In the midst of intensifying public and political attention towards the market power of big technology, Epic Games in 2020 challenged the status quo that has existed for years in the Apple iOS and Google Android mobile application marketplaces and payment systems. Apple and Google removed Fortnite from their app stores after its developer Epic Games intentionally introduced an unauthorized payment system. Epic Games sued Apple and Google, alleging their monopolistic control over the distribution of apps and the unreasonable commission rate for in-app purchases. Epic rallied other application developers and its 350 million Fortnite users in its fight. The case begins with a brief history of Epic Games and some background on the antitrust issues around mobile platforms. Then, the case details the many actions taken by each side in the ensuing legal and public relations battle. The case provides context on future technologies, like cloud gaming, that will hinge on the issues already being fought over in 2020. The case challenges students to think about strategy for both the smaller complementor and the larger incumbent platform, and how to challenge and maintain market power respectively, in the context of looking forward to the future.
Launched in 2015 by Melinda Gates, co-chair of the Bill & Melinda Gates Foundation, Pivotal Ventures is an investment and incubation company. The company aims to support and promote transformational ideas, people and organizations, and advance social progress for women and families in the U.S. Hoping to leverage and expand her expertise in mission-driven investing, Erin Harkless Moore (HBS 2012) recently took on the role of new Director of Investments in Pivotal Ventures. As the company prepares for the new phase of growth that would improve its position in the Venture Capital (VC) market, Harkless Moore is tasked to select the next VC fund that Pivotal Ventures would participate in as an investor. Which VC fund would allow Pivotal Ventures to support more diversity in VC investing? Should she change the scoring and review process that ultimately led the decision of which opportunity to invest in? How could Pivotal Ventures perform well and generate high returns while staying in line with its organizational goals?
In the Spring of 2017, Soomin Kim, Founding Partner of Unison Capital Korea, and his team were debating the potential exit of Unison Capital Korea's investment in Gong Cha Korea, the sole local franchisor of the premium milk tea brand that they proprietarily sourced three years ago. Since acquiring Gong Cha Korea in 2014, Unison Capital Korea sought to transform what was an unorganized start-up into an established business by professionalizing its management and operations, expanding into untapped overseas markets, and even acquiring the master franchisor of the Gong Cha global business. In early 2017, however, Gong Cha Korea was showing mixed signals in terms of operational and financial performance when Unison Capital Korea received a soft bid for the company from a potential financial buyer. This bid offered an early exit opportunity at a modest return. Investment Committee members were divided. Several factors concerning value-add initiative were considered in evaluating this decision. What made it more complicated was that Gong Cha Korea was the first and largest deal of Unison Capital Korea. With these strategic considerations in mind, Soomin had to decide which path to take on his firm's biggest deal to date-should he pursue an early exit with modest yet certain returns or risk waiting in hopes of realizing the longer-term full potential of transformation?
On January 2, 2019, Canada-based Barrick Gold Corporation (Barrick) and Randgold Resources (Randgold) merged to become the largest gold mining company in the world. Following the merger, Barrick's new executive team communicated a financial strategy that emphasized a long-term focus, particularly on sustainability. Barrick's executive performance scorecard-a key management tool used to direct executive attention and evaluate performance-had been introduced in 2013, after an overwhelming majority of shareholders voted against a proposed compensation plan at the annual general meeting. No changes had been made to the scorecard since 2015, despite changes in the organization and in the mining industry overall. An external human resources professional who was proposing a new executive scorecard for the company faced several questions: Should she emphasize the short-term or long-term incentive plan? Which metrics and weightings should be changed? Were the existing financial and non-financial measures still appropriate, and did they adequately reflect Barrick's sustainability goals? Was Barrick doing enough to satisfy regulators, institutional investors, and the many guidelines and standards that had been released in recent years?
Suning Logistics, a retail logistics enterprise, was located in Nanjing, Jiangsu, China. As a subsidiary of Suning Holding Group (Suning), Suning Logistics represented the core competitiveness of Suning in occupying the leading position in China's retail landscape. Suning Logistics was registered as a company in 2012 but was a subsidiary of Suning before growing into Suning Logistics Group (Suning Logistics) in 2015. During the 30-year development process, Suning Logistics had repeatedly iterated and upgraded its logistics model to support the transformation from a physical retailer to online retailer. With the China's new retail wave, experiential shopping and digital consumption brought challenges to the logistics upgrade. To win competitive advantage, the general manager of Suning Logistics had to make a choice between two transformational directions: Should the company improve the logistics efficiency of multi-scenario retail? Or, should it explore the reverse supply chain with emerging technology?
High-speed rail (HSR) is a high-performance transportation technology that is time competitive with airplanes and automobiles, and is an environmentally preferable alternative due to its low carbon dioxide emissions. Brightline is a Florida HSR system in Phase II of its development and aims to connect West Palm Beach and Orlando. As construction continues, Brightline needs to determine to what extent it should target the leisure and business traveler segments when Phase II launches. Given a limited marketing budget and high upfront investment, it is critical for the company to gain ridership quickly and establish a foothold in relevant consumer segments. This decision is contingent on evaluating not only consumer characteristics and needs for each market segment, but also pricing strategies and potential incentives Brightline could offer.
Suning Logistics, a retail logistics enterprise, was located in Nanjing, Jiangsu, China. As a subsidiary of Suning Holding Group (Suning), Suning Logistics represented the core competitiveness of Suning in occupying the leading position in China's retail landscape. Suning Logistics was registered as a company in 2012 but was a subsidiary of Suning before growing into Suning Logistics Group (Suning Logistics) in 2015. During the 30-year development process, Suning Logistics had repeatedly iterated and upgraded its logistics model to support the transformation from a physical retailer to online retailer. With the China's new retail wave, experiential shopping and digital consumption brought challenges to the logistics upgrade. To win competitive advantage, the general manager of Suning Logistics had to make a choice between two transformational directions: Should the company improve the logistics efficiency of multi-scenario retail? Or, should it explore the reverse supply chain with emerging technology?
By early 2020 Harvard University was facing growing pressure from students, faculty, and alumni to divest its $40 billion endowment of financial stakes in fossil fuel producers. Its previous policy of avoiding the issue was quickly becoming outdated-$21 trillion of institutionally managed money now gave some consideration to sustainability. This case considers the two important questions surrounding a potential divestment: 1) Should the University alter its endowment's portfolio to meet broader social objectives, and 2) If so, how should it integrate climate objectives, or ESG considerations more generally, into its investment strategy and portfolio construction? In the case, the University is being advised on these questions by Nicole Abramson, an investment management professional specializing in ESG products. To formulate her recommendation, Abramson considers the views of Harvard's stakeholders and the sustainability best practices of institutional investors and asset managers around the world.
For the first half of 2020, the COVID-19 crisis seemed on the verge of spiraling out of control. The business world struggled to figure out what COVID meant for macroeconomics. Extended restrictions limiting human interaction meant an end to normal economic production, and a resulting global economic crisis. France, Germany and the United States tackled the economic side of the COVID crisis through complex fiscal policy measures, with differing levels of success.
This exercise serves to help students understand the proper role and use of costs in a firm's pricing decisions. The exercise is designed such that the learning of students evolves across a classroom session, starting from understanding which costs are relevant when setting the price of a product, progressing to a discussion on the wisdom of the traditional "cost-plus" approach to pricing, and ending with a demonstration of how to leverage cost information to construct an iso-profit curve-which, in turn, serves as a useful benchmark to assess possible price changes. These topics emerge as the result of hands-on calculations, where students make recommendations based on the data provided in the exercise, and in-class discussion, where students defend their preferred course of action and reflect on the biases and heuristics that may lead managers to misuse costs in pricing decisions.
Whether organizations build or buy AI tools, their use of the technology exposes them to new risks as well as benefits. Boards must be prepared to provide adequate oversight of how AI is developed and deployed.
Megan Huddleston, head of marketing for Tyson's Hillshire Farm brand, seeks new growth with a brand extension. But which product line and brand envelope would most effectively leverage Americans' shifting eating habits? This case allows students to explore the key tradeoffs in brand extension with the overarching goals of gaining revenue growth while protecting brand equity.
In 2015, Union Square Hospitality Group (USHG), helmed by famous restauranteur Danny Meyer, sent shockwaves through the restaurant industry by announcing the end of tipping in its restaurants. Under its new policy, Hospitality Included (HI), USHG would charge higher menu prices and pay higher base wages to its employees, replacing tipping with a system of revenue sharing. The change sought to reduce inequality between front and back-of-house staff and to provide more stability and fairness for servers, whose tip-based compensation depended heavily on the whims of sometimes-biased patrons. However, five years later, the organization was still struggling to implement HI, and evidence was suggesting that employees, customers, and owners were losing out under the policy in unanticipated ways. Chip Wade, the President of USHG and Patti Simpson, Chief People officer of USHG, had to determine a better path forward.
Four diverse women entrepreneurs launched their ventures in a thriving entrepreneurial ecosystem that was part of a shift to a creative technology-driven economy for Miami. Although Miami was rated the #1 U.S. city for startups in 2017, the region contained structural barriers and cultural biases unfriendly to women and people of color, including lack of access to capital and relationships. The case highlights women founders' backgrounds and experiences with an ed-tech startup, a coding school and events for Black entrepreneurs; an incubator for green businesses with a Black leadership focus; and an accelerator for social impact ventures that also runs social media campaigns for problems such as climate change. The women CEOs reveal the barriers they faced, how they overcame them, and how they attempt to enrich the ecosystem for other women and people of color. This case raises the question of what must be in place for cities to take advantage of the innovation and job-creating potential of a wider population of entrepreneurs and gain the benefits of diversity, and for women founders to thrive.
At 6:27 a.m. on May 14, 2018, an Airbus A319, Flight 3U8633 of Sichuan Airlines took off. It was dawning. Flight to and from Lhasa was very difficult. The route was featured with rough terrain and changeable weather, and there were several high mountains beneath. The airplane was passing Chengdu and heading for the Tibetan Plateau at 7:08pm when a heavy thud was heard in the cockpit. In a blink, Capitan Liu Chuanjian found himself in a dreadful situation--the front windshield on his right was gone, and his copilot was almost out of the cockpit, being held only at legs by the safety belt. Wind at over 800 km/hr and -40℃ was blowing in and cutting Liu's face and body. In the cockpit, oxygen was very thin. Wind pressure and extreme coldness were tearing him. The dashboard failed and the airplane was diving at a large angle with port-wing down. Holding the sidestick in his left hand and the throttle lever in his right hand, Liu was intensely trembling in his seat due to coldness. He had to quickly pull himself together. He knew that the lives of all passengers and the crew depended on him.
On September 25, 2019, an activist investment management company, which was sometimes referred to as the biggest activist hedge fund in the world, publicly released a detailed report advocating for Marathon Petroleum Corporation to be split into three separate companies, divided along three major business lines: oil refinery, midstream services (i.e., pipelines), and retail. The refinery company would consist primarily of 16 oil refineries in the United States and would retain the Marathon name. The midstream company, which would consist of pipelines, logistics, and oil terminals, would be formed from MPLX LP, the publicly traded subsidiary that was 63 per cent owned and fully operated by Marathon Petroleum Corporation. The retail company would be formed from Speedway LLC, the wholly owned subsidiary of Marathon Petroleum Corporation that operated 3,923 retail locations across the continental United States. The investment company argued that Marathon Petroleum Corporation's shareholders stood to benefit considerably from the proposed split. Was the proposition a good idea?