In July 2021, a major supply-side crisis in Nigeria forced the Dangote Tomato Processing Co. Limited plant of Dangote Farming to operate at just 20 per cent of its production capacity. Since its inception in 2016, the plant was shut down several times due to a shortage of fresh tomatoes of the required quality. Although the Nigerian government supported Dangote Farming by pursuing pro-tomato and pro-tomato-paste policies, it was unable to operate its processing plant at full capacity, reduce per-unit cost, and improve profitability. Due to various constraints, several tomato processing plants had exited the Nigerian market in the past several years. In view of persistent supply-side problems and tough competition from low-priced Chinese tomato paste, Dangote Farming needed to decide about the continuity of its tomato processing plant in the Nigerian market. If it decided to remain in the market, then it needed to devise strategies that could make the plant competitive and profitable.
In the quarter ending March 2022, Apple Inc. (Apple)’s share in the Chinese smartphone market fell to 17.9 per cent from 21.7 per cent in the previous quarter. Business analysts attributed the falling share to weak consumer sentiments; a lack of innovations; and major supply-side headwinds, including frequent COVID-related lockdowns in China, power shortages, Russia's invasion of Ukraine, and the trade and technology war between the United States and China. Apple needed to identify strategies to gain a leading share in the Chinese market. In the face of demand- and supply-side adversities in China, it also needed to reconsider its supply chain and manufacturing base. Should Apple keep its supply chain concentrated in China, to reap the benefits arising from the economies of scale in the production process? Or should it pursue geographic diversification for its supply chain, to protect itself from the major problems hovering on the horizon?
Urban Company (UC) was a digital labour platform that connected consumers with service providers (referred to as “partners” by UC) for home services such as plumbing, painting, and beauty and salon services. UC was ranked as the top digital platform company in India in the Fairwork India Ratings in 2020, but on October 10, 2021, the company met with a protest by its women partners from the beauty and salon segment. Two months later, on December 20, it faced another protest from its partners for unfair work practices. UC had shown a stellar performance in 2020, registering a 146 per cent increase in its revenue. However, the company was unprofitable, and its losses inflated further in 2021. Accommodating the partners’ demands might deteriorate the company’s bottom line further and might adversely impact the success of its initial public offering, planned for 2023. Additionally, continued unrest by the women partners might tarnish the company’s image, adversely affecting its rating in Fairwork’s annual survey. There was also a possibility that the government might impose stricter norms for the functioning of digital platforms. What should the company do to appease the protesters while also protecting its bottom line?
Sterlite Copper (Sterlite), owned by Vedanta Resources Limited (Vedanta), was one of three major copper plants in India. However, the plant had been the subject of controversy and public protests. The people residing in Tuticorin, where the plant was located, considered Sterlite to be a major contributor to the air and water pollution in the neighbouring area. In light of the latest public protest on May 23, 2018, which was supported by several national and international non-government organizations, human rights activists, and Tamil solidarity groups, the Government of Tamil Nadu ordered a permanent shutdown of the plant. Since the plant contributed around 5 per cent to Vedanta’s operating profit, the closure of the plant not only threatened the earnings and profitability of the parent company but also damaged its brand image. The plant was a major source of copper for over 400 small and medium-sized industries in its downstream value chain. The closure of the plant put at risk the jobs of a large number of employees, which Sterlite supported both directly and indirectly through its value chain. What should Vedanta do in such a hostile environment?
On September 9, 2019, thousands of Amazon.com Inc. employees threatened to join the global climate strikes planned for the week of September 20–27, 2019. Employees were protesting the e-commerce giant's customer-centric approach and its lack of transparency regarding its carbon footprint. Pressure for more transparency was mounting—not only from employees but also from various non-governmental organizations, politicians, and competitors. However, transparency could reveal environmental issues that might lead to a boycott of the company's products and services. Furthermore, transparency and environmental initiatives could work against Amazon’s customer-centric approach, and would likely not be approved by the shareholders. Amazon.com Inc. needed to make a decision. Should the company adopt a confrontationist approach and steadfastly pursue its customer-centric approach in the interest of shareholders? Or, should it adopt a co-operative approach and change the company's business model to minimize environmental damage?
In 2018, China was the biggest market for Internet services in the world. Along with the country's huge market size, its comparatively low penetration made it an immensely attractive market for search engine services. To capture this market, Google was planning to re-enter the Chinese market—after leaving in 2010—with a censored search engine codenamed “Dragonfly.” The move was opposed by human rights activists, Google’s own employees, and the U.S. government. Google had the opportunity to improve its share in the global search-engine segment if it could somehow tap into the vast Chinese market. But the tight control over Internet services by the Chinese government on one hand, and the protests by various interest groups on the other, had put Google in a tight spot. Google had to decide if it should go ahead with the plan to offer Dragonfly in China. Should Google instead explore other market and non-market strategies to re-enter the Chinese market?
In July 2017, the government of India implemented goods and services tax (GST), which brought uniformity in the tax rates on all types of biscuits. Compared to the pre-GST regime, the uniform tax rate resulted in a higher tax rate on mass-market biscuits and a lower tax rate on premium biscuits. Parle-G, the most popular brand of Parle Products Private Limited (Parle), fell into the mass-market biscuit category. The Parle-G brand had 75 to 80 per cent market share in the mass-market biscuit category, and it contributed nearly 33 per cent of Parle’s total revenue. The brand was sold at a very low price point and was highly price sensitive. To mitigate the tax rate increase, one option was to raise Parle-G prices; however, any price increase or change in package size for a product in the highly price-sensitive category could reduce company revenue. Therefore, new business strategies were needed under the new tax regime and amid the country’s overall changing business and economic scenario so that Parle’s margins and leading position were retained.
In April 2017, the Indian government announced the country would be free of fossil fuel cars by 2030. Maruti Suzuki was the market leader in India’s conventional passenger car segment, and did not agree that electric cars should be forced on the average consumer. Electric cars were very expensive and had limited mileage, making them a poor fit for Indian consumers, who were generally budget-conscious and mileage-obsessed. It would be very difficult to replace fossil fuel cars quickly, especially with largely non-existent infrastructure for the operation of electric cars. Maruti Suzuki wondered if it should wait for the uncertainty in the country to clear, while other car manufacturers took their chances on India’s electric car market, or if it should expedite the process of building electric cars and keep its market leadership position intact.
In June 2015, Lee Pharma Limited, a small Indian pharmaceutical company, filed an application with the Indian Patent Office for a grant of a compulsory licence to manufacture the diabetes drug Saxagliptin on the grounds that the patented version of the drug had not been made available to the public at an affordable price. The granting of a compulsory licence was expected to make the drug more affordable for the general public, but it would also undermine the interests of the patentee, a Western multinational company. If the developed world imposed sanctions against India in retaliation for such a protectionist measure, the flow of trade and foreign capital into the country would be adversely affected. Should the patent office strictly enforce the patent regime, which would encourage higher foreign capital inflows in research and development in the Indian pharmaceutical industry and promote inventions and innovations in the country? Or should it grant the compulsory licence, thereby attaching greater weight to the welfare of India’s general public?
In response to a recommendation at a government-sponsored power forum, Delhi’s aging and inefficient Rajghat Power House (RPH) was scheduled to close its doors. The coal-based plant had reached the end of its 25-year useful life, and its outdated equipment spewed toxins into Delhi’s air and water on a daily basis. Environmentalist bodies and power-distributing units in Delhi had made similar recommendations for the RPH’s closure over the years, and while the government had gone so far as to approve some of those plans, nothing had ever come of them. With the arrival of the forum’s recommended date of October 2015 for the plant’s closure, Delhi’s government officials faced a difficult decision. Should they ignore the environmental degradation to achieve a high growth rate in the short run, or should they protect the environment to achieve a sustainable growth rate in the long run?
Coal India Limited, the world’s largest coal mining company and India’s largest corporate employer, regularly produced less coal than was both achievable (i.e., it had excess capacity) and needed. As a result, it failed to meet the demand for coal from power utilities and other industries in the country. The Government of India, which had a persistent and large fiscal deficit, held the majority interest in the company. In January 2015, the government wanted to reduce its deficit and improve both the productivity of Coal India Limited and India’s coal supply. Should the government opt to disinvest from Coal India Limited or privatize the company?
When General Motors Holden announces its plan to exit from car manufacturing in Australia, Toyota faces a decision dilemma amid losses and adverse business and economic conditions. Should it continue as the country’s sole vehicle manufacturer and wait for business and economic scenarios to change favourably, or should it exit the market? Toyota’s position is assessed by applying microeconomics concepts, including the optimal scale of operation, minimum efficient scale of operation, economies of scale, short-run and long-run cost analyses, concentration ratio and fragmented markets.
The 2013/14 exit announcement by Australian car manufacturers poses a threat to the survival of the country’s automotive industry, and the pull-out is expected to have a significant and adverse impact on the Australian economy as a whole. The case highlights the dilemma that government decision-makers often face: Should they provide protection to loss-making industries in order to support domestic employment and economic output, or should they let struggling industries die out to make room for more prosperous economic activities? The case also highlights the dilemma faced by firms within a supply chain when original equipment manufacturers (OEMs) exit: Should the firm follow the OEMs or adopt survival strategies?
Google’s plan to gear up its flight search service in India by allowing users to compare fares and book tickets made other domestic travel portals in India nervous. There were fears that this development might turn out to be discriminative as Google had the dominant share in Internet search service. Fearing a substantial reduction in their share of the search market, these domestic portals had the option of lodging a complaint against Google with the Competition Commission of India.<br><br>Google’s business practices had been challenged and/or come under the scanner of anti-competitive law in many other countries as well. The public in India wondered why Google was involved in such controversies. Why did competing companies fear Google’s business practices? What would be the Competition Commission of India’s stand and how would it help consumers and society in general?