Based in Boston's Chinatown, the Asian Community Development Corporation's mission was to build affordable homes, empower families, and strengthen communities. The case examines whether ACDC should continue pursuing all three goals or focus on affordable housing.
This case explores the opportunities and challenges associated with expanding the operations of a complex entrepreneurial business model. It highlights how cultural aspects of different geographies impact a startup's operational and economic models. The case also debates the considerations of expanding operations internationally versus penetrating new customer segments within a company's existing market. Lastly, the case presents the tensions that may exist between investors and entrepreneurs in deciding the desired course of action.
Ceibal was founded in 2007 in Uruguay, as an initiative to reduce the digital gap in the country. After playing an important role providing a smooth transition to remote learning during COVID, Ceibal in 2022 must now determine the best way to fulfill its mission to "be the center of educational innovation with digital technologies in Uruguay.... in order to improve learning and promote processes of innovation, inclusion, and personal growth."
In the pandemic, financial inclusion icon BancoSol faces a government-mandated year-long deferral of all loan payments, followed by the sudden Covid death of its CEO. In a Bolivia mired in political turmoil following a failed presidential election, with clients not obligated to pay either interest or principal from March to the end of 2020, the bank faces a severe cash deficit. This is exacerbated by the regulatory determination that, as the deferrals are mandated, loans must be deemed current and performing and resulting profits continue subject to income taxes that must be paid. BancoSol management must decide how to respond to this crisis. When the mandated deferrals come to an end, the bank regulators issue instructions as to how the restructuring must take place. As the total deferred amounts add up to 85% of its loan portfolio, this is a critical matter for BancoSol. Prior to the regulatory instructions, management had painstakingly designed its own restructuring program. Convinced that it is the optimal way to proceed, management strongly recommends its implementation regardless of contradicting the regulatory instructions. The deteriorating financial condition of the bank adds urgency to the decision. In the midst of these issues, in February 2021, Covid suddenly claims the life of the bank's longtime CEO, Kurt Koenigsfest, the architect of the modern BancoSol. With the bank's very existence at stake, Esteban Altschul, the chair of the board of directors, must come to grips with how the restructuring of the deferred loans will take place and how the various management gaps exposed by Koenigsfest's death will be filled. At the same time, convinced that the future leadership of BancoSol is linked to its adaptation to the digital age, Altschul must assess the efforts of the bank to-date in this area and how it should proceed in the future.
Launched in Dhaka, Bangladesh, in 2018, Praava Health ('Praava') delivered high-quality in-clinic primary and specialist care, backed by its own high quality diagnostic laboratories, imaging and pharmacy. Praava was founder Sylvana Sinha's response to what she saw as a broken healthcare system in one of the world's most populous countries, unable to provide efficient, reliable medical attention to the majority of its population. Centered on the patient, it had a flagship state-of-the art medical center in Dhaka, and digital channels, including Bangladesh's first patient app, telemedicine, and e-pharmacy. Behind all this was a highly qualified medical, technical and management team, made possible by equity investments of $11.1 million. But raising funds had been a difficult and arduous process, even as Praava's revenues were growing at around 20% a month. As Sinha proceeded to plan her next steps in Series B fundraising, she wondered if there were modifications that she needed to consider. Were there any changes-in the Praava business model, in the financing structure or in her messaging-that would allow her to break through in the capital markets?
Bodega Aurrera, serving the base of the pyramid and Walmart's main Mexican format, is considering launching a full eCommerce channel as Covid-19 has erupted in the country. In 2019, Bodega Aurrera accounted for 45% of revenues and 2,748 of Walmex's 3,416 stores. Having introduced eCommerce with the high-income segments served by its Walmart and Superama formats, Walmart Mexico (Walmex) had slated an online channel for Bodega Aurrera in the next three or four years, considering that its core clients belonged to the C and D socioeconomic segments. However, with the onset of the Covid-19 pandemic, retail store sales plummeted and analysts around the world began to note that sales on digital channels were surging. In late April 2020, Lilia Jaime, the CEO of Bodega Aurrera, wondered if this was an opportunity she had to seize. If so, she had to act right away, ahead of her competition. Yet, normally, the established procedure to introduce a full online channel involved the Walmart Bentonville, AR headquarters at both business and Information Technology (IT) levels, and it would take several months. The only way to launch quickly, the experienced Walmex eCommerce team told her, was by bringing in an outside firm with an eCommerce framework already in place and mounting Bodega Aurrera on top of it. To their knowledge, this had never been done at Walmart before. Also, she would have to carve the initiative out of her own approved budgets, at the expense of projects she already considered a priority. But were the families at the base of the pyramid ready to place grocery orders online and trust paying through digital channels? And if Lilia went ahead and it didn't work, she would risk inflicting serious damage to one of Mexico's most beloved brands.
The co-founders of PhonePe, India's leading digital payment platform are considering pursuing various growth opportunities in a huge country just entering the digital age. In a highly competitive industry, the founders are keenly aware that making the right choices is not only a matter of opportunity cost but critical to preserving the company's market leadership. PhonePe began as an enabling platform between parties and, unlike some of its competitors, did not get involved up to now in the direct delivery of goods and services. But PhonePe's brand and reach make it relevant now to revisit the question. In the next board meeting, three areas of obvious digital potential are likely to come up: lending, education and gaming. Another is taking the model international. What should the founders recommend to their board?
The Canadian city of Toronto had one of the largest housing affordability problems of any city in the developed world. One company trying to address this problem was Dream, one of the largest real estate groups in Canada. In 2021, Dream had just launched a new system for impact investing, along with two new investment vehicles to connect investors with environmentally and socially beneficial projects. A first mover in impact investing among Canadian real estate firms, Dream wrestled with the question of how to use the language and concepts of impact investing to solve Toronto and Canada's housing affordability crisis. How could Dream work with federal, provincial, and local governments to make housing more affordable? How could it scale impact across the real estate industry to increase affordability? How could Dream also integrate other aspects of impact, like environmental sustainability, into its approach without losing focus on affordability? Students will consider the case of a single large Dream development in Toronto as they evaluate these questions.
The company's innovative approach was widely recognized, both locally and internationally. In 2018, Moller was invited to join a prestigious NGO focused on the role of the private sector, which led to an invitation by Unilever Chile's CEO to join forces to meet a corporate-wide Unilever commitment: a 25% reduction by 2025 of the plastics it put out into the world. One of the most efficient ways of doing so was the replacement of single-use plastic packaging by reusable containers, but the challenge was to make consumers remember to take their empty containers with them when shopping. With the insight that people never forget to take their wallets, Moller's response was Packaging-as-a-Wallet (PaaW), a reusable plastic container imbedded with a Radio Frequency Identification (RFID) chip that, through Algramo's smartphone app, could also become a digital wallet. At the same time, the app allowed the user to order the exact amount desired and have it home-delivered by electric tricycle. In January 2020, following a successful pilot test, Unilever Chile and Algramo rolled out PaaW across Santiago, Chile's capital. With plastic pollution a highly visible global issue, Algramo's efforts attracted wide international attention and recognition. Several leading FMCG multinationals and environmental NGOs approached Algramo to explore potential partnerships. For many years, Algramo's financing came through awards and prizes, friends and family and benefactors. At the end of 2019, Algramo completed its first institutional capital-raise in a round led by New York-based impact investor Closed Loop Partners. That relationship opened the doors to projects that would take the Algramo model to New York City. In March 2020, Algramo's board approved a joint venture with a Dutch NGO to deploy Algramo in Indonesia, the world's second-largest source of plastic leakage into the oceans. That same month, Chile registered its first Covid-19 case.
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?
In 2009, Dan Meyer and Richard Palmer, two veterans of the fast-moving consumer goods (FMCG) industry, founded Nehemiah Manufacturing to build FMCG brands while providing jobs to Cincinnati, Ohio's beleaguered urban core. Two years later, the pair made their first "second-chance" hire of a convicted felon, a successful experiment which would grow to define the company. By 2019, Nehemiah's factory floor, as well as several supervisory and management positions, would be staffed by ex-offenders. With a robust net of social support services and a non-profit foundation for training peer companies in how to hire second-chance employees, Meyer and Palmer advocated using second-chance hiring to decrease turnover and create staff loyalty. This case deals with the challenges and opportunities associated with growing a manufacturing company while prioritizing a social mission, and enables students to evaluate the potential of second-chance hiring programs.
After long dominating Mexican microfinance, Compartamos Banco faces the emergence of fintech, just as for the first time its loan portfolio and clients have declined. Enrique Majós, CEO of GENTERA, the bank´s parent company, is keenly aware of the profound changes since the Compartamos IPO in April 2007, when it was valued at $1.5 billion and became the first bank wholly dedicated to microfinance to be quoted in a major stock exchange. Since then, the market has become intensely competitive, with both large established institutions and new entrants vying for the same customers. Simultaneously, the digital era has spawned fintech, threatening to disrupt Compartamos' highly successful model but also providing opportunities for the bank to reshape it. While challenged to manage key innovation within a leading incumbent, Majós must consider whether to commit his team to a major cost reduction in the next few years to his board of directors at their next meeting at the end of the month.
Accion, an NGO, had been a pioneer in microfinance since its entry into that sector in the early 1970s. Its investments in Banco Compartamos paid off, when the microfinance bank went IPO in 2007, leaving an influx of $138 million for Accion. Under a new CEO, Michael Schlein, who came from Citibank, the organization was constantly wrestling with what its next strategic direction should be. In 2010, Schlein decided to move the organization in the direction of fintech, betting that the new digital technologies would enable a rapid inclusion of the 1.7 billion people who had been traditionally excluded from financial products and services. The case lays out the components of the new strategy and asks students to assess its effectiveness.
This case tells the story of how Wang Minghui, Chairman of Yunnan Baiyao Group since 1999, transformed a single-product traditional Chinese medicine (TCM) state-owned enterprise (SOE) into a major diversified consumer health player in China's highly competitive fast-moving consumer goods market. The case also traces the development of the company from a private business to an state-owned enterprise (SOE) and then to a SOE under mixed state-private ownership.
In the fall of 2017, self-made businessleader Edgardo Novick pondered his campaign to be elected President of Uruguay, "the Switzerland of Latin America." Inspired by populist revolts against the statue quo observable worldwide, Novick hoped he could ride popular momentum to break the political monopoly of the traditional parties and return the country to its past greatness. Uruguay had been one of the world's most successful countries in the nineteenth and early twentieth centuries, but had since experienced a long period of relative decline. Could Novick's campaign turn the tide of history? And what policy should Uruguay adopt with regard to the world economy?
BIM, Turkey's giant retailer with a hard-discount model for the popular segments, must decide whether to launch a brand-new format challenging the modern supermarkets. Since its founding in 1995, BIM has adhered to a business model based on a relentless focus on costs and operational efficiency, built on private labels and an unswerving limit on SKUs. Unprecedented in Turkey, the success of this retail concept propelled BIM to an IPO in the Istanbul Stock Exchange and to being the country's largest retail company by market capitalization. Seeing an opportunity to pioneer the format internationally, the company was now also in Morocco and Egypt. While the hard-discount format was still growing, in 2014 Haluk Dortluoglu, the company's CFO, began to develop an entirely new retail model for Turkey- FILE, a discount supermarket. FILE would carry many more SKUs in larger stores and compete head-to-head with national and local supermarkets. Throughout the year, in their various executive committee meetings, the senior executives of the company have debated the many issues posed by a totally different retail format and the advisability of launching it. Finally, in its first meeting of 2015, the company's board of directors are set on reaching a decision on FILE.