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After a 26 year partnership in the Indian two-wheeler industry, Hero and Honda parted ways. Honda had now become one of Hero’s main competitors. The case covers the reasons for the split, the challenges faced by Hero and the strategic initiatives it had to use to overcome these challenges. After the split, rebranding and re-positioning itself as a stand-alone brand was of primary importance to Hero MotoCorp. To ensure that Hero MotoCorp continued its association with the Indian consumers, it underwent a series of transition phases. With ever rising competition, Hero was putting all of its efforts into ensuring that it overcame each roadblock and maintained its number one position in the Indian two-wheeler market, but were the strategies producing results?

Jeju Air is a market leader in the South Korean low-cost carrier industry, operating more than 20 domestic and international air routes in Asian countries. In the midst of rising economic activity and the opening of more air routes in North Asia, Jeju Air is planning an initial public offering to seek capital to grow its China business.<br><br>Meanwhile, Singapore Airlines is in discussions to purchase a 20 per cent equity investment in Jeju Air. Is this investment a wise decision for Singapore Airlines? Additionally, what is Singapore Airlines’ future outlook in terms of its existing underperforming subsidiaries?

In 2012, an equity research firm based in California accused Singapore-based Olam International Limited (Olam) of engaging in potentially misleading and dangerous accounting practices. The firm — Muddy Waters Research — further stated that Olam was on the verge of bankruptcy. The primary complaint made against Olam by Muddy Waters was that Olam allegedly made aggressive use of “non-cash accounting gains,” particularly when reporting on Olam’s biological assets. Olam’s share price tumbled after the accusations were made public. Olam defended itself by asserting that it had applied Singapore Financial Reporting Standard (FRS) 41 — Agriculture appropriately and that the fair value gains of the biological assets were justifiably derived. FRS 41, equivalent to International Financial Accounting Standards 41 — Agriculture, required Singapore-listed companies to use fair value in the measurement of biological assets. This case examines the complex challenges that valuators face when presented with different valuation models, the application of financial reporting standards and the fine balance between reliability and relevance in the accounting of assets in the real world.

In 2014, a well-reputed innovative technology company had introduced a new operating system and two new smartphone devices with the goal of turning around the company’s slumping hardware sales. Despite positive product reviews in the media, the models did not sell as well as expected. Consequently, the lower demand led to impairment of inventory and supply commitments at various times throughout the following fiscal year. At the end of the fiscal year, the task facing the company’s chief financial officer was deciding whether or not further impairment was required. Because this decision came at a time of significant uncertainty about the company’s future in the competitive marketplace, the task also involved considering the impact of a potential adjustment on the company’s financial statements and on shareholder confidence.

Following a turbulent 2014 for Standard Chartered Bank, the bank’s largest shareholder, Temasek Holdings, began showing indications that it was seriously considering offloading at least a portion of its massive shareholdings in Standard Chartered Bank. This case seeks to provide a fair valuation of Standard Chartered Bank’s intrinsic value, as well as rationalize the most appropriate way for Standard Chartered Bank to raise funds to satisfy the higher capital requirements under Basel III regulatory rules. Assuming that Standard Chartered Bank decided to hold on to its significant bank investments and to raise funds to satisfy the higher capital requirements, what could be some possible financing alternatives? Would it help to attract more bank deposits, raise debt, or go for a seasoned offering? What would be the impact of these financing alternatives? Finally, what would be a suitable recommendation on how to raise the funds if one took the valuation results into consideration?

In 2015, Penn West Petroleum Ltd. (Penn West), a large Canadian oil company, made multiple acquisitions that led to a buildup of goodwill (i.e., the purchase price was higher than the net book value of the acquisitions). When the economic environment worsened, there was concern that this goodwill had been impaired. The concern deepened as economic factors improved but Penn West’s stock performance continued to be poor, indicating that the market believed that the company was potentially overvalued. A review of Penn West’s accounting practices revealed irregularities, and industry analysts — as well as the U.S. Securities and Exchange Commission — began to question the value of the company’s goodwill. It was becoming clear that Penn West had been overly optimistic in its forecasts regarding revenue streams from its properties. Would the company be able to move forward? How?

Jaguar Land Rover Automotive plc, a wholly owned subsidiary of the Indian company Tata Motors Limited, announced bond issue worth US$500 million. The proceeds of this issue were to be used to refinance costlier outstanding bonds. The company was able to raise new debt at substantially lower interest rates than its outstanding debt as a result of its sustained good performance, which led to strong company fundamentals and improved credit ratings. Students will analyze the various motivations for such a financial strategy, whether it will lead to cost savings or cash flow savings and, if so, the extent of the savings.

Hindustan Unilever Limited (HUL) had always focused on new and innovative ways to connect with rural customers in India. However, like many players in the market, the company found it challenging to reach certain areas. Popular media channels like television and radio were limited in rural India, and power cuts further reduced the reach of electronic media. Yet mobile penetration was relatively high and growing. Inspired by the success of its mobile “missed call” marketing campaign for Wheel detergent, HUL was considering extending the campaign to all of its brands. Should it introduce a dedicated mobile marketing channel, whereby customers could receive both entertainment and advertising by making missed calls? Were customers likely to choose a mobile phone-based entertainment channel? Would it be a sustainable media for creating long-term brand awareness among target customers?

This is the second case in a two-case series. See also <a<br>href=https://www.iveycases.com/ProductView.aspx?id=72903>9B15A037.</a>

NJOY, Inc., an electronic-cigarettes enterprise based in Phoenix, Arizona, conducted some Experiential Concept Tests (ETCs) on a sample size of 215 panelists. The sample included a mix of gender, age, education and income. It also included a mix of users and non-users of electronic cigarettes. In light of the consumer insights gained from the ETCs, NJOY Inc. wants to leverage the results to resolve three particular issues and pave the company’s way forward: How should NJOY sharpen its differentiation from big tobacco? What further innovations would be necessary in the core product? How should NJOY position its flagship product for long-term success?

New medicine launches in India had come down by nearly 80 per cent during the last six years. The risks associated with new-drug development were high, and for that reason, companies were considering buying the potential molecules in the early stages of development at comparatively cheaper rates. Apart from cutting costs, out-licensing provided opportunities for domestic players to enter into collaborations with global players. Now, with out-licensing gaining popularity in the global pharmaceutical markets, one of the fastest growing pharmaceutical companies in India wondered whether out-licensing could be its next big Indian opportunity.

A Singapore-based financial services company, the second largest lender in Southeast Asia, offered to acquire a Hong Kong bank, the eighth largest lender in the country, for a premium price per share. Three months later, a multi-billion hedge fund firm based in the United States had accumulated close to 8 per cent of the Hong Kong bank’s shares. According to Hong Kong’s securities law, the Singapore-based financial institution would have to acquire 90 per cent of the Hong Kong bank’s shares to successfully take the bank private, and there were only 25 days left for the company to meet this requirement. The hedge fund firm’s unspoken message was clear: raise your bid price to buy our shares or we will keep the company public at your expense.

After having virtually created the yoga-wear segment more than a decade earlier and having become a stock-market darling, Lululemon Athletica finds itself at a critical point in its development. After a series of missteps and a first-quarter profit drop of 60 per cent, the yoga-wear retailer’s founder, Chip Wilson, prepares to go into battle, meeting with banks and private equity firms to mount a buyout and take the company private. Similar to other highly successful entrepreneurial companies and their leaders, Lululemon, Wilson and the company executives face fundamental struggles in their attempts to balance an ambition to grow with the need to preserve core elements of the brand as the firm evolves.

By May 2015, Zivame, an Indian online lingerie retailer, had established itself as a market leader in this category by providing traditionally conservative Indian women a reliable solution to help them confidently purchase their most intimate wear while avoiding any confrontation with sales executives, mostly men, of brick-and-mortar stores. It helped its customers understand their lingerie needs, browse through styles, order their right size and get their orders delivered quickly at their doorstep without any embarrassment. Reliable customer care, availability of various national and international brands and a wide range of sizes and styles had made the brand popular in its target market, averaging 1,200 daily orders, almost a 200 per cent jump from the previous year. Can Zivame reach its goal of becoming a billion dollar enterprise in the next five to seven years or will confining itself to the women’s lingerie segment become a hurdle to future growth?

In India, customers were used to the idea of buying groceries in stores. BigBasket.com, India’s first online grocery retailer, was set to break this mindset. Customers were signing up at an aggressive rate based on word-of-mouth. With a commitment to provide a top-quality product assortment at competitive prices, BigBasket successfully provided last-mile delivery to customers across Bangalore, Hyderabad and Mumbai. While traditional brick and mortar grocery retailers were struggling, BigBasket became the first online grocery retailer to report a breakeven in March 2014 in one of the cities where it operated.<br><br>Brick and mortar grocery retailers had started focusing on a hybrid model and analysts believed that hybrid models had more profit potential than pure online grocery retailers. Despite this, BigBasket had arranged funding from venture capitalists, receiving the highest-ever amount of Series A funding among the online retail industry in India. BigBasket leveraged innovative, customer-centric policies that not only boosted customer confidence but also enhanced overall profit margins. Could it permanently change the shopping habits of consumers? Was the breakeven a short-term phenomenon for BigBasket or would it achieve similar performance in other cities? Would online grocery retailing be profitable in the long run?

Ola Cabs, a pioneer in the taxicab aggregation business in India, was confronting several issues that were posing serious challenges to the company. The government had temporarily banned cab services offered by aggregators due to an incident involving an assault on a female passenger. Subsequently, new regulations were put in place to protect passenger safety, which stipulated that cab aggregators must obtain a licence under the radio taxi category. This was a major blow to Ola Cabs as it was a technology platform provider that connected customers with cab owners. The situation required quick resolution as Ola Cabs was going through a major phase of unprecedented growth and had set ambitious targets in terms of revenue. The company had been growing at a rate of 40 per cent month on month, and had more than 50,000 cabs in its network, which spread across 28 cities.

On September 25, 2014, the prime minister of India extended an official invitation to businesses across the globe to invest and produce in India. The program, called “Make in India,” began as a way to meet the growing needs of the country’s developing economy by encouraging both local innovation and foreign direct investment. Its goal was to make products without defects and with no negative impact on the environment, while protecting intellectual property. Regulatory changes and labour reforms were undertaken to enable favourable conditions for investment. However, various leading authorities had doubts about the program’s focus on manufacturing and the likelihood of a successful replication of China’s export-led growth model. With the many strategic and operating challenges in the way, especially with regards to infrastructure and the availability of a sufficiently skilled and motivated workforce, will “Make in India” be able to succeed in transforming the Indian economy?

By the end of 2013, PC Financial remained one of the few successful no-frills banking providers in Canada. Since its founding in 1998, the company had grown into a significant competitor in consumer financial services with nearly three million customers and $644 million in revenue. The financial crisis of 2008 and the competitive situation in Canadian retail financial services had led to the acquisition and in some cases closure of several of its competitors. While the changes in the market arguably seemed to be beneficial by reducing competition, they also raised questions about the company’s ability to continue as a separate operating entity.

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?

Arçelik, a member of the Turkish Koç Group, had grown from a leading manufacturer of household appliances (also known as ‘white goods’) in Europe’s largest emerging economy to a substantive international player. Yet the company faced new challenges in strengthening its positions in advanced economies, exploiting its competitive advantages across a wider range of emerging economies and in raising the profitability of its international operations. In Western Europe, its Beko brand was often perceived as a low-tier brand, and in most of the region, brand recognition was low. In Eastern Europe, Arçelik’s low-cost strategies matched local demand, but the potential for demand growth was limited. In the Middle East, brand recognition was strong, but political risks remained high. In other emerging economies, Arçelik’s product offering fit local demand patterns well, yet trade barriers inhibited import market penetration. Thus, the firm needed to design and prioritize strategic initiatives for future growth.