The case opens in April 2020 with Sani Åžener, CEO of TAV Airports, a vertically integrated regional airport operator headquartered in Istanbul, Turkey, and his team discussing the pending acquisition of the Almaty International Airport in Kazakhstan. The company had been looking for ways to increase its revenues, which had shrunk by 35% in 2019 after the closing of its flagship airport in Istanbul. The business case for acquiring Almaty International was quite strong: it was an asset acquisition with no maturity, and it came with fuel and cargo operations, functions that were unaffected by the cyclicality of passenger traffic. But the world had changed significantly since TAV made a conditional offer of $415 million, outbidding all other interested parties in November 2019. Due to the COVID-19 pandemic, the aviation industry had been facing unprecedented challenges, and passenger traffic in Almaty had dropped by around 40%. In the meantime, the seller of Almaty International was undeterred and pressed TAV to close the deal. Åžener and the senior management team were at a critical juncture: they had to move ahead soon or risk missing out on an opportunity that had looked very bright pre-pandemic.
Over its 17 years in existence, Tesla had redefined people's view of electric cars, and in 2020, the company saw its stock rise by more than 700% to became the most valuable carmaker in the world. In December 2020, Tesla celebrated its fifth consecutive quarter of profit and joined the S&P 500. However, in 2021 competition in the electric vehicle space was rapidly heating up. In January, General Motors announced that it would phase out gas-powered vehicles to sell only vehicles with zero emissions by 2035. A week later, Ford announced that it would invest $22 billion on electric vehicles (including hybrids) and $7 billion on autonomous vehicles by 2025. Meanwhile, BMW was developing electrified versions of all its models, and the Volkswagen Group had announced a new strategic plan with the specific aim of catching up with Tesla. Tesla's run had defied the skeptics, but with competition revving up, would Tesla be able to dominate the market in the years to come?
The two vignettes within "Vignettes on Professional Service Firm Governance" (HBS No. 122-024) present various issues relating to governance in professional service firms ("PSFs"). In the first, the Managing Director of a U.S. consulting firm contemplates whether to bring on outsiders to sit on the firm's Executive Leadership Board and the potential implications of doing so. In the second, a U.S.-headquartered Private Equity firm's Managing Partner of India was excited about the opportunity to acquire another Indian firm but worries about the potential resistance from the firm's Global Management Committee. This vignette has deliberately been written as a PE firm so as to allow participants from PSF firms to step away from their immediate organizations and reflect on the broader issues that are involved. This vignette attempts to explore the meaning of being a global firm in the context of PSF and the methods to realize a PSF's global ambitions. The vignettes allow students to discuss a breadth of issues related to the governance and strategy of PSFs.
In February 2020, the director of Global Creative Intelligence at McCormick & Company, Inc. (McCormick), was grappling with some challenges at his desk at the company's headquarters in the United States. Having been mandated to deploy Artificial Intelligence (AI) in developing new products-in partnership with IBM-he had been interfacing with over 500 product developers at the company's various locations worldwide. The director faced three managerial dilemmas: How should he get the company's product developers to trust the findings of AI? How could he teach and train AI to become smarter? And how should he deal with the global-local dynamics at McCormick in launching AI-engineered products?
The exercise directs students to watch specific scenes from the movie Hidden Figures, which is loosely based on the book by Margot Lee Shetterly that tells the story of three African American women who were mathematicians working at the Langley Research Center in Virginia in the 1960s. The women encountered racism and sexism as they attempted to contribute to the Center's work for the National Aeronautics and Space Administration (NASA) and its space race with the Soviet Union. The clips assigned to students for viewing portray moments of leadership in the story of the three Black women who were considered "human computers." The students are expected to view the assigned clips and consider how the scenes portray leadership and what character dimensions the actors demonstrate in their roles.
On January 3, 2017, the principal investigator at the Biomedical Engineering and Technology Innovation Centre (BETIC), in India's Indian Institute of Technology Bombay was considering the next steps for a newly developed product. BETIC was a multi-disciplinary and multi-institutional translational research and development network in the medical technology sector that acted as a running partner for innovators and entrepreneurs. The core vision of BETIC was to create global success stories of indigenous medical devices by providing systematic guidance and support to innovators developing medical devices. The principal investigator and his team had developed an indigenous and innovative smart stethoscope from the ideation stage to a functional prototype. The next critical challenge was how to commercialize the product and ensure that it could deliver the maximum amount of social impact.
This case set challenges students to consider the upcoming free agency decision-making of an NBA team by conducting some basic statistical analyses of three possible targets, all of whom are upcoming unrestricted free agents-Danny Glover, David Bowie, and Mike Meyers. Each of these players could potentially fit the team's need to find a shooter and versatile defender at the forward position. Students are asked specifically to evaluate what each of these three players might be worth paying to acquire based on their past performances.
This case set challenges students to consider the upcoming free agency decision-making of an NBA team by conducting some basic statistical analyses of three possible targets, all of whom are upcoming unrestricted free agents-Danny Glover, David Bowie, and Mike Meyers. Each of these players could potentially fit the team's need to find a shooter and versatile defender at the forward position. Students are asked specifically to evaluate what each of these three players might be worth paying to acquire based on their past performances. The B case puts students into the role of a player's agent responsible for finding the best contract for their client.
This case set challenges students to consider the upcoming free agency decision-making of an NBA team by conducting some basic statistical analyses of three possible targets, all of whom are upcoming unrestricted free agents-Danny Glover, David Bowie, and Mike Meyers. Each of these players could potentially fit the team's need to find a shooter and versatile defender at the forward position. Students are asked specifically to evaluate what each of these three players might be worth paying to acquire based on their past performances. The C case puts students into the role of a team representative responsible for leading negotiations with players and their agents to get the best contract for the team.
In May 2018, celebrated journalist Katie Couric and her husband, John Molner, had recently launched a full-service media firm called Katie Couric Media (KCM). Couric treasured the opportunity to address important social issues like gender equality, environmental sustainability, and mental health. The couple had raised enough funding to launch the venture. Now, they needed to land a first client to underwrite production costs, sign a partner to promote and distribute the content, and identify a story Couric wanted to tell. The first customer would be crucial in establishing a strong foundation for future work. They wanted to partner with a brand interested in the purpose-driven content about which they were passionate, but they did not want to sell a one-time consulting engagement. Rather, they were interested in customers to sign on for a recurring, subscription-based contract.
On November 4, 2020, the group chief financial officer of Domino’s Pizza Enterprises Limited was tasked with determining the cost of capital in preparation for the corporate response to the COVID-19 pandemic. In planning for 2021, the company would need to make considerable investments throughout its franchises in Australia, New Zealand, Japan, and Europe. The cost of capital would be integral to these investment decisions. In the previous year, Domino’s Pizza Enterprises Limited had made A$98.9 million in investments, so the difference of a few per cent in capital costs could mean a swing in millions of dollars in expenditures. The chief financial officer had all background information including balance sheets, income statements, cash flow statements, common stock data, financial ratios, market return data, peer firm data, and an itemized list of debt obligations. Based on this information, he had to derive the company’s cost of capital using a weighted average cost of capital methodology.
Amazon.com, Inc. (Amazon) India expanded Amazon Food into the food delivery market in March 2021 amid a pandemic and the ensuing lockdown. The move surprised the industry, especially considering that Swiggy and Zomato Ltd. (Zomato), the two key players in the food delivery business, were facing an all-time slump and that restaurants were seeking to move away from aggregators to create their own ordering platform. Zomato and Swiggy, a duopoly in the food service aggregator (FSA) space in the country, had been struggling to keep cash burn low, squeezing delivery-executive commissions, executing mass layoffs, and scaling down profit-draining cloud kitchens. Although the timing of the launch appeared risky, Amazon India’s confidence to take on the established players and challenge the status quo stemmed from its size, reach, resources, technological prowess, reliability, trust, and goodwill. In a market scenario where safety and hygiene standards were set to change forever and the odds were stacked against FSAs, the industry and consumers were expecting a tough battle. Amazon had to reassess whether its strengths would be adequate to help it make satisfactory inroads into the industry, confront the obstacles, and overcome the ongoing slump and make good on its decision to be the new entrant when the established players were bearing the brunt of not only the pandemic but also a deeply divided restaurant industry.
In April 2020, the chief executive officer of Xiaoxiandun E-Commerce Co. (Xiaoxiandun), faced a tough choice. Founded in 2014 in Beijing, China, Xiaoxiandun focused on birds’ nests—an extremely popular traditional Chinese tonic product—and advocated the benefits of nourishing Chinese medicine. Low-temperature technology and timely delivery helped consumers to nourish the bird's nest on time and in standardized amounts. The "Expert of Fresh Stewed Bird's Nest" strategy during 2017-2019 helped Xiaoxiandun surpass the original leader in the bird's nest industry and became number one in sales on Tmall Double Eleven in 2019. In the same year, the leader regarded Xiaoxiandun as the main competitor, and adopted similar fresh stew technology. Faced with this challenge, how should Miao move forward: adhere to the "expert" strategy, diversify and expand, or make strategic changes to become a leader?
The case documents the efforts by Lone Stubberup, Global Director of Quality, Health, Safety and Environment (QHSE) to convert her employer, Danish wind-mill nacelle and nose cone producer Jupiter Bach, to the highest sustainability standards through all its activities as a means to differentiate in a highly competitive, cost-driven industry. Deeply committed to the need of address issues such as material recycling and CO2 emissions, she set out to convince the executive board and the firm's VC investors to push sustainability to top of the agenda. A surprising feature of the case is of course the realization that the windmill industry, a much-acclaimed key player in the much-anticipated energy transition, has very much been operating so far as if exonerated from doing its part thanks to the very nature of its activities. Wind turbine producers have been lambasted not only for their extremely poor sustainability footprints but also their total disregard for most social and environmental impacts. Cost has been the single focus of attention, in a mad drive to run down the cost of energy production to levels competitive with other energy sources. Lone Stubberup knew from the beginning she was in for a rough ride, but she was committed to making the case for sustainability at Jupiter Bach. In her mind, this was perfectly in line with the firm's positioning as a leading Denmark-based nacelle and spinner cover producer for off- and onshore wind turbines, and a most legitimate value addition that would set the company up for further success in the future. She spent months putting together a solid sustainability strategy showing a clear path forward, at a pace the company could handle, that was completely aligned to the firm's core value of "We Care". She received the support she needed but reality intruded in 2020 with the COVID crisis, and a sudden return by most clients to a pure cost-driven agenda. Jupiter Bach initially lost significant business because of its higher