard Business Review (HBR) Group was an early adopter of social media, boasting a robust presence on Twitter, Facebook, and LinkedIn. Now the company is seeking to evolve the Group's efforts from social media to social strategy - and start moving both revenue generation and strategy integration into HBR's core. To that end the company created two parallel projects, each tasked with developing two concrete new offerings that leveraged social dynamics on social platforms, while at the same time creating revenues or slashing costs for HBR. Now it has to choose between four different projects.
Meli Marine, a container shipping company, is facing an important strategic decision after an interesting acquisition opportunity presents itself. Founded in 1974 by the Chang Family, the Singapore-based company has carved out a niche in the intra-Asia transport market. After years of success, eroding business conditions caused a financial crisis and a new CEO, David Tian, was brought in. Tian created a successful strategic change effort that resulted in a more stable but slower-growth company. More than ten years later, Meli Marine has a rare and affordable opportunity to acquire the larger shipping vessels it needs to move into a global market. Tian and his board must decide to whether to expand the franchise into Asian-North American shipping lanes, as key competitors have done, or continue with its current conservative business model.