AWARD-WINNING CASE - Latin American Business Cases Category, 2019 European Foundation for Management Development (EFMD) Case Writing Competition. Cinépolis S.A. de C.V. (Cinépolis), an innovative private Mexican firm—and one of the largest movie theatre companies in the world—had developed an over-the-top (OTT) streaming product, KLIC, and launched it in Mexico. But by late 2017, the Mexican OTT market had become competitive and crowded, with Netflix, Claro Video, Blim, Amazon Prime Video, iTunes, and others in the space. KLIC initially faced challenges with finding a proper niche and had not yet achieved profitability. Cinépolis wanted to make the product successful and hoped that interesting synergies between its movie theatre business and the new streaming unit could be found.
In June 2017, the two founders of Nilgai Foods Private Limited reintroduced Cocofly—a fresh, healthy, and pure coconut water—at the lowest price point among competing brands. The initial response to the product when it was first introduced in 2016 was overwhelmingly positive. However, the two founders were concerned in 2017 that Cocofly might be unable to sustain its success for the future. Some important questions were worrying the two founders: How could they avoid the commoditization of their product? How would they differentiate Cocofly from its competitors? Was price differentiation a sustainable strategy? What was the right marketing strategy for a market dominated by unorganized competitors and some early entrants? How should they expand their market across India, especially in the coastal cities of the country, where coconut water was readily available through unorganized companies?
In February 2018, the founder of Toronto-based Mixtape Social was wondering how to grow his business. He had spent the past two years bootstrapping the two-pronged business, which offered services to help professional athletes build their personal brands and creative advertising and social media campaigns for corporations and other entities. With a roster of professional athletes, including Mitch Marner, one of the top players for the Toronto Maple Leafs hockey team, the business had succeeded. Having gained momentum in the last year, the founder thought about how he should map out the next two years: Where should he focus? What services should he offer? How should he position his value proposition?
In March 2018, an analyst at an investment management firm in Toronto, Ontario, had to decide whether or not to recommend that his firm establish a position in shares of Restaurant Brands International Inc. (RBI). Formed after the merger of Burger King and Tim Hortons Inc., RBI was led by the private equity firm 3G Capital. RBI was a powerhouse–the third-largest, quick-service restaurant chain in the world. Although RBI was performing well and seemed to present an attractive investment opportunity, the company was facing issues from disgruntled franchisees, who were dissatisfied with the cost-cutting measures implemented at Tim Hortons Inc. as part of 3G Capital’s acquisition. This led to class action lawsuits from franchisees as well as a business slow-down, as measured by same-store sales figures. With not much time left, the analyst had to determine and present a decision to the rest of his team on whether or not to invest in RBI.
In August 2017, MoviePass dramatically lowered its subscription price from $50 per month to just $10 for up to one movie per day. The idea was to rapidly scale the business to the point where it could generate incremental revenue streams from related businesses (e.g., a share of ticket and concession revenues from theaters, advertising revenue from movie studios; and revenue from ride-sharing companies). Within two days, Moviepass had gotten 150k new subscribers; within six months, it had more than 2 million. But as of February 2018, the company faced three challenges: theaters were resisting the concept, investors were shorting the stock in record numbers as losses mounted, and competitors were beginning to appear. Could CEO Lowe convince investors that the company was viable and it could, indeed, monetize the growing subscriber base? At the same time, Lowe had to decide whether to raise subscription prices to cover the growing losses or keep prices low to grow the subscriber base as quickly as possible.
After long dominating Mexican microfinance, Compartamos Banco faces the emergence of fintech, just as for the first time its loan portfolio and clients have declined. Enrique Majós, CEO of GENTERA, the bank´s parent company, is keenly aware of the profound changes since the Compartamos IPO in April 2007, when it was valued at $1.5 billion and became the first bank wholly dedicated to microfinance to be quoted in a major stock exchange. Since then, the market has become intensely competitive, with both large established institutions and new entrants vying for the same customers. Simultaneously, the digital era has spawned fintech, threatening to disrupt Compartamos' highly successful model but also providing opportunities for the bank to reshape it. While challenged to manage key innovation within a leading incumbent, Majós must consider whether to commit his team to a major cost reduction in the next few years to his board of directors at their next meeting at the end of the month.
This case details how semiconductor company PMC-Sierra implemented different corporate entrepreneurship strategies to take advantage of two major industry disruptions: 1) the transition from hard disk drives to solid state drives; and 2) the rise of cloud computing. The core business of PMC-Sierra's enterprise storage business was developing products called controllers that interfaced directly with hard disk drives. The company sold these controllers to the world's largest storage equipment manufacturers, including HP, Dell, and IBM. The case focuses on the years 2010-2012, during which the company strove to develop a new type of controller optimized for solid state drives-while maintaining the strength of its existing core hard disk drive business. With the rise of cloud computing, PMC-Sierra added a major new customer base: giant cloud service providers like Amazon, Google, and Facebook. As these cloud service providers grew in strength, they upended the industry supply chain, negatively impacting PMC-Sierra's traditional core customers such as Dell and HP. The big challenge, and opportunity, for PMC-Sierra was to retain its current large customers while capturing new growth opportunities. The case ends in 2012 at a decision point for PMC-Sierra. Should the company continue building solid state drive products internally, given that it was emerging from two major setbacks-or look for an acquisition possibility, which would be very expensive? Either way, the company had to decide how to organize its next development effort, drawing from corporate entrepreneurship lessons it had learned in the previous few years. Additionally, the company had to decide whether to develop a newer, but riskier, technology on the horizon. Could PMC-Sierra launch and maintain development of two new technologies, or would it have to choose one or the other?
The (B) case starts with PMC-Sierra's decision to acquire for $100 million a solid state drive controller business, which included a prototype and a team of 50 people. The company also acquired intellectual property required to build PCIe switches-a related product family that was newer and cutting edge, but riskier to develop. After the acquisition, PMC-Sierra created a new, isolated business, the Non-Volatile Memory Solutions Group (NSG), and protected NSG's resources. To encourage rapid decision making, PMC-Sierra rolled marketing, R&D, and technical support under NSG's leader. NSG was indeed able to move quickly to produce a new product. At the same time, carving out this dedicated business meant that PMC-Sierra lost some efficiencies in the company as a whole. The acquisition and formation of NSG also put some burden on other parts of PMC-Sierra, as NSG required dedicated attention and resources during its start-up phase. A few months after the acquisition, PMC-Sierra leadership shut down the existing internal group working on the solid state drive controller, because the company had two teams and two sets of products. This proved to be one of the company's biggest tradeoffs-and an unpopular decision. Along with that decision, the company opted to develop the newer, riskier product that it had acquired the intellectual property for, PCIe switches.
Tucker Company Worldwide Inc. (TCW), located in Haddonfield, New Jersey, specialized in providing supply chain logistics solutions to companies in the energy, pharmaceuticals, and food sectors; and to government organizations. On Friday, June 1, 2018, TCW’s president and chief operating officer received a bidding solicitation from a refinery in Reading, Pennsylvania. He tasked his most responsible carrier sales manager with responding to the bid. Both men knew that winning this bid was important for the company and would be a valuable gain. However, the bid needed to be submitted by the end of the day, and the sales manager was challenged with how to effectively showcase TCW's value, address all practical transport options, and remain consistent with the company’s core practices.
Tucker Company Worldwide Inc. (TCW), located in Haddonfield, New Jersey, specialized in providing supply chain logistics solutions to companies in the energy, pharmaceuticals, and food sectors; and to government organizations. On Friday, June 1, 2018, TCW's president and chief operating officer received a bidding solicitation from a refinery in Reading, Pennsylvania. He tasked his most responsible carrier sales manager with responding to the bid. Both men knew that winning this bid was important for the company and would be a valuable gain. However, the bid needed to be submitted by the end of the day, and the sales manager was challenged with how to effectively showcase TCW's value, address all practical transport options, and remain consistent with the company's core practices.
On January 6, 2019, HelloSelf, a London-based "BrainTech" company, founded a year earlier by Charles Wells, soft launched. The proposition was simply to help its members "Be your Best Self." The company provided its registered members with access to a clinical psychotherapist, a life coach, and an AI engine that personalized advice. The platform provided members with the ability to set goals, track progress, and discover new things about themselves. Throughout the previous nine months, over 500 people had registered interest in the proposition, price points had been tested, competitors analyzed, members and specialists interviewed, and wireframes developed, but there were several questions still crossing Wells' mind. Did the subscription LifeCoach bot model combined with pay-as-you-go therapist sessions make sense? How could he attract an early cohort of users? How would HelloSelf interact with the broken mental health solutions in the UK? How quickly would the platform scale and learn to provide meaningful AI support for both therapists and the LifeCoach bot? And most importantly, would the platform deliver on the mission "to help everyone discover, understand and experience their Best Self"?
This note provides a perspective and some tools to predict and shape interactions with other players when making strategic decisions. As a strategist, you must consider that your firm's actions evoke reactions from other players in the market and that, reciprocally, you may need to respond to their actions. The note on Strategic Interactions introduces students to the fourth module of the RC Strategy course. We look at strategic interactions in three contexts: between players along the supply chain, between symmetrically placed rivals, and between asymmetrically placed rivals. Common themes run through the three circumstances, but there are important distinctions as well.
CareerWise Colorado (CWC) is an organization that equips high school students with the skills to build successful careers through apprenticeships. Founded in 2016, the young organization has attracted interest from different groups and civic leaders from across the U.S., some of whom want to replicate CWC's model, and others who want CWC to bring and then operate its program in their localities. Noel Ginsburg, CWC's founder and CEO, and Ashley Carter, COO, now have to decide how, when, and where to grow CWC. They both believe in CWC's apprenticeship model's widespread applicability, but so far it is still a relatively small-with just over 200 active apprentices spread across two cohorts; all of whom live in Colorado-and unproven entity. As of late 2018, no apprentices had yet completed the three year program. They did not want to scale the program too soon, but Ginsburg and Carter also did not want to miss out on the attractive opportunities being presented to them. How should they scale this organization?
BloombergQuint (BQ) was started as a collaboration between Quintillion Media (QM) and Bloomberg in April 2016. In the competitive landscape of business news broadcasters in India, it started by providing stock updates, financial sector news and opinion articles on financial issues on its website. BQ later expended by providing video content in September 2017. It had applied for a television broadcasting license and awaited approval from the Ministry of Information and Broadcasting, Government of India. The lack of a suitable television channel obligated BQ to use alternate distribution channels for ensuring that its content reached a wider audience. One of the alternate channels used by Ankit Dikshit, Manager, Digital Marketing, at BQ, was WhatsApp, a mobile messaging app widely used in India. This case explains the process whereby BQ grew its user base through WhatsApp. Growth by WhatsApp has led to Anil Uniyal, the CEO of BQ, setting ambitious targets for Dikshit. Class participants have to guide Dikshit on the way forward for BQ.
Forced by the investor preference for passive instruments like exchange-traded funds (ETFs) driven by ETFs' fee and performance advantages, regulatory pressures, and the rise of robo-advisors, the renowned active manager Fidelity embraced ETFs by introducing smart beta ETFs. As the new chairman, Abigail Johnson had to consider the challenges ahead including incompatibility with Fidelity's investment philosophy and fierce industry competition. The case is based on several concepts including ETFs, mutual funds, index funds, factor asset pricing models, financial innovation, active vs. passive investment management, and efficient market hypothesis, aiming to help students understand ETFs, especially smart beta ETFs, as well as Fidelity and other ETF providers. The case can be used to facilitate teaching in the area of Finance & Investments.
On June 12, 2018, 29-year old PlayDate founder and CEO Amanda Raposo and advisor Michael Ryan-Southern considered an offer from "celebrity mom" and founder of a fashion brand Daphne Decoates to combine their independent playdate app start-ups and split the equity 50-50. Raposo, had been running PlayDate in various formats since 2010 but Decoates' app was still in the conceptual phase. The decision was urgent, as Raposo had committed to investors that she would launch PlayDate's online application by July 31, in six weeks. Raposo also had internal issues: her lead app developer had been hospitalized the day before, and she needed to finalize the equity split with her co-founder and part-time chief marketing officer, Courtney Bernabei. Lastly, conversations with senior executives in larger parental outsourcing firms brought to light challenges with the complexity and expense of simultaneous vetting of multiple caregivers and multiple families. Raposo considered her best path forward with respect to company ownership, strategic partnerships, and delivering on a compelling, differentiated value proposition. This case asks students to consider the multitude of issues that an entrepreneurial leader must manage as they move towards launching their venture.