"Intrapreneurship" is the use of entrepreneurial management techniques within established companies to create new environments that foster innovation. Mature firms have consistently faced risk of elimination from competitors, shifting consumer preferences, and disruptive innovations. That threat has intensified enormously over the past several decades with the emergence of new technologies with sweeping relevance to business practices, increasing the pressure to innovate or perish. Entrepreneurial managers in charge of innovation must ask themselves: What are you trying to achieve? Is your company confronting a specific strategic challenge? Is innovation core to your firm's mission? Or do you simply want the firm to be open to new ideas and be more innovative? How integrated with the company do you want the innovation effort to be? In this note, we focus on the innovations that are core to the firm and pose real threats to its future, and provide a framework for how to structure innovation efforts in more traditional organizations.
The case describes a difficult choice faced by Victor Wang, Managing Director of Singapore-based Eurasian Brewing Company (EBC), concerning the competing product launch plans of Le Jie, Vice President of EBC's China and East Asian operations, and Vivian Chin, EBC's Director of Marketing and Export Sales. Wang's decision will shape not only the company's future strategy but also the organization model and management approach EBC takes in its fast-growing business. The narrative focuses on the role of Le Jie in growing the sales and profitability of EBC's beer business in China and subsequently in its East Asian operations. Tension arises when Le announces his plan to introduce a new product into the fast-growing craft-beer segment in China. Simultaneously, Vivian Chin initiated a rollout of a small-batch craft-type beer that she felt had strong regional and perhaps even global potential. The two executives have escalated their conflict to Wang. His decision will not only shape EBC's product market strategy but will also exert a strong organizational influence on the division of responsibilities between headquarters and subsidiary management. In addition, it will likely send a signal about the risks and rewards of local entrepreneurial initiative. The case can be taught in courses in strategy, general management, international business management, global marketing, organizational behavior, and entrepreneurship at both the MBA and executive education levels. Its action-oriented decision focus suggests using it in the later stages of a course.
The case, set in May 2018, follows an analyst as she undertakes the challenge of decoding the acquisition strategy behind a deal that rattled both venture capitalist and tech startup circles in India. Ananya Menon, Chief Consultant for Retail and E-Commerce at a research and consulting firm in India, had been asked by a client to provide a report on the recent acquisition of the Indian marketplace major Flipkart Pvt. Limited by the Arkansas-based retail behemoth Walmart Inc. Founded in 2007, Flipkart, buoyed by multiple massive funding rounds, had registered meteoric growth both in terms of revenue and market share, and dominated the Indian online retail industry. Though it faced a few setbacks due to misplaced strategies and regulatory changes, it managed to cement its position as the market leader with a share of nearly 40% of the market in terms of gross merchandise value (GMV). However, analysts were sceptical about the sustainability of this position, as the company was a long way from profitability and was burning cash in the form of massive discounts to augment its customer base. Moreover, Amazon Inc., another leading global marketplace company, with deep pockets and top-of-the-line technological capabilities, was close on its heels. Walmart had waited on the fringes of the Indian retail industry since 2007 when the market was opened to foreign investors, but regulatory barriers had confined its operations to the wholesale segment. The e-commerce segment was opened to foreign investment eventually, but under several restrictive conditions. Walmart leapt at the chance and acquired a 77% stake in Flipkart, the leader in the online retail segment. However, the deal price of US$ 16 billion for a company that was consistently making huge net losses sent shockwaves across the VC and e-commerce community. As speculation and debate over the move mounted, Menon was tasked by her client with demystifying the strategic rationale behind the deal.
In 2012, Reshma Saujani founded Girls Who Code (GWC) with the mission of closing the technology (tech) industry's gender gap. While GWC offered coding education programs to middle- and high-school-aged girls, the organization also sought to alter cultural stereotypes surrounding women in tech through books, advertisements, and social media campaigns. Saujani remained active in promoting her organization's message through a TED Talk, a best-selling book, and frequent media appearances and interviews. By 2019, GWC had served approximately 185,000 girls, expanded its programs to all 50 U.S. states, and reached hundreds of millions of individuals through its advertising and media campaigns. However, the tech gender gap was still significant. Saujani claimed that the organization was on track to close the gender gap among entry level tech roles by 2027. Would GWC reach its goal? If not, were there new initiatives that it should consider to increase its effectiveness?
When businesses deliver a product or service, they often forego receiving immediate cash payment and allow their customers to pay later. Such payment terms are called trade credit. While trade credit fosters sales to existing and new customers, such credit is not free. The cost of trade credit to sellers is twofold: it creates repayment uncertainty and it increases the seller's financing cost. By extending trade credit, sellers effectively take on a banking role as they finance a portion of their customers' assets. This note explores and illustrates the trade-offs that businesses make regarding trade credit.
The well-known net present value (NPV) rule advocates accepting all investment projects that have a positive NPV. The NPV rule makes economic sense since positive-NPV projects are expected to create economic value. But what should a manager do if the total investment capital needed to fund the available positive-NPV projects exceeds the budgeted capital available? This note illustrates and discusses the profitability index, one tool that is used to assist managers in such constrained situations.