Since the founding of Ontario-based Social Focus Consulting (SFC) in 2011, its founder had led a team of over 100 members to work on more than 30 projects for over 30 non-profit organization (NPO) clients from London to Ottawa. SFC’s competitive market included NPO consulting firms that were more established, larger, or offered pro bono services. SFC set itself apart by exclusively hiring undergraduate and graduate students. The organization specialized in youth-oriented marketing strategies that helped NPOs raise more funds and awareness in a highly fragmented multi-billion-dollar Canadian market. Although SFC had achieved some success, the founder wondered if SFC's recent declining revenues and failure in new project acquisition meant that its business model was not feasible over a long-term horizon. In September 2017, he had to decide whether to continue running SFC with long-term goals for success or avoid the risk of ruining his professional reputation and wasting time and money by ending his work with SFC.
Comfort Remote Site Services Ltd. (Comfort) was a remote-site food service company based in Oakville, Ontario. The chairman and chief executive officer (CEO) of Comfort was preparing a bid for the catering, housekeeping, and janitorial services for the Gregory Mine, an iron ore mine owned by Yellowstone Mining and located 320 kilometres north of Yukon, Canada. The remote food services industry involved a highly competitive bidding (often closed) process. Revenues in the industry had declined by 30 per cent in 2015 due to a weak global economy, and a subsequent downturn had occurred in natural resource commodity prices. The CEO must work through the financial analysis before deciding on whether to submit a bid.
By January 2015, OJSC Transaero Airlines (Transaero) was the largest Russian open joint-stock airline and the second-largest airline carrier in Russia and Eastern Europe combined. Tracing its history back to 1990, Transaero was the safest airline in Russia and was ranked 17th in the world in 2015 in terms of safety. In September 2015, the public learned that Transaero had serious financial troubles, which could lead to bankruptcy for the firm. The news came as a shock because Transaero had demonstrated a stable performance accompanied by sound financial results for many years. The 2015 news revealed that Transaero was unable to service its debt of US$4 billion, including the company’s lease obligations. Was it possible for the safest, second-largest Russian airline company to avoid bankruptcy?
The chief executive officer of Scotbar Proprietary Limited (Scotbar) in Queensland, Australia, decided to develop a process to convert sandstone to sand, a technique that large multinational mining companies failed to perfect. The stakes could not have been higher, with global environmental disaster looming and the world quickly depleting its reserves of construction sand, severely affecting coastal communities and destroying marine ecosystems in the process. After spending years and millions of dollars on research, Scotbar appeared to have developed a process to produce construction sand, although more expensive than natural sand. Scotbar decided not to patent its process in hopes that more companies would adopt it and thereby reduce the harmful impact of mining on the environment. Was Scotbar's approach to sustainability through innovation an effective response to the environmental legacy of more traditional mining processes? Was the company's approach to intellectual property appropriate in this context?
Comfort Remote Site Services Ltd. (Comfort) was a remote-site food service company based in Oakville, Ontario. The chairman and chief executive officer (CEO) of Comfort was preparing a bid for the catering, housekeeping, and janitorial services for the Gregory Mine, an iron ore mine owned by Yellowstone Mining and located 320 kilometres north of Yukon, Canada. The remote food services industry involved a highly competitive bidding (often closed) process. Revenues in the industry had declined by 30 per cent in 2015 due to a weak global economy, and a subsequent downturn had occurred in natural resource commodity prices. The CEO must work through the financial analysis before deciding on whether to submit a bid.
By January 2015, OJSC Transaero Airlines (Transaero) was the largest Russian open joint-stock airline and the second-largest airline carrier in Russia and Eastern Europe combined. Tracing its history back to 1990, Transaero was the safest airline in Russia and was ranked 17th in the world in 2015 in terms of safety. In September 2015, the public learned that Transaero had serious financial troubles, which could lead to bankruptcy for the firm. The news came as a shock because Transaero had demonstrated a stable performance accompanied by sound financial results for many years. The 2015 news revealed that Transaero was unable to service its debt of US$4 billion, including the company's lease obligations. Was it possible for the safest, second-largest Russian airline company to avoid bankruptcy?
In November 2016, the co-founders of Poppy Barley Inc. (Poppy Barley) had just finished discussing the company's fiscal projections and sustainability goals for the upcoming 2017 year. Poppy Barley, a made-to-measure footwear retailer in Edmonton, Alberta, had grown rapidly. The co-founders, who were sisters, wanted to further both their product line and their commitments to corporate sustainability. Would becoming certified as a sustainable business publicize their commitments and values, and improve their triple bottom line? If so, which certification should they choose? On the other hand, given the company's growth stage, would directing finite resources toward certification detract from other important business areas?
Since the founding of Ontario-based Social Focus Consulting (SFC) in 2011, its founder had led a team of over 100 members to work on more than 30 projects for over 30 non-profit organization (NPO) clients from London to Ottawa. SFC's competitive market included NPO consulting firms that were more established, larger, or offered pro bono services. SFC set itself apart by exclusively hiring undergraduate and graduate students. The organization specialized in youth-oriented marketing strategies that helped NPOs raise more funds and awareness in a highly fragmented multi-billion-dollar Canadian market. Although SFC had achieved some success, the founder wondered if SFC's recent declining revenues and failure in new project acquisition meant that its business model was not feasible over a long-term horizon. In September 2017, he had to decide whether to continue running SFC with long-term goals for success or avoid the risk of ruining his professional reputation and wasting time and money by ending his work with SFC.
This is a standalone reading designed to enhance students' understanding of liabilities and their measurement, presentation, and impact on a company's financial statements. The reading provides the formal definition of a liability and the conditions required to measure, classify, and record a liability on the balance sheet.
Since its founding eight years earlier, Hidrovias do Brasil ("Hidrovias"), an integrated logistics provider serving corporate customers exporting products from South America via the Atlantic Ocean, had grown to 900 employees and $253 million in annual revenues. Hidrovias was founded by the Brazilian private equity firm, Pátria Investments, who had built the business from the ground up, forging and nurturing relationships with customers, investors, government entities, and suppliers. As Bruno Serapiao, Hidrovias's CEO pondered next steps for the company, he considered: What had been the key drivers of Hidrovias's success to date? What were the major challenges? And, what was the best path for the company going forward?
By 2014 Altice had made over 20 acquisitions in 8 countries followed by an IPO resulting in a market capitalization of €5.7B. By mid-2015, it was worth $35B, 369% higher than the IPO price. It entered the US market with a successful bid for a major US cable operator, becoming the only European provider to take an aggressive position in the US market. It subsequently made an offer for Cablevision, but its stellar capitalization growth was interrupted by a 70% drop in share price, driven by investors' concern about its ability to continue to execute its M&A playbook, especially with larger integrations in the US. Altice responded by increasing equity financing and playing down further M&As. Another investors' concern was customer attrition, experienced by Altice in some markets due to over-aggressive cost-cutting, resulting in poor network quality and customer care. In response, it increased CAPEX in France, Israel and Portugal but was it enough to stop attrition and increase revenues? Or should it exploit other options to drive incremental revenue, e.g. leveraging and expanding content creation capabilities or moving beyond voice and data into cloud computing, internet security, call centers etc. Having started as a small regional operator, Altice became a significant global player and #4 in the US, proving that an M&A strategy can create value. It took average performing businesses and created greater value based on its strong telecom and M&A capabilities. Now, Altice must decide how to stay ahead of the game and which resources and capabilities to develop. The case explores how Altice applies its M&A playbook and leverages its capabilities to compete and grow in a mature industry. Why do telecom operators sell to Altice and how can it offer more than other firms? The case also promotes discussion about the sustainability of Altice's business model, future strategic moves and its reasons for entering the US market.
In 2015, Cerana Beverages Pvt. Ltd. launched Bira 91 (Bira), India’s first handcrafted beer. It was introduced to fill a gap in the market between Indian brands and expensive imported beers. The handcrafted beer was priced lower than several premium beers but was more expensive than the market leaders. This allowed Bira to develop price leadership in the premium beer segment. By setting a new price range, Bira executed “high quality, low price” appeal and became capable of influencing customer product evaluations. With its intention to replicate this pricing strategy in its global expansion, now Bira would have to successfully design a proactive strategy to meet the associated challenges.
In 2015, Cerana Beverages Pvt. Ltd. launched Bira 91 (Bira), India's first handcrafted beer. It was introduced to fill a gap in the market between Indian brands and expensive imported beers. The handcrafted beer was priced lower than several premium beers but was more expensive than the market leaders. This allowed Bira to develop price leadership in the premium beer segment. By setting a new price range, Bira executed "high quality, low price" appeal and became capable of influencing customer product evaluations. With its intention to replicate this pricing strategy in its global expansion, now Bira would have to successfully design a proactive strategy to meet the associated challenges.
A Canadian couple whose daughter owned Metta Rest Spa, a flotation spa that opened in September 2014 in Vancouver, British Columbia, had invested almost CA$1.2 million in the business. Their daughter had recently asked for another $60,000 to keep the business afloat, and in early 2016 the couple needed to decide whether to invest more money in the business. The business had a net loss in 2015 and needed cash to continue to operate. What other information should they be asking for? They needed to know if the business would be able to sustain itself without requiring their retirement funds.
UltraTech Cement Limited was a global leading producer of cement that had implemented best-in-class safety practices at all of its units. Despite this, the company's Rawan Cement Works plant in Raipur, Chhattisgarh, India, had witnessed some serious safety incidents in the past, and these had resulted in lowered employee morale. A close analysis revealed that un-safe conduct by employees was partly responsible for the accidents, and that there was a strong need to bring about behavioural modification among employees in order to avoid such accidents in the future. In 2015, the chief operating officer and executive president of the Rawan Cement Works plant faced the challenge of managing the crisis that had engulfed the unit and looked for ways to effect a transition from a process-centric approach to a people-centric approach.
Reliance Jio Infocomm Limited (Jio) launched JioMoney, a mobile wallet (m-wallet) service, in May 2016. Jio was a new entrant in a market populated by established services. Six months later, when the government of India announced demonetization of two high-value currency notes, India's cash-driven economy was pushed toward digital payments, providing Jio and its competitors with an opportunity. Jio had advanced technology supporting its service. But to leverage the opportunity and its technology, Jio would have to access the 72.2 per cent of India's population that lived in rural areas. Many of these people did not have bank accounts, and most of them had no experience with digital transactions. Further, despite the availability of the latest 4G cellular technology-which was necessary for successful digital money transfers-a great number of people in India still used phones that were two generations older and unable to take advantage of the m-wallet industry. How could JioMoney overcome the challenges to take advantage of the opportunities?