Preparing and strengthening the developing world for the 4th Industrial Revolution is a challenge that Computer Aid is tackling head on. Founder Tony Robert's vision is "Empowering the developing world by providing access, education, implementing technology and supporting environmentally responsible solutions." The case discusses the extent of digital divide gaps and challenges in the developing world. It traces Computer Aid's evolution from operations in a single African country to regionalization in Southern Africa with operations in many countries, and South-South expansion to Latin America and other developing country locations. Regionalization efforts focus on localization of operations within a region for creation of a mutually beneficial context for local businesses to become part of the digital divide solution through processing obsolete donated technology that Computer Aid then recycles and matches with beneficiary needs. The company has built a regionalization hub in South Africa. While they have had some success, questions remain-Is this the best approach for leveraging their service delivery, technology refurbishment and education? Will regionalization be effective in Latin America?
This case study focuses on enterprise considerations when entering into new sales modalities. Retail shopping models had long been considered binary - either e-commerce or brick and mortar. In practice the retail industry involved a long spectrum with pure e-commerce on one end and pure brick and mortar on the other end. In between, many different models were emerging like ordering online and picking up in-store (Walmart's Grocery Pickup), shopping in-store and ordering online (Warby Parker and Bonobos made their name in this space - largely facilitating the showroom behavior of consumers), digitally-enhanced physical shopping (several companies hold patents in this space with virtual reality promising to push this model), and many others. By 2019 Amazon, was the world's most valuable online retailer at around $1 trillion (USD). So, when the company announced the purchase of Whole Foods and further committed to the expansion of Amazon Go store locations many questioned the strategic value. Why would a company so clearly successful in the digital realm seek to enter the more traditional brick and mortar space?
Early in the 21st Century the United Arab Emirates (UAE) government estimated that their oil reserves could run out in a 150 years. They began efforts to diversify the UAE economy into clean industries--tourism, technology and renewable energy--and signal that the country was pivoting away from an oil-based economy toward one that would grow and thrive as an environmentally aware, sustainable, low-carbon economy. Masdar City, a UAE marquee initiative designed to be the world's first zero-carbon city, was an important pillar of this economic diversification. Dr. Al-Jabar, Masdar City founder, envisioned it as a commercially viable "green-tech" cluster including an economic free zone relying on solar energy and other renewable resources that could serve as a model for sustainable urban development regionally and globally. This bold effort was not as straightforward as anticipated and planned. The case documents the wide variety of surprises--technological, financial and environmental challenges--that obstructed the initiative's progress, as well as the invaluable learning that unfolded as the Masdar City initiative evolved. The case provides an opportunity to explore the UAE's business climate, the role of government in economic development, challenges inherent in building an industry cluster, and limitations due to scarce talent resources.
China is Apple's fastest growing market but the road to success has not been smooth. This case documents Apple's journey on this road to success; the role that Tim Cook played on this journey; the basic dynamics of China's telecommunications sector, the world's largest and most dynamic; and obstacles Apple is likely to encounter on the road to its future there. Apple's products are predominantly contract manufactured in China by Foxconn, a Taiwanese company that was the focus of considerable criticism and negative publicity for poor working conditions and suicides among its young workers. Apple, an aspirational brand in China, was named the top brand in the world in 2015 by Brand Finance--followed in second place by their global nemesis, Samsung. The growing consumer power of the Chinese middle class has accelerated demand for Apple products. Apple's popularity in China led to considerable counterfeiting or copying of their prototypes, products, know how, trade secrets, service model, and store concepts. It has spawned a cottage industry that supplies fake Apple stores with logos, uniforms, shopping bags, shelves and other accessories to make them appear real. Face-seeking behavior, the propensity of some Chinese to show off high status consumer goods, further spurs the activities of Apple counterfeiters and imitators to meet market demand. After more than a quarter century of continuous high levels of economic growth, China's economy is cooling. Despite a panoply of obstacles, Apple CEO Tim Cook maintains that China is key to Apple's bottom line now and in the future.
Indigenous competitor Xiaomi is changing the smartphone landscape in China and potentially the world through a cost-leadership focused strategy that relies on contract-manufacturing and savvy supply chain management. China is the world's largest smartphone market, a position attained in 2011. Since their founding 2010, Xiaomi was has become the world's third largest smartphone company based on units shipped--only global competitors Apple and Samsung ship more smartphones. Under the guidance of Lei Jun, CEO, Chairman and Founder, and a world-class executive team, Xiaomi started developing software and evolved into a mobile Internet and e-commerce company that contract-manufacturers smartphones and compatible devices designed to offer their customers--known as Mifans--a complete customer experience at a modest price. Xiaomi relies primarily on social media to sell their products and maintain an intimate, reciprocal relationship with their Mifans, a relationship that drives their continuous innovation efforts. This rich case explores Xiaomi's growth from its founding through its heralded smartphone success, to its earning the top spot--at U.S.$ 46 million--as the highest valued private company worldwide in 2015. This case documents the dynamics of Xiaomi's cost leadership strategy implementation including supply chain dynamics; e-marketing; Mifan relationship management; an emphasis on innovation and continuous improvement; and global expansion.
Global Thermostat (GT) is a high technology start-up has developed proprietary technology to help stabilize the global climate and close the carbon cycle through direct capture of carbon dioxide from the air. The case provides an opportunity to examine the impact of climate change on society, potential solutions to this complex challenge, and the growth of a start-up high technology company bringing disruptive technology to the marketplace. The case explores issues associated with disruptive technology-driven change in a large, highly successful industry with many powerful vested interests. It concludes with questions surrounding trade-offs between corporate versus social responsibility when addressing climate change. The case discusses challenges associated with growing a start-up high technology company including proof of concept, financing, scaling and globalization are highlighted, as are challenges related to successful navigation of the "technology hype cycle" and commercialization of what promises to be disruptive technology. The case also provides an overview of the energy and the clean technology industries, and their regulatory contexts. It discusses drivers and consequences of environmental degradation attributed to climate change. Motivations and objectives of the prominent co-founders; Graciela Chichilnisky, creator of the carbon market enshrined in the emissions treaty of the United Nations Kyoto Protocol; and Dr. Peter Eisenberger, a distinguished professor of Earth and environmental sciences at Columbia University with deep energy industry experience, and their executive team are explored.
During Sir Robert Wilson's 30+-year Rio Tinto career, the company evolved from taking a reactive response to external stakeholder criticism to a proactive position to help the mining industry embrace sustainable development practices. Wilson championed Rio Tinto's efforts to transform the company with initiatives such as those that countered apartheid in South Africa; introduced conservation programs in Madagascar and Western Australia; and established the Inland Sea Shorebird Reserve project in Utah-efforts which have all become models for the mining industry. He championed the Global Mining Initiative and the Mining Minerals and Sustainable Development project to encourage the improvement of industry sustainable development practices thorough shared learning and dialogue. Along with 40 transnational companies, Rio Tinto signed the Global Compact, which supported the promotion of sustainable development. Despite all of these activities, Rio Tinto encountered significant criticism from a variety of stakeholders. As Sir Robert Wilson prepared to hand over the reins of the company to oil industry veteran Paul Skinner, he contemplated the insights he would pass along to his successor. He was certain that society's expectations of the corporate responsibility of all industry, and especially of MNCs, were going to continue to increase. He was also certain that sustainable development had to be more than a one-off effect on communities in which they operate. Yet, there were important questions to be answered: Sustainable development sounded good, but could Rio Tinto make the business case for embracing this approach? Why had some stakeholder groups persisted in believing that a mining company claiming to embrace sustainable development was a sham? What steps would he recommend that Skinner take to continue Rio Tinto's sustainable development agenda?
Intellectual property protection is the No. 1 challenge for multinational corporations operating in China. According to the U.S. government, China accounted for nearly 80% of all IP thefts from U.S.- headquartered organizations in 2013, causing an estimated $300 billion in lost business. For European manufacturers, the loss of IP in China reduced potential profits by 20%. The effects from IP leakage are visible in counterfeited items including toys, luxury goods and automotive and aircraft parts. But IP violations go beyond products to include pirated operational processes and entire business and service models. For many multinational corporations, IP leakage becomes a barrier to integrating Chinese sites and partners into global activities. IP leakage frequently occurs through staff transfers or shared practices from foreign multinationals to local joint ventures or supply chain partners. For multinationals, this type of IP leakage is often a calculated risk worth taking. However, unintended IP leakage can affect a company's reputation and profitability, and can create powerful local or even global competitors. In studying more than 50 multinational corporations, authors Andreas Schotter and Mary Teagarden identified nine IP protection practices for use in China. Four of the practices are defensive and externally focused; the others are proactive and internal. Together, they create what the authors call the "IP protection web," which allows corporations to (1) expand faster within China and in other emerging markets; (2) improve performance; and (3) enhance local and global innovativeness. Most of the companies the authors studied learned to protect their IP through trial and error. The changing composition of IP risk creates a need for ongoing reconfiguration. Indeed, as Chinese companies become more skillful at absorbing leaked IP, international companies must develop more sophisticated responses and develop new ways to engender loyalty.
In January 2013, the CEO of the Russian automotive company Gorky Automobile Plant (GAZ) was pleased with the results of the recently implemented changes to the company's product-market strategy and the related organizational processes. He believed that this series of radical changes could help GAZ further cement its domestic market leadership position and at the same time allow it to complete a dramatic turnaround that had resulted in the company's most profitable year ever. He was now planning the launch of the third generation all-new Gazelle Next light transport truck, which he believed would take the company to a new level of competitiveness and revenue growth in Russia, and even more importantly, in other emerging markets.
In January 2013, the CEO of the Russian automotive company Gorky Automobile Plant (GAZ) was pleased with the results of the recently implemented changes to the company’s product-market strategy and the related organizational processes. He believed that this series of radical changes could help GAZ further cement its domestic market leadership position and at the same time allow it to complete a dramatic turnaround that had resulted in the company's most profitable year ever. He was now planning the launch of the third generation all-new Gazelle Next light transport truck, which he believed would take the company to a new level of competitiveness and revenue growth in Russia, and even more importantly, in other emerging markets.
Jules Munyampeta, founder and CEO of RD Tech Rwanda, was questioning his company's current strategy. The ICT market in Rwanda had transformed significantly since the company was founded in 2005. RD Tech began as a computer importer that sourced new laptop computers from Dubai. Munyampeta soon realized that the market for new computers in Rwanda was very small, and subsequently had great success with a new approach-importing and selling refurbished used computers from the United States. The lower price point for refurbished computers allowed RD Tech to expand its market and have a greater impact on Rwandan society. Originally, the company sold personal computers to individuals, but quickly shifted focus to schools and government institutions as a result of changes in government policy. This shift resulted in rapid growth, and RD Tech Rwanda expanded distribution of refurbished computers throughout Rwanda, Burundi, and eastern Democratic Republic of Congo. RD Tech survived the impact of the global financial crisis, competition from Chinese entrants into the Rwandan market, and NGOs, such as One Laptop per Child, providing free computers to schoolchildren when, suddenly, sales came to a crashing halt. The Rwandan government made rapid technological advancement a priority for public schools and local governmental agencies, but refurbished computers and monitors were no longer acceptable for these institutions. Munyampeta considered his options. Was integrating the refurbishment operations into the East African supply chain the answer? Would this strategy deliver sufficient cost savings to justify the initial capital outlay and continuing operational costs? If so, could Winter and Brice raise the capital required to make the change? Or might a return to the original unsuccessful model of selling new computers now be feasible? Munyampeta wondered if, instead of focusing on a growth strategy, he should be considering a liquidation strategy.
Toyota, the world's leading automotive company and a global benchmark for quality and continuous improvement stumbled seriously. They faced a recall crisis unlike any they had seen before. Mr. Akio Toyoda, Toyota's president and grandson of the founder, was called to testify before the U.S. House of Representatives Committee on Oversight and Government Reform about the company's response to the recall. Through the lens of the accelerator crisis, the case documents trade-offs Toyota made while pursuing a marketing strategy based on quality and customer experience, while simultaneously pursing an operational generic cost leadership strategy. Historic information tracks the evolution of the company's early focus on lean manufacturing, quality, and the customer to the contemporary focus on aggressive cost control and rapid globalization; it also traces the factors that shaped the context in which the product failures occurred; and documents the failure of Toyota to respond appropriately and with sufficient speed. The case discusses Toyota's evolution from a small entrepreneurial family firm to global industry giant status; their role in driving industry-wide lean manufacturing, continuous improvement, and quality, known as the Toyota Way; their responses to a series of highly visible product failures; and the resultant erosion of Toyota's reputation. The case concludes with Akio Toyoda exhausted from his testimony, considering which combination of strategic, structural, or cultural challenges led to the current recall crisis. Had the company lost sight of its long-term philosophy, a key principle behind the Toyota Way? Had Toyota sacrificed quality and their historic customer focus at the expense of extreme cost reductions? Were nonfamily managers truly to blame for "hijacking" Toyota? What role did Toyota's supply chain and keiretsu structure play in the recalls? Or was Toyota simply subject to the latest media witch hunt in the wake of the global economic crisis?
Chiquita Brands International and its leaders learned a very hard lesson about paying off terrorist groups to protect their employees. Over the past 25 years, no place has been more perilous for companies than Colombia, a country that is finally beginning to emerge from the effects of civil war and narco-terrorism. In 2004, Chiquita voluntarily revealed to the U.S. Justice Department that one of its Colombian banana subsidiaries had made protection payments to terrorist groups from 1997 through 2004. The Justice Department began an investigation, focusing on the role and conduct of Chiquita and some of its officers in this criminal activity. Subsequently, Chiquita entered into a plea agreement that gave them the dubious distinction of being the first major U.S. company ever convicted of dealing with terrorists, and resulted in a fine of US$25 million and other penalties. To make matters worse, the industry was facing pressure from increasing retailer purchasing power, major changes in consumer tastes and preferences, and Europe's imposition of an "onerous tariff" on companies that sourced bananas from Latin America. With this in mind, Fernando Aguirre, Chiquita's CEO since 2004, reflected on how the company had arrived at this point, and what had been done to correct the course so far. He faced major challenges to the company's competitive position in this dynamic industry. What would it take to position the company on a more positive competitive trajectory? Would this even be possible in this industry and in the business climate Chiquita faced?
The conventional wisdom holds that the best way to develop global leaders is to circulate talent through positions overseas. Expose promising managers to new cultures, the thinking goes, and they'll grow and thrive. Unfortunately, that approach isn't enough. Plenty of smart, talented executives fail spectacularly in expatriate assignments. So what does prepare people to thrive in leadership roles abroad? Years of research by the Thunderbird School of Global Management, involving more than 5,000 managers around the world, reveals that success abroad hinges on something called a global mind-set. This mind-set allows executives to cope with the challenges of working in unfamiliar cultures and helps them influence stakeholders who are unlike them. It has three main components: intellectual capital (global savvy, cognitive complexity, and a cosmopolitan outlook); psychological capital (passion for diversity, thirst for adventure, self-assurance); and social capital (intercultural empathy, interpersonal impact, and diplomacy.) It can be measured-with a diagnostic developed at Thunderbird. And it can also be measurably improved-through a development plan that focuses on building each kind of capital.
Robert D. Walter built Cardinal Health into the most valuable company in the U.S. health care services industry and the world's largest distributor of health care products. With revenues of $81 billion in 2006, it was ranked Number 19 on the Fortune 500 list, and owned a third of the drug distribution business; yet most people had never heard of Cardinal Health. The case begins in 1979 with Walter's purchase of Monarch Foods, a wholesale food distribution company, which he built into a strong regional food wholesaler, Cardinal Foods, in the subsequent decade. Through a series of acquisitions, Walter repositioned the company into the pharmaceutical distribution industry. The result was the emergence of Cardinal Health, Inc. Cardinal was one of a handful of large U.S. companies that had achieved earnings-per-share growth in excess of 20 percent for 15 years straight. Nevertheless, by 2007, Wall Street was questioning whether Cardinal Health could continue to grow at this remarkable rate through acquisitions. This general doubt, coupled with questionable "stock crushing" accounting practices among wholesalers, including one of their own suppliers, was weighing down Cardinal's stock price despite their continued earnings growth. Cardinal Health, the merger and acquisition juggernaut, had hit an earnings speed bump. As Walter contemplated retirement, he was faced with the challenge of reinventing the company one last time.
Mattel, an industry leader with a sterling reputation in corporate responsibility, was being pulled into a recall vortex that had seen affected a variety of products produced in and exported from China in 2007, including dog food, toothpaste, tires, and seafood. Mattel CEO Robert Eckert was faced with a crisis. By the time the dust settled, Mattel had recalled 19 million toys made in China. Mattel's stock price declined as they took a $40 million charge for recalls, and their costs increased because of added regulation in China and the United States. Customers threatened to boycott Mattel and all toys made in China. Bob Eckert had been called to testify before both U.S. House and Senate hearings on toy safety. Chinese government officials saw Mattel's recall public relations approach as blaming China's manufacturers for what was primarily a Mattel design problem. This unfavorable publicity drew attention from Chinese regulators, and resulted in Mattel making a highly publicized public apology to China and China's quality watchdog chief, Li Changjiang. When it looked like nothing could get worse for Mattel, Congress sent a letter to Mattel stating that Robert Eckert was not honoring the public commitment he had made to consumers during the initial recall incident. This tsunami of negative events left Mattel executives perplexed and reeling: How could a company so highly regarded as a toy industry model of corporate citizenship find itself mired in such a controversy? What next steps should they take to recover from the crisis? How should they protect their brand? What should they do to restore their reputation? Was this crisis a roadblock to achieving their vision of being the world's premier toy brand "tomorrow"?
Robert D. Walter built Cardinal Health into the most valuable company in the U.S. health care services industry and the world's largest distributor of healthcare products. With revenues of $81 billion in 2006, was ranked Number 19 on the Fortune 500 list, and owned a third of the drug distribution business. Walter began this evolution with Cardinal Foods, but realized that this company would never be a big player in the food business given the presence of large, powerful incumbents. Through a series of acquisitions, Walter repositioned the company into the pharmaceutical distribution industry. Cardinal Health was one of a handful of large U.S. companies that had achieved earnings-per-share growth in excess of 20 percent for 15 years straight. Nevertheless, Wall Street was questioning whether Cardinal Health could continue to grow at this remarkable rate through acquisitions. This general doubt, coupled with questionable "stock crushing" accounting practices among wholesalers, including one of their own suppliers, was weighing down Cardinal's stock price despite their continued earnings growth. Cardinal Health, the merger and acquisition juggernaut, had hit an earnings speed bump. In October 2003, Cardinal Health disclosed that the SEC had launched an inquiry into questionable accounting practices in 2000 and 2001 in which Cardinal Health allegedly recognized $22 million in gains from litigation settlements before they were finalized. In May 2004, the SEC inquiry was converted into a formal investigation. It was July 2004 before Cardinal announced that their 2004 earnings, which had been predicted by the company to reach the "mid-teens or better," would only be 11 percent higher than the previous year. In July 2007, Cardinal announced that it had reached a final settlement with the SEC of $35 million, concluding an investigation into the company's historical financial reporting and disclosures from 2000 to 2004.
On the watch of three generations of executives, conservative management and aggressive expansion guided Southwest Airline's legendary growth and success in an unattractive industry. Herb Kelleher, founder and industry revolutionary, introduced a business model that transformed the airline industry. After 20 years of steady growth, Kelleher passed the baton to James Parker and Colleen Barrett, the first man-and-woman team to run an airline. This team maintained Kelleher's direction and focus. However, the company soon experienced cracks in its façade in the wake of 9/11 terrorism, spiraling fuel prices, labor unrest, and credible new entrants like JetBlue. After reorganization, Southwest's former CFO, Gary Kelly, took the helm. His message was that the Southwest brand was under attack, and the company would have to change. Kelly had to overcome many challenges within this turbulent environment if Southwest was to continue the impressive track record of profitable growth that they had enjoyed for 35 years. Could Southwest preserve the Herb-centric culture and, more importantly, was this culture critical to their future success? Would Southwest lose its leadership position to copycats, or, worse, have to copy the copycats to meet customer expectations? What could Southwest do to maintain their cost advantage in light of spiraling fuel prices, costly labor concessions, intense competition, and aggressive industry consolidation? Finally, was it time to reinvent the 40-year-old legendary company?