"AMB and ProLogis: A Momentous Proposition" provides a sequel to the story of AMB's experience in the Global Financial Crisis (GFC) that is outlined in case RE134: AMB Property Corporation: Navigating Treacherous Waters. It is now October 2010, the world economy is recovering from the GFC, and AMB Property Corporation (AMB) encounters an unusual opportunity. It has the chance to acquire ProLogis (PLD), AMB's top (and much larger) competitor. Ahead of the GFC, PLD had borrowed heavily to fund risky speculative development; now, post-GFC, the consequences of PLD's hunger for return persist, and the company is no longer the darling it once was among REIT investors. PLD's ailing stock price has created a possibility that the top two industrial REITs could merge (together ""NewCo"") to become the world's largest industrial REIT. NewCo would control over $44 billion of assets, boast a global footprint of nearly 600 million square feet of real estate, and own a significant presence across the world's prime logistics corridors. Hamid Moghadam, AMB's co-founder and Chief Executive Officer, sees significant benefits from a merger. He believes savings in corporate G&A, coupled with lowered financing costs, can exceed $100 million per year, and anticipates the deal to generate further synergies by deepening NewCo's customer relationships and providing a valuation boost for PLD's fund management business. However, Moghadam also recognizes the complexities to executing a successful deal. AMB would need to absorb PLD's lower credit rating, higher debt load (which came with a higher interest rate), and assets in lower quality markets that AMB had long avoided. Moghadam also knows that the starkly different cultures at AMB and PLD would make the integration process challenging, while also complicating the negotiation of deal parameters-especially whether to pursue a ""merger of equals"" or a traditional acquisition. Moghadam knows that AMB needs to pursue an opportunity with
In May 2020, Rio Tinto, the world's second-largest mining company, destroyed a cave system in Juukan Gorge, in the remote Pilbara region of Western Australia. The caves were of exceptional archaeological distinction - thought to be the oldest site of continuous human habitation on Earth - and were of deep spiritual and cultural significance to the local Aboriginal community, the Puutu Kunti Kurrama and Pinikura (PKKP) people. Rio Tinto was reputed to be an industry leader on Aboriginal partnerships, environmental protection, and other 'social licence' issues. The cave blast was entirely legal. It had received government approval and was supported by a signed agreement with the PKKP people. Nonetheless, the destruction sparked global outrage. Rio Tinto was panned in the local and international media for disregarding cultural heritage. Furious investors and shareholders demanded executive accountability. The Australian government launched a parliamentary inquiry. Trust between Rio Tinto and Aboriginal communities was shattered. The destruction of Juukan Gorge was the culmination of a decision-making process that lasted over a decade. What happened during that period was not unusual for a company of Rio Tinto's size - lucrative contracts were negotiated, new details trickled in on the Gorge's significance, a new executive team was installed, and changes were made to the organisational structure. Combined, these events cast uncertainty over who knew (or should have known) crucial information, the extent to which stakeholder consent was obtained, and how the company's values had evolved. Students step into the shoes of Simon Thompson, chairman of Rio Tinto, as he considers how to respond to the crisis. First, he must decide who to fire as a demonstration of accountability. Three top executives are implicated in the blast, but none is clearly individually responsible. Second, and perhaps more importantly, he must determine what went wrong at Rio Tinto that allowed it to
The case opens with the current crisis for Amazon because of its alleged use of sensitive and confidential business information from third-party sellers on its platform to develop competing products under Amazon's private label (PL) brands, a practice at odds with the company's stated policy. Such allegations not only hurt Amazon's reputation as one of the largest e-tailers but also brought to light a larger debate about the right way to launch PL brands. Although Amazon claims to have prohibited its employees from using nonpublic, seller-specific data, it agrees to have used aggregate customer data like other brick-and-mortar stores to improve customer experience. However, the third- party sellers feel that Amazon's unfair practice of using their private information has hurt them, decreasing their return on investment and compromising their product innovations. Russell Grandinetti, who currently runs Amazon's international consumer business, faces the following dilemma: Should Amazon continue its PL brands? Because PL brands are important for Amazon's business, Grandinetti must find ways to build synergy with third-party retailers while developing Amazon's PL brands. Grandinetti needs to address these concerns in the next shareholder's meeting.
This case can be utilized to highlight the importance of the various aspects and stages of the change management process. The case follows the farmer's protest against the three farm laws introduced by the Government of India in 2020. It retraces the events that led the government to repeal the three farm laws on November 19, 2021. The case does not have a protagonist; however, role plays can be used in the class to draw attention to the points of conflict in the case. The case highlights the missteps of the Government of India at various levels in the change management process related to the three farm laws. The government's oversight in assessing the risk of resistance to the farm laws is also emphasized in the case. The case also identifies how the farm unions were able to initiate and sustain the protest for almost a year (which too, is an example of change management). The case at no point attempts to comment on or analyze the merits of the three farm laws framed by the Government of India. The case indicates that a change was imperative, but a judgment on the appropriateness of the three farm laws is beyond the scope of this case.
The Organic Mandya (OM) case explores the journey of Madhu Chandan, a successful entrepreneur who gave up his comfortable life in the United States to return to his home state, Karnataka, in India and set up OM, a first-of-its-kind organic movement led by farmers in Mandya. Over the years leading up to his return to his roots, Chandan had observed certain disturbing trends such as increasing farmer suicides in Karnataka, the reduced life expectancy of the rural population, and large-scale migration of youth to cities for employment opportunities. He began to delve deeper to understand the problems faced by these farmers. He observed that the adoption of chemical farming in Mandya over the past few decades had led to an increase in lifestyle diseases and reduced life expectancy-a phenomenon hitherto unheard of within rural communities. OM was born out of Chandan's journey to change consumer and farmer behavior and encourage farmers to revert to traditional and more ecologically friendly farming practices. The case examines the challenges that Chandan encountered in convincing farmers to revert to sustainable farming practices, while simultaneously attempting to change the mindset of urban consumers by encouraging them to seek health-promoting, organically grown farm produce. This case will help students understand the traits that an entrepreneur driving a socially oriented business and led by a strong sense of purpose will need for success, as well as the challenges and opportunities in building a community-based enterprise. The case is set in August 2020, when Chandan was forced to reflect on the sustainability of OM's business model in the rapidly changing social context and increasing competition from big players. Consumer preference for online shopping for foodstuff was making it imperative for Chandan to continue to innovate OM's business model and to identify new opportunities to continue to stay relevant.
The case is set in 2017 and covers the journey of Fluid AI. Fluid AI is a five-year-old artificial intelligence (AI) startup that emerged as a pioneer in offering various AI-based products to solve various business problems. Its customers were primarily international and domestic (Indian) banks that generated and held enormous data but struggled to make sense of it. These banks needed help in solving problems such as predicting which customers they should lend money to, having an effective collection mechanism with reduced reliance on human decision-making, and using AI as modern technology to enhance the overall quality of customer experience. High cost-to-income ratios in banks provided another business imperative for building AI-based solutions to automate various operational processes in banks. Recognizing these needs, Fluid AI's founders-Raghav and Abhinav Aggarwal-built a core set of products powered by deep technical expertise and knowledge of AI algorithms. Enthused by the success from their first banking customer, the duo invested heavily in creating a two-pronged AI value proposition: predictive AI capabilities and conversational bots, with the ability to deploy solutions both on the customer's premises and on the cloud. This unique capability put Fluid AI in a formidable position to compete with more established AI startups, including some large IT service providers and product companies. The brothers did all of this in a completely bootstrapped mode, allowing the Fluid AI team full freedom to make technology, architectural, and business model decisions. They reached a critical mass of customers as more banks signed up and started using Fluid AI's products. A turning point came when Forbes magazine approached Fluid AI to help create a virtual avatar of Warren Buffett. This case traces Fluid AI's journey from being a startup, including its young founders and their dreams.
This case traces the life of Steve Jobs who throughout his career flaunted convention and chose an unusual path to success. The case describes how Jobs, as young man, acquired an appreciation for aesthetics and the liberal arts, but was also quick to recognize and capitalize on new information-technology innovations. The case also describes how his demanding personality and continuing quest for perfection influenced those around him and led to the growth and success of Apple, one of the most valuable companies in history. Students will learn how Steve Jobs navigated life's choices to leave a lasting impact on the world.
In business and strategy contexts, network effects are often accompanied by bandwagon (or herding) effects, positive feedback loops (or accumulated advantage effects), and market tipping (or winner-take-all dynamics). Though these phenomena are often grouped together under the general use of the term "network effects," this note aims to distinguish the core notion of network effects from the related phenomena that interact and often co-occur.
From modest beginnings in 2018, selling to a few enthusiasts from her apartment, Madame Berrima quickly built Layla's Delicacies, an exotic Tunisian pastries company, into a thriving mail order business. Her sweets were handmade, customers posted rave reviews, and the New York Times attested to the product line's authenticity. The company invested heavily in product design, packaging, and branding and rode a wave of popularity of artisanal foods, which were enjoying brisk growth in the US. But by 2020, Layla's had fallen short of its goals.
Within nine months from the time of its Initial Public Offering (IPO) in April of 2021, EKI Energy Services (EKI) shares had increased by more than 8,000%. Equally explosive was the growth of the company's revenues and Earnings Before Interest, Taxes and Depreciation (EBITDA), which rose in 2022 by almost ten and twenty times respectively. However, in 2022, several commentators started doubting the credibility of the carbon credits that firms, such as EKI, purchased or developed and sold to customers worldwide. Given that most of EKI's revenues relied on these credits, the company focused on its ongoing efforts to diversify the types of carbon credits that it developed and sold, while defending the validity of its existing carbon credit inventory. On April 25, 2022, EKI announced its intention to supply one billion carbon credits to clients within the next five years. In the next few months, EKI's stock price declined significantly from the highs of early 2022 but still traded close to 4,000% higher than its IPO price. Was this a reasonable price to pay for EKI's assets and future profitability? How sustainable were the earnings of the company and its stock market valuation in the fast-changing carbon credit market? Did the recent decline in EKI's stock price represent a buying opportunity, given its growth ambition?
In November 2021, Procter & Gamble Company (P&G)'s announcement regarding the recall of more than a dozen of its Old Spice and Secret aerosol deodorants and sprays over elevated levels of benzene threatened to damage their brand value. Considering that product recalls come at a cost and involve various phases, P&G need to assess how the recall will impact their brand value. As the Cincinnati, Ohio, multinational consumer goods corporation progress with their recall, what can they do to sustain trust and confidence among their consumers and use the recall as an opportunity to solidify their brand image and superiority proposition and prevent an irreversible loss in their profits?
It was September 2022, and, despite a long day at the office, Stephen Price had a lot to consider. He had just finished a meeting with the development and sales team at Graywood Developments (Graywood), during which they had discussed one of the latest developments in Graywood’s pipeline—the Centricity project. With a zoning bylaw amendment (ZBA) in hand, kicking off sales for the project was the next step in the process. However, with a looming recession and an anticipated cooling of the real estate market, Price had to decide whether to proceed with a sales launch in the first quarter of 2023, or shelve the launch until market conditions improved. Graywood could ultimately launch sales in January 2023 in the hope of achieving an average selling price of CA$1,650 per square foot, or it could delay the launch until January 2024 and hopefully sell at $1,700 per square foot or higher—though there was no guarantee that the market would improve. He wondered what impact his decision would have on Graywood’s plans to launch its tenth real estate fund in 2023. This case includes a complex merchant developer Microsoft Excel model, whereby students can adjust inputs and observe how key metrics change.
In May 2022, Rohan Jain, the second-generation entrepreneur of an Indian family-managed carpet design firm, TexCarp Consulting, had to decide whether to enter a new vertical with one of their biggest clients, American Carpets. The opportunity involved using technology and personnel to carry out virtual reality rendering for American Carpets so that the US-based company could showcase its products to clients in virtual space. Jain tried to convince his father to invest. But the technology involved high costs, and Jains’s father was opposed to the idea, since it would involve tying capital to fixed costs. But Jain could also convert the fixed costs into variable costs by either hiring technology or outsourcing the project. Should Jain go ahead with the VR rendering project? And if so, which of the three options should he select: buy, hire, or outsource the required technology and personnel?