The case describes how Uber, the mobile ride hailing service provider, made an entry into China in July 2014 and, after facing stiff competition from local players, was forced to sell its stake and exit the country two years later. Prior to Uber's entry, China's major players, Didi and Kuaidi, had been competing fiercely to attract both riders and drivers by offering steep discounts and subsidies. To compete with the two local players, Uber established a strategic partnership with Baidu, one of China's largest Internet companies. Shortly after, Didi and Kuaidi merged to form a formidable, monopolistic competitor against Uber, controlling almost 95% of the ride hailing business. Uber's future in China appeared bleak. It had been losing over US$1 billion a year in China since its entry into the market. Faced with such stiff competition and recurring loses, Uber sold its stake and exited China in August 2016. Now Travis Kalanick, CEO of Uber, would have to assess what went wrong, what could have been done differently, and what should be the next steps for expanding and increasing Uber's market share in Asia.
Luminopia-a start-up founded in January 2016 by three Harvard College freshmen-uses virtual reality technology to treat amblyopia (more commonly called "lazy eye"), the single biggest cause of visual disorders among children. By February 2017, the three founders had raised $950,000 in angel funding and developed a prototype of their virtual reality product, which was in use in clinical trials at Boston Children's Hospital. As the founders prepare to bring their new medical device to market, they struggle with two key decisions: Should Luminopia create its own salesforce to sell its product or should it outsource? And how should the company price its device to maximize returns yet remain attractive to doctors, insurance providers, and individual patients?
In November 2014, an intern at Top Dog Wealth Management in Brisbane, Australia, was assisting with a market evaluation and company evaluation for Medibank Private Limited (Medibank). The upcoming Medibank initial public offering (IPO) was set to be one of Australia's largest and was expected to generate more than AU$4 billion from shareholders who were keen to own a piece of the country's largest private health insurer. Because the intern was new to the deal, her supervisor gave her access to his notes and directed her to use Bloomberg terminals. As she read through this material, the intern pondered some important questions: What was Medibank worth? Which valuation methods should she use?
The complex and fragmented agribusiness sector has been resistant to legislation surrounding greenhouse gas emissions and other climate change regulations. Cargill, one of the largest agribusiness companies and the largest privately held company in the U.S., has the ability to become a significant driver of the climate change conversation and set new industry standards. But, in 2013 Cargill was a traditionally silent group with a negative environmental record. Cargill CEO Gregory Page must decide whether to push Cargill into the climate change spotlight by joining the Risky Business Project, a new and innovative initiative that sought to evaluate the economic impact of climate change on the U.S. economy. Page must weigh the environmental and business implications of his decision, as well as how it may affect company stakeholders.
In 2013, Hampton Creek entered the mayonnaise marketplace with the world's first plant-based, vegan mayonnaise "Just Mayo". The creation of an egg-free version of mayonnaise had the potential to upset the market, especially for Unilever's Hellmann's brand. The case provides an overview of Unilever's role in the mayonnaise market, highlighting its commitment to innovation and sustainability, as well as its analysis of Hampton Creek as both an opportunity and a threat. Students are asked to examine this complex problem with Unilever and grapple with the tension between encouraging innovation and progress, while protecting a key source of revenue from a new market entrant.
Kaya Skin Clinic (Kaya) was started in India in 2002. It expanded its operations to the Middle East in 2003. The company's value proposition was to provide medical advice from a dermatologist, which formed the basis for product and service recommendations that would dramatically improve customers' skin. The company had worked hard to position the Kaya brand through defined e-marketing and customer relationship management strategies; however, in 2015, Kaya needed to consider whether combining expertise, customized solutions, and a friendly environment would continue to work for the brand, or whether it was time to revamp and redefine the Kaya brand in the Middle East.
In the spring of 2016, the San Francisco Museum of Modern Art, or SFMOMA, opened its doors for a series of celebrations following a three-year closure. The museum had much to rejoice: a $305 million renovation that included a spectacular new ten-story addition that almost tripled gallery space; the 100-year loan of the renowned 1,100-work Doris and Donald Fisher Collection of postwar and contemporary art; the success of the "Campaign for Art," which saw generous donors gift or promise approximately 3,000 artworks; and the opening of the new Pritzker Center for Photography, the largest gallery and research space for photography in the United States. Reviews that rolled out in the wake of the celebrations proved largely laudatory. The Boston Globe, for instance, said SFMOMA was not only bigger, it was "also better-to such a degree, and in so many interesting, potentially game-changing ways, that for the next six months museum directors everywhere are going to be driven crazy fielding the same question: 'Have you seen what they've done in San Francisco?'" But once SFMOMA re-opened to the public on May 14, Director Neal Benezra and his colleagues had to get down to the business of running what was in many regards a brand-new museum. Most crucially, perhaps, they had to determine how to best continue fulfilling Benezra's oft-repeated pledge: to make SFMOMA mean more to more people. This case, based on interviews with Benezra, his colleagues, and SFMOMA Board President Robert J. Fisher and Board Chairman Charles R. Schwab, explores SFMOMA's effort to fulfill Benezra's pledge.
Kaya Skin Clinic (Kaya) was started in India in 2002. It expanded its operations to the Middle East in 2003. The company’s value proposition was to provide medical advice from a dermatologist, which formed the basis for product and service recommendations that would dramatically improve customers’ skin. The company had worked hard to position the Kaya brand through defined e-marketing and customer relationship management strategies; however, in 2015, Kaya needed to consider whether combining expertise, customized solutions, and a friendly environment would continue to work for the brand, or whether it was time to revamp and redefine the Kaya brand in the Middle East.
In 2014, Mar Hershenson and Pejman Nozad teamed up to form Pear VC, a venture capital firm that invested in start-ups spanning three stages of company development: 1) pre-seed, which Pear termed "soil"; 2) seed; and 3) Series A. The duo had known each other for well over a decade before creating Pear VC. And while they have very different backgrounds-Hershenson had founded several companies after receiving her PhD in electrical engineering, while Nozad had invested in dozens of successful start-ups as an angel investor after immigrating to the United States from Iran-they shared the same deep-rooted mission of helping early-stage start-ups succeed. Along with financial capital, Pear provided its portfolio companies with the tools, network, support, and mentorship needed to grow their businesses. Hershenson and Nozad took great pride in Pear's high-touch, values-driven approach, which they deemed "partnering" rather than "investing." The two spent significant time helping start-ups develop into sustainable, category-defining companies, whether that meant assisting with an operating plan, introducing founders to potential employees, or connecting teams with experts in a given industry. The "Pear VC" case explores the myriad challenges associated with forming and growing a seed-stage venture capital firm, from raising a fund, to aligning on investment criteria, to scaling the business.
Riccardo Zacconi was the co-founder and CEO of King Digital Entertainment, the video game company which had quickly established itself as the world's leading maker of casual games for mobile devices after the sensational success of its game "Candy Crush Saga." Zacconi had only a few days left to decide what to reply to Activision Blizzard, one of the largest video game publishers in the world, which had offered to acquire King for almost $6 billion. King had already managed to successfully adapt to disruptive technological changes in the course of its history, could it continue to go solo? Or would an acquisition by a complementary video game maker like Activision be the best choice for King to continue to thrive? The clock was ticking but Zacconi knew that whatever the final decision, it had to satisfy one condition: Player was King.
The Corporate Strategy Reading uses the lens of value creation and value capture in order to examine corporate strategy. It highlights why firms, especially those competing in multiple businesses, need a corporate strategy in order to guide their decisions about the scope of businesses they should operate in, as well as whether and how to structure the relationships between these businesses. In doing so, the Reading emphasizes how different modes of coordinating economic transactions affect the likelihood of positive and negative synergies. The Reading also considers how a firm should organize in order to implement its corporate strategy successfully. It concludes with two short supplemental readings that consider the interaction between corporate strategy and organizational scope.
In 2016, two years after leading OCBC through its largest acquisition of Wing Hang Bank, Group CEO Samuel Tsien settled into his flight home from a townhall meeting with his new colleagues in Hong Kong. Addressing them in Cantonese, he felt that the session went well, and that the cultural fit was good. Tsien continued the OCBC tradition of being sensitive to the concerns of staff in the acquired entities and their local business and regulatory requirements, even as OCBC integrated them to group standards in finance, compliance, audit and risk management. In the previous decade, OCBC had also acquired Bank NISP in Indonesia, and ING Asia Private Bank (IAPB) to spur the group's regional growth. Looking back, Tsien was satisfied that OCBC had successfully integrated them to achieve its strategic intent. Key executives in the acquired banks had stayed with the new owner. Major customers were successfully retained and had expanded their business with the OCBC Group. The growth trajectory of the acquired banks accelerated and new horizons opened. How did OCBC execute its acquisition strategy? What was its approach to integrating its acquisitions?
On April 20, 2010 an explosion rocked the Deepwater Horizon drilling rig in the Gulf of Mexico 41 miles off the coast of Louisiana. BP was using the Deepwater Horizon to drill an "ultra-deep" offshore well. The explosion was the result of a "blowout" of the wellhead at the seabed of the Gulf of Mexico, 5,000 beneath the drilling rig. BP was unable to cap the leaking well for nearly 3 months while oil spilled out of the wellhead at a rate of 35,000 to 60,000 barrels per day. By late May, thick crude was fouling Louisiana, Alabama and Florida coastal marshes and beaches. Tourism revenues fell and thousands of miles of fishing grounds were closed. BP was finally able to seal the well (temporarily) on July 14 and then permanently seal the well in September. By that time, an estimated 4.9 million barrels (207 million gallons) of oil had been spilled and nearly 700 miles of coastline had been oiled. Years of damage assessments, restoration projects, claims and lawsuits lay ahead. This case is designed for use in classroom discussions that analyze and dissect the problem and the actions taken. The oil spill disaster and response is analyzed in terms of: (1) situational awareness (cognitive biases in identifying and understanding the magnitude and ramifications of disasters), (2) the concept of "responsible party" and liability in environmental law, (3) the novelty and size of disasters and the scalability of response efforts, (4) the response structure used to manage oil spills, (5) the role of government vs. the private sector "responsible party" in managing the cleanup of environmental accidents, (6) the tensions between local, state and federal governments in managing a crisis, (7) leadership during crisis, (8) disasters as political events, (9) the challenges of managing public perception and expectations during a crisis, (10) the role of public opinion in the shaping of responses to disasters, and (11) the role of the media in shaping the "narrative" of disasters.
Back in 1999, the Spanish oil company Repsol purchased 98 percent of the Argentine oil company YPF's shares for more than $15 billion and changed its name to Repsol-YPF. At the time, the New York Times said the deal "appears to be a perfect marriage" and asked, "Repsol-YPF: As Good as It Gets?" However, on April 16, 2012, that "perfect marriage" was effectively annulled when Argentine president Cristina Fernandez de Kirchner announced that her government was expropriating YPF. "The model chosen for the future of YPF is not nationalization," said Fernandez, "but recovery of sovereignty and control of hydrocarbons." This case explores, in three parts, the background to the expropriation of YPF; the responses considered by Repsol; and Repsol's ultimate decision to fight the expropriation, which resulted in its receiving $5 billion in guaranteed bonds from the Argentine government.
Supplement to case P90. Back in 1999, the Spanish oil company Repsol purchased 98 percent of the Argentine oil company YPF's shares for more than $15 billion and changed its name to Repsol-YPF. At the time, the New York Times said the deal "appears to be a perfect marriage" and asked, "Repsol-YPF: As Good as It Gets?" However, on April 16, 2012, that "perfect marriage" was effectively annulled when Argentine president Cristina Fernandez de Kirchner announced that her government was expropriating YPF. "The model chosen for the future of YPF is not nationalization," said Fernandez, "but recovery of sovereignty and control of hydrocarbons." This case explores, in three parts, the background to the expropriation of YPF; the responses considered by Repsol; and Repsol's ultimate decision to fight the expropriation, which resulted in its receiving $5 billion in guaranteed bonds from the Argentine government.
Supplement to case P90. Back in 1999, the Spanish oil company Repsol purchased 98 percent of the Argentine oil company YPF's shares for more than $15 billion and changed its name to Repsol-YPF. At the time, the New York Times said the deal "appears to be a perfect marriage" and asked, "Repsol-YPF: As Good as It Gets?" However, on April 16, 2012, that "perfect marriage" was effectively annulled when Argentine president Cristina Fernandez de Kirchner announced that her government was expropriating YPF. "The model chosen for the future of YPF is not nationalization," said Fernandez, "but recovery of sovereignty and control of hydrocarbons." This case explores, in three parts, the background to the expropriation of YPF; the responses considered by Repsol; and Repsol's ultimate decision to fight the expropriation, which resulted in its receiving $5 billion in guaranteed bonds from the Argentine government.