In August 2015, the managing director of the Tamil Nadu Handloom Weavers’ Co-operative Society Ltd. (Co-optex), an Indian state handloom co-operative, was preparing to receive an award for one of the organization’s products during the first National Handloom Day celebrations in India. While the award was a validation of the managing director’s efforts to revive Co-optex, which had accumulated significant losses for 13 years, his worries were far from over. Co-optex faced a host of challenges, both on the demand and supply sides. The public-sector organization had experienced a 77 per cent decline in profits over the past year. The director wondered what constituted failure for a public-sector organization. How should Co-optex reinvent itself in a changing competitive landscape to stay ahead of competition and remain relevant in the context of the changing profile of Indian customers?
In October 2013, the Royal Bank of Canada (RBC), Canada’s largest bank, hired a new head of Enterprise Fraud Strategy, a department tasked with protecting RBC’s global customers from fraud. The department head’s immediate priority was to prevent fraudulent transactions by RBC’s own customers—a phenomenon called first-party fraud—by implementing a bourgeoning technology called social network analysis (SNA). The technology used predictive analytics and big data to forecast the occurrence of first-party fraud. The head of Enterprise Fraud Strategy had three primary questions: First, how should SNA be used to bring down the ratio of fraud alerts to actual fraud at RBC? Second, how should the cost of maintaining SNA protocols be reduced? Finally, how should the issues around systemic performance of SNA be resolved?
This case provides a brief update to Boris Groysberg's, John D. Vaughan's, and Matthew G. Preble's, "MOD Pizza: A Winning Recipe?" HBS No. 416004 (Boston: Harvard Business School Publishing, 2015). "MOD Pizza in 2017" describes how MOD Pizza has grown between May 2015 (when the first case ends) and early 2017.
Di-Ann Eisnor, Director of Growth at Waze, founded the company's Connected Citizens Program (CCP), a data-sharing partnership that provided officials with traffic incident and congestion data in exchange for data on anticipated road closures, re-routing, etc. Since 2015, her program had enabled officials in Kentucky and elsewhere to share more reliable traffic information more quickly with drivers. Amidst limited resources, her free program had become a key tool in their transit management arsenal. But now, facing ever-rising expectations and perhaps record crowds, the program that Eisnor and CCP's 3-person team had built, was short the analytical tools Kentucky officials felt they needed to prepare for the Kentucky Derby, their biggest event of the year. What would she do about that? Eisnor had a challenge on her hands in Kentucky. And also in Jakarta. And Los Angeles. From its launch in October 2014 through spring 2016, one-on-one contact by her small CCP team had spurred growth from 10 to more than 50 partners, including city, state and country government agencies, nonprofits and first responders. CCP's early successes had won numerous accolades in the international press. This high-profile media attention had, in turn, earned Eisnor and Paige Fitzgerald, CCP's Program Manager, kudos from their Waze colleagues and caught the attention of Waze's now-parent company, Google. But the successes came with high expectations, too. Waze was intensely focused on user-growth and Google's culture was to build things and then build those things "10x" bigger. How would Eisnor's team take a free program supported by three people to 500 partners, or more?
At the beginning of 2017, India was among the top 10 markets for Johnson Controls-Hitachi Air Conditioning India Limited, accounting for around 10 per cent of its revenue. The company was trying to increase its room air conditioner (RAC) market from 11 per cent to 20 per cent by 2020. It was positioned in the premium segment of the RAC market but wanted to enter the popular segment, which was crowded with established players. The company's focus had been on the inverter air conditioner (AC) segment, which accounted for 40 per cent of its RAC revenue; however, because of this segment's market potential and growth, competition from key competitors was stiff. Under these circumstances, the company faced the dual challenge of finding the right strategy to establish itself in the popular RAC market and deciding how to defend its position in the inverter AC segment.
Sushma Industries Private Limited (SIPL) wanted to accelerate its growth after two decades as a small enterprise. Enabling growth required having the right talent in place, by first attracting these employees, and then evaluating and appropriately rewarding their performance. The new chief executive officer hired a human resources specialist to design and implement a compensation structure to recognize the changing competitive environment and to align SIPL's human capital strategy with the organization's strategic goals. The human resources specialist faced the challenges of establishing a new compensation structure in a growing organization, timing the change appropriately in the organization's growth journey, and aligning and positioning it to fit within the current organizational and industry context.
Set in late 2016, this case recounts the remarkable performance record of Blue Chip Growth Fund (BCGF), a mutual fund managed by Larry Puglia at T. Rowe Price, Inc. The case describes the investment style of Puglia, whose record with BCGF had on average outperformed the S&P 500 since the inception of the fund in 1993. The tasks for the student are to assess the performance of the fund, consider the sources of its success, and decide on the sustainability of Puglia's performance. Consistent with the introductory nature of the case, the analysis requires no numerical calculations. The instructor should not be deceived, however: the absorption of capital-market background and the implications of financial concepts in the case will fully occupy the novice. This case updates and replaces "Bill Miller and Value Trust" (UVA-F-1481) and "Peter Lynch and the Fidelity Magellan Fund" (UVA-F-0777). The case is intended for use in the opening stages of a finance course. It provides a nontechnical introduction to the U.S. equity markets and lays the foundation for some basic concepts in finance.
Behavioural economics, a relatively new branch of study, formally began in the 1980s and has garnered increasing attention from economists and neuroscientists since. Behavioural finance, a subfield of behavioural economics, attempts to explain financial market-related behaviour. This note introduces behavioural finance by providing an overview of fundamental behavioural economic theories and empirical findings, including more recent findings that have expanded the breadth of the field. It also outlines strategies for correcting irrational financial behaviour.
The founder of a cloud computing business needs to determine the costs of providing the company's services to its clients. Students must perform an activity-based costing exercise to determine the cost of the company's two core product offerings and recommend which product should become the company's focus. Students must also consider the treatment of upfront capital costs when determining profitability. To make a decision, students must understand the company, the industry in which it operates and the costing issues involved.
A financial advisor located in Hong Kong is requested by local clients for investment instruments with exposures to China stocks. He recommends several mutual funds of Value Partners. Value Partners is one of the largest asset management companies in Asia, and already has several funds investing in China stocks. To help customers decide which fund to invest, how should he evaluate and compare the performance of these funds? Which fund better satisfies the investment demand of each client?
The objective of this reading is to enhance understanding of the nature of the information that general purpose financial reports provide. This goal is achieved by exposing readers to the basic accounting concepts and assumptions that shape the form and character of this information.
AquaSafi Purification Systems Pvt. Ltd. (AquaSafi) was a social enterprise that aimed to provide clean water to people in the developing world. The organization assembled and sold its water purification technology, at cost, to villages and non-governmental organizations in rural India. Before deciding to change AquaSafi's current operating model, the executive director thought it would be useful to perform a cost/benefit analysis to see how the company's cash flow would differ at a new water filtration plant under the current and proposed operating models. He also wondered whether it made sense for AquaSafi to change its operating model as it expanded its operations, since the company's current operating model had been well received in the villages.
In 2016, the founder and chief executive officer of Red Star Macalline, China's largest furniture shopping mall operator, was finalizing the company's new growth plan-the "1001 Strategy." The plan was to be implemented in two phases: first, building 1,000 brick-and-mortar shopping malls, focused on home improvement products, and then integrating the malls into a seamless ecosystem through a single overarching Internet platform. The company faced challenges in being the first in the Chinese home improvement industry to forge such a path. Could the chief executive officer sustain the company's first-mover advantage? Would his overall strategy work? Did he need a reality check for the execution plan?
In its first three years, East Coast Lifestyle, a Nova Scotia-based apparel company and one of Canada's fastest-growing business ventures, sold more than 500,000 products and received plenty of publicity from celebrities who wore its gear. To continue its substantial growth, the company needed a market that offered room for expansion. In early 2017, the 25-year-old chief executive officer faced several options, including developing the company's Canadian brand portfolio with West Coast Lifestyle; expanding its main brand, East Coast Lifestyle, into the United States; and licensing the brand abroad. The real question was which strategy to pursue, and more importantly, how to implement the chosen strategy and roll it out.
In 2016, Inditex as a group with worldwide sales of US$24.9 billion, and Zara, as its flagship retail concept store, had recorded significant year-on-year growth in net sales at 11.5% and 13% respectively. However, despite a presence across 93 countries, Inditex's regional sales contributions were skewed. Europe, comprising only 26% of the global apparel market and exhibiting declining growth, accounted for 60.8% of Inditex revenues. The Americas, the second largest market in the world with 30% share, had the least contribution at 15.3%, and Asia Pacific, the fastest growing and largest market with 36% share of the global apparel market, contributed only 23.9%. Unlike other apparel producers, Zara manufactured 60% of its merchandise in the 'near markets' of Europe and North Africa, close to its logistics centres in Spain. The labour costs in these markets were substantially higher than Asia, where the bulk of global apparel production took place. Would this put Zara at a disadvantage in reaching out to the high growth Asian consumer markets of China and India? Moreover, while Zara had been online since 2010, its online sales in 2016 accounted for only 7% of its total sales. As consumers increasingly shopped online, would Zara with its reliance on stores and impulse purchases become another retail casualty of e-commerce?