On June 30, 2009, Nava Bharat Energy India Limited (NBEIL) proposed the setup of two coal-fired power projects: one in Paloncha, Khammam District, and another in Dharmavaram, East Godavari District, Andhra Pradesh. The sites of these projects were located adjacent to the existing power plants of Nava Bharat Ventures Limited, parent company of NBEIL, a renowned industrial group based in South India.<br><br>NBEIL approached the president of a bank to arrange a term loan of ?9.70 billion through project financing under a syndication strategy. The banker would have to evaluate whether project financing would be a suitable lending instrument for these projects, and if so, what would be the potential implications to both the lenders and project owners? Would it be wise to proceed to syndicate the term loan for the coal-fired power plants?
The Dalian Wanda Group Co. Ltd. (Wanda) was a fast-growing real estate imperium in China, built by Jianlin Wang, the wealthiest man in China. In 2010, Wang transformed Wanda into an entertainment conglomerate and initiated an ambitious international growth strategy. His ambitions knew few limits; however, one of his acquisitions—the Edificio España in Spain, an iconic historical building in the centre of Madrid—ran into difficulties due to conflicts with the local authorities. Wang’s refurbishment plans for Edificio España envisaged a comprehensive renovation and upgrade of the building’s commercial spaces, which required approvals from the Local Historical Heritage Commission. Initially, politicians expressed their support for Wang’s plan, but the application progressed slowly through the formal process and became entangled in local politics. A local election mid-process resulted in a new party gaining control of the city council—a governing party that was not supportive of Wang’s plans. Should Wang cut his losses and sell the building, or persist and reboot his project management?
In 2014, the production manager at Hari Krishna Exports Pvt. Ltd., a diamond manufacturer and exporter in India, faced the challenge of maintaining his duty towards the company’s employees while it experienced low growth and profitability after a downturn in the industry. High attrition among employees was a common problem across the industry; it cost the company heavily and had a significant impact on employees’ morale. Recruiting strong employees and retaining them was a challenge, especially during a time of crisis. The production manager wanted to build on the initiatives of the chairman and founder and pursue a performance-based incentive system, value-added incentives, and other employee-friendly human resource policies. Could these strategies keep the attrition rate low and help the company create a high-performance work environment? Success could help Hari Krishna Exports in its plan to grow from a diamond manufacturer to a diamond jewelry retailer with a global reach.
NewStar Marine & Scooter Inc. was a small family-owned retail operation in Eastern Passage, Nova Scotia. It offered a diverse range of products, from boats and motors to scooters and trailers, all under one roof. For a small family business, it was very successful. Sales grew from $198,000 in the first year to over $600,000 by year three, despite little marketing, few part-time staff, and an unconventional operational strategy. By February 2017, this significant growth coupled with the owner's lack of planning had created a series of problems, including unhappy employees, facility limitations, and brand confusion. To continue its remarkable growth, the owner needed to rethink the business operational and marketing strategies.
This note explores the mechanics of multiples, different types of multiples, when and how to use them, and common pitfalls associated with multiples valuation. While a multiples approach is a very convenient valuation method, breaking down the underlying assumptions can significantly improve the robustness and power of multiples valuation.
On April 9, 2017, United Airlines flight 3411 to Louisville was held at the gate in Chicago while customer Dr. David Dao was forcibly removed from his seat and dragged off the plane by officers from the Chicago Department of Aviation. The first public response from the airline was a tweet on Monday morning from CEO Oscar Munoz, apologizing for needing to "re-accommodate" the passenger. Munoz quickly revised his statement and his response evolved over the weeks that followed, but people couldn't help but question: How could an airline treat a customer so terribly? In this case, students explore the United processes and policies in place that led to the incident and consider how CEO Oscar Munoz should position United to recover from this event.
In June 2009, Greenpeace accused the cattle industry of contributing to deforestation in the Brazilian Amazon. Big brands that bought beef and leather were named as silent partners to the practice. Pressure from Greenpeace and the Brazilian government led to major changes. Meatpackers Bertin, JBS, Marfrig, and Minerva, responsible for one-third of exports, agreed to stop purchasing directly and indirectly from ranches that cleared more forest than legally permitted, and committed to buying from direct and indirect suppliers that reduced deforestation to zero. Fernando Sampaio, executive director of Abiec, the Brazilian Beef Exporters Association, worked closely with meatpackers that exported beef to comply with deforestation agreements. While Abiec's mission was to grow the export sector, his members were now asked to take an active role in curbing deforestation. Progress was promising. Deforestation dropped by over 80 percent from 2004 to 2014, attributable in part to the cattle agreements. This was clear progress, since the cattle sector in the Amazon was one of the largest drivers of global deforestation. Yet, traceability of animal movements among farms and slaughterhouses was a big challenge. Some non-compliant ranches were selling to slaughterhouses without full monitoring systems. Other non-compliant ranches were selling cattle into legitimate supply chains through licensed ranches. By mid-2015, Brazilian Amazon deforestation had grown by 16 percent compared to the prior year, demonstrating that gains were fragile. How could Abiec, which represented 29 meatpackers responsible for 70 percent of slaughtering and 93 percent of exports, persuade more members to adopt a zero-deforestation policy and demand supplier compliance? Sampaio's goal of growing sales for his members while curbing deforestation was complex and required working with many beef value chain actors.
In July 2016, India celebrated the 25th anniversary of its economic reforms, which were initiated in 1991 as a result of a severe fiscal deficit-driven balance of payments crisis. The reforms saw India gradually break free of a low annual growth rate of 3.0–3.5 per cent. In 2016, with a growth rate of 7.6 per cent, India emerged as the fastest-growing economy in the world. The increases in the country’s macroeconomic indicators in the past 25 years indicated a major turnaround. Were these positive macroeconomic indicators sufficiently sustainable? Should investors be confident about India’s growth story in 2016?
In July 2016, India celebrated the 25th anniversary of its economic reforms, which were initiated in 1991 as a result of a severe fiscal deficit-driven balance of payments crisis. The reforms saw India gradually break free of a low annual growth rate of 3.0-3.5 per cent. In 2016, with a growth rate of 7.6 per cent, India emerged as the fastest-growing economy in the world. The increases in the country's macroeconomic indicators in the past 25 years indicated a major turnaround. Were these positive macroeconomic indicators sufficiently sustainable? Should investors be confident about India's growth story in 2016?
This technical note outlines the process of proper experimentation in the world of business. This reading begins by describing why organizational experimentation is important and then defines a true experiment, highlighting the differences between testing and management by intuition. It then goes on to explain when it is appropriate to use experiments, outlines several different types of experiments, and provides their strengths and weaknesses. Next, the note walks through how to run an experiment, defining the components of experiments and detailing the experimental design process. Finally, it provides preliminary guidance on the analysis of experimental results, focusing on statistical significance, precision, scalability, and sustainability. Ultimately, this reading prepares MBA students and industry professionals alike to become effective designers, analyzers, and proponents of experimentation.
BigBasket.com had emerged as one of the major players in highly competitive Indian online grocery retailing market by employing inventory based model. On March 22, 2016, Big Basket had secured Series D funding worth USD 150 million from the United Arab Emirates-based Abraaj group for driving its future growth. A few days later, the Government of India came out with guidelines on March 29, 2016, through its Press Note No. 3 (2016 Series) which stated that Foreign Direct Investment (FDI) in the inventory based model of e-commerce would not be permitted. As BigBasket grappled with the challenges of a growing and expanding business, BigBasket team had to evaluate the existing business model. This case traces the predicament of BigBasket in formulating a business strategy for taking the online grocery retailing business further.
'Saksham', a corporate social responsibility (CSR) initiative of one of the largest public sector companies in India, the Gas Authority of India Limited (GAIL), provides specific training in skills required for plastic industry to low-income communities potentially affected by GAIL's business operations. Unlike a typical GAIL CSR programme, which directly targets communities affected by GAIL's operations, the Saksham programme serves the needs of one of GAIL's main customers - the small and medium scale plastic industry. Although the programme is a huge success and has completed three batches, all the students of which were placed in plastic manufacturing companies, Shamasundara, Zonal General Manager of GAIL is still not sure about the future of the programme. He wondered what should be the metrics to evaluate whether a programme can be classified as a CSR initiative by a firm.
Alan Wong, an intern at Gem Asset Management, was pleasantly surprised when, as per his supervisor's instructions, reviewed the stock multiples (P/E, P/Sales, P/Book Value, and EV/EBITDA) of healthcare stocks listed on the Singapore Exchange (SGX). He recalled from his Equity Analysis 101 class at business school that the stock valuation metrics of companies in the same industry tended to trade within a narrow range. But certain stock valuation metrics of Healthway Medical Corporation appeared attractive in relation to SGX-listed peers. Alan performs the Du Pont analysis and financial statement analysis to ascertain if the Healthway stock was indeed attractive against the backdrop of its performance. Did the conclusions of his analysis support his initial impression?
In 2014, the production manager at Hari Krishna Exports Pvt. Ltd., a diamond manufacturer and exporter in India, faced the challenge of maintaining his duty towards the company's employees while it experienced low growth and profitability after a downturn in the industry. High attrition among employees was a common problem across the industry; it cost the company heavily and had a significant impact on employees' morale. Recruiting strong employees and retaining them was a challenge, especially during a time of crisis. The production manager wanted to build on the initiatives of the chairman and founder and pursue a performance-based incentive system, value-added incentives, and other employee-friendly human resource policies. Could these strategies keep the attrition rate low and help the company create a high-performance work environment? Success could help Hari Krishna Exports in its plan to grow from a diamond manufacturer to a diamond jewelry retailer with a global reach.
In early 2016, Naresh Jain was busy looking at various rental properties on popular real estate listing websites. Because of a sudden downturn in business conditions and an immediate need for money, Jain's landlord wanted to sell the property and therefore had asked Jain to vacate the premises within 30 days. Jain had been living in the spacious, two-bedroom apartment in North West Delhi for the past five years as it was within a reasonable commuting distance to his workplace. After looking at various rental properties, Jain had come across a furnished apartment identical to his, next door, and met with a broker to discuss it. During the discussion, it came up that an identical apartment in an adjoining locality was for sale at ₹12.5 million. Jain was thus faced with a quantitative finance decision of buy versus rent to arrive at the right option for him given his current financial conditions and the potential future benefits.