In December 2017, during the celebrations of the third anniversary of his company, the founder and president of Dami Technology Co. Ltd. (Dami) reflected on the success of his entrepreneurship efforts since 2014. Using mobile Internet, Internet of things, and artificial intelligence technologies, Dami implemented a new rice supply chain from farm to table by developing smart kitchenware, such as rice buckets and rice cookers. Dami was the first company to accomplish this goal in the Chinese rice industry. By the end of 2017, Dami had created its own market in more than 30 of China’s major cities, including Beijing and Shanghai. Having achieved great success, Dami had two main options for its next phase of growth: (1) build a complete smart kitchen ecosystem using all available resources, or (2) partner with a Chinese home appliances giant and join a smart kitchen ecosystem.
By August 2015, Swiggy, an on-demand food delivery start-up, had been operating for almost one year in Bengaluru, India. The exponential growth of the business was expected to persist. However, Swiggy was incurring a loss, or a cash burn, on each delivery it was making. The company’s current cash reserves were also drying up, and its chief executive officer had been unsuccessful in attracting new venture capital funding to finance the cash burn estimated for the next four quarters. Swiggy must figure out how to pursue its growth without the injection of any fresh funds.
Founded in 1969 as a small operation, Otsuka Kagu, Ltd. became Japan’s largest furniture retailer and was listed on the Tokyo Stock Exchange in 1980. A membership program in 1993 managed to revitalize the company’s sales at a time when Japan was in a recession. Years later, after sales began to decline and the founder was convicted of insider trading in 2008, the presidency was transferred to the founder’s daughter, who applied a more customer-centric model to the business. This change infuriated the founder, who removed his daughter from the company’s leadership. After persistently poor performance, the company’s board of directors reinstated the founder’s daughter; she then launched a notorious public battle for control of the company. Despite new environment-responsive strategies, revenues continued to decline to the point of the company declaring its biggest loss by the end of 2017. In August 2018, the company reported a net loss of ¥2.3 billion, with the company’s shares trading at their lowest level ever. Facing financial distress, the company had to look both inward and outward to determine its next steps.
In January 2017, the founder of Sunton Manufacturing in Wuxi, Jiangsu Province, China, boarded a flight to Cambodia. He had to tackle the performance issue of the company’s garment manufacturing joint venture (JV) there—after two years in operation, it had run out of cash. After meeting with his JV partner, he concluded that the existing JV in Sihanoukville was beyond repair. He now needed to decide whether to exit Cambodia or to remain there, albeit in a different city and with a new partner. A new factory would require further investment. If he quit Cambodia, could his company survive and develop in the future?
In 2015, the corporate affairs executive of the leading Swiss agribusiness company Syngenta Crop Protection AG (Syngenta) and founder of the next-generation innovation platform Thought for Food, faced a dilemma about whether to register Thought for Food as an independent non-governmental organization, or to keep it housed within Syngenta. The choice had implications for Thought for Food’s potential for future growth and for its impact on global food-security challenges. To grow within Syngenta, Thought for Food would have to close the gaps between its open innovation practices and Syngenta’s traditional operations. To grow independently, it would have to develop a business plan that assured financial security. In either case, Thought for Food had to continue growing in relevance to its non-financial stakeholders, like the student participants and expert judges in its annual innovation challenge and summit.
This note addresses the key concepts of food security and sustainability, non-linear innovation, and open innovation models such as incubators and accelerators.
In January 2017, the online cake company Ohmycake.in, which was started two years earlier by a young entrepreneur in Kerala, India, ran into trouble after a series of successful experiments. Adding to the company’s problems, customers were becoming more demanding and the competition was catching up. The entrepreneur had hired a new operations executive to help solve the company’s business strategy and scalability issues, including a current problem: whether to accept or reject demanding custom orders that were appearing in the company’s online order management system.
Shortly after entering the kombucha market in Calgary, Alberta, True Büch Kombucha (True Büch) experienced significant growth. True Büch was sold from reusable kegs and in single-serving bottles at local markets and retailers. However, with such high demand for its product, True Büch was struggling to keep up. The reusable kegs that were on site at retailers required maintenance and refilling, and the maximum output of the homemade bottling line was only 1,000 single-serving bottles per day. In addition, True Büch’s production space was at capacity, and the owners had nothing left to invest. They had yet to take on any additional financing, but they knew some capital would be required to keep up with demand. In 2017, three years into the business, the owners were at a crossroads and contemplated the best approach to maintain their growth and expand.
Since its founding in 1989, Mejzlík Modellbau, a propeller manufacturing company based in the Czech Republic, had gained high visibility in the remote-controlled plane market. It had achieved a strong position by maintaining product quality and providing excellent customer service. The company had a strong cash position and an excellent credit rating; however, by mid-2018, the market for remote-controlled planes was reaching its saturation stage, as evidenced by Mejzlík Modellbau’s declining profits. If the company continued to rely solely on the remote-controlled plane market, it might soon face bankruptcy. The founder decided to explore various other markets wherein he could utilize his expertise of making high-quality carbon fibre propellers. But how would he strategically determine which market to pursue?
On October 5, 2017, the chief executive officer of Sony India Pvt. Ltd. (Sony), in Mumbai, India, was concerned about the future of the television show Taarak Mehta Ka Ooltah Chashmah (TMKOC), which aired on the television channel Sri Adhikari Brothers Television (SAB TV), a general-entertainment channel owned by Sony. TMKOC was a flagship, family-friendly comedy show that had enjoyed top ratings for years. However, new comedy shows that featured more hard-edged and less family-oriented content, with jokes at the expense of characters rather than at situations, were gaining new viewers. Current viewers were also using mobile devices rather than traditional television sets to watch content. The chief executive officer wondered how he could sustain SAB TV as a market leader, despite the growing popularity of less family-friendly content from new comedy shows and emerging digital platforms.
On March 8, 2017, Singapore-based food outlet operator Kimly Limited (Kimly) announced its intention to go for an initial public offering (IPO). Through this IPO, it aimed to raise SG$43.5 million. Altogether, 173.8 million new shares would be issued at SG$0.25 per share, comprising a retail tranche of 3.8 million shares and a placement tranche of 170 million shares. The chances of successfully getting Kimly’s IPO shares were slim, given the small retail tranche. In addition, the controlling shareholder and other key shareholders were subject to lock-up periods, which would prevent a short-term overhang of the shares. These factors implied that the supply of Kimly’s shares would be scarce in the initial six months after the IPO, which could have a positive impact on the share price. A retail investor, drawn to the issue because of Kimly’s identity as a family firm, applied for the IPO and was also considering purchasing shares in the aftermarket later in March. Was this a worthwhile investment, and if so, what should this investor’s maximum price be? Should such an investor plan to sell immediately or hold for the long term?
Character House Entertainment was a small entertainment company in the Greater Toronto Area that provided Disney and cartoon-character performances for children’s birthday parties and corporate events. The company's customizable services featured musical performances, meet-and-greets, games, dances, stuffed animals, and cotton candy. In April 2017, the company’s founder and chief executive officer anticipated an influx in demand for a recently released movie that had achieved worldwide success and critical acclaim. She wanted to offer this new theme in the company's event options in order to contend with competitors and stay current with customers. In addition to customer and competitor indicators, she wanted to assess the return the company could expect if it expanded into offering those characters.
Friends Parker and Miles are brainstorming the possibilities of a local start-up-a landscaping venture that leverages their love of the outdoors and their self-taught green thumb skills in planting, mowing, edging, trimming, landscape design, and the like. Without any formal professional or business training, however, they strategize and slowly work through their "next steps," taking into account the cost of their initial investment, potential competitors, target customers, and the type of budget-friendly advertising that will gain them a share of the local market. As they conceptually differentiate themselves in a way that creates business and customer value, are they ready to launch?
Character House Entertainment was a small entertainment company in the Greater Toronto Area that provided Disney and cartoon-character performances for children's birthday parties and corporate events. The company's customizable services featured musical performances, meet-and-greets, games, dances, stuffed animals, and cotton candy. In April 2017, the company's founder and chief executive officer anticipated an influx in demand for a recently released movie that had achieved worldwide success and critical acclaim. She wanted to offer this new theme in the company's event options in order to contend with competitors and stay current with customers. In addition to customer and competitor indicators, she wanted to assess the return the company could expect if it expanded into offering those characters.
In December 2017, during the celebrations of the third anniversary of his company, the founder and president of Dami Technology Co. Ltd. (Dami) reflected on the success of his entrepreneurship efforts since 2014. Using mobile Internet, Internet of things, and artificial intelligence technologies, Dami implemented a new rice supply chain from farm to table by developing smart kitchenware, such as rice buckets and rice cookers. Dami was the first company to accomplish this goal in the Chinese rice industry. By the end of 2017, Dami had created its own market in more than 30 of China's major cities, including Beijing and Shanghai. Having achieved great success, Dami had two main options for its next phase of growth: (1) build a complete smart kitchen ecosystem using all available resources, or (2) partner with a Chinese home appliances giant and join a smart kitchen ecosystem.
Shortly after entering the kombucha market in Calgary, Alberta, True Büch Kombucha (True Büch) experienced significant growth. True Büch was sold from reusable kegs and in single-serving bottles at local markets and retailers. However, with such high demand for its product, True Büch was struggling to keep up. The reusable kegs that were on site at retailers required maintenance and refilling, and the maximum output of the homemade bottling line was only 1,000 single-serving bottles per day. In addition, True Büch's production space was at capacity, and the owners had nothing left to invest. They had yet to take on any additional financing, but they knew some capital would be required to keep up with demand. In 2017, three years into the business, the owners were at a crossroads and contemplated the best approach to maintain their growth and expand.
On March 8, 2017, Singapore-based food outlet operator Kimly Limited (Kimly) announced its intention to go for an initial public offering (IPO). Through this IPO, it aimed to raise SG$43.5 million. Altogether, 173.8 million new shares would be issued at SG$0.25 per share, comprising a retail tranche of 3.8 million shares and a placement tranche of 170 million shares. The chances of successfully getting Kimly's IPO shares were slim, given the small retail tranche. In addition, the controlling shareholder and other key shareholders were subject to lock-up periods, which would prevent a short-term overhang of the shares. These factors implied that the supply of Kimly's shares would be scarce in the initial six months after the IPO, which could have a positive impact on the share price. A retail investor, drawn to the issue because of Kimly's identity as a family firm, applied for the IPO and was also considering purchasing shares in the aftermarket later in March. Was this a worthwhile investment, and if so, what should this investor's maximum price be? Should such an investor plan to sell immediately or hold for the long term?