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Excel spreadsheet for students.

Instructor spreadsheet for product 8B16N006.

Student spreadsheet for product 9B16N006.

In April 2015, Coromandel International Limited (CIL), a manufacturer of fertilizers based in Chennai, India, requested that the National Bank of India increase CIL’s existing short-term finance arrangement. CIL operated 14 state-of-the-art manufacturing facilities across India with a combined installed capacity of four million tonnes per annum and over 2,000 employees. It sold its products through a countrywide dealer network as well as in its own 800 retail chain stores, with plans for aggressive expansion both at home and to various countries in Southeast Asia, Latin America, and Africa. However, CIL was dependent on government subsidies and, because many of its raw materials had to be imported, was also dependent on a positive foreign exchange rate. Over the previous three years, CIL had acquired four fertilizer companies as part of its growth strategy in inorganics. With extended short-term financing, CIL could integrate these companies and take advantage of the resulting synergy. The country head of the Wholesale Banking Group was concerned that CIL’s request would exceed the bank’s exposure norms on the fertilizer industry as well as the bank’s prudential exposure limits on a single borrower. Should the bank accept CIL’s request for enhanced short-term borrowing?

If you think you know your customers well enough, think again. Every organization, regardless of its earnings and marketing sophistication, can benefit from a better understanding of its customers. Indeed, figuring out how to dramatically improve your customer experience is something to think about right now, if you want your organization to have a future. Coming waves of disruption threaten every established business on the planet. Since these waves are driven by a shift toward consumers, as well as a number of low-cost new technologies, they are unstoppable. Companies like Uber and Airbnb haven’t spent much money on marketing, but are taking over by word of mouth and by creating value through servicing customers in better ways. Established players should learn how to proactively raise the customer service bar and offer a “lights out” experience that can’t be beat. If leaders don’t focus on what it takes to get customers to stick with them, then the cost of customer acquisition becomes forbiddingly expensive. <br><br> Deploying analytics alone can no longer be relied upon as a source of competitive advantage because most analytics strategies are easily replicated. Companies must investigate what customers want before they want it. Knowing where customers want you to take them before they realize it (or someone else takes them there) involves creativity and design thinking. It requires understanding how generational thinking can bias your product or service development. It also requires getting outside of your industry and understanding how the ideal customer experience changes. Don’t be fooled by good surveys, reviews, sales, or market share data. They won’t tell you what’s coming or what weaknesses expose you to eager competitors with a better emotional connection to your market.

In March 2015, the founder and chief executive officer of Nyassa Retail Private Limited — a manufacturer of premium natural and luxury bath and body products based in Mumbai — was contemplating how to ensure the company’s future growth. Product acceptance had been phenomenal, allowing the company to build up a reasonable market share, with healthy profit margins. Although Nyassa had experimented with franchising as a quick way to gain a foothold in and cater to new target markets, it had quickly realized that the odds of losing control over the process due to lack of infrastructure were too high and might result in dissatisfaction and poor service. Thus, it had focused on developing its chain of exclusive retail stores, kiosks, and “shops in shops.” As competition from both Indian and international companies increased, the company was exploring online marketing options, return policy, packaging changes, and cross-selling for its new ultra-premium products. Should it penetrate deeper in India, skim the markets that showed high potential, launch the brand in overseas markets, or accept venture capital funding to achieve its goals?

After more than 1,100 people lost their lives in the 2013 collapse of the Rana Plaza garment factory building in Bangladesh, executives of Joe Fresh, a Canadian fashion and lifestyle brand, had to respond. Along with numerous other Western retailers, Joe Fresh had sourced much of its merchandise from the Rana Plaza factory. The disaster evoked an emotional public reaction, ranging from sympathy to outrage. The clothing industry had become a critical part of Bangladesh’s economy, and this was not an isolated incident. How would the Rana Plaza incident affect the public perception of Joe Fresh, and what could the company do to improve that perception? More fundamentally, how could Joe Fresh balance its competitive position, obligations to shareholders, and customer demands with ethical sourcing?

Instructor spreadsheet for product 8B15N001.

Student spreadsheet for product 9B15N001.

Today’s official interest rates are unprecedented, thanks to the spread of negative interest rate policy around the world. Negative interest rate policy is not an academic abstraction to be ignored by the corporate world. Indeed, negative rates come with negative implications for running a business. Until recently, zero was the lower bound on policy rates. But lately, various central banks representing about 25 per cent of global GDP have gone negative. Negative policy interest rates were even discussed in Canada last year by the Bank of Canada’s governor. The goal of negative rates is to make not using money costly for banks and to get them to lend it out, thereby stoking economic growth, job creation, consumption, investment, exports, a lower currency value, and inflation. <br><br> If the Bank of Canada looks like it might be headed negative on its policy rate, this means it is very worried about the macroeconomic conditions that make or break businesses. It also means the Bank of Canada may not be confident that politically motivated fiscal policies involving deficits, government spending and taxation will support economic growth. As a result, executives should be prepared to consider comprehensive reviews of important aspects of their businesses, including working capital, capital spending, financing, acquisitions, product pricing, compensation, and long-term contracting. Negative policy rates are very tough on bank margins and profitability, and weakened banks are no help in a stagnant economy; they encourage people to do unusual things with their money like storing it in a safe or hiding it. Finally, negative policy rates turn time-honoured accounts receivable and accounts payable policies upside down such that you may now want to receive money as late as possible and pay it out as soon as possible.

Mahindra & Mahindra Limited was the largest manufacturer of farm equipment in India, with a more than 40 per cent market share. It manufactured five different tractor brands in the domestic market, including a brand of mini-tractor, the Yuvraj 215 NXT. This brand was targeted at small farmers with less than two hectares of land, who were primarily dependent on bullocks or power tillers for farming but aspired to own a tractor to increase productivity at an affordable price. Although such farmers formed over 70 per cent of the farming population, the penetration of tractors in this segment was the lowest. While the situation demonstrated high potential, selling tractors in this segment was challenging due to low product awareness, limited access to information, and low financial resources among target customers. With such a product in its portfolio, how should Mahindra & Mahindra Limited promote the Yuvraj 215 NXT among small and marginal farmers?

In June 2013, The Coca-Cola Company (TCCC) launched Coke Life, a naturally sweetened but sugar-reduced carbonated soft drink. Coke Life complemented TCCC's established product line consisting of Coca-Cola Classic, Diet Coke, and Coke Zero. Coke Life substituted a portion of the sugar component with stevia leaf extract and contained 35 per cent less sugar than Coca-Cola Classic. TCCC claimed that “Coke Life is for adults looking for a great tasting Coke but [one with] fewer kilojoules and [that is] sweetened from natural sources.” Affected by governmental interventions, such as the implementation of special taxes and warning labels, the consumption of soft drinks had slowed down significantly, which had caused leading soft drink manufacturers to introduce “green” product modifications of their traditional beverages. When TCCC launched Coke Life, the market for carbonated soft drinks was highly competitive and was shrinking in part due to concerns over soft drinks contributing to obesity and type 2 diabetes. Was Coke Life likely to be successful? Or was it simply a “greenwashed” product in a highly segmented market?

In 2009, two young entrepreneurs created Convene, a New York based company with an innovative business model that catered to an underserved segment of the local meetings industry. They were in the unique position of having no real direct competitors and a tight grip on a niche market within a US$15 billion industry. However, to achieve their growth ambitions for the company, the duo had to deftly navigate the changing competitive landscape, identifying which players could become real competitors and which could be co-opted into becoming partners and clients. They also needed to adapt their business model to capture these opportunities. Over time, their expensive expansion standards and operating costs began to present a nagging concern: With only so much capital available each year, just how quickly could Convene really grow? Would the capital intensiveness of their current model stymie the rapid growth that they so desperately wanted (and needed) to achieve in order to establish a nationally recognized brand?

In 2014, an inquiry was filed against a member of the Indian Police Service who had engaged in his duties as a police officer with the utmost integrity. As the director general of police, the highest administrative position in the police service, he had acted with independence and honesty in pursuing several high-profile cases. Consequently, the state government retaliated by filing a First Information Report (FIR) against him in a matter that was more than 10 years old. Although there were some ambiguities pertaining to the technical details of the case, the director general was proud of his reputation and trusted the judicial system. Would the High Court agree with the director general that this inquiry was unwarranted and exonerate him by quashing the FIR filed against him?

In September 2015, Susie reflected on the performance of her personal investment portfolio over the past seven years. Susie had invested in two exchange traded funds (ETFs): Lyxor ChinaH and Lyxor MSIndia. She was now considering Lyxor USDJIA as a third ETF to diversify her risk. This analysis would involve the concept of portfolio diversification and the application of the capital asset pricing model. In addition, Susie would need to calculate mean returns, standard deviations, covariances, correlations, betas, and required returns in order to fully assess the merits of her decision. Although Susie had been satisfied with her portfolio performance over the past seven years, the high growth in these two emerging markets had fizzled out lately. Should Susie diversify her portfolio or remain invested in China and India only?

In early January 2016, FinSAS Financial Research Inc. needed to recruit more programmers because of its rapid growth. However, the average annual salary for financial programmers had been increasing significantly. The financial research company decided that it needed advice from a “programming strategist” from the software engineering industry. The company contacted such a strategist to build a reusable module for use by all company programmers, to avoid coding the same functionality over and over. FinSAS provided access to some of its programs and asked the strategist to prepare a proposal for the project. Would the strategist’s proposal meet the needs of FinSAS and its programmers?

Instructor spreadsheet for product 8B16N004.

Anyone looking at stock charts these days has good reason to feel like cutting their losses. Despite the partial recovery after the Global Financial Crisis, sovereign and consumer debt levels have only increased while commodity prices have plummeted along with China’s economic growth levels, so thinking about rebalancing investment portfolios is clearly a good idea. When thinking about rebalancing investments, it is unwise to let stock charts alone convince you to sell or buy. Stock charts are widely used to help professional and retail investors make decisions regarding when to buy or sell equities. But research shows that stock charts display information in a way that leads to irrational decision making. The problem with using stock graphs to decide whether or not it is time to sell a company’s shares has to do with the importance that people place on observations. Simply put, the most recent past is frequently seen as more diagnostic than the distant past and so lines on a graph can be misleading. Furthermore, research has found that feeling isolated or ostracized causes consumers to pursue riskier financial opportunities.

The chief executive officer of South Africa’s Nedbank Ltd. contemplated the dilemma of growing the bank in a mature, competitive market within his own country, as well as successfully expanding outside of South Africa’s border. Nedbank’s extensive investment in Ecobank, with its pan-African presence, was a risk, and required improvement of the capabilities of the leaders to execute Nedbank’s strategy. To achieve this, Nedbank focused on building an internal capacity through coaching and mentoring programs for its leaders, in addition to other initiatives to enable employees to execute the bank’s strategy. The chief executive officer was proud of his own innovative idea for a new product, and hoped he was setting an example for other leaders. He was equally proud that Nedbank was a values-oriented business that believed in using its influence to positively impact its community and environment. In 2014, despite positive advancements, the economic situation was grim and the chronic lack of skilled workers was a detriment to the country, and to Nedbank in particular. Could Nedbank rapidly increase its capabilities in time to meet the immediate challenges it faced as it expanded into locales where the stakes, and the risks, were higher?

In 2012, All Nippon Airways diversified into Japan’s emerging low-cost carrier market by launching two new low-cost carriers: Peach Aviation and AirAsia Japan. After one year, Peach Aviation experienced financial losses and operations failures; after two years, the company announced cancellation of many flights. The second carrier, AirAsia Japan, ended its operations in 2013, and was later restructured as Vanilla Air, a wholly owned subsidiary of All Nippon Airways. Why was a highly successful flag and legacy carrier unable to successfully run a low-cost carrier in Japan?