In March 2020, the global pandemic was delivering a dose of volatility to the US economy. Catherine Faddis, the CIO of Grace Capital, a Boston-based long-only equity manager, analyzed movements in her portfolio while eyeing previously shelved opportunities to invest in preferred stock. The case explores the characteristics of preferred stock, the investment philosophy and strategy of Grace Capital, and the decision making process behind the team at the fundamentals-based investment fund.
The Allbirds: Decarbonizing Fashion (A) case introduces Allbirds as a footwear startup not only focused on simple design, comfort, and sustainable natural materials but on decarbonizing the wider fashion industry. Background material highlights the growing environmental impact of the footwear industry, including its use of leather and fossil-fuel-based materials and its focus on shorter product lifespans. Allbirds' product development process, by contrast, collaborated with suppliers to develop natural materials including wool and sugarcane to substitute for conventional petroleum-based materials and leather. The case is set in 2021, when Allbirds was extending its product range into apparel and expanding beyond its online store to open more retail stores around the world. Allbirds was freely sharing its know-how and material innovations with its competitors to try to scale its efforts to decarbonize fashion, yet the company was also keen to remain ahead and differentiated based on its shoes' comfort, minimalist design, and sustainable natural materials. The Allbirds: Decarbonizing Fashion (B) case encourages students to assess Allbirds' product development and go-to-market strategies now that Allbirds is a publicly listed company. The (B) case provides a 2024 update on Allbirds including its initial public offering, mounting losses, decreasing share price, and the release of a strategic transformation plan. It also covers co-founders Tim Brown's and Joey Zwillinger's transition out of the co-CEO role.
In October 2020, after spending almost a decade to turnaround Southern Bancorp, an Arkansan bank founded with the mission to provide financial services to rural, underserved communities, CEO Darrin Williams is wondering how Southern Bancorp should continue to grow. Since taking the helm of the bank, Williams has worked with his team to revamp the bank's finances, provide liquidity to its investors, raise new capital, and prove that the bank's operations (dubbed "the margin") reinforced its mission to provide financial services to underserved communities. Williams has several questions to consider in preparing Southern Bancorp's next phase of growth: Should he continue Southern Bancorp's efforts to grow in preparation for a traditional public offering? Or should he take advantage of the increasing public and private capital dedicated to racial equity to deepen the bank's mission and become a central player in the effort to close the racial wealth gap? Would listing Southern Bancorp in public markets disrupt the delicate balance between the mission and the margin? Was Southern Bancorp attractive enough to receive the dedicated capital flooding to close the racial wealth gap?
Launched in 2015 by Melinda Gates, co-chair of the Bill & Melinda Gates Foundation, Pivotal Ventures is an investment and incubation company. The company aims to support and promote transformational ideas, people and organizations, and advance social progress for women and families in the U.S. Hoping to leverage and expand her expertise in mission-driven investing, Erin Harkless Moore (HBS 2012) recently took on the role of new Director of Investments in Pivotal Ventures. As the company prepares for the new phase of growth that would improve its position in the Venture Capital (VC) market, Harkless Moore is tasked to select the next VC fund that Pivotal Ventures would participate in as an investor. Which VC fund would allow Pivotal Ventures to support more diversity in VC investing? Should she change the scoring and review process that ultimately led the decision of which opportunity to invest in? How could Pivotal Ventures perform well and generate high returns while staying in line with its organizational goals?
By mid-2016, five years of aggressive growth had transformed Fetchr from a small logistics startup to a 1,000-employee, full-fledged last-mile delivery company operating across four countries in the Middle East and North Africa (MENA). Already beneficiaries of the largest Series A round to the Middle East from an American firm, CEO Idriss Al Rifai and the Fetchr team had ambitions of raising another $40 million in Series B and deliberated continuing international expansion. But first, Al Rifai and his team needed to address the operational efficiency and profitability issues that led their investors to threaten the discontinuation of funding, and put the company's future at stake. The case provides background information on the logistics sphere in the Middle East and the challenges companies face in the region. The case then takes the reader through Al Rifai's journey of founding and growing Fetchr, backed with innovations like their patented GPS-based delivery technology. Finally, the case zooms in on Fetchr's management team as they race against time to perform evaluations of their operational efficiency, weigh cost-cutting options, and explore strategies to improve profitability.
In October 2007, Tarek Sakka and Fouad Dajani launched Ajeej Capital, the first independent investment advisory in the MENA region. Fittingly named ajeej, an Arabic word which translates to "growth and propagation in a chaotic setting," the firm's AUM grew from $20 million to $1 billion before its 10th anniversary despite a deep-cutting global financial crisis, market turmoil driven by the Arab Spring, and years of weak oil prices. Leveraging deep local knowledge, strong relations in the region, and a "PE investment approach in public equity markets," Ajeej had outperformed its benchmark regional stock indices and attracted investing capital from large institutional investors around the world. The case follows the investment methodology of Ajeej Capital's investment fund, the Ajeej MENA Fund, through the turmoil of Ajeej's first decade. The case then focuses in on September 2016, with Sakka and Dajani facing a historic hurdle: Saudi Arabia, the largest economy in the region, had just announced their first ever public-sector pay cuts, triggered by the Vision 2030 agenda. Ajeej, with 50% of its portfolio invested in Saudi companies, had to decide how to position its investment portfolio to successfully navigate a period of structural change in the region.
In December 2012, less than two years into the founding of their music-streaming platform Anghami, cofounders Elie Habib and Eddy Maroun found themselves evaluating an unorthodox term sheet. Habib and Maroun needed to make a decision vis-Ã -vis the proposal put forth by the MBC Group, the region's largest media network. The offer was a media-for-equity deal, which would provide Anghami with advertising towards the media giant's millions of viewers and boost its chances of competing with the likes of iTunes and Spotify in the Middle Eastern market. However, the deal would also cost the cofounders a significant share of their company, and might place them in the middle of a rivalry between MBC and Rotana, the region's largest music label. The case takes the reader through the co-founders' journey, from the founding of the company to the successes and challenges they have faced navigating product launch, scale-up, and partnerships.
In 2015, Yıldiz Holding, one of the world's largest producer of confections, biscuits and crackers, was at the end of its divesture process from Ak Gida, one of the leading dairy companies in Turkey. The company had adopted a dual track process, pursuing an initial public offering (IPO) process as well as attempting, in parallel, a strategic sale to create a competitive bidding process. Ak Gida was co-founded in 1996 by the Ulker and Topbas families as a result of a joint vertical integration strategy: Ulker family, owners of Yildiz Holding, would secure milk powder, one of the main raw materials for its biscuits and chocolate production, and Topbas family would be able to create its own private label dairy products for its nation-wide hard-discount chain BIM. Following Yildiz Holding's acquisition of United Biscuits for over $3 billion in 2014, the Holding's CFO Cem Karakas and its Chief Strategy and Growth Officer Nurtaç Ziyal Afridi, were tasked with divesting of its vertical assets including Ak Gida. The duo had prepared Ak Gida for an IPO in Istanbul, while also having negotiated with multiple parties for its sale. Now, the duo needed to make a final decision: should they go forward with the listing, or should they sell Ak Gida to the world's largest dairy company, Groupe Lactalis?
In summer of 2010, Murat Çavuşoğlu (HBS MBA 1994) led private equity firm Actera Group's investment in Mars Cinema Group (Mars), the leading movie exhibitor in Turkey. Immediately after acquiring Mars and merging it with the second larger player in the market, AFM, Çavuşoğlu focused on institutionalizing and implementing value creation work streams in Mars. While transforming an entrepreneurial company into an institutionalized firm, Çavuşoğlu established adjacent businesses such as movie advertising and ticket sales. The most recent step in transforming Mars was to establish a movie distribution arm, which would help the company to monitor and manage the seasonal cycles, enhance the appeal for investors in the exit, and improve the valuation. However, while Çavuşoğlu was laying out the plans for his next move with movie distribution in 2014, Turkey's Council of State, the highest administrative court in the country, had decided to cancel the approval for the merger of Mars and AFM, putting all of Actera's efforts on Mars at risk. Should Çavuşoğlu push the stop button for distribution? If Çavuşoğlu decided to move forward with distribution, should he do it now or wait until the process with Turkey's judiciary and regulatory authorities cleared out?
In summer of 2010, Murat Çavuşoğlu (HBS MBA 1994) led private equity firm Actera Group's investment in Mars Cinema Group (Mars), the leading movie exhibitor in Turkey. Immediately after acquiring Mars and merging it with the second larger player in the market, AFM, Çavuşoğlu focused on institutionalizing and implementing value creation work streams in Mars. While transforming an entrepreneurial company into an institutionalized firm, Çavuşoğlu established adjacent businesses such as movie advertising and ticket sales. The most recent step in transforming Mars was to establish a movie distribution arm, which would help the company to monitor and manage the seasonal cycles, enhance the appeal for investors in the exit, and improve the valuation. However, while Çavuşoğlu was laying out the plans for his next move with movie distribution in 2014, Turkey's Council of State, the highest administrative court in the country, had decided to cancel the approval for the merger of Mars and AFM, putting all of Actera's efforts on Mars at risk. Should Çavuşoğlu push the stop button for distribution? If Çavuşoğlu decided to move forward with distribution, should he do it now or wait until the process with Turkey's judiciary and regulatory authorities cleared out?
In March 2017, Elsa Pekmez Atan (MBA 2004), was wondering about the future of Enpara.com, a digital-only banking platform of QNB Finansbank. Since its launch in October 2012, Enpara had been successful in attracting over 600,000 customers by appealing to digital savvy, middle-class customers that QNB Finansbank was lacking for a long time. By the end of 2016, it accounted for 16% of QNB Finansbank's deposits. With the support of the top management, Atan was able to run Enpara as an independent company. However, as Enpara grew there were increasing pressures to integrate with the parent company. While Atan believed that this would destroy the unique culture and positioning of Enpara, senior management was wondering whether to spin it off or merge it with the parent company.
The case opens in November 2015, after the Turkish military's shooting down of a Russian military airplane over the Turkish-Syrian border. The incident threatened to undermine the countries' political and economic ties, and starting from late 2015, the dialogue between Ankara and Moscow was suspended for several months. The case explores the initial steps toward rapprochement in June 2016. The central dilemma is this: whether in light of the existing uncertainties companies operating in both countries can resume their investments and commercial activities, or should decisions be put on hold? What is the best strategy during such turbulent times? Can companies bet that a reunion would last?
In October 2016, Nevzat Aydin, co-founder and CEO of Yemeksepeti, the Turkish online food-ordering company, was looking over the company's quarterly results and projections for the upcoming year with his management team. It had been almost a year and a half since Aydin had agreed to sell the company's shares to Delivery Hero, the Berlin-based global leader in online and mobile food ordering, for $589 million. In 2016, the company had had grown to include more than 13,000 member restaurants servicing six million users and achieved a 41% year-on-year growth. Yemeksepeti operated with an EBITDA margin of over 50%. Although the company had introduced other revenue streams over the years, commissions remained as the main source of income. Aydin believed that, while there was plenty of room to grow by taking market share from phone orders, much could be done by revenue diversification; the company simply had too much valuable data to be ignored. What should the company do to take advantage of its data analysis capabilities and the new technologies on the market? What kind of outside-the-box solutions could create additional revenue streams and vertical growth capabilities? What about the cohort analysis and data generated from order histories? He motivated his the management team to come up with new ideas to put the vast amount of transaction data to use. The case describes potential avenues for a company to monetize its data, illustrates the pros and cons of each option. The case will help students think about how to prioritize growth over diversification, and forward think with regards to new technologies and customer trends.
In March 2010, Burak Dalgın (HBS MBA 2004) led private equity firm Darby's investment in Sırma, a local Turkish water and beverage company. Sırma was owned and managed by members of two Turkish business families. The existing management, while being highly entrepreneurial, had paid less attention to managing the company in a professional manner, leading to a highly leveraged balance sheet and a significant need for financing. After the investment, Sırma introduced new products, opened a new factory, and built up its financial reporting system from scratch. Two years after Darby's investment, Sırma's operational performance had improved. However, the company was still suffering from significant financial problems. By early 2013, although Sırma had received two cash injections from Darby, the company still required another round of financing. Dalgın was looking at three potential options: Should Darby make another investment in Sırma? If Darby stayed invested in Sırma, should it replace its managing partners? If Dalgın advised Darby to exit, would that be a premature move?
During Timucin Guler's decade at OPET, a prominent fuel distributor in Turkey, he transformed the definition of marketing in the company. Under Guler's lead, OPET, once a local player in the downstream distribution market, became the second largest fuel distributor in Turkey. As assistant general manager, Guler had paved the way for customer-oriented marketing, which helped OPET differentiate itself in the market and become fiercely competitive. However, starting from 2009, changing regulations in Turkey's highly regulated oil and gas industry limited OPET's marketing tools, forcing Guler to revisit his marketing strategy. He was concerned that more restrictions were on the way and that these could possibly affect OPET's loyalty program, in which the company had invested heavily. How should Guler go about revising OPET's marketing strategy so as to keep up with and possibly foresee further regulatory changes, while trying to stay ahead of the competition? What would be the best way for Guler to optimize the company's investment in its customer loyalty program?