In 2019, Ajith Rai, Executive Chairman of Suprajit Engineering Limited (SEL), a pioneer in the design and manufacture of mechanical control cables in India, is contemplating his company's future growth strategy in the face of changing trends and demands in the automotive sector. Established as a private limited company in 1985, SEL became a public limited company in June 1995. In its over three decades of existence, SEL had grown from a single-product, single-customer, single- segment, single-brand, and single-location company to a multi-product, multi-business, multi-brand, multi-customer, multi-location, global company. SEL's growth and evolution as a truly diversified company was the result of Rai's ability to expand its operations in domestic and overseas markets organically and inorganically through acquisitions. In 2019, when the case is set, new developments in the automotive sector, both in terms of new technology as well as competition, made it necessary for SEL to take stock and plan for the future. Rai decided it was time to conduct a thorough analysis of the business, its growth both organically and inorganically, its ability to integrate its acquisitions, and its environment, in order to reinvent itself and identify the next wave of growth. By tracing SEL's inspiring growth story and highlighting the reasons behind its success, the case provides valuable insights into the rapid growth strategies used by entrepreneurial firms.
Starting in 2001, Inditex's Sustainability Department promoted with the Group's business units a unique chain that remained largely unknown to the general public: for&from. This labor inclusion project for people with mental disorders hinged on the creation of stores in collaboration with social organizations, following a franchising scheme. Inditex made an initial investment on these stores that maintained the image and quality that characterized the Group's chains. Inditex's brands sold their excess inventory at discount prices to these social enterprises, which, in turn, marketed them at outlet prices. The project intended to build an optimal support ecosystem for people with special needs, so that they would learn about retailing jobs, strengthen their self-esteem, and eventually manage to integrate themselves into society. This scheme relied on long-term partnerships with social organizations, with which Inditex built a hybrid value chain. By 2017, the program featured 13 stores in nine towns, with over 150 mentally-challenged employees, and it engaged five social organizations -namely, Fundación Privada el Molà d'en Puigvert ("Molà Foundation"), Moltacte, Cogami, APSA, and Fundación Prodis ("Prodis Foundation)- as well as five Inditex chains -Massimo Dutti, Bershka, Stradivarius, Oysho, Pull&Bear, and Tempe (a footwear and accessory manufacturer that supplied all chains). In the ensuing years, the program grew gradually, and by 2017 Inditex realized that it needed to assess options and make critical decisions about the social venture's future. Would it prove wiser to take this program online? Should Inditex carry this scheme to other countries? Did it make more sense to expand further in Spain first? How was the program's actual impact measured? Would it be best to create multi-brand outlets? Many questions filled program heads' minds at this juncture.
Alicia Soulier, owner of Capelli Salon Studio, a hair salon in Saskatoon, Saskatchewan, has developed an application (app) that can help save hair salons thousands of dollars per month in hair colour costs. However, she is struggling to recruit enough subscribers to her new software as a service (SaaS) company, SalonScale. With the diversion of her attention from her hair salon to the app threatening her core business, Soulier must soon decide on a customer acquisition strategy.
Guillaume Laverdure, chief operating officer at Medicom Group (Medicom), was evaluating a potential investment in a new facility that would manufacture melt-blown polypropylene (melt-blown PP), a key raw material for surgical and respirator masks. It was February 2021, and the previous 12 months had been eventful for the company, one of the largest suppliers of medical masks in the world, as the COVID-19 pandemic had led to a staggering increase in demand for its products. Raw material supply shortages had been a major problem during 2020, and Laverdure was exploring opportunities that would make the company's supply chain more resilient. Laverdure was scheduled to meet with Medicom's chief executive officer the following week to review alternatives and to make a decision regarding melt-blown PP supply.
In April 2021, Charles Wells, founder and CEO of HelloSelf was reflecting on the company's progress since it launched two years earlier. HelloSelf's goal was to help the mentally ill recover and those who were mentally fit to stay well and feel even better. To do this, the company intended to provide members most in need with convenient access to PhDs in Clinical Psychology. For members with moderate needs and those seeking personal coaching HelloSelf would develop AI-powered "personalized psychological advice." This platform would provide its members with the ability to set goals, track progress, and discover new things about themselves. While it would take time to build all these capabilities, Wells identified the first step as providing clinical psychology-based talk therapy - Clinical Behavior Therapy (CBT) and other clinically tested methods - to those in most need. Progress to date, according to Wells, had been "reasonable." The company had built a platform to support effective, secure, online therapy with rigorous measurement of outcomes, and 125 therapists were using it to provide help to over 400 members every week. Members could track their progress on a native app. This was helping almost 2,000 members a year to get well and generating annualized revenues of £2.5 million. Now, the company was aiming to be 10 times bigger within three years - "hypergrowth" according to Wells. But this was only the beginning. The long-term goal was to help 20 million people a year which would require hypergrowth for more than a decade! How was HelloSelf going to do it?
In August 2018, after nearly six months of searching, Charles Wells was convinced that he should found HelloSelf to help people improve their sense of mental wellbeing. Those feeling mentally unwell would receive support from fully qualified clinical psychotherapists, while those feeling good would receive coaching and support to feel even better. Having researched a wide range of opportunities in the "BrainTech" space, including measuring brain function in job recruiting and brain-machine interfaces to control equipment, Wells had concluded that the search for mental wellness was the problem he would commit to solving. Now he had to develop a business model that would help turn HelloSelf into a successful enterprise and shape his launch strategy.
It is spring 1995, and the CFM partnership-a joint venture between GE Aviation and France's jet engine manufacturer Snecma-is facing difficult challenges. The parent companies must decide whether and how to renew their nascent partnership agreement, in the face of global and national economic turbulence in an industry undergoing dramatic change. The JV's careful attention to an equitable split across both partners is suddenly jeopardized as conditions in the market have changed and new leadership at the parent companies brings different aspirations for each side. Now the partners must decide how to move ahead.
Alicia Soulier, owner of Capelli Salon Studio, a hair salon in Saskatoon, Saskatchewan, has developed an application (app) that can help save hair salons thousands of dollars per month in hair colour costs. However, she is struggling to recruit enough subscribers to her new software as a service (SaaS) company, SalonScale. With the diversion of her attention from her hair salon to the app threatening her core business, Soulier must soon decide on a customer acquisition strategy.
In April 2020, the interim president of the 3D printing and digital manufacturing business of HP Inc. was weighing his options in resolving three managerial dilemmas: (1) How should HP promote technology awareness among industrial customers? (2) How should HP scale up its production of 3D printers? (3) How could HP promote shorter technology adoption cycles among industrial customers?
This case explores how a family business builds a board that includes independent directors that helps to professionalize and strengthen governance in the company. The case relates to One Family Textiles, an Abu Dhabi-headquartered manufacturer of garments. The company was founded in 1975 by Adnan Kalam and his elder brother Ali Kalam; two Kenyan nationals with Indian roots. The company enjoyed impressive growth, and by the early 1980s had several factories in the South-Asian sub-continent and sold to businesses in Asia, the Middle East, North America, and Europe. By the mid-1990s, members of the second generation joined the family business and pushed Adnan to further professionalize the company and strengthen its governance practices. Accordingly, the family sought the help of consultants and hired experienced senior executives, two of whom (first in 2014, and then in 2018) were appointed as the first independent directors of the advisory board. Over the next two years, the board focused on helping revamp operations and instilling sound governance measures. By January 2020, Adnan had stepped back from day-to-day operations and bought out his brother's stake in the company, making him the sole owner of the business. His eldest son was the group CEO and felt it was time for an IPO. The board was divided on this decision; significant improvements in professionalization and governance had been made, but the independent directors foresaw more work to be done. What should Adnan do?
On February 15, 2021, Alina Moss, an analyst who covered the technology company MicroStrategy, pondered a rise in MicroStrategy's share price. Moss had dialed into the company earnings call. When it ended, Moss had more questions than answers. MicroStrategy had recorded a meager operating income of $390,000 in the fourth quarter of fiscal year 2020, yet its non-GAAP operating income was $30.1 million and its share price had climbed 160% during the period. In 2020, MicroStrategy had invested heavily in Bitcoin, and its CEO Michael Saylor said that MicroStrategy would continue using Bitcoin as its primary treasury reserve asset. The accounting treatment of cryptocurrencies was murky as standard setters had not yet decided how firms should account for cryptocurrencies, leaving it up to companies to determine the appropriate accounting. MicroStrategy treated cryptocurrencies as intangible assets on its financial statements, as did many other firms. Accounting rules for intangible assets required reporting downward price shifts as impairment losses but did not require the recording of upswings in price. MicroStrategy disclosed a significant decline in net income as compared to the fourth quarter of 2019 because of impairment losses on Bitcoin. How well was MicroStrategy really doing? Did the current accounting treatment for cryptocurrencies make sense for companies holding Bitcoin? How should investors assess firms' Bitcoin investments?
Asset management firm Capital SAFI wanted to attract new strategic investors and expand to other countries. Having the right corporate governance in place was critical to achieve this goal.
In 2020, over half of all initial public offerings (IPOs) in the United States were special purpose acquisition companies (SPACs), blank-check companies that typically had two years to find a business to take public, usually through a reverse merger. Together, 248 SPACs raised over $83 billion, 46% of the total US IPO proceeds in 2020. The SPAC boom accelerated in 2021. By the end of March 2021, there were 298 SPAC IPOs year-to-date, raising $96.6 billion. At the time, SPAC sponsors were eagerly seeking out opportunities in sectors such as fintech, healthtech, renewable energy, and electric vehicles to invest the $136 billion they had at their disposal. Moreover, there was another $66.4 billion in SPAC IPOs in the pipeline. The opportunities for SPAC sponsors were attractive, as much as a ten-times return on their investment, but SPAC investors had also made some spectacular returns. For instance, Luminar Technologies, a leading producer of sensor technology for autonomous vehicles, entered into a definitive agreement with a SPAC in August 2020, for a post money valuation of $3.4 billion. At the end of March 2021, it was valued at $8.3 billion, down from a day-end high of $13.5 billion, but still up 135% on flotation. Proponents of SPACs touted a more efficient and streamlined path to public markets compared to the traditional IPO process - a type of "regulatory arbitrage." There was also the benefit of giving retail investors opportunities that would be otherwise reserved for private equity and institutional investors. Yet many industry observers were skeptical of the SPAC boom, noting the misalignment between sponsor and shareholder interests, the opacity of the process, and the poor historic returns of the entire asset class. They believed that the SPAC boom would soon end.
The case examines the short selling of GameStop by hedge fund Citron Capital. The valuation case for short selling GameStop is explored, along with the actual market mechanics of short selling a stock (i.e., rebate rates, securities lending collateral, and loan recalls). In addition to the costs, additional risks of short selling, including the potential for a short squeeze, are introduced.
When the outbreak of COVID-19 in early 2020 affected commercial circulation in various regions around the world, Heilongjiang Feihe Dairy Co. Ltd. (Feihe), a leading Chinese dairy company, had been facing difficulties for a while. The company's enterprise strategy was actively adjusted, and various measures were taken to protect the company's supply of raw materials and the business operations of its production, distribution logistics, sales, and other departments from adverse effects of the pandemic in the first quarter of 2020. Feihe announced that its revenue growth rate in the first quarter of 2020 would not be less than 30 per cent. However, due to the impact of COVID-19, the pattern of competition among milk powder brands had quietly changed. Although Feihe had successfully gained a share of the high-end market, which had previously been dominated by foreign brands, its proportion of this market was still not high. At the same time, the rapid rise of other domestic brands had disturbed Feihe's brand appeal of being "more suitable for Chinese babies" and its claim that its sales were far ahead in China. How should Feihe further adjust its strategy to properly deal with its competitive relationship with other brands?
Seattle-based Dropbox Inc. (Dropbox) was a leading provider of cloud storage and online collaboration tools. The company had successfully grown a global user base by combining digital channels (user-driven viral growth) with investments in physical assets (offices and infrastructure) overseas. However, in 2020, when the COVID-19 pandemic forced individuals and organizations worldwide to work remotely and created an unprecedented growth opportunity, the company found itself outflanked by more aggressive rivals. Dropbox needed to reassess its existing strategy and find a way forward.
The Pratham Institute for Literacy, Education & Vocational Training (Pratham Institute) in India, ran vocational education and training (VET) centres that were engaged in skilling the rural youth of India to prepare them for vocational careers. In April 2020, the organization's centre in Pilani, Rajasthan, along with several other chapters, had noted that a significant share of the institute's trainees were failing to sustain their employment for a long period and were returning home to their native villages instead. Though the VET centres had seen several success stories, they were somewhat perplexed about why so many of their trainees were not staying in their careers, despite the promise of greater financial benefits and job security compared to farming-based livelihoods. Some of the common concerns of trainees included urban culture shock, family pressures to return home, sustenance worries, career ambiguity, and a lack of psychological readiness to cope with harsh city life. The head of the Pilani centre was left pondering how to tackle such psychological issues among the Pratham Institute's trainees and thereby reduce the dropout rate and fully realize the positive impact of the training programs.
In April 2020, the interim president of the 3D printing and digital manufacturing business of HP Inc. was weighing his options in resolving three managerial dilemmas: (1) How should HP promote technology awareness among industrial customers? (2) How should HP scale up its production of 3D printers? (3) How could HP promote shorter technology adoption cycles among industrial customers?