In 2020, as the COVID-19 pandemic swept across the globe, Apple and Google partnered to develop a contact tracing application that would collect information about users infected with the disease and notify those who they had been in contact with. While Apple/Google's app would keep information about infection and contact private, some governments wanted more access. Apple and Google refused to provide this information, sparking a debate over what responsibilities the companies had in the realms of personal privacy and public health. This incident marked a seeming increase in privacy protections among technology companies, with Apple increasing user privacy options with its iOS 14 update and Zoom offering free end-to-end encryption. Did this indicate a permanent shift in the tension between privacy and safety?
In September 2019, Zaoui & Co.'s close-knit team of professionals convened for their annual off-site. In its nine years of operation, the boutique investment bank founded by the brothers Michael (HBS '83) and Yoel Zaoui (Stanford GSB '88), had garnered a track record for advising on several significant transactions across Europe. At the retreat, the firm's leaders were debating whether to (a) continue as a small boutique focused on mergers and acquisitions (M&A) advisory services, (b) grow aggressively in M&A advisory, or (c) diversify into principal investing. Each alternative presented strategic and organizational challenges and opportunities. Whichever path they elected to pursue would significantly influence what kind of firm Zaoui & Co. would become.
In September 2019, founding partners Michael and Yoel Zaoui decided to add principal investing to Zaoui & Co.'s offerings. The case outlines how, over the next two years, Zaoui & Co. pursued the formation of a SPAC, Odyssey Acquisitions, followed by the identification of a target company, BenevolentAI, and the subsequent de-SPACing process that led to the execution of the transaction in April 2022. Although their initial foray into principal investing was a success, the process proved more arduous and time-consuming than anticipated, diverting considerable attention and resources from Zaoui & Co.'s core M&A advisory business. The brothers were wondering whether Zaoui & Co should (a) continue to aggressively seek principal investing opportunities, or (b) scale back its principal investing efforts, or (c) focus solely on M&A advisory. The choice would have important strategic and organizational implications for the firm. Although their initial foray into principal investment was a success, the process proved more arduous and time-consuming than anticipated, diverting considerable attention and resources from Zaoui & Co.'s core M&A advisory business. The brothers were wondering whether Zaoui & Co should (a) continue to aggressively seek principal investing opportunities, or (b) scale back its principal investing efforts, or (c) focus solely on M&A advisory. The choice would have important strategic and organizational implications for the firm.
Over a history of more than 240 years, the United States Marine Corps has forged a distinct culture and institutional identity centered on its "warrior ethos." In the wars of American history, Marines fought with uncommon valor, rising to international prominence for their bravery on the battlefields of Belleau Wood, Iwo Jima, Chosin, Khe Sahn, Fallujah, and Marjah. However, the Corps has found its distinct institutional character threatened with extinction on more than one occasion. Political maneuvers, tight defense budgets, shifting geopolitical priorities, and the evolution of the character of warfare has forced the Corps into a delicate balancing act across the decades, adapting its institutional character on the one hand while retaining its core cultural ethos on the other. With one of the highest turnover rates among the U.S. military services, the Corps relies heavily on a robust training program to inculcate its warrior ethos in generation after generation of new Marines. Historically, this program placed a heavy emphasis on infantry skills, on deconstructing the individual and cultivating intense habits of teamwork, and on centering new Marines on the historical legacy and core values of the Corps. The consistent output has been "Marines with Marine training"-a force that can fight and win "in any clime and place." Yet as new geopolitical challenges in the 2020s forced the United States to redefine its national security strategy, questions arose regarding the Corps' continuing relevance and its need to adapt yet again.
A young paralegal joined the London, UK law firm Darby & Fox LLP in August 2020. The position was a one-year contract during the COVID-19 pandemic. The paralegal was subjected to employee discrimination and harassment, starting with a requirement to be in the office, unlike other workers, because she was a newly-hired contract-based employee. She endured overwork, job threats, and simultaneous work assignments from an associate partner, as well as his spouse and colleague. Workplace conflict aggravated her situation, receiving increased workload, longer work hours, lack of compensation for overtime, delegated work from other paralegals, and monitored office activity. Even the process for approval of time off work was changed, making it more cumbersome for her to take a one-day leave. The paralegal wondered how to resolve her situation.
Snowman Logistics Ltd was publicly listed in 2014 at a huge premium to the issue price. The company was the first pan-Indian player in the temperature-controlled logistics industry, which was largely unorganized and fragmented. Changing consumer preferences and increasing demand for processed food were expected to drive the business’s growth rates and profitability. However, India updated its accounting standards in 2019, which impacted Snowman’s financial statements. Even after six years of listing, the company had failed to meet expected growth in revenue and profitability, and an assessment needs to be made about why it failed to meet investor expectations.
Concise Industries Private Limited (Concise Industries), a small enterprise operating in the material handling and control equipment sector, manufactured fixed cranes and undertook annual maintenance contracts for its clients scattered across India. In the face of the uncertainty posed by COVID-19, the owner was contemplating whether to stick with the company’s current strategy or to expand to take advantage of the benefits of growth in this industry. As the economy continued to improve, he believed that demand for these goods would rise. He was considering project expansion but was unsure whether this move would bring value to his company. Hence, he was investigating several project expansion proposals and associated expected cash flow projections to make an investment decision.
A young paralegal joined the London, UK law firm Darby & Fox LLP in August 2020. The position was a one-year contract during the COVID-19 pandemic. The paralegal was subjected to employee discrimination and harassment, starting with a requirement to be in the office, unlike other workers, because she was a newly-hired contract-based employee. She endured overwork, job threats, and simultaneous work assignments from an associate partner, as well as his spouse and colleague. Workplace conflict aggravated her situation, receiving increased workload, longer work hours, lack of compensation for overtime, delegated work from other paralegals, and monitored office activity. Even the process for approval of time off work was changed, making it more cumbersome for her to take a one-day leave. The paralegal wondered how to resolve her situation.
Two women entrepreneurs co-founded a profitable direct-to-consumer apparel brand called Suta. In June 2021, as the business owners were planning to increase advertising expenditure and scale up operations, they were confronted with a declining return on advertising spend on social commerce and other digital platforms. The co-founders needed to make use of marketing analytics to examine the effectiveness of their online store in converting visitors into customers and decide whether adopting a conversion rate optimization strategy could help improve performance.
When it comes to valuing projects in highly uncertain business environments, real options valuation (ROV) isn’t popular as a management tool despite having long been touted as a best practice in academic circles. Seeking to understand why industry has failed to adopt this best practice, the authors interviewed valuation specialists in finance, consulting, and the mining industry. This article aims to help more industry players see ROV as, well, a real and valuable option by highlighting the case for using real options in highly uncertain business environments and offering recommendations on how to effectively deploy ROV. The authors found that the poor adoption of ROV occurs for three key reasons. First, it happens due to a lack of managerial expertise and knowledge. Second, the ROV computation process is highly complex. Third, communication issues exist because the outcomes of ROV are not easily understood without strong knowledge of the underlying concepts. To overcome these limitations and promote the use of real options, the authors present three recommendations: improve training and education, practice greater transparency, and communicate clearly. In order to facilitate these three recommendations, the authors have developed a new ROV software tool to value commodity-producing projects such as mines or refineries. Their Monte Carlo simulation method approximates the ROV by determining the optimal exercise strategy, enabling users to model complex real options problems that include multiple stochastic variables, early exercise rights, and operational flexibility.
Planet Milk produced and distributed A2 milk in Bhubaneswar, the capital city of the state of Orissa, in India. Despite the best efforts of its founder, Planet Milk had remained unprofitable since the COVID-19 pandemic struck in March 2020. In January 2022, the founder considered three broad alternatives to revive his milk business. The first was to change the milk’s packaging from glass bottles to Tetra Pak cartons. This change in packaging would increase the milk’s shelf life, allow wider customer reach, and improve revenues. The second alternative was to introduce an online order management option for consumers, which would increase the visibility of demand and thereby increase the operational efficiency of the business, reduce wastage and logistics costs, and increase profits. However, these options also required significant capital investments that would potentially not be recouped if the desired increase in sales did not occur. The third option was to target institutional buyers or retail channel partners, which would potentially increase sales but also decrease margins and increase credit. The founder had three months to implement a revival plan; if it proved unsuccessful, he could sell the business.
Snowman Logistics Ltd was publicly listed in 2014 at a huge premium to the issue price. The company was the first pan-Indian player in the temperature-controlled logistics industry, which was largely unorganized and fragmented. Changing consumer preferences and increasing demand for processed food were expected to drive the business's growth rates and profitability. However, India updated its accounting standards in 2019, which impacted Snowman's financial statements. Even after six years of listing, the company had failed to meet expected growth in revenue and profitability, and an assessment needs to be made about why it failed to meet investor expectations.
Concise Industries Private Limited (Concise Industries), a small enterprise operating in the material handling and control equipment sector, manufactured fixed cranes and undertook annual maintenance contracts for its clients scattered across India. In the face of the uncertainty posed by COVID-19, the owner was contemplating whether to stick with the company's current strategy or to expand to take advantage of the benefits of growth in this industry. As the economy continued to improve, he believed that demand for these goods would rise. He was considering project expansion but was unsure whether this move would bring value to his company. Hence, he was investigating several project expansion proposals and associated expected cash flow projections to make an investment decision.
In this case study, students will explore some of the differences and considerations that may emerge when entrepreneurs evaluate and choose between multiple financing offers from venture capital investors. The case follows the two founders of a fictional company, All Hands, as they raise a Series A financing round. The founders have received term sheets from two venture capital firms that differ not only in the valuation of the firm's equity but also in other important financial and non-financial ways, including preference structures, dividends, anti-dilution protection and governance. Students will put themselves in the position of the founders to identify differences across the two term sheets, evaluate potential economic and governance tradeoffs, and develop a point-of-view on which offer they would accept.
In 2021, IPI celebrated its tenth anniversary since its inception as a public-funded innovation intermediary in Singapore, a city-state with a strong focus on innovation as an economic growth strategy. Among the many initiatives promoted by the government agencies is open innovation - an approach that enables firms, both large and small, to pursue innovation with the help of external expertise or partners, as few could innovate effectively on their own. As a neutral party facilitating collaboration between the local SME community and technology innovators in developing new products, services, and processes, IPI is the missing element that plugs the gap in the local innovation ecosystem. Its value proposition includes reaching a wider network of partners, acquiring industry-specific knowledge insights, and identifying and catalysing new market opportunities for licensing technology by a multidisciplinary team. Over the past decade, IPI has grown into a trusted intermediary for thousands of companies that are either seeking or offering innovative solutions. However, IPI is still unknown to many among the 300,000 plus SME community in Singapore. Wong Lup Wai, who took the helm as CEO in 2019, has set out to rebrand IPI's identity and strengthen its service offerings. He concedes there is still much work to be done. What factors will help IPI succeed in the next decade? How can IPI scale its key services to create an even more vibrant innovation community for SMEs?
When Jack Sim turned 40, it was the height of the 1997 Asian Financial Crisis, which had decimated half his wealth. The Singaporean entrepreneur found himself wanting to live a more meaningful life, and decided to devote his remaining years to promoting the need for clean sanitation. He first set up the Restroom Association of Singapore (RAS), and buoyed by its success, he went on to found the World Toilet Organization (WTO). Given that the topic of sanitation is awkward and not one to generate interest among the public at large, Sim opted to use humour, specifically toilet humour, to attract attention and gather support for his cause. In the process, he often drew upon his expertise as a consummate salesman to persuade people to agree with him that clean toilets could be a status symbol - not unlike branded handbags. Sim also found that in trying to enlist governments to aid his movement, he had to understand how bureaucrats work and tailor his strategies accordingly, such that the probability of getting their support would be raised. But while he had perfected the art of using humour to make the unsanitary topic as commonplace and ordinary as the weather, with the world still buffeted by COVID-19, the Ukraine war, and sky-rocketing inflation, how could he continue to sustain people's interest in this cause?