In May 2018, a China-born entrepreneur living in Canada was at a seaside market in Qingdao, China, inspecting inexpensive pearls. She wondered whether pearls presented a good market opportunity in the West. At markets in China, she consistently found cultured pearls that would cost far more in Canada. This experience led her to wonder whether or not it was feasible to sell pearls on a wholesale basis in Canada, or perhaps through one of many retail options. Or was there a reason why pearls-such a timeless product-did not present more of a dynamic market opportunity in the West?
On March 11, 2011, at 2:46pm, a 9.1-on-the-Richter-scale, six-minute long earthquake unleashed a tsunami that ravaged the Tohoku region of Japan, damaging the Fukushima Daiichi Nuclear Power facility and releasing sufficient radioactive material into the air and ocean to make it one of only two "level 7" nuclear disasters in history (second only to Chernobyl). But just how much radioactive material had escaped was not clear. A tense time was made worse by sporadic disclosures of fragmented information. Those who had power or cell service, mostly friends and family outside the region, were glued to their television and smartphone screens, but, by definition, no one could see the radiation they feared. Frustrated by their own desires to know what should have been knowable, three technologists-Sean Bonner, Pieter Franken and Joi Ito-founded non-profit Safecast around a volunteer-centered, open, citizen-science, "crowdmapping" model to monitor radiation levels. With the help of thousands of volunteers, by 2018, Safecast had become not just the "go to" source of information on radiation issues in Japan and elsewhere, but also the vanguard example of citizen science. Yet as Safecast's dataset strengthened exponentially, the sustainability of its financial model weakened. The same open, crowd-based model that made the founder's data collection sustainable was still financially unsustainable. Was there a business model that could sustain the organization financially without undermining their volunteer-based operations, and if so, what would it look like?
The case gives students an opportunity to analyze the ways in which the company's management uses Prem Watsa's value investment philosophy to guide its decisions, both in its core business and in its acquisitions. The case also gives students lessons the value investment philosophy offers to investors and managers of firms. The travel industry is beset by structural changes and new paradigms and owners have to respond to the changing environment.
Kaan Terzioglu, Turkcell's CEO, was in a pensive mood on his fifth day on the job. He had just received his first WhatsApp call, which highlighted the challenge his company - Turkey's largest mobile telecommunications provider - was facing from over-the-top (OTT) service providers. Of Turkcell's 35 million mobile subscribers, 10 million were WhatsApp users. The 4.5G spectrum auctions, where the company would be competing against Vodafone and Turk Telekom, were approaching in August 2015. Turkcell needed to decide whether to bid aggressively to maintain its market leading position or to bid less aggressively to acknowledge a more competitive and less profitable future. Turkcell had remained solidly profitable and its revenues in Turkey had increased by 10% from the first quarter of 2014 to early 2015. Voice revenues in Turkey had dropped by 4%, though an increase in data revenues of 46% had more than counterbalanced this. Intense competition with Vodafone and Turk Telekom made it difficult to increase prices. Turkcell faced significant internal challenges. Mobile and fixed-line communications were run by separate subsidiaries, which made it difficult for Turkcell to present one face to the consumer and react effectively to the converging telecom market. The organization was top-heavy with too many managers at all levels. Despite all this, the feeling within the company was that there was no compelling need for change because it was number one among mobile telecom operators and profitable. Turkcell's international operations had been hit by currency devaluations in Ukraine and Belarus. They were a mixed bag including both subsidiaries and minority stakes. As the new CEO, Kaan Terzioglu knew that he had a window of opportunity to make significant changes. He wondered where he should start.
Supplement to case IMD972 Kaan Terzioglu, Turkcell's CEO, and his top team had spent Capital Markets Day with global investment analysts celebrating the firm's achievements. Over the last three years, the company had transformed itself from a network operator selling undifferentiated data and voice services in Turkey into an experience provider that offered messaging, music, TV, search and other services to its customers. This had culminated in the launch of its Lifecell digital brand in Turkey in September 2017. This had turbocharged its revenue growth, which reached 23% in 2017. While there was room for Turkcell to grow its core consumer business in Turkey, it would also rely on opportunities in digital services, the corporate market and in new business areas including energy, finance, healthcare and automotive to sustain future growth. Turkcell had rationalized its international portfolio, taken steps to make its subsidiaries in Ukraine, Belarus and Northern Cyprus financially stable and was moving forward with the same digital operator strategy as in Turkey. The company planned to grow internationally by franchising the digital operator model it had pioneered in Turkey to telecom operators worldwide. Kaan Terzioglu felt this would increase the company's valuation given the valuation of global over-the-top (OTT) companies. Turkcell's growth plan raised questions. Did the firm have the management bandwidth to move into so many new business areas in Turkey? Would it be able to grow internationally using the franchise model? The answers were not clear.
This 9-page version of Seizing the Moment primarily differs from the original in omitting a 4-page section that describes the early, confusing stages of Myanmar's democratization process. This leadership case is set in the spring of 2016 and gives students the chance to grapple with the difficult challenges confronting Myanmar's opposition leader, Aung San Suu Kyi, after a rapid turn of fortune took her, over a period of six years, from longtime prisoner of conscience to civilian head of state in Myanmar. The case describes the nature of Suu KyI's political role in Myanmar during her many years of house arrest and then shows how that role shifted in the years following her release. With freedom and an increase in formal power came new dilemmas, for example, whether to take an oath to a problematic Constitution, how to manage her star power vis-Ã -vis Myanmar President Thein Sein, and how to address intercommunal violence between Buddhists and Rohingya Muslims, an unpopular ethnic minority in Rakhine state. (See HKS case Fallen Idol? Aung San Suu Kyi & the Rohingya Humanitarian Crisis (2139.0) for a more detailed treatment of this last issue, which devolved into a desperate humanitarian catastrophe in August and September of 2017. Another two-part HKS case, Icon of Hope A/B (1685.0, 1686.0), focuses on Suu Kyi's early adult life and transformation from an expatriate living a quiet life in Oxford, England to an opposition leader and icon for democracy and human rights.)
Soon after Myanmar's longtime democracy crusader and opposition leader, Aung San Suu Kyi, was released from a long house arrest and elected to the country's parliament in 2012, intercommunal violence began to escalate in the western state of Rakhine between local Buddhists and Rohingya Muslims. Over the next five years, the long-persecuted Rohingya minority faced increasingly violent waves of attack, culminating in a humanitarian catastrophe in August and September of 2017 characterized by indiscriminate killing, mass rape, and the wholesale incineration of villages. To the shock of her many admirers around the world, Suu Kyi did nothing to try to prevent or stem the military-led attacks, nor did she condemn the military after-the-fact, instead accusing international monitors and fact-finders of spreading false reports. This case explores the evolution of anti-Rohingya sentiment in Myanmar and details the escalation of intercommunal violence against the Rohingya between 2012 and 2017. It describes Suu Kyi's reaction to the growing Rohingya crisis in these years, and ends with assorted theories about why a leader long revered as an icon for democracy, symbol of peaceful protest, and crusader for human rights-having finally become her country's civilian head of state-would choose not to take a stand against the brutal campaign against the Rohingya. Two other HKS cases explore earlier periods in Aung San Suu Kyi's evolution as a leader. "Icon of Hope" A/B (HKS870, HKS871) focuses on Suu Kyi's transformation from an expatriate living a quiet life in Oxford, England to an opposition leader and icon for democracy and human rights. "Aung San Suu Kyi, Seizing the Moment: Soaring Hopes & Tough Constraints in Myanmar's Unfolding Democracy" (HKS746), focuses on Suu Kyi's swift and challenging evolution from human rights icon under house arrest to de facto prime minister in 2016.
In this case, students assume the roles of FK Day and Dave Neiswander, leaders of the social enterprise World Bicycle Relief (WBR), which donates and sells bicycles in sub-Saharan Africa. As a social enterprise, WBR combines not-for-profit and for-profit activities. Starting as a traditional not-for-profit organization formed to donate bicycles after the Indian Ocean tsunami in 2004, WBR eventually added a for-profit arm to facilitate growth and reduce its dependence on donations and grants. As a result, by 2017 WBR had distributed around 400,000 bicycles, primarily to schoolgirls, entrepreneurs, and health workers. As the organization grows, its leaders are interested in optimizing operations and entering new countries in Africa. What is the optimal distribution of WBR's resources between its for-profit and not-for-profit operations? How should it define the objective of its operations: should WBR maximize its social impact or the total number of bicycles in the field? Which countries should it enter? To answer those questions, students are required to analyze the social enterprise business model. This analysis starts at the strategic level and ties into the operational level. If desired, this analysis can be followed by an Excel optimization of WBR's operations. The case contains historical data on the organization and poses questions that can be analyzed from the perspectives of a number of academic fields. It can be used in various types of courses including strategy, not-for-profit organizations, operations, and finance. The instructor materials include a prepared Excel model that can be used to make the quantitative analysis accessible to students without quantitative backgrounds, videos from WBR, and a video that shows FK Day and Dave Neiswander answering questions in the inaugural use of the case at Kellogg.
In 2014, Australia's national airline Qantas Airways Limited (Qantas) faced one of the most difficult years in its history. Following a loss of AU$2.8 billion, the airline's chief executive officer asserted that government intervention was necessary. He wanted the government to publicly guarantee the airline's debt, which would secure its credit rating and provide relief in challenging circumstances. His efforts were unsuccessful. Qantas instead embarked on a structural review and company transformation, seeking to repair its balance sheet and improve free cash flow. On August 23, 2016, having completed one of Australia's largest and most public corporate turnarounds, Qantas announced AU$1.53 billion in underlying profit. Inevitably, questions arose as to how Qantas would reward long-suffering shareholders. Having overcome trying financial problems, Qantas was facing a different challenge: whether, and how, to return cash to shareholders, having not paid a dividend for seven years.
In 2014, Australia’s national airline Qantas Airways Limited (Qantas) faced one of the most difficult years in its history. Following a loss of AU$2.8 billion, the airline’s chief executive officer asserted that government intervention was necessary. He wanted the government to publicly guarantee the airline’s debt, which would secure its credit rating and provide relief in challenging circumstances. His efforts were unsuccessful. Qantas instead embarked on a structural review and company transformation, seeking to repair its balance sheet and improve free cash flow. On August 23, 2016, having completed one of Australia’s largest and most public corporate turnarounds, Qantas announced AU$1.53 billion in underlying profit. Inevitably, questions arose as to how Qantas would reward long-suffering shareholders. Having overcome trying financial problems, Qantas was facing a different challenge: whether, and how, to return cash to shareholders, having not paid a dividend for seven years.
In July 2017, shares of Automatic Data Processing, Inc. (ADP) surged 12% following a report that the activist investor Bill Ackman had acquired a sizable stake in the company and planned to nominate his own slate of directors at the company's annual meeting in November. Over the months that followed, Ackman and ADP engaged in an increasingly acrimonious battle of words about the future of ADP. Ackman argued that the company was materially underperforming its potential and could substantially improve its operating margins. ADP vigorously rebutted Ackman's assertions, arguing that none of his ideas were new and that ADP shares had outperformed the market. As the November deadline loomed, ADP shareholders needed to decide whether to vote for Ackman's slate of directors or the company's slate. In making this choice, shareholders needed to consider a single, critical question: Is ADP achieving its maximum potential?
This case is about the business, governance and leadership transformation of Merck - a 13th generation, family-owned, German multinational group operating in the pharmaceuticals, performance materials and life science industries. Established in 1668 as a pharmacy in Darmstadt, Germany, Merck ventured into the manufacturing of pharmaceuticals and specialty chemicals in 1827. Successfully overcoming several business and family challenges, it continued to grow. By 2017, Merck had a legacy of nearly 350 years of successful business operations, a presence in 66 countries and about 52,000 employees on its rolls. In 2017, Merck was led by Dr. Frank Stangenberg-Haverkamp (69), an 11th generation member who was the Chairman of the executive board and the family board of E. Merck KG (the group's holding company). With his 70th birthday approaching, Frank wanted to identify an able successor who could help him build the group for the next 100 years and take the Merck legacy forward.
In late 2016, Russ D'Souza and Jack Groetzinger, co-founders of the online event ticketing platform SeatGeek, faced some difficult decisions. In the company's seven-year history, SeatGeek had positioned itself primarily as an aggregator, facilitating ticket transactions between sellers and buyers on the "secondary ticket market." But in early 2016, D'Souza and Groetzinger had decided to pursue the "primary ticket market"-contracting directly with the sports teams and venues that issued tickets to events, a space dominated by Ticketmaster. This move would require SeatGeek to confront Ticketmaster, an established incumbent, develop or acquire the back-end software necessary to enable primary market ticket sales, and establish partnerships with sports teams and event venues. Entering the primary market would also likely necessitate a Series D funding round.