In 2012, the founder of Patanjali Ayurved Limited (PAL) and his associate were leveraging a unique business model by venturing into the fast-moving consumer goods sector in India. By March 2016, PAL had become the fourth-largest company in this highly competitive industry and was planning to become the market leader by 2020. Through its low-priced herbal and Ayurvedic products, PAL occupied a unique white space in the already existing strategic groups of domestic and multinational competitors. Industry experts were undecided about whether PAL posed a serious threat to multinational and domestic firms or if PAL should be praised for creating a new market for its products in India. If PAL was posing a real threat, then other fast-moving consumer goods firms had to develop strategies to maintain their own position, and PAL needed a plan to face the challenges involved in its future growth.
Doing business in China requires a preemptive intellectual property (IP) strategy because local firms built IP arsenals after learning from past patent battles. As foreign companies flocked to China over the past three decades, they faced significant IP risks such as counterfeiting and the difficulty of enforcing IP rights. Now they have a new problem—an escalating risk of committing an infringement of Chinese intellectual property rights. While China remains a major factory of the world, Chinese government officials have been pushing to transform the country into an innovation powerhouse. Several recent moves have been made to transform the economy, including policies to support the development of IP. Consequently, there has been an influx of Chinese patents filed in the manufacturing and technology sectors, and the impact of these patents is being felt domestically and internationally. <br><br>To gain long-term IP rights in China requires a local patent in one of three categories: a) regular invention patent, b) utility model (UM) patent, or c) design patent. Besides driving a dramatic increase in patent filing, Chinese public policy has had a disturbing side effect—an explosion of domestic UM filings. This paper recommends that foreign companies file UM patents on their OEM and ODM products in China as soon as possible—even before sourcing Chinese manufacturers. Foreign companies, especially SMEs in the manufacturing and technology sectors, must implement a Chinese market IP strategy that includes filing UM patents and/or design patents before entering. They should see this as a necessity, even if they don’t plan to enter the Chinese market anytime soon. If they don’t, foreign companies should heed the advice given to Chinese firms by American lawyers in 2003: expect to be sued.
Case A describes the challenges a multinational corporation, Cisco Systems Inc., faces in an emerging market in developing new products specific to local needs. Dr Ishwardutt Parulkar and his team at Cisco's Indian subsidiary in Bangalore had identified a promising concept that could potentially become the company's first product developed end-to-end at the India site. They had to address three critical issues: How to define the right product to address the specific needs of telecom network customers in the emerging market? How to build the business case for approval from the headquarters in the US? How to compensate for the significant gaps in the Indian ecosystem that was not fully mature in terms of partners and skills required to develop such a product? Case B presents how the Cisco team resolved the new product development challenges. The success of the new Advanced Services Router (ASR) 901 would mark a milestone in Cisco's journey of evolution of engineering capability in emerging countries into the next phase of innovation and thought leadership. Learning objectives: 1) Identify key challenges in developing a mainstream product from concept to completion in an emerging market. 2) Understand essential factors for building subsidiary R&D capabilities for mainstream product development. 3) Introduce the Technology Champion framework, which serves to bring out innovation aspirations in a subsidiary R&D team.
Case A describes the challenges a multinational corporation, Cisco Systems Inc., faces in an emerging market in developing new products specific to local needs. Case B describes the journey undertaken by Dr Ishwardutt Parulkar and his team in developing the Advanced Services Router (ASR) 901 - from idea to launch in 2011. The case helps to identify key success factors for new product development through a decentralized R&D model in emerging markets and to recognize the importance of the ecosystem for successful innovation. Learning objectives: 1) Identify key challenges in developing a mainstream product from concept to completion in an emerging market. 2) Understand essential factors for building subsidiary R&D capabilities for mainstream product development. 3) Introduce the Technology Champion framework, which serves to bring out innovation aspirations in a subsidiary R&D team.
This module reading shows how to link profit plans and other performance measurement systems to both internal and external markets. Starting with the transfer of goods and services within a firm, the module discusses the different methods of designing transfer pricing systems, the effects of these methods on the profitability of the divisions involved, and explains the trade-offs among transfer pricing policies. Next, the module focuses on the linkage between internal business operations and external markets including capital markets, customer markets, and supplier markets. The discussion illustrates how managers use accounting-based tools such as profit plans, ROE measures, and residual income measures such as EVA to communicate with these markets. While this module is designed to be used alone, it is part of the Strategy Execution series. Taken together, the series forms a complete course that teaches the latest techniques for using performance measurement and control systems to implement strategy. Modules 1 - 4 set out the foundations for strategy implementation. Modules 5 - 10 teach quantitative tools for performance measurement and control. Modules 11 - 15 illustrate the use of these techniques by managers to achieve profit goals and strategies. View the full Strategy Execution series at: hbsp.harvard.edu/strategy-execution.
This module reading introduces diagnostic and interactive control systems. Diagnostic control systems are the management-by-exception systems that managers use to monitor the achievement of their business strategy. Interactive control systems are the systems that top managers use to focus the organization on strategic uncertainties. Diagnostic control systems and interactive control systems work together to ensure the implementation of today's strategy and, at the same time, allow the organization to position itself for tomorrow. The module discusses how managers choose which interactive system to use and explores the risks that are introduced through the use of these performance measurement and control systems. While this module is designed to be used alone, it is part of the Strategy Execution series. Taken together, the series forms a complete course that teaches the latest techniques for using performance measurement and control systems to implement strategy. Modules 1 - 4 set out the foundations for strategy implementation. Modules 5 - 10 teach quantitative tools for performance measurement and control. Modules 11 - 15 illustrate the use of these techniques by managers to achieve profit goals and strategies. View the full Strategy Execution series at: hbsp.harvard.edu/strategy-execution.
This module reading explains how managers use performance goals and incentives to ensure that employee actions align with the overall business strategy of the organization. The module begins by discussing how managers use goals to communicate business strategy, the importance of targets and benchmarks for motivation, and the multiple purposes for which goals are used, including planning, coordination, motivation, and evaluation. Three tests are offered to evaluate the effectiveness of performance goals: alignment with strategy, measurability, and linkage to economic value creation. The discussion then turns to intrinsic and extrinsic rewards and examines short-term incentives such as bonuses and recognition as well as long-term incentives such as deferred payments and stock options. Because performance goals and incentives define success (and failure) for individuals, this module also explores the interaction of goals and incentives with human behavior. While this module is designed to be used alone, it is part of the Strategy Execution series. Taken together, the series forms a complete course that teaches the latest techniques for using performance measurement and control systems to implement strategy. Modules 1 - 4 set out the foundations for strategy implementation. Modules 5 - 10 teach quantitative tools for performance measurement and control. Modules 11 - 15 illustrate the use of these techniques by managers to achieve profit goals and strategies. View the full Strategy Execution series at: hbsp.harvard.edu/strategy-execution.
Between late 2014 and late 2016, Tesla and CEO Elon Musk undertook several major, and risky, initiatives that would dramatically expand the scale and scope of Tesla's business. In late 2014, Tesla began construction on a $5 billion "gigafactory" that would manufacture lithium-ion batteries used in Tesla's electric vehicles on an unprecedented scale. In early 2015, Tesla announced a new product line of battery packs designed for large-scale energy storage for residential, commercial, and utility-scale installations. In 2016, the company acquired SolarCity, a leading solar energy firm, creating what Musk called "a vertically integrated energy company." These moves, representing billions of investment and extension into new industries, came at a time when Tesla was still losing money and struggling to scale up production of its electric vehicle lines to meet ambitious delivery targets. Meanwhile, Musk was also CEO of SpaceX, which was, while growing its business of launching satellites and cargo into space for commercial and governmental clients, preparing to take astronauts into space, pioneering the use of reusable rockets, and announcing plans to colonize Mars. Would Musk be able to realize his ambitious goals or was he taking too many risks with his investors' money?
When Tony Tan Caktiong had stepped down as president and CEO of Jollibee Foods Corporation in mid-2014, he had been succeeded by his younger brother, Ernesto Tanmantiong. In 2016, the brothers were working together to realize the company's vision of making JFC a truly international organization with a significant global presence. As they positioned the company for expansion, they thought perhaps the company's eight values should become more succinct, memorable, and aligned with the company's vision. Tan Caktiong was aware, however, that some company executives would view pausing to contemplate values a waste of time; they would argue that values are essentially identical at every company and irrelevant to performance. Others would assert that values should not change. Was it the right time to reassess the company's values? How could Tan Caktiong persuade skeptics that values make a difference? And as the company grew, should values be articulated at the corporate level, or should they vary among JFC's brands?
Cameron (Cam) Barker, founder and CEO of Blake Sports Apparel and Switch Activewear, manufacturers and distributers of sports apparel and accessories, was facing a challenge with his executive team. Their inability to work together on seemingly simple issues was a chronic problem. Although they were a competent group of executives, most of whom had been with Barker for a number of years and had played an integral role in the growth of his company, the team's dynamics were dysfunctional. Lack of communication, mistrust, and refusal to collaborate were some of their biggest challenges. Barker had had enough and was ready to take action, but what action should he take? How could he teach the executive team to work together? Did he have the right people in the right roles? Was the team appropriately structured and managed? How could Barker bring his executive team together in order to maximize performance and face the challenges and opportunities that would be presenting themselves to his young company in the months and years ahead?
Ruwwad was a youth-centric community development organization aimed at empowering and supporting marginalized and underdeveloped communities in the Arab world. It had launched numerous programs revolving around three main components: 1) youth empowerment, 2) community empowerment, and 3) child development. Samar Dudin, regional head and program manager of Ruwwad, was reflecting on the key strengths, weaknesses, opportunities, and challenges that Ruwwad faced in its home operation so that she could present her recommendations to the board of directors (BOD) on Friday. Her main concern was to present to the BOD a reasoned plan on how to expand the Ruwwad model and how to strengthen the partnerships required to scale up the impact of the model in the future.
In 2016, the founder and chief executive officer of West Paw Design (WPD) was faced with a growth dilemma: how could he align WPD's socially responsible ethos with his desire to expand business activities in the growing pet products market? Based in Bozeman, Montana, WPD developed, manufactured, and distributed pet products. The company was a certified "B Corporation," meaning its social and environmental credentials had been verified by an external organization, B Lab. The founder had to consider his options very carefully, because some of them could undermine or negate WPD's growth objectives, as well as its cherished B Corporation principles.
Alchemist Accelerator follows the story of Ravi Belani, founder and Managing Director of Alchemist Accelerator, as he leads one of the leading enterprise-focused accelerators in Silicon Valley. The case discusses the origins of the program, as well as the many challenges faced by Belani and his team as they seek out potential methods of scaling the program. The management team debate difficult choices, such as how to preserve the quality of the Alchemist program while also reacting to rapidly changing market dynamics. This case prepares students who are interested in learning more about venture capital, enterprise startups, and enterprise-focused accelerators.
In April 2015, Ian Shakil and Pelu Tran, co-founders of Augmedix, are discussing how to grow their emerging health care startup. The company's sole product, also called Augmedix, streams video of doctor-patient interactions to remote medical scribes, thus freeing doctors from the burden of having to manually input information into an electronic medical record (EMR) and giving them additional time to focus on patients. Shakil and Tran had grown the company by allowing any qualified doctor or health system to use the service, but are now discussing whether they should segment the market and focus on a particular type of client. They also wonder whether Augmedix's current pricing appropriately reflects the value their service provides. Lastly, the two want to discuss how to staff and structure the company's nascent sales function as Augmedix grows.
Fola Laoye is the Group Managing Director of Hygeia Group, a Nigerian healthcare insurer and provider, and she is deciding on the optimal strategy to grow the provider arm of her business. Hygeia Group was founded in the 1980s by her physician parents, and although operating a healthcare company in Nigeria offered challenges particularly in human resources and infrastructure, by 2011, it had expanded to include three hospital and clinic sites and a large insurance company. The company has just received a large equity investment from an international private equity company, and it has decided to focus on expanding tertiary care capabilities in its hospitals. A consulting team has identified cardiology, oncology and advanced surgery (orthopedic and minimally invasive) as areas with strategic potential. However, Ms. Laoye must decide which of these options offers the greatest growth opportunities. In addition, as her company grows, she must decide the how best to structure the payor and provider aspects of her business in a way that maximizes synergies for both.
This module reading explains how to construct a strategy map and build a balanced scorecard. Using an internal value chain model, the module illustrates how a balanced scorecard can support and enable customer management, innovation, operations, and post-sale service processes. The analysis provides details on how to design performance indicators to monitor financial goals, customer goals, internal process goals, and learning and growth goals. The module discusses how these measures provide a comprehensive set of tools for monitoring strategy execution. The module concludes by discussing how to assign accountability for balanced scorecard measures to individual managers to ensure focus and alignment throughout the organization. While this module is designed to be used alone, it is part of the Strategy Execution series. Taken together, the series forms a complete course that teaches the latest techniques for using performance measurement and control systems to implement strategy. Modules 1 - 4 set out the foundations for strategy implementation. Modules 5 - 10 teach quantitative tools for performance measurement and control. Modules 11 - 15 illustrate the use of these techniques by managers to achieve profit goals and strategies. View the full Strategy Execution series at: hbsp.harvard.edu/strategy-execution.
In April 2014, a research analyst for UR Investing, an investment group from the University of Regina, in Saskatchewan, Canada, was contemplating the decision of investing in a real estate investment trust (REIT). The decision had strategic implications because it would affect the risk profile of the student-managed fund. The analyst was given the task of evaluating the H&R REIT in particular and estimating a target price for H&R’s units. He had to carefully weigh the benefits in terms of returns generated against the risk of taking a position in the REIT. He had to analyze the strategic value of investing in REITs and decide whether to recommend that UR Investing should buy H&R units.
Hillary Clinton was expected to succeed U.S. President Barack Obama, but not because of her character. Americans were expected to elect her as the candidate often seen as the “lesser of two evils,” but U.S. voters shocked the world by handing the Oval Office to Donald Trump. Being a good head of state requires being a good leader who goes about nation-building in a sustainable and socially responsible way, and this requires more than competencies and commitment. Good leadership requires having what Ivey calls “leader character” in order to ensure that competencies are deployed in ethical and effective ways for all stakeholders. Character in the White House matters more than ever before. After all, what mainly set America apart in the past was its ability to create wealth while maintaining a perceived commitment to religious tolerance, equality, and freedom. The pivotal role that character plays in good leadership has been articulated by Ivey research on the causes of the 2008 financial crisis. But as Ivey research notes, the expensive lessons learned in the aftermath of that crisis already appear forgotten as high-profile cases of appalling corporate behaviour continue to undermine capitalism. While Trump could prove to be a strong president who creates American jobs in the medium term, the example he has set as a leader is far from presidential and his election does not bode well for those who care about social responsibility and economic sustainability.
In late 2011, Netflix was migrating from its highly successful business model of delivering DVDs by mail to streaming movies and other media content directly to subscribers' televisions. To be profitable, Netflix decided to charge more for receiving DVDs by mail—a service that its existing customers had come to expect as a minor add-on to their original subscription arrangement. This charge led to a huge backlash: subscribers defected and Netflix's stock price dropped. Netflix faced the dilemma of remaining profitable in the video streaming business while paying much more for content and dealing with competition that had been absent in its DVD-by-mail business model. The company was at a crossroads; the path it chose would affect its future. Should it return to combining the two services or continue with two separate services and live with the consequences?<br><br>This case is a follow-up to Netflix, 9B09M093, and precedes Netflix: Proving the Skeptics Wrong, 9B16M081.