Kamal Patel and Tushar Thumar, co-founders of Khedut Feeds & Foods Private Limited (KFFPL), were contemplating whether to accept the proposal from Royal Exporters Private Limited (REPL) to become one of its contract manufacturers. REPL was a leading peanut exporter in India that shipped premium peanuts to the European Union (EU) and other markets. Patel and Thumar had invested INR 134.8 million to establish a cutting-edge peanut-processing facility for exporting peanuts to the EU. However, despite producing high-quality peanuts, they could not find buyers in the EU willing to pay a reasonable price. This happened for two reasons. First, they started at a time when the EU was considering a ban on Indian peanuts because of the presence of aflatoxin in them. Second, many EU importers were unwilling to take a chance on a new exporter from India. By accepting REPL's offer, KFFPL could benefit from gaining access to its production capacity and obtaining a guaranteed return on investment. However, the downside would be losing autonomy in decision-making, brand-building potential and international recognition.
Sunit Raj was the Vice President, Marketing of Schematic Software Company (SSC), a Software-as-a-Service (SaaS) company. He was pondering how to preserve the company's growth momentum it had achieved over the last few years. In the third quarter of 2021, the company's valuation reached USD 25 billion, representing a year-over-year gain of 50%. Within 12 years of operation, it had over 50,000 employees worldwide and over 100,000 paying customers in more than 150 countries. Raj had to decide the company's future direction among new territories, buyer segments and product categories that would bring revenue and aid in sustaining its growth.
The case focuses on a family feud that started with a property dispute and became public news in 2017. Gautam Singhania (chairman and managing director, MD, of Raymond Limited, India) and his father, Vijaypat Singhania, are involved in the dispute. The case narrates both sides of the story. It provides an opportunity to discuss succession management, as well as "family feuds", their reasons and their repercussions on a family business. The case offers interesting insights into the overlap of family, business and ownership dimensions in a family business. The case ends with the speculation of whether such disputes could ever be settled.
The case, "AirAsia Malaysia: The IPO Decision", presents the situation faced by Tony Fernandes, founder and CEO of AirAsia Berhad (AAB), when he and his team of senior managers had to decide whether they should raise funds through an initial public offer (IPO) or through private equity. The airline started operations in January 2002 and became debt-free within eight months. It earned a net profit of RM 49 million on a revenue of RM 392.7 million in 2004. The AAB planned to buy planes and augment its fleet of 17 aircraft. Fernandes wanted to replicate his low-cost model in other countries as well. In November 2003, he entered into a collaboration with Shin Corporation of Thailand to start a budget carrier there. The team needed RM 800 million to buy more aircraft to expand its business. Going public would mean greater administrative burden on the small team of managers. Fernandes had the choice of going through private placement and raise funds, which would mean control in the hands of a few as opposed to diffused control in a public offer. In this context, he wondered what could be done.
The case describes a situation facing Mikul Patel and Rahul Mirdha, the co-founders of Moodcafe, an online mental healthcare service provider. They had to choose between the two angel investors and negotiate the terms and conditions for funding their start-up. In September 2018, they started Moodcafe to provide services to people struggling with mental health issues. The case mentions several crucial decisions in a start-up's journey that are related to "minimum viable product", "adding more features to the platform", "proof-of-concept testing of the product in the market", "building a core team" and "deciding on equity division between the co-founders". The co-founders need to raise funds from angel investors to test the product at the country level. They need to choose between the two angel investors and decide the terms and conditions of seeking investment.
The case provides an opportunity to formulate a late entrant's response to the competitive dynamics set in motion by its repositioning as a low-cost airline. It presents the dilemma before Tony Fernandes-the chief executive officer of AirAsia Sdn Bhd (AAB)-about how he should respond to the competitive retaliation from Malaysia Airlines (MA), the incumbent national carrier of Malaysia. Fernandes entered the Malaysian aviation industry in December 2001 by acquiring an ailing AAB. After acquiring the airline, he repositioned it as a "low-fare, no-frills" airline with the tagline "Now everyone can fly". He focused on all possible avenues to reduce the operations and maintenance costs and maximise the capacity utilisation of the planes. The initiatives yielded results, and AAB became debt-free within eight months of its renewed operations and reported a monthly cash flow of RM 18 million. With the utilisation of 4,000 seats daily and a passenger load factor of 70%, the airline repaid the loan of RM 100 million and earned a monthly profit of RM 2 million. In August 2002, MA retaliated by announcing its super saver offer that provided a full-service flight experience at 50% of the original fare. The tariff reduction resulted in a drop of 40% in AAB's bookings and threatened its survival. Fernandes had to respond to the new development.
In January 2013, the chief executive officer and the department heads of Shoppers Stop Limited, India’s largest department store chain, met to discuss the Indian government's imminent clearance of direct foreign investment applications by major global retailers. To prepare for the upcoming challenges from international competition, the head of the non-apparel department was asked to prepare a strategy. After discussions with the other department heads, he decided to recommend a sense-and-respond business model. However, he was unable to complete his plan because the head of distribution and logistics was unavailable until the following week.<br><br>In part B of this case, the head of the non-apparel department met with the head of distribution and logistics to assess the advantages and disadvantages of centralized and decentralized distribution and logistics structures. The head of the non-apparel department was considering an expansion to an online business, and knew that a dedicated, efficient, and cost-effective distribution and logistics system would ensure its success. He had a preliminary plan for a sense-and respond strategy but had some lingering questions. Which key elements of this strategy did the organization already possess? How could Shoppers enhance these capabilities in the future? Would the company need a major distribution and logistics restructuring to improve its sense-and-respond capability?
In January 2013, the chief executive officer and the department heads of Shoppers Stop Limited, India's largest department store chain, met to discuss the Indian government's imminent clearance of direct foreign investment applications by major global retailers. To prepare for the upcoming challenges from international competition, the head of the non-apparel department was asked to prepare a strategy. After discussions with the other department heads, he decided to recommend a sense-and-respond business model. However, he was unable to complete his plan because the head of distribution and logistics was unavailable until the following week. In part B of this case, the head of the non-apparel department met with the head of distribution and logistics to assess the advantages and disadvantages of centralized and decentralized distribution and logistics structures. The head of the non-apparel department was considering an expansion to an online business, and knew that a dedicated, efficient, and cost-effective distribution and logistics system would ensure its success. He had a preliminary plan for a sense-and respond strategy but had some lingering questions. Which key elements of this strategy did the organization already possess? How could Shoppers enhance these capabilities in the future? Would the company need a major distribution and logistics restructuring to improve its sense-and-respond capability?
Supplement to case W20752 In January 2013, the chief executive officer and the department heads of Shoppers Stop Limited, India's largest department store chain, met to discuss the Indian government's imminent clearance of direct foreign investment applications by major global retailers. To prepare for the upcoming challenges from international competition, the head of the non-apparel department was asked to prepare a strategy. After discussions with the other department heads, he decided to recommend a sense-and-respond business model. However, he was unable to complete his plan because the head of distribution and logistics was unavailable until the following week. In part B of this case, the head of the non-apparel department met with the head of distribution and logistics to assess the advantages and disadvantages of centralized and decentralized distribution and logistics structures. The head of the non-apparel department was considering an expansion to an online business, and knew that a dedicated, efficient, and cost-effective distribution and logistics system would ensure its success. He had a preliminary plan for a sense-and respond strategy but had some lingering questions. Which key elements of this strategy did the organization already possess? How could Shoppers enhance these capabilities in the future? Would the company need a major distribution and logistics restructuring to improve its sense-and-respond capability?
This case presents a situation faced by Tony Douglas, CEO of Etihad Airways, a government-owned, full-service airline. It is February 6, 2020, and Douglas is reviewing the progress he has made in turning Etihad around and charting a direction for its future. The key strategic options are: 1) Contracting and turning Etihad into a regional airline, 2) reshaping Etihad as a low-cost carrier (LCC), or 3) continuing to operate Etihad as a full-service, internationally-focused airline. Additionally, the company could form an alliance with its closest competitor, Emirates Airline. Created in 2003 with a mandate to operate "safely, commercially, and profitably," Etihad positioned itself as a luxurious airline and pursued aggressive internationalization and growth. It was the second national airline in United Arab Emirates (UAE) after Dubai's Emirates Airline. Etihad's initial strategy was directed by CEO James Hogan, and while the company was profitable for many years, it began incurring losses in 2016. The case provides quantitative and qualitative information to enable students to evaluate Etihad's strategy and performance and make recommendations for its future. This case was the third place winner in WDI Publishing's MENA Case Writing Competition "Doing Business in the Middle East North Africa Region," sponsored by Michigan Ross Executive Education.
In December 2019, Vishal H Mistry, the founder of Jalaram Rice Mills Private Limited (JRMPL), a rice-exporting firm in Ahmedabad, is facing some dilemmas concerning the export of rice. Currently, the firm is exporting non-basmati rice to Russia and South Africa. He received a bulk order for non-basmati rice from a new Russian firm. Based on his experience in the field, bulk orders are always risky, as the likelihood of the order getting cancelled in the last moment could put him at very high risk. Similarly, he is confused about the selling price of the rice. Compared to that between India and South Africa, the exchange rate between India and Russia was experiencing more significant fluctuations in recent years. The appreciation of the Indian currency against that of the importing countries made the export costlier for Mistry. This was happening in a context where a severe price competition in the importing markets existed. Since Mistry is a small exporter, he does not have much ability to reduce the price due to the lack of monopoly in the importing market. Therefore, Mistry is a price-taker and not a price-maker in the world market. Will he accept the order? If so, at what price?
This case presents the situation facing Tony Fernandes, the former Vice President of Warner Brothers, ASEAN region, in 2001, who had to decide whether to venture into the aviation business by acquiring an existing airline or drop the idea altogether. Fernandes was interested in starting a budget airline in Malaysia similar to low-cost airlines in the USA and Europe. He and his two close associates presented a proposal to Mahathir bin Mohammad, Malaysia's Prime Minister (PM), to start a low-cost airline. Mohammad rejected the proposal and suggested Fernandes to consider buying an existing airline. Conceptually it helps the participant to build the concept of entry through acquisition mode as opposed to entry through own creation. In the larger context, it involves the participants in evaluating a strategic opportunity for a new entrant.
The AirAsia India 2017 (AAI) case presents the situation faced by Tony Fernandes, the CEO of the AirAsia group of companies, in 2017, when he had to respond to the changes in aviation policy made by the Ministry of Civil Aviation (MCA). As per the changes, an airline operating in India could start its international operations without having five years of domestic flying experience provided it deployed 20 of its aircraft or 20% of the total capacity, whichever was higher, for domestic operations. The objective of this case is to help discuss issues relating to sustaining late entry and exploring new growth opportunities in the context of regulatory changes.
Vishant Patel, the founder of Patidar Exports Private Limited (PEPL), an export firm for cotton and other products in Ahmedabad in January 2017, was thinking whether to export cotton to Indonesia or not. He exported cotton to countries like China, Bangladesh, Pakistan and Vietnam, but not sure about Indonesia because of the strict regulation of the buyers in the country. Indonesia was the sixth largest importer of cotton in the world. Exporting to Indonesia could create a new market for Patel while meeting the standard requirements would increase the cost of his cotton. He was not confident whether Indonesian buyer would like to purchase Indian cotton at a higher cost when they had options like American and Australian sellers available.
The case describes the evolution of a global multi-tiered supply chain involving one of the world’s largest automotive original equipment manufacturers (OEMs), its tier 1 supplier — Automek, a U.S.-based global corporation — and the tier 2, tier 3, and tier 4 suppliers based in India. <br><br>With Automek’s engineering support, India-based Agile Electric had successfully developed many parts for the OEM in the past. Based on this experience, Automek buyers placed an order with Agile for a new product — an actuator assembly. In developing this product with little support from Automek, Agile was concerned due to its lack of knowledge concerning the suppliers for the actuator assembly components and the critical requirements. To allay its concerns, Automek promised to locate suppliers and assess and validate the suppliers based in India. Agile then invested in the assembly line and developed the actuator assembly. When supplies started, the OEM reported many quality problems, traceable to the tiered suppliers. <br><br>Along with quality and parts supply issues, the issues of subsequent liability in the case of a recall by the OEM were faced by members of the supply chain. Agile felt that since Automek had selected or approved the suppliers, and since Agile had had no original product expertise, that Automek should take responsibility for resolving the quality problems.
The case describes issues related to supply chain quality and how they evolve in the context of a multi-tiered global supply chain. The case involves a global multi-tier automotive supply chain made up of one of the world's largest automotive original equipment manufacturers (OEMs), its tier 1 supplier that is also a U.S.-based global corporation and the tier 2, tier 3 and tier 4 suppliers based in India. With Automek's engineering support, Agile had developed many parts successfully for the OEM in the past. Based on this experience with the company, Automek buyers placed an order with Agile for a new product (an actuator assembly). In developing this product with little support from Automek, Agile was concerned due to its lack of knowledge concerning the suppliers for the actuator assembly components and the critical requirements. To allay its concerns, Automek promised to support Agile by (a) locating the critical global suppliers for specialized components and (b) assessing and validating the critical suppliers based in India on behalf of Agile. Agile then invested in the assembly line and developed the actuator assembly. When supplies started, the OEM reported many quality problems that were traced to the tiered suppliers. Along with the quality and part supply issues, the issues of subsequent liability in the case of a recall by the OEM were faced by the members of the supply chain. Agile felt that since Automek had selected or approved the suppliers, and also as Agile had no knowledge of the product, that Automek should take the responsibility of resolving the quality problems arising from the supplier base. To complicate matters, some of the tiered supply chain members were not willing to invest time and effort in implementing improved manufacturing and process control practices as desired by Automek.