This case examines factors contributing to the collapse of Silicon Valley Bank (SVB) in March 2023, an event as unpredicted as it was quick. SVB funded nearly half of all U.S. venture-backed startups and at the end of 2022 held $173 billion in deposits, largely comprising the venture capital those startups had raised. On February 28, 2023, Moody's warned SVB about a potential credit rating downgrade, reflecting concerns over "funding, liquidity, and profitability" which factored in substantial unrealized losses on SVB's debt securities. To strengthen its balance sheet, SVB sold $21 billion in securities on March 8, but the move shocked its customers, as it resulted in a realized loss of $2 billion. The ensuing bank run intensified as SVB proved unable to placate investor fears or raise capital to plug that hole, and SVB was placed in receivership on the morning of March 10. Finger-pointing began immediately. Some argued that misguided pressure from Moody's over the fair value of SVB's debt securities prompted the bank's death spiral. Others blamed SVB management and directors, its regulators, and the venture capitalists whom SVB otherwise benefited. What went wrong, and what lessons could be learned?
October 8, 2021: Tata Sons won a bid to acquire India's national carrier Air India, marking the airline's return to its original owners after 68 long years. The winning bid of $2.4 billion gave Tata Sons full ownership of the airline and its coveted network of 6,200 landing and parking slots in Indian airports and 900 slots in overseas hubs. This bid marked the end of a two-decade-long journey for the Indian government that had been trying to sell the troubled airline which, according to recent estimates, was losing nearly $3 million per day. The chairman of Tata Sons, Natarajan Chandrasekaran (Chandra), described the occasion as a "historic moment." "It will be a rare privilege for our group to own and operate the country's flag bearer airline. It will be our endeavor to build a world-class airline that makes every Indian proud." The acquisition of a heavily indebted and loss-making public sector asset raised several questions: Why did Tata Sons acquire Air India? Was it an emotional decision to regain control of an airline they had started? Was this an example of Tata Sons helping India overcome another persistent challenge, a trait well documented throughout its corporate history? Was it a commercially sound decision?
In the wake of Covid-19's disruptions, Kshore, a Chinese appliance maker, is thinking of realigning its supply chain. Like many other global manufacturers, it's being pressured by its customers, which include Walmart and other large retailers, to reduce the time, expense, and environmental impact of shipping goods between countries. On a trip to Monterrey, Mexico, Kshore's CEO and COO tour factories that are closer to North American markets-and are impressed by their professionalism. But questions about transportation and staffing give the executives pause. Should Kshore start production in Mexico or consider other countries? Two experts weigh in.
In the wake of Covid-19's disruptions, Kshore, a Chinese appliance maker, is thinking of realigning its supply chain. Like many other global manufacturers, it's being pressured by its customers, which include Walmart and other large retailers, to reduce the time, expense, and environmental impact of shipping goods between countries. On a trip to Monterrey, Mexico, Kshore's CEO and COO tour factories that are closer to North American markets-and are impressed by their professionalism. But questions about transportation and staffing give the executives pause. Should Kshore start production in Mexico or consider other countries? Two experts weigh in.
In the wake of Covid-19's disruptions, Kshore, a Chinese appliance maker, is thinking of realigning its supply chain. Like many other global manufacturers, it's being pressured by its customers, which include Walmart and other large retailers, to reduce the time, expense, and environmental impact of shipping goods between countries. On a trip to Monterrey, Mexico, Kshore's CEO and COO tour factories that are closer to North American markets-and are impressed by their professionalism. But questions about transportation and staffing give the executives pause. Should Kshore start production in Mexico or consider other countries? Two experts weigh in.
In November 2017, Puneet Chhatwal, took charge as MD and CEO of IHCL, popularly referred to as the Taj Hotels. Despite being India's largest hospitality company by market capitalization and respected for its values and service, IHCL had made losses for the last seven years and had high debt levels. Chhatwal prioritized improving the company's profitability while reducing debt. He opted for an asset-light portfolio and refreshed the brand architecture. With each brand addressing a different price point, IHCL expanded its portfolio across different customer segments. The new strategy of 'asset-light' and 'multi-brand' yielded impressive financial results and Chhatwal started planning the next phase of IHCL's growth. What more should IHCL do to sustain this momentum, especially amidst increasing competition from global players?
In 2022, Abdulaziz B. Al Loughani, CEO and co-founder of Floward, an online flower and gifting company established in Kuwait in 2017, contemplated the firm's growth trajectory. Floward, an e-commerce enterprise that offered fresh-cut flowers sourced directly from global growers and had control over the entire delivery chain, had expanded its footprint to 32 cities across nine MENA countries and had ventured into the UK. Witnessing a remarkable CAGR of over 160% between 2020 and 2022, Floward was valued at $152.5 million during its Series B investment round in 2021. Having served over 400,000 customers and recently diversifying into the broader gifting sector, Al Loughani faced pivotal decisions: Should Floward pursue further global expansion or solidify its gifting vertical in the Gulf? And, considering its aggressive growth aspirations, should the company opt for an IPO, and if so, which stock exchange should they target?
In Spring 2023, SECO CEO Massimo Mauri had the ambition to grow the €200 million revenue technology company to a €1 billion company by 2030. Founded in Italy in the 1970s, the family-owned company had gone through a period of growth and internationalization, facilitated by private equity funding (in 2018) and an IPO (2021). Its corporate governance had also evolved, but Mauri was eager for even more change at the board level. He wished to create a board that would partner with him in shaping the company's strategy and in challenging himself and his team on SECO's performance. What kind of board should that be and what steps should he take to make it happen?
T.V. Narendran, CEO of Tata Steel, India's oldest steel manufacturing firm, had taken concrete business and cultural transformation steps to future-ready the firm since taking over in 2013. He had deleveraged and instilled financial discipline, acquired new businesses, entered new segments and adjacent businesses, and launched digital transformation, agility, safety, and sustainability programs. At the heart of his transformation program lay the digitalization drive. Now, he turned his attention to the firm's burgeoning B2C business. In 2018, the firm had launched an e-commerce platform to sell products directly to retail customers. Now he needed to decide whether to open up this platform to non-Tata group third-party suppliers of ancillary home construction products, like cement, paint, tiles, and other home fittings. Would this create a unique one-stop shop for construction-related goods, or take Tata Steel further away from its core mission? He and his team needed to decide fast.
Velong is a supplier of kitchen equipment and backyard grills for major global brands and store brands of large western retailers. In light of the COVID-related disruptions to the global supply chains, and the evolving trade tensions between China and the Western countries, Velong's global customers were pressuring the company to move 30% of its manufacturing from China to other locations. Velong was considering a number of countries to shift its manufacturing-India, Vietnam, Turkey and Mexico. At present, none of these countries seem to be able to match the cost structure and manufacturing quality that the company is able to achieve in China. Velongs co-founders, Jacob Rothman and Iven Chen, need to decide soon how to formulate a strategy to deal with the challenge.
"The case focuses on strategy and governance issues at SWVL, a tech-enabled mass mobility marketplace. It describes the journey of CEO and Chairman Mostafa Kendil on his journey from founding to the company's listing on Nasdaq. Since its founding in Egypt in 2017, Swvl produced a series of great successes with its innovative solution that promised safe, reliable, and affordable mass commuting trips in markets where such a service was unavailable. In a short time, Swvl was able to raise notable amounts in MENA (Middle East and North Africa) investor funds, expand geographically to neighboring and faraway markets, and become the fastest growing unicorn in the region. Expanding the company's existing regional footprint, Kandil and his team were pursuing their ambition to become the world's number one mass mobility provider. They worked with Queen's Gambit, a SPAC (Special Purpose Acquisition Company), to take the company public on Nasdaq. They established both statutory and advisory boards that would not only guide the company on its growth plans but also showcase its strong compliance agenda-a priority from the outset. Once listed, Swvl would become the second and the youngest MENA-based company to ever go public on Nasdaq. With this, Swvl accepted a challenging responsibility: it would have to position itself among well-established U.S. public companies on one hand and overcome the notorious reputation MENA-based companies had for corporate governance on the other. To emerge successful in global financial markets, Swvl had to ensure that its marketplace design was lean enough to allow the company to grow profitably without compromising customer experience on its rides. Swvl also had to assess its expansion strategy, particularly in terms of how fast and how far it could launch in new markets without mishap.
Launched in September 2018, e-retail startup DealShare has created a tech-enabled model for the Indian mass market that allows customers to buy together, save money on good quality goods, and at the same time have fun. It targets customers who are still getting used to the Internet for commerce and for whom big e-commerce players are not an ideal option. As DealShare transitions from a regional to a national company, the founders are at a crossroads. Until now, they have prioritized profitability at the unit economics level over growth. Now that they are confident that the DealShare concept can be profitable, should they relax their commitment to profitability and expand rapidly to preempt competition? Will the investments required and added complexity derail the company's success?
In 2004, Chinese e-commerce company Alibaba created Alipay, an app to facilitate payments on its e-commerce sites. As Alibaba grew, so did Alipay, until Alipay spawned its own ecosystem of financial technology products and services under the name of Ant Group. By 2020, Ant had one billion users on its platform, which offered investment opportunities, consumer lending, and insurance, targeted towards middle class individuals and small- and medium-sized businesses. In November 2020, Ant Group was poised for its initial public offering (IPO). But the Chinese government canceled the IPO just days before Ant was expected to raise $34 billion at a valuation of $310 billion. Regulators were concerned that Ant's partners were bearing too much risk and they fretted that the Chinese economy showed signs of rising consumer spending. What was next for Ant Group?
Urban Company is an India-based market platform that helps customers book home services and at home beauty services. The company differentiated itself by investing heavily in building customer trust. Rather than merely positioning itself as a lead generating platform, like many other marketplace platforms such as Uber, Airbnb, and Trip Advisor have done, the company invested in training and supporting the service providers, thus getting significantly involved in the service delivery process itself. While this approach increased the company's costs and slowed down its growth, the company's founders believed that its strategy would ultimately lead to a more sustainable business model. During the COVID pandemic, while the company's business was under significant pressure, the founders proposed to double down on this approach even further to build differentiation, and to strengthen customer trust even more. Is this strategy viable? How should the company leverage its current market position as it examines expansion into new verticals, new customer segments, and new geographies?
Kenyan off-grid-solar pioneer d.light can power entire homes in rural Africa but must now decide how to fund the growth of its asset-heavy business model. Ned Tozun and Sam Goldman founded d.light in 2006 to transform lives through solar solutions enabling access to electricity, the seventh of the United Nations Sustainable Development Goals for 2030. Originally providing simple portable solar lanterns to people without access to reliable electricity, the enterprise developed solar home systems that included lights, mobile chargers, and an energy-efficient device such as a radio, fan or TV. By 2019, with the success of home systems, d.light had become one of the leading players in the off-grid solar sector, with the world's largest distribution network for off-grid solar products and a projected revenue of over $90 million. Key to d.light's solar home systems was pay-as-you-go (PayGo) plans, a lease-to-own model consisting of a down payment followed by small (<$1.50) daily payments, normally for a period of 12 to 18 months. In 2019, sales from PayGo products were expected to contribute close to 70% of the company's annual revenue. However, PayGo was an asset-heavy model and in the past 18 months, d.light had raised over $90 million, nearly 75% of which was in debt facilities. As the company continued to grow rapidly, its co-founders were deliberating whether they ought to go out and raise capital again. If so, should it be equity or debt? How much and from whom? If not now, when? Alternatively, should they modify the business model to reduce the company's need for so much external funding?
The case opens in 2020 as Michael Lahyani, founder and CEO of Property Finder, Dubai's leading online real estate classifieds portal, contemplates the company's five-year growth strategy. Since its founding in 2005 in the United Arab Emirates (UAE), Property Finder had secured multiple rounds of investments and expanded into countries in the Middle East and North Africa. The business grew following a proven business model revolving around monthly flat subscription fees paid by real estate brokers for packages of listings, while remaining free for end-customers to browse. By 2020, Property Finder had reached profitability in the UAE, Bahrain, and Qatar, which it considered its core markets, and had done significant brand building in newer markets of Saudi Arabia (KSA), Egypt, Morocco, Lebanon, and Turkey. In 2020, Lahyani needed to decide on the company's growth strategy to increase profitability. Property Finder could focus on its core markets and switch to segmented pricing, lure in more developers to post first hand property directly, and create new revenue channels. Alternatively or in parallel, the company could tailor its business model to suit the dynamics of each of its newer markets. All the while, Lahyani had just onboarded a new executive team that was busy adjusting the organizational structure and institutionalizing procedures and processes. As a result, company resources were spread thin and Lahyani found himself at a crossroads; should the company focus its efforts on bolstering its position in incumbent markets and thus forego growth abroad, or should it pursue new markets and risk tarnishing its reputation in its core markets in case of a failure?
M-Lab's founding goals were to infuse an innovation mindset into Mitsubishi Corporation; to catalyze new business opportunities; and to enable a dialogue between Japanese business and Silicon Valley. M-Lab housed representatives from each of Mitsubishi Corporation's verticals who were joined by executives from other prominent Japanese corporations. While M-Lab was still early in its history, its leader, Tsunehiko Yanagihara, was pleased with its progress: the ecosystem was fertile with research on cutting edge technology; resident executives collaborated across industries on a daily basis; several investments and proof of concept projects were underway; staff had launched an innovation learning program; and soon, an on-site retail-tech accelerator would welcome its first participants. As some of the projects born out of M-Lab now evolved to commercial businesses, Yanagihara saw yet a new role for M-Lab - that of startup advisor. How might he harness Silicon Valley insights on scaling technology ventures and feed them back to the young ventures made possible by M-Lab? And how might he help those now responsible for implementing and executing at these new businesses apply these learnings to the hurdles they faced?
Amazon has been unsuccessful in its efforts to develop a business in China. Even though Amazon was an early entrant into China's e-commerce space, its domestic rivals, especially Alibaba, created innovative business models uniquely suited for the conditions in China. Amazon's failure to adapt to the local conditions in China ultimately led to its exit from the country. Determined to learn lessons from this experience as it developed its business in India, Amazon made a number of innovations in its business model in India. By 2020, Amazon established a strong presence in India. However, the company faces a number of challenges because of changes in regulation that challenge its hybrid business model of both being a seller of its own goods and a marketplace for third party sellers, the rise of strong local rivals, and its own ambition to expand beyond top tier cities and upper middle class customers in India.