This case follows the founder and CEO of King's Flair International (KFI), Alex Wong, as he navigates a critical situation involving Zhong Ying (ZY), a long-standing strategic partner of KFI. KFI, a reputable Hong Kong-listed Original Design Manufacturer (ODM) for premium international household brands, has collaborated with ZY as a manufacturing partner for over two decades. Throughout the years, ZY has enjoyed a steady stream of orders from KFI, contributing to its gradual business growth. However, due to its recent overexpansion and mismanagement, ZY found itself buried heavily in bank loans. In early 2019, ZY had reached a point where it could no longer meet its regular debt repayment obligations due to a lack of funds. Consequently, the bank issued an ultimatum, demanding full loan repayment within a few days or else initiating legal action against the company. Faced with this dire situation, ZY had no choice but to seek out Wong's assistance. Wong now faces two crucial decisions: 1) whether he should extend help to ZY, and 2) if he decides to help ZY, which of the three alternatives should he choose? Complicating matters further, ZY is currently working on an urgent order for KFI. Wong understands the gravity of his choice, as it carries significant implications that extend beyond ZY and can impact other manufacturing partners as well. Hence, he must carefully deliberate and weigh the potential consequences before making a decision.
Sigma Ventures is a venture capital (VC) firm that invests in technology, intelligent manufacturing, healthcare, and consumer services companies in their early and growth stage. In late 2017 Li Yuan, Sigma Ventures' founder and managing partner, needed to decide whether a startup called Isolimit was worth investing in. If so, then Isolimit was to be valued. The case describes how Sigma Ventures assessed Isolimit's team, market, and technology and shows how Sigma used the venture capital method to evaluate its potential investment. Specifically, the case discusses three aspects of early-stage venture capital investments: (1) How should venture capital firms evaluate early-stage startups? (2) What is the logic of the venture capital method? (3) How should venture capital firms apply the venture capital method to determine the percentage stake they should receive in exchange for their investment?
Sigma Ventures is a venture capital (VC) firm that invests in technology, intelligent manufacturing, healthcare, and consumer services companies in their early and growth stage. In late 2017 Li Yuan, Sigma Ventures' founder and managing partner, needed to decide whether a startup called Isolimit was worth investing in. If so, then Isolimit was to be valued. The case describes how Sigma Ventures assessed Isolimit's team, market, and technology and shows how Sigma used the venture capital method to evaluate its potential investment. Specifically, the case discusses three aspects of early-stage venture capital investments: (1) How should venture capital firms evaluate early-stage startups? (2) What is the logic of the venture capital method? (3) How should venture capital firms apply the venture capital method to determine the percentage stake they should receive in exchange for their investment?
This case series describes the decision of King's Flair International (KFI) on whether to venture into the nanofiber business. KFI grew from an original equipment manufacturer (OEM) in the kitchenware and household products market to a successful pioneer in developing and implementing a "virtual manufacturing system" led by the company founder, Alex Wong, with his adventurous and entrepreneurial personality. KFI's innovative product design and engineering, along with its celebrated virtual manufacturing (VM) system, enabled it to enjoy steady growth over three decades starting in 1989, and it was listed in 2015 on the Hong Kong Stock Exchange. As Wong constantly challenged the company's status quo, he became aware of nanofiber material and its potential. However, he also knew that the nature of the nanofiber business was very different compared to KFI's existing business-a dilemma emerged. In case (A), students will assume the role of the Founder and CEO of KFI and decide whether the company should venture into the nanofiber business. During the process, students will gain insights into how the founder grew KFI by developing and managing its core competencies, and in particular how the virtual manufacturing system played a pivotal role in realizing KFI's core competencies. In case (B), students will take the role of Gigi Wong, Executive Director of the company and the Founder's daughter, to decide how the nanofiber business could be implemented in KFI.
This case series describes the decision of King's Flair International (KFI) on whether to venture into the nanofiber business. KFI grew from an original equipment manufacturer (OEM) in the kitchenware and household products market to a successful pioneer in developing and implementing a "virtual manufacturing system" led by the company founder, Alex Wong, with his adventurous and entrepreneurial personality. KFI's innovative product design and engineering, along with its celebrated virtual manufacturing (VM) system, enabled it to enjoy steady growth over three decades starting in 1989, and it was listed in 2015 on the Hong Kong Stock Exchange. As Wong constantly challenged the company's status quo, he became aware of nanofiber material and its potential. However, he also knew that the nature of the nanofiber business was very different compared to KFI's existing business-a dilemma emerged. In case (A), students will assume the role of the Founder and CEO of KFI and decide whether the company should venture into the nanofiber business. During the process, students will gain insights into how the founder grew KFI by developing and managing its core competencies, and in particular how the virtual manufacturing system played a pivotal role in realizing KFI's core competencies. In case (B), students will take the role of Gigi Wong, Executive Director of the company and the Founder's daughter, to decide how the nanofiber business could be implemented in KFI.
The case narrates the IPO journey of Budweiser APAC (Budweiser APAC), the Asia-Pacific subsidiary of Anheuser-Busch InBev (AB InBev). During its time in Asia, megabrewer AB InBev not only engaged in many mergers and acquisitions but also witnessed first-hand the development of an up-and-coming market. This allowed Budweiser APAC to become a leader in the Chinese and South Korean markets and develop plans to significantly expand its market share in Southeast Asia. Nevertheless, challenges such as the overall sluggish beer industry and fierce competition for talent slowed Budweiser APAC's business. In 2019, the brewer behemoth suspended plans to list on the Hong Kong Stock Exchange. Shortly thereafter, the company offloaded its Australian Subsidiary Carlton & United Breweries (CUB) and then successfully listed Budweiser APAC in Hong Kong. Instead of providing the entire IPO story at once, the case intentionally splits this content into two parts. Case A focuses on Budweiser APAC's initial failed IPO attempt and asks students to put themselves in the shoes of Jan Craps, AB InBev's Zone President Asia Pacific and CEO & Executive Director of Budweiser APAC. Initially, the class discussion should focus on the global beer industry, the competitive landscape in different geographic regions, and Budweiser APAC's major competitors. Subsequently, students should discuss which of the proposed alternatives to the failed IPO listing best serves the needs of both AB InBev and Budweiser APAC. Case B follows Case A and discusses which alternative was actually chosen: AB InBev successfully listed Budweiser APAC on the Hong Kong Stock Exchange after selling its Australian subsidiary to Japan's Asahi Group. This divesture facilitated Budweiser APAC's second IPO attempt not only by making it clear to investors that the company will focus on growth markets such as China, India, and Vietnam, but also by making the listing more attractive to investors who seek exposure to emerging
Supplement to Budweiser APAC Spinoff (A): The Financial Strategy for Localization. Case B follows Case A and discusses which alternative was actually chosen: AB InBev successfully listed Budweiser APAC on the Hong Kong Stock Exchange after selling its Australian subsidiary to Japan's Asahi Group. This divesture facilitated Budweiser APAC's second IPO attempt not only by making it clear to investors that the company will focus on growth markets such as China, India, and Vietnam, but also by making the listing more attractive to investors who seek exposure to emerging markets.
Being a century-old family business, Li & Fung ("LF") had celebrated its evolution from a small trading company to a well-established, internationally recognized supply chain solution provider. However, the rapid advancement of internet technology and e-commerce development in recent years challenged the company's once-innovative business model. Although LF had aggressively streamlined and transformed its business, the company was still struggling to turn around. However, the recent trade war between the U.S. and China, along with the outbreak of the COVID-19 pandemic, triggered the Fung family to consider taking the company private. Case A enables students to take the role of LF's consultant to assess the motives, challenges, pricing, regulatory and financial implications of the going-private offer before making a recommendation to the company. Case B describes the actual outcome and the immediate developments of the company after taking it private. The new hindsight enables students to revisit the company's go-private decision in light of the new developments, offering students an opportunity to understand the agency conflict between the majority and minority shareholders in a listed family business. It also raises the question of whether going private is considered necessary for the Fung family. A moral dilemma would emerge towards the end, stimulating students to think about the issue of ethical leadership.
Supplement to the Li and Fung: Stay Public or Go Private (A). Case B describes the actual outcome and the immediate developments of the company after taking it private. The new hindsight enables students to revisit the company's go-private decision in light of the new developments, offering students an opportunity to understand the agency conflict between the majority and minority shareholders in a listed family business. It also raises the question of whether going private is considered necessary for the Fung family. A moral dilemma would emerge towards the end, stimulating students to think about the issue of ethical leadership.
In the second decade of the 21st century, many time-honored baijiu distillers faced challenges from the digital economy. Going digital was undoubtedly tricky for them, but the mega-trend of digitalization was unavoidable, and the time-honored baijiu distillers had no choice but to adapt. Leading time-honored baijiu distillers were the first in the industry to jump into this trend. However, the road ahead seemed more challenging for small and medium baijiu distillers. This case study focuses on digitalizing a time-honored baijiu distiller in Jiangxi - LIDU Liquor (hereinafter referred to as LIDU). The case describes LIDU's digital journey starting in 2014, focusing on defining digitization, influencing factors, digital measures, and evaluating indicators. It aims to help students understand why and how time-honored baijiu distillers start digitalization. It also provides suggestions on how to assess its digitalization performance. This case offers insights and references for traditional manufacturers and companies in the digital era.
This case describes the aggressive growth of Luckin Coffee since its inception in 2017. In merely two years, Luckin established a coffee network in China, surpassing Starbucks despite the US giant's 20 years of experience in the country. The case concludes with Luckin's announcement of accounting fraud in April 2020, followed by the immediate stock market and investor reaction. The case's epilogue also enables students to consider the spillover implications of accounting scandals for other stakeholders. This case exposes students to several business-related, accounting, and finance issues that lay the foundation for further examination in specific accounting and finance topics.
This case describes the strategies and business models of Alibaba and JD.com (JD). After more than ten years of development, two giants-Alibaba, the world's largest online marketplace operator, and JD.com (JD), China's largest online direct sales operator-towered over China's e-commerce industry. In 2014, Alibaba and JD were listed successively, and in the first half of 2015, they disclosed their first annual reports after listing. These two financial statements attracted the attention of Zhang Wei, a sell-side investment manager who has just graduated from his EMBA program. To prepare for questions from his clients, he has begun to think about the differences between the strategies and business models of Alibaba and JD. How would these differences affect their financial statements? What are the investment highlights of the two companies?
This case describes how Alibaba and JD built their business empires and delivered results using their respective business models after going public. Shortly after Alibaba and JD.com (JD) released their respective annual financial reports in the first half of 2019, Zhang Wei, who had been recently promoted to Investment Manager, got a call from an institutional investor. The investor intended to purchase shares of Alibaba or JD, and hoped to assess the two companies' investment value from a financial perspective. Alibaba and JD adopt different development strategies and business models, ranking the top two in China's e-commerce arena. Which company is of higher investment value: Alibaba or JD? As a business school graduate, Zhang Wei has decided to analyze the two companies' financial statements, and based on that, evaluate the two companies' investment value and investment risk.
This case discusses the phenomenon of high-ratio stock splits in China's capital market. Unlike in the U.S. capital market, where cash dividends are common, high-ratio stock splits in China are often associated with sharp stock price fluctuations and attract close attention from investors, listed companies, and regulators alike. In April 2018, the two Chinese stock exchanges released the most stringent regulations to date to prohibit ineligible companies from carrying out such practices. Nonetheless, there were still many cases where companies found ways to circumvent the rules to continue high-ratio stock splits. In the first half of 2018, Profit Cultural & Creative Group (PCCG) and Zhejiang Wolwo Bio-Pharmaceutical Co., Ltd. (WolwoPharma) announced a 1.8-for-1 stock split together with a cash dividend of ¥0.25 per share and a 1.8-for-1 stock split together with a cash dividend of ¥0.4 per share, respectively. Although the stock prices of both companies went up initially after the announcement, the prices moved in the opposite direction after the ex-rights date. What were the motivations behind the listed companies' high-ratio stock splits? Why did the stock prices of the two companies show different patterns after the stock split? How should investors respond to high-ratio stock splits?