On November 25, 2009, the city state of Dubai stunned markets by announcing that Dubai World, its flagship state holding company, would seek a six-month "standstill" on at least $4 billion U.S. dollars of its $26 billion in debt obligations. This case describes Dubai's development strategy in detail and narrates how, as part of that strategy, a series of state-owned holding companies accumulated billions of dollars in debt. The (A) case ends as Sheikh Ahmed bin Saeed, chairman of Dubai's Fiscal Committee, has to decide what to do about the financial troubles of Dubai World and other state-owned holding companies. The case presents Sheikh Ahmed bin Saeed having to decide among three options: the Dubai government can guarantee the debt, they can renegotiate the debt, or they can walk away (i.e., default). The B case describes the decision and the reactions to this decision around the world and presents a new decision on the part of bond holders of Dubai's state-owned holding companies. The C case briefly analyzes the advantages and disadvantages of Dubai's bankruptcy procedures, both for investors and for the holding companies of Dubai.
On November 25, 2009, the city state of Dubai stunned markets by announcing that Dubai World, its flagship state holding company, would seek a six month "standstill" on at least $4 billion U.S. dollars of its $26 billion in debt obligations. This case describes Dubai's development strategy in detail and narrates how, as part of that strategy, a series of state-owned holding companies accumulated billions of dollars in debt. The A case ends as Sheikh Ahmed bin Saeed, chairman of Dubai's Fiscal Committee, has to decide what to do about the financial troubles of Dubai World and other state-owned holding companies. The case presents Sheikh Ahmed bin Saeed having to decide among three options: The Dubai government can guarantee the debt, they can renegotiate the debt, or walk away (i.e., default). The B case describes the decision and the reactions to this decision around the world and presents a new decision on the part of bond holders of Dubai's state-owned holding companies. The C case briefly analyzes the advantages and disadvantages of Dubai's bankruptcy procedures, both for investors and for the holding companies of Dubai.
On November 25, 2009, the city state of Dubai stunned markets by announcing that Dubai World, its flagship state holding company, would seek a six month "standstill" on at least $4 billion U.S. dollars of its $26 billion in debt obligations. This case describes Dubai's development strategy in detail and narrates how, as part of that strategy, a series of state-owned holding companies accumulated billions of dollars in debt. The A case ends as Sheikh Ahmed bin Saeed, chairman of Dubai's Fiscal Committee, has to decide what to do about the financial troubles of Dubai World and other state-owned holding companies. The case presents Sheikh Ahmed bin Saeed having to decide among three options: The Dubai government can guarantee the debt, they can renegotiate the debt, or walk away (i.e., default). The B case describes the decision and the reactions to this decision around the world and presents a new decision on the part of bond holders of Dubai's state-owned holding companies. The C case briefly analyzes the advantages and disadvantages of Dubai's bankruptcy procedures, both for investors and for the holding companies of Dubai.
A residential real estate developer competes in a heated auction for a prime retail development site in the interior of China during the 2009 boom. Total project cost might be in excess of $1billion US for over 4,000,000 square feet of building. Hang Lung Properties has enjoyed success in residential building in Hong Kong but has focused on very limited projects in China, notably two retail properties in Shanghai. After a decade in Shanghai the firm decides to enter second tier Chinese cities including Chengdu, a city of 11 million in interior China. The case covers Hang Lung Properties' due diligence and thought process with respect to anticipated rental income, construction costs, and land costs. The auction includes many other well capitalized firms and the price escalates. Hang Lung's team must decide whether to participate or withdraw. Students need to use judgment with respect to estimates of key variables including stabilized income, construction cost, and minimum expectations for return on investment in order to prepare their bids. The (B) case goes into further steps in the auction as well as Hang Lung Properties' internal discipline with respect to asset types, infrastructure in target cities, and baseline returns.
Second phase of auction for a prime retail development parcel in Chengdu, China. Competition forces the firm to revisit all of its land purchase criteria. Hang Lung Properties is known for rigorous due diligence, for discipline in buying property, and for good understanding of market cycles. The (B) case reveals the firms assumptions in the Chengdu situation, as compared to what students had to derive on their own in the (A) case. The (B) case also reviews strategic focus with respect to asset classes and geography, as well as best practices for what to look for in cities that will be attractive for superblock mixed use projects.
The German country managing partner of a global law firm must decide how to respond to a corporate mandate to restructure its client portfolio. The case enables a discussion of different types of clients in a global professional service firm in terms of relative revenues, profitability, and strategic significance. It also highlights the tensions between local subsidiaries and corporate headquarters with respect to managing client portfolios.
The case focuses on the US Dept. of Energy and the $38 billion dollars of stimulus funding the DOE received to encourage clean tech. They focus on "bridging the valley of death" i.e., helping young, innovative companies finance technically risky and very capital intensive development and commercialization programs. The case focuses on two DOE programs in particular, the Loan Guarantee Program and ARPA-E. The case raises the question of why these valleys of death exist, what can be done to deal with them, and how these DOE programs are designed and implemented.
This case illustrates the evolving structure of the airline industry in Europe and the competitive determinants in the industry. This case initially outlines the context of the airline industry prior to deregulation. The industry's evolution subsequent to deregulation is then examined. We examine the competition between incumbents and new entrants and the arrival of low-cost airlines into the industry structure. The case illustrates incumbents' differing responses to the change in the industry's structure and the evolvement of new customer segments. The case further illustrates the differing competitive requirements as the structure changes in the period between 1993 to 2000 and beyond, and the incumbents' and entrants' choices as the basis of competition changes in the industry. Incumbents' and entrants' competitive positioning and the changes in positioning are also examined. Finally, the case also illustrates the possible new business models and their link to competitive positioning and industry structure. This case is placed in the years 1993 to 2000 when the deregulation unfolded in the industry bringing in significant and substantial changes to the industry's structure.
In April 1998, Pfizer Inc ("Pfizer") launched Viagra, a prescription drug for treating erectile dysfunction, in the US and Europe with huge success. However, its market entry into China was met with an 11-year battle with local drug companies over Viagra's patent, Chinese trademark and three-dimensional trademark ("3D trademark"). Pfizer's patent was invalidated in July 2004 by the authorities after being jointly challenged by 12 local companies. A local company had launched its own erectile dysfunction drug using Viagra's Chinese nickname as its trademark, and copying Viagra's 3D trademark. Pfizer defended its intellectual property rights ("IPR") in court. It won the patent and 3D trademark litigations, but lost in the Chinese trademark case. Irrespective of the litigation outcomes, Viagra's sales in China have been stifled by prevalent counterfeits and herbal substitutes containing its active ingredient or equivalents. Pfizer's management is trying to figure out what went wrong in its market entry strategy, how to generate more sales before its patent expires in 2014, and what should be done to better protect the IPR of the drugs it intends to launch in the country.
Playa Dorada Beach & Resort in Boca Raton, Florida, faces a growing seasonal demand for tennis services. The number of guests is expected to double in the next few years, and while the tennis facilities are a popular and well-promoted amenity at the resort, court space is limited. The director of tennis operations analyzes court capacity, usage history, pricing, and other factors as he assembles a plan for expansion. He must also consider how his strategy affects other divisions of the Playa Dorada Corporation, including finance, operations, marketing, and sales. Can he transform the resort's tennis operations into a profit center? To prepare for case discussion, students complete a quantitative analysis of past and expected future usage of the tennis facilities and formulate a growth strategy.
This note describes the precautionary principle and its key tenets, highlights challenges associated with its use, and includes many examples of its application, primarily within the realm of regulating activities based on the risk of harm to human health and the environment. Appendices provide detailed examples of how the precautionary principle has been applied to regulations in three key industries: agriculture, chemicals, and pharmaceuticals. Describes various forms of the precautionary principle, its widespread adoption in international agreements, its distinction from cost-benefit analysis, its shift of the burden of proving that activities are safe from regulators to industry, and the importance of considering Type I and Type II errors and status quo bias when contemplating whether to evoke the precautionary principle.
Zensar is a rapidly growing, mid-sized Indian IT services company with a collaborative management philosophy and innovative HR policies. One of its practices, Vision Communities, is an inclusive forum for innovation and strategy formulation. As the company grows, managers must decide how to scale the Vision Community process so that it retains its spirit of employee involvement and engagement while encompassing a larger, more geographically dispersed group of participants.
Renova, a Portuguese toilet paper manufacturer, is battling to survive in a stagnant, commoditised market dominated by international giants and private labels. To grow and remain independent, CEO Paulo Pereira da Silva is considering three options: 1) private label manufacturing, 2) new functional innovations, and 3) launching a black toilet paper. What should he do? And how should the chosen strategy be implemented? Please copy and paste the following url into a browser http://cases.insead.edu/renova/ to view an introductory video and an inspection copy of the case.
This case tells the story of successful corporate entrepreneurship bringing sustainable value innovation to agribusiness. It recounts the history of EADS-Astrium, subsidiary Infoterra and the development of a new product-service called Farmstar to help farmers reduce costs and increase yields. The case describes the creation of uncontested market space through the successful development of an innovative product that increases private benefits (profits) on adoption. Farmstar also generates public benefits (lowers pollution) by reducing the negative externalities of intensive agriculture. The process of simultaneously increasing public and private benefits through productivity increase and cost reduction is known as sustainable value innovation (SVI).
In May 2006, Foxconn International Holdings first discovered a trade secret leakage to BYD Company Limited through current and former employees. Despite successful conviction of four individuals involved, prosecutors dropped all criminal charges against BYD in December 2008. Around 400 senior managers and engineers have left Foxconn for BYD since 2003, posing continuous threats of further infringement of intellectual property ("IP") rights. In response to a deep global recession since late 2008, one of Foxconn's strategies has been to increase investments in research on and production of smartphones, which maintain strong demand relative to traditional mobile phones. Because Foxconn's factories are located mainly in emerging markets with high IP risks, the success of this strategy is being threatened by ineffective IP protection. It is imperative for the company to revisit its IP management strategies, not only to protect its research and development investment but also to generate extra revenue for survival. It also has to devise an appropriate litigation strategy against BYD.
Foxconn International Holdings is the world's largest contract manufacturer of mobile phones. BYD Company Limited entered the market in 2003 and has pursued a learning-by-hiring strategy by actively recruiting workers from Foxconn. In May 2006, Foxconn first discovered a leakage of its trade secrets to BYD through current and former employees. Materials seized from BYD's premises were found to contain substantial non-public information belonging to Foxconn. A number of individuals involved were arrested and prosecuted. However, BYD declared that the information it possessed about Foxconn came from publicly available sources. Foxconn has concluded from internal investigation that BYD has been stealing its trade secrets systematically over a long period. Its management is contemplating pursuing criminal charges against BYD in order to protect its intellectual property ("IP"). (Please refer to case B for China's legal system for resolving IP disputes and factors that influence IP litigation outcomes in the country.)
The market for electricity on the Fox Islands of North Haven and Vinalhaven, Maine is unique and costly for residents. Historically, electricity prices on the islands had been three times the national average because of the high cost of importing electricity via an underwater cable and maintaining the distribution network on the islands. George Baker, a professor at Harvard Business School, decided to lower the energy costs of the island's residents with wind power.
This note provides an overview of the rationale and the challenges associated with building new businesses within established companies. It provides a framework for understanding why corporations pursue entrepreneurial ventures and the various levers that they employ. The note offers a comparison of the various approaches, with examples, and their pros and cons.