Ivey Publishing

Strategic Management: Planning for Domestic & Global Competition

Pearce, J.A., Robinson, R.B.,13/e (United States, McGraw-Hill Irwin, 2013)
Prepared By Majid Eghbali Zarch, Ph.D. Candidate, Strategy and International Business
Chapter and Title Chapter Matches: Case Information
Chapter 1:
Strategic Management

Eric Morse, Ken Mark

Product Number: 9B13M053
Publication Date: 4/19/2013
Revision Date: 4/19/2013
Length: 15 pages

The co-founder and CEO of StarTech.com is reviewing his firm’s strategic plan, including an aggressive target of $150 million in sales in three years. To achieve this goal, the company needs to leverage its knowledge to develop a meaningful presence in Europe. The challenge is to identify the best way to go to market, given country and regional differences in how people buy computer parts. The company can capitalize on several favourable trends: the economic weakness in Europe, which prompts consumers to extend the life of their electronic equipment; the lack of a European direct competitor; and the company’s ability to self-finance the venture.

Teaching Note: 8B13M053 (9 pages)
Industry: Manufacturing
Issues: Differentiation; expansion; business models; channel strategy; adaption; Canada
Difficulty: 4 - Undergraduate/MBA

Mridula Anand, Anand Nandkumar, Charles Dhanaraj

Product Number: 9B13M004
Publication Date: 4/16/2013
Revision Date: 4/16/2013
Length: 7 pages

AWARD WINNING CASE - Indian Management Issues and Opportunities Award, 2013 European Foundation for Management Development (EFMD) Case Writing Competition.The Embrace case series provides an engaging context to understand social innovation, by taking students through a sequence of critical decisions from opportunity analysis and market feasibility study to formulating a competitive strategy and developing business models for growth. The focus of the case is on an innovative idea to solve the problem of a high number of fatalities in premature births in rural India, and the potential for an affordable product.

The case is structured as a four-part series:

  • Part A: Opportunity Identification. The setting is an MBA classroom where five teams have been given five ideas and the students are asked to match each idea to each team. The focus is on how to identify and evaluate an appropriate opportunity given a unique entrepreneurial team, its composition, and its prior experience. Often, entrepreneurs discount the critical role that team-task fit plays in subsequent success.

  • Part B: Market Feasibility Analysis (9B13M005). The social problem associated with neonatal care in rural India is presented and the economics of providing reasonable care for premature babies is discussed. Is it possible to find an affordable and profitable price point, and make the project sustainable?

  • Part C: Competitive Strategy (9B13M006). The students are taken through an external analysis of the potential competition. This calls for a close analysis of what the competitive advantage of the venture is and whether it is sustainable. It forces the students to consider other available neonatal care options in the market, as well as to think about the IP issues they could face.

  • Part D: Building the Business Model (9B13M007). The team must decide between manufacturing the product in-house or outsourcing to vendors. Also, issues of distribution and sales require consideration.

Teaching Note: 8B13M004 (16 pages)
Industry: Health Care Services
Issues: Emerging markets; affordable innovation; business plan; social entrepreneurship; India
Difficulty: 5 - MBA/Postgraduate

Stewart Thornhill, Ken Mark

Product Number: 9B09M063
Publication Date: 9/24/2009
Revision Date: 8/26/2010
Length: 18 pages

Thirteen years after it began operations with three airplanes, WestJet is the second-largest airline in Canada. It has grown revenues at an annual rate of 37 per cent per year for the past 11 years, and is poised to become the country’s dominant airline in the future. As it has grown, WestJet seems to have made changes to its original strategy of low-cost, no-frills, point-to-point, single-class service. The case examines WestJet’s strategy over the years and focuses on the company’s latest decision point: whether to add smaller planes to its single-model Boeing fleet. The objective of the case is to examine changes in a company’s strategy over time, and to review the potential impact of these changes on a company’s future performance.

Teaching Note: 8B09M63 (10 pages)
Industry: Transportation and Warehousing
Issues: Strategic Planning; Strategy Development; Strategic Positioning; Change Management; Airline Industry
Difficulty: 4 - Undergraduate/MBA

Oana Branzei, Stewart Thornhill, Adam Reeds

Product Number: 9B08M092
Publication Date: 12/9/2008
Length: 16 pages

The case illustrates the tensions, trade-offs and adaptation challenges involved in designing a clean technology venture in a changing regulatory, funding and competitive context (Ontario, Canada, 2006-2008). The multiple decision points in the case have the students critically and iteratively assess the prospects of clean technology ventures and the evolving interface between technology and strategy in Canada's emerging clean energy sector. Beyond understanding the specific challenges faced by the venturing team, students are asked to grapple with the controversies and priorities for Canada's environmental policies in the energy sector, discuss competitive tension or symbiotic relationships between incumbents and disruptors, and actively align new venture design and strategy with a rapidly morphing regulatory, technological and competitive environment. The case discussion also opens up a broader platform for exploring the role of incumbents and disruptive business models in informing provincial and national responses to climate change, and, more generally, the role of cleantech venturing and venture capital in fostering climate change readiness and greener energy solutions. The A case asks students to compare and contrast the clean technologies available, discuss their pros and cons, and articulate a compelling business proposition.

Industry: Utilities
Issues: Venture Capital; Technology; New Venture; Sustainable Development
Difficulty: 4 - Undergraduate/MBA

Chapter 2:
Company Mission

W. Glenn Rowe, Tony Francolini

Product Number: 9B10M081
Publication Date: 11/1/2010
Length: 14 pages

The president and chief executive officer (CEO) of Goodwill Industries of Greater Grand Rapids Inc. (Goodwill) was analyzing a staff proposal to begin selling donated books online. Her initial response to the proposal had been to approve the idea without any reservation; however, some pointed questions raised during discussion at a recent board meeting caused her to revisit her support for the project. The CEO determined that to make a thoughtful recommendation about the proposal, she needed to evaluate three main criteria: 1) The strategic and financial fit of the proposal in relation to the current salvage buyers of Goodwill's books; 2) The operating and revenue needs of Goodwill's retail stores, and; 3) Alignment of the proposal with Goodwill's mission statement.

Teaching Note: 8B10M81 (11 pages)
Industry: Social Advocacy Organizations
Issues: Corporate Strategy; Non-Profit Management; Introductory Business; Strategic Planning
Difficulty: 4 - Undergraduate/MBA

Jean-Louis Schaan, Ramasastry Chandrasekhar

Product Number: 9B06M058
Publication Date: 6/21/2006
Revision Date: 9/21/2009
Length: 24 pages

Asian Paints, recognized as one of the best managed companies in India, has recently embarked on a significant push to internationalize its activities. The president of the international division is faced with the challenge of simultaneously meeting sales volumes expected, and to contribute to the company's goal of becoming one of the top five decorative paint companies in the world.

Teaching Note: 8B06M58 (12 pages)
Industry: Manufacturing
Issues: Mergers & Acquisitions; Emerging Markets; International Strategy
Difficulty: 4 - Undergraduate/MBA

Chapter 3:
Corporate Social Responsibility and Business Ethics

Robert Klassen, Ramasastry Chandrasekhar

Product Number: 9B13M010
Publication Date: 1/28/2013
Revision Date: 2/27/2013
Length: 15 pages

The CEO of Britannia Industries Ltd, a manufacturer of bakery products, was at a crossroads. Two years earlier, the firm had started providing specially fortified biscuits to small groups of school-going children in selected locations in India. The product offered a step toward addressing the widespread national problem of malnutrition and, unlike corporate philanthropy, this initiative was an extension of what the company was fundamentally good at – making biscuits. After early signs of success, Britannia’s CEO faced two challenges. How should Britannia scale up the manufacture and distribution of social products? And, how should the firm develop the social products into a sustainable business?

Teaching Note: 8B13M010 (10 pages)
Industry: Manufacturing
Issues: Sustainable Development; Corporate Social Responsibility; Capacity Expansion; Stakeholder Management; Brand Management; Non-government Organization Partnerships; India
Difficulty: 4 - Undergraduate/MBA

Klaus Meyer

Product Number: 9B09M001
Publication Date: 1/9/2009
Revision Date: 5/3/2017
Length: 13 pages

The case outlines the conflicting ethical demands on a Danish pharmaceuticals company, Novo Nordisk, that is operating globally and is aspiring to high standards of corporate social responsibility. A recent report alleges that multinational pharmaceutical companies routinely conduct trials in developing countries under alleged unethical conditions. The company's director reflects on how to respond to a request from a journalist for an interview. This triggers a discussion on the appropriate ethical principles and how to communicate them. As a company emphasizing corporate responsibility, the interaction with the media presents both opportunities and risks to Novo Nordisk. The case focuses on clinical trials that are required to attain regulatory approval in, for example, Europe and North America, and that are conducted at multiple sites around the world, including many emerging economies. Novo Nordisk has implemented numerous procedures to protect its various stakeholders, yet will this satisfy journalists and non-governmental organizations, and how should the company communicate with these stakeholders?

Teaching Note: 8B09M01 (11 pages)
Industry: Manufacturing
Issues: Location Strategy; Ethical Issues; Emerging Markets; Research and Development
Difficulty: 4 - Undergraduate/MBA

Alex Beamish, Paul W. Beamish

Product Number: 9B09C018
Publication Date: 9/18/2009
Revision Date: 3/24/2010
Length: 8 pages

In September 2009, Brian Lee purchased a computer game developed by a major company and, like other customers, he was experiencing difficulty running it. The source of the problems was a highly restrictive system of digital rights management (DRM), which, while more or less universally disliked, was causing serious technical problems for a minority of users. Lee began to share his experience on the company's message board and was engaging in a debate about online piracy with a company representative. He was curious about piracy in the file-sharing age and wondered why it would be wrong to download a pirated version of the game with the DRM circumvented. The case deals with an issue which resonates with students. Although the context is simple, the problem is complex, thus giving instructors wide latitude on how to teach the case. It is suitable for modules or courses focused on ethics, service operations, intellectual property rights and information technology.

Teaching Note: 8B09C18 (7 pages)
Industry: Arts, Entertainment, Sports and Recreation
Issues: Service Recovery; Intellectual Property; Internet; Ethical Issues
Difficulty: 4 - Undergraduate/MBA

Chapter 4:
The External Environment

Shih-Fen Chen, Aihwa Chang

Product Number: 9B12A011
Publication Date: 3/16/2012
Revision Date: 3/16/2012
Length: 24 pages

This case shows the expansion of 7-Eleven to Taiwan and the adaptation of the store format by its local franchisee to the new market environment. The core issue in this case is the balance between standardization and localization in business-format franchising across national borders. Despite keeping the store logo and convenience concept that was well established in the United States, the local franchisee of 7-Eleven in Taiwan re-formatted almost all aspects of the store chain, including its positioning, location, layout, and product offerings. In addition, 7-Eleven in Taiwan introduced a wide variety of new services for its customers, such as e-commerce (train or movie tickets), e-payment, mobile communications, pickup/delivery, and taxi services. The local franchisee, President Chain Store Corp. (PCSC), seemed to have struck the right balance between standardization and localization that allowed it to use service differentiation to gain competitive advantages over its rivals. In about three decades, it grew from zero to nearly 5,000 stores in Taiwan with over 50 per cent of the market, while expanding its reach to China and Thailand.

Teaching Note: 8B12A011 (7 pages)
Industry: Retail Trade
Issues: Service Standardization; Localization Across Borders; Service Differentiation; Service Marketing; International Franchising; Taiwan; CNCCU/Ivey
Difficulty: 4 - Undergraduate/MBA

Paul W. Beamish

Product Number: 9B11M006
Publication Date: 1/11/2011
Revision Date: 5/4/2017
Length: 13 pages

The Chinese fireworks industry thrived after China adopted the open-door policy in the late 1970s, and grew to make up 90 per cent of the world’s fireworks export sales. However, starting in the mid-1990s, safety concerns led governments both in China and abroad to set up stricter regulations. At the same time, there was rapid growth in the number of small family-run fireworks workshops, whose relentless price-cutting drove down profit margins. Students are asked to undertake an industry analysis, estimate the industry attractiveness, and propose possible ways to improve the industry attractiveness from an individual investor’s point of view. Jerry Yu is an American-born Chinese in New York who has been invited to buy a fireworks factory in Liuyang, Hunan.

Teaching Note: 8B11M006 (16 pages)
Industry: Manufacturing
Issues: Market Analysis; Industry Analysis; International Marketing; Exports; China
Difficulty: 4 - Undergraduate/MBA

Charlene Zietsma, Ramasastry Chandrasekhar

Product Number: 9B04M082
Publication Date: 1/28/2005
Revision Date: 9/21/2011
Length: 20 pages

The president of Loblaw Companies Limited must decide what to do in response to the rumoured introduction of Wal-Mart's SuperCenters (combining grocery and non-food items) in Canada. The potential launch of SuperCenters in Canada was seen by observers as a threat to Loblaw, the market leader in Canadian grocery. Wal-Mart is a vigorous competitor, and the Every Day Low Prices strategy of Wal-Mart's SuperCenters could wean away traffic from Loblaw's various banners.

Teaching Note: 8B04M82 (8 pages)
Industry: Retail Trade
Issues: Food and Drug; Industry Analysis; Competition
Difficulty: 4 - Undergraduate/MBA

Chapter 5:
The Global Environment

Subramaniam Ramnarayan, Charles Dhanaraj, Krithiga Sankaran

Product Number: 9B13M023
Publication Date: 4/24/2013
Revision Date: 4/23/2013
Length: 16 pages

Carborundum Universal Murugappa International (CUMI) was a leading abrasives manufacturing company based in India with global operations in Russia, South Africa and China. In the global abrasives business, China held 50 per cent of the raw materials for the industry. China was also the largest market for abrasives worldwide and was expected to contribute to one third of the global demand for abrasives. CUMI had the vision to become a global leader in the abrasives industry within 10 years. It had successfully expanded operations in Russia and South Africa, where it was seen more as a partner than a conqueror in its acquisition strategy. In 2006, the company entered China through a joint venture with a Chinese state company but subsequently bought out the partner. However, the company was facing several problems with its stand-alone operation there, especially in terms of maintaining its workforce and hiring local managers. It was clear that winning market share in China was necessary, but the complexity of the Chinese market had proven to be a challenge. The managing director had to present a strategy for working successfully in China to the board.

Teaching Note: 8B13M023 (22 pages)
Industry: Manufacturing
Issues: Internationalization strategy; mode of entry; joint venture; Russia; South Africa; China; India
Difficulty: 5 - MBA/Postgraduate

Pascal Vidal, Pierre-Xavier Meschi

Product Number: 9B13M029
Publication Date: 3/27/2013
Revision Date: 3/27/2013
Length: 16 pages

The fast rise of Lenovo among its competitors in the computer industry raised a series of questions regarding the sustainability of its competitive position, as well as the choices it had made in its efforts toward globalization. First, how could Lenovo establish and sustain a leadership role in an industry where competitive positions were increasingly unstable? Next, how could the Chinese firm build a solid competitive position in an industry characterized by smaller and smaller margins? Finally, after the acquisition of IBM’s PC business and the subsequent accelerated international expansion, could Lenovo still be considered an entirely Chinese entity or was it a truly global enterprise of Chinese origin?

A video interview with Lenovo's strategy and corporate development vice-president, Lenovo: A Chinese Dragon in the Global Village - DVD, is also available.

Teaching Note: 8B13M029 (13 pages)
Industry: Information, Media & Telecommunications
Issues: International expansion; growth strategy; global; China
Difficulty: 4 - Undergraduate/MBA

Ajith J. Kumar, Sivakumar Alur

Product Number: 9B13M027
Publication Date: 3/18/2013
Revision Date: 11/8/2013
Length: 18 pages

AWARD WINNING CASE - Best case in the Innovation Management category, 2012 ISB-Ivey Global Case Competition. An Indian company was planning to set up a Global Design Competence Centre (GDCC) in India. The company offered scented candles and holiday and gift products primarily for the U.S. market. Through its two American subsidiaries, it made and sold its products to large American mass-merchandisers and independent retailers. In-house design capabilities also existed in the form of six teams across India and the United States. Through the GDCC, the company intended to use Indian designers in collaboration with U.S. designers to create products for the U.S. market. The case draws students into exploring possible strategies to set up the GDCC.

Teaching Note: 8B13M027 (12 pages)
Industry: Manufacturing
Issues: Global product design; Product development; Design collaboration; Cross-cultural; India; United States
Difficulty: 5 - MBA/Postgraduate

Alvaro Cuervo-Cazurra, Flavia De Magalhaes Alvim

Product Number: 9B13M012
Publication Date: 3/5/2013
Revision Date: 3/6/2013
Length: 21 pages

The chief executive officer and chair of the board of directors of a company that designs, builds and sells consumer and commercial refrigeration products are trying to decide if the firm should expand in Asia and, if so, which method it should use. In recent years, Metalfrio has become a global leader in its industry by establishing manufacturing operations in Mexico, Turkey and Russia, as well as expanding within its home territory of Brazil, with sales in over 80 countries. Asia is offering promising opportunities for growth, and key customers are suggesting the company establish manufacturing operations there to better serve its global needs. The case addresses how Metalfrio transfers its competitive advantages across its international operations, and it further discusses how the company coordinates its operations to serve countries in which it does not have a production facility via exports. The case analyzes the competitive advantage of the firm and its transferability to other countries.

The supplement, A Note on the Commercial Refrigeration Industry 9B13M024, provides an overview of the commercial refrigeration sector.

Teaching Note: 8B13M012 (8 pages)
Industry: Manufacturing
Issues: Competitive Advantage; Emerging Markets; Internationalization; Brazil; Turkey; Russia; Mexico; Denmark
Difficulty: 4 - Undergraduate/MBA

Chapter 6:
Internal Analysis

Kevin McKague

Product Number: 9B12M033
Publication Date: 4/17/2012
Revision Date: 4/17/2012
Length: 9 pages

This case examines how CARE, a non-profit international development organization, begins to pursue a market-based approach to meeting its poverty-reduction mission. Specifically, a CARE project manager explores how previous work with low-income livestock herders in drought-prone eastern Kenya might offer an opportunity to work with value chain actors to improve access to markets and increase farmers’ incomes.

With the Kenyan livestock project as the pilot for this new approach, Case (A)’s main decision point concerns a strategic choice on what role CARE should play in the value chain to support low-income pastoralists. Options include 1) becoming directly involved in value chain transactions, buying and selling livestock, and providing inputs to farmers or 2) acting as a value chain facilitator to provide the information and incentives to existing actors to make the value chain more efficient and inclusive for low-income producers. This strategic decision is part of a larger proposal that students are tasked to create for CARE’s market-based livestock project.

Teaching Note: 8B12M033 (13 pages)
Industry: Agriculture, Forestry, Fishing and Hunting
Issues: Value Chain; Social Entrepreneurship; Non-profit Organization; Agriculture; Market Analysis; Kenya; Africa
Difficulty: 4 - Undergraduate/MBA

Ariff Kachra, M.B. Sarkar, Kirti Madhok Sud

Product Number: 9B11M055
Publication Date: 5/24/2012
Revision Date: 10/19/2012
Length: 24 pages

The vice president and managing director of Nokia India needed to decide whether to undertake an all-India launch of Nokia’s newest service offering for emerging markets, called Nokia Lifetools (NLT). The NLT pilot was very successful, with consumer adoption and retention rates over 70 per cent. However, offering services and applications that came directly loaded onto a handset was new for Nokia, put it in direct competition with service providers, and required the company to develop a very different distribution strategy. It could not avoid the important stakeholders in the telecommunication value chain as they were also crucial partners whose cooperation was key to Nokia’s success. Successfully launching NLT in India could shift the telecommunications industry globally. The decision facing the vice president was likely one of the most important business decisions he would ever make.

Teaching Note: 8B11M055 (9 pages)
Industry: Information, Media & Telecommunications
Issues: Value Chain; Industry Analysis; Financial Projections; Core Competence; Action Planning and Implementation; Telecommunications; India
Difficulty: 4 - Undergraduate/MBA

Stewart Thornhill, Ken Mark

Product Number: 9B08M093
Publication Date: 1/20/2009
Revision Date: 5/3/2017
Length: 18 pages

The Dell story is well-known in the business world: a young Michael Dell, while attending the University of Texas in Austin, founds a computer sales company that eventually revolutionizes the industry. The case puts students in the position of a senior executive at Dell who is preparing for an investor relations meeting. As the senior executive reviews information on his company, he wonders how best to convey to skeptical investors that Dell's strategy will return the company to growth. In examining the Dell story, students learn about how Dell built up a set of competitive advantages that seemed unassailable until the early 2000s. The second part of the case illustrates the impermanence of competitive advantages - it describes how Dell is attempting to remake itself after falling behind its competitors.

Teaching Note: 8B08M93 (5 pages)
Industry: Manufacturing
Issues: Strategy Development; Strategic Change; Globalization; Strategic Balance
Difficulty: 4 - Undergraduate/MBA

Pratima Bansal, Lindsay Sgro

Product Number: 9B04M008
Publication Date: 1/15/2004
Revision Date: 10/9/2009
Length: 9 pages

While McDonald's breakfast and snack sales have been increasing, they have not kept pace with industry growth. The primary barrier to this sales growth in the Canadian market, according to a franchise owner, is the quality of the coffee. McDonald's in Canada has been attempting to build its coffee brand equity for many years. They had switched to the Higgins and Burke coffee but had little success changing customers' negative perceptions. To truly change customer perceptions, McDonald's needed to revolutionize their coffee program. McCafe was introduced in response to this coffee issue. McCafe was full service coffee bar, located in a McDonald's restaurant as an extension to the front counter or located as a stand-alone restaurant. Over 300 McCafes existed worldwide. While McDonald's would like to get a piece of the lucrative coffee market, McCafe's main objective was to eliminate coffee as a barrier to breakfast and snack sales. The question for one franchise owner is whether McCafe's strong initial sales can be sustained.

Teaching Note: 8B04M08 (9 pages)
Industry: Manufacturing
Issues: Diversification; Corporate Strategy; Strategy Development; Strategy and Resources
Difficulty: 4 - Undergraduate/MBA

Chapter 7:
Long-Term Objectives and Strategies

Arpita Agnihotri, Saurabh Bhattacharya

Product Number: 9B13M033
Publication Date: 4/16/2013
Revision Date: 4/16/2013
Length: 18 pages

The case focuses on the profitability of the Indian aviation industry and explains how Indigo Airlines, a new entrant in the Indian aviation space, registered profits within three years of its inception while its competitors continued to struggle with losses. The case demonstrates how a firm incorporating innovative business practices can not only survive but also earn abnormal profits. The strategies adopted by Indigo Airlines to reduce its operational cost and enhance its revenue are discussed in the case. The case also explores whether the profits earned by Indigo are sustainable in the long run and focuses on the changes in the competitive positioning of Indigo Airlines as it switches from the position of a low cost player to a hybrid player in the aviation industry.

Teaching Note: 8B13M033 (8 pages)
Industry: Other Services
Issues: Innovative practices; competitive advantage; hub and spoke model; India
Difficulty: 5 - MBA/Postgraduate

David Wood, Taylor Sekhon

Product Number: 9B13M040
Publication Date: 3/26/2013
Revision Date: 9/4/2013
Length: 11 pages

After a massive earthquake destroyed many buildings in Haiti in 2011, reconstruction has become a source of opportunity and competition for non-governmental organizations, international business and local companies. The Haitian chairman and CEO of a very successful, multi-million dollar information technology company wants to provide affordable quality housing, especially for the disadvantaged poor, using steel frame technology from his start-up, KayTek. What he has not yet determined is how to get his product to market. He has three options: to keep sales and construction in-house, to outsource, or to franchise in order to create opportunities for young Haitian engineers to become entrepreneurs. Each option has costs, in terms not only of finances and time but also of control of brand quality and accessibility.

Teaching Note: 8B13M040 (12 pages)
Industry: Construction
Issues: Strategic Positioning; New Venture; Competitive Advantage; Sustainable Development; Franchising; Haiti
Difficulty: 4 - Undergraduate/MBA

Nicole R.D. Haggerty, Fridah Theuri, Meera Haji, Nurin Jamal, Nadeem Nathoo

Product Number: 9B13M052
Publication Date: 4/16/2013
Revision Date: 8/3/2018
Length: 13 pages

The co-founder of a Kenyan microfinance institution was troubled. Although his company had experienced great success in the past three years, it faced cash flow problems in June 2012. The co-founder had exhausted his personal resources and seeks an investor, local or international banks, or a process improvement program to ensure the company’s long-term success. The co-founder needed to evaluate his options and propose a solution to the other board members.

Teaching Note: 8B13M052 (4 pages)
Industry: Finance and Insurance
Issues: microcredit; high growth strategy; developing country; emerging markets
Difficulty: 4 - Undergraduate/MBA

Ben Forrey, Andreas Schotter, Jonathan Doh, Thomas Lawton

Product Number: 9B12M013
Publication Date: 2/17/2012
Revision Date: 2/17/2012
Length: 22 pages

By 2007, AirAsia had become one of the most successful budget airlines in the world. Having dominated Southeast Asia and entered China and India, AirAsia was poised to solidify its place as a top budget airline and one of the most consistently profitable globally. But company founder Tony Fernandes had bigger plans. From the outset in 2001, Fernandes had intended to offer long-haul service, competing against the largest and most established airlines in the world. However, his advisors had urged him to focus on regional, short- to medium-distance service. With many previous successes, Fernandes was once again ready to attempt long-haul service. Despite warnings from industry insiders, Fernandes pushed forward with the expansion.

Hiring 36-year-old Azran Osman-Rani as the CEO for the new long-haul venture, nicknamed X, was a critical step in this process. By early 2010, X had received its eleventh aircraft and was flying to 15 destinations on three continents. However, over time the substantial differences between long-haul and short-haul operating requirements became more apparent. Consequently, the management decided to formally separate X from AirAsia. This separation, and the inherent challenges for X and its recently appointed head of commercial operations, included: (1) how best to leverage the extensive network of the regional sister company AirAsia in selecting new and profitable destinations for X, (2) how to increase revenues without raising ticket prices, (3) how best to globally position the airline’s brand in non-Asian markets, (4) how to shift his marketing team’s mentality away from a start-up mindset, and (5) how to prepare for a global initial public offering within the next year. See supplement 9B15M018.

Teaching Note: 8B12M013 (15 pages)
Industry: Other Services
Issues: Strategic Marketing Management; Competitive Strategy; Expansion; Emerging Markets; Airline Industry; Malaysia
Difficulty: 4 - Undergraduate/MBA

Chapter 8:
Business Strategy

Cara C. Maurer, Bryan Sinclair

Product Number: 9B12M108
Publication Date: 4/17/2013
Revision Date: 4/17/2013
Length: 18 pages

In early January 2009, the newly hired head of Business, Strategy & Development, Cash Equities at Hudson Bay Bank (HBB) was analyzing how his group could increase revenues after the market meltdown of 2008. His analysis specifically focused on a business segment known as high-frequency trading, in some ways a controversial revenue stream, whereby traders take advantage of split-second price differences to earn a profit. Although U.S. firms had been using this technology for years, the Canadian landscape had only just become hospitable to the concept. This business segment could represent an attractive new source of revenue, but the financial services industry had seen dramatic changes since 2007, calling into question many of its foundational policies and procedures. Will high-frequency trading provide the innovation that HBB was seeking to grow revenues?

Industry: Finance and Insurance
Issues: Financial Crisis; Growth Strategy; High Frequency Trading; Canada
Difficulty: 4 - Undergraduate/MBA

Anil Nair

Product Number: 9B09M019
Publication Date: 5/22/2009
Revision Date: 5/4/2017
Length: 18 pages

IMAX was involved in several aspects of the large-format film business: production, distribution, theatre operations, system development and leasing. The case illustrates IMAX's use of its unique capabilities to pursue a focused differentiation strategy. IMAX was initially focused on large format films that were educational yet entertaining, and the theatres were located in institutions such as museums, aquariums and national parks. However, IMAX found that its growth and profitability were constrained by its niche strategy. In response, IMAX sought to grow by expanding into multiplexes. Additionally, IMAX expanded its film portfolio by converting Hollywood movies, such as Harry Potter and Superman, into the large film format. This shift in strategy was supported by the development of two technological capabilities - DMR for conversion of standard 35 mm film into large format, and DMX to convert standard multiplexes to IMAX systems. The shift in strategy was partially successful, but carried the risk of IMAX losing its unique reputation.

Teaching Note: 8B09M19 (11 pages)
Industry: Arts, Entertainment, Sports and Recreation
Issues: Business Policy; Strategic Positioning; Industry Analysis; Corporate Strategy
Difficulty: 4 - Undergraduate/MBA

Rod E. White, Paul W. Beamish, Daina Mazutis

Product Number: 9B08M046
Publication Date: 5/15/2008
Revision Date: 5/24/2017
Length: 19 pages

Research in Motion (RIM) is a high technology firm that is experiencing explosive sales growth. David Yach, chief technology officer for software at RIM, has received notice of an impending meeting with the co-chief executive officer regarding his research and development (R&D) expenditures. Although RIM, makers of the very popular BlackBerry, spent almost $360 million in R&D in 2007, this number was low compared to its largest competitors, both in absolute numbers and as a percentage of sales (e.g. Nokia spent $8.2 billion on R&D). This is problematic as it foreshadows the question of whether or not RIM is well positioned to continue to meet expectations, deliver award-winning products and services and maintain its lead in the smartphone market. Furthermore, in the very dynamic mobile telecommunications industry, investment analysts often look to a firm's commitment to R&D as a signal that product sales growth will be sustainable. Just to maintain the status quo, Yach will have to hire 1,400 software engineers in 2008 and is considering a number of alternative paths to managing the expansion. The options include: (1) doing what they are doing now, only more of it, (2) building on their existing and satellite R&D locations, (3) growing through acquisition or (4) going global.

Teaching Note: 8B08M46 (19 pages)
Industry: Manufacturing
Issues: Telecommunication Technology; Change Management; Globalization; Staffing; Growth Strategy
Difficulty: 4 - Undergraduate/MBA

Chapter 9:
Multibusiness Strategy

Federico M. Berruti, Heng-Yih (Gordon) Liu

Product Number: 9B11M123
Publication Date: 1/20/2012
Length: 12 pages

Green-Tech Inc., a Canadian company founded in 2006, was dedicated to developing, manufacturing, and marketing portable and stationary systems for the production of bio-oils and bio-char from biomass residues and wastes. Green-Tech was a recent spinoff from a large university research centre with a very good reputation for providing bio-energy solutions. Although focused and well positioned, Green-Tech had to manage relationships with large companies such as Shell that controlled vast and complete supply chains of oil-related businesses, as well as small firms and clients that were unable to manage their waste effectively. Large firms could provide plenty of business opportunities for Green-Tech, but could also jeopardize the company’s autonomy. Small customers on their own might not bring in enough cash flow, but could give Green-Tech sufficient freedom to pursue its own strategic goals. Both relationships seemed to lead to a promising future for this entrepreneurial start-up company, but also created serious risks. At the time of the case in 2011, Fernando Bruteque, vice president and one of the principal engineers of Green-Tech, was seeking the appropriate growth approach for Green-Tech. Being in charge of business operations, Bruteque also had to maintain a balance between research and development (R&D), investor and client concerns, and business opportunities. What would be the appropriate growth strategies and business operation strategies for a resource-constrained firm such as Green-Tech? How should it proceed?

Teaching Note: 8B11M123 (10 pages)
Industry: Professional, Scientific, and Technical Services
Issues: Bio-fuels; Renewable Energy; Research and Development; Canada
Difficulty: 4 - Undergraduate/MBA

Seungwha (Andy) Chung, Sunju Park

Product Number: 9B09M015
Publication Date: 2/9/2009
Length: 16 pages

In recent years, greater competition and diminished profits, due to domestic and global oversupplies as well as higher development costs, have led the automobile industry to engage in domestic and international mergers and strategic collaboration. This case examines one of the largest mergers and acquisitions (M&As) in the Korean automobile market in recent years: the acquisition of Kia Motors (Kia) by Hyundai Motors (Hyundai). The case describes the background conditions of the acquisition, the integration processes after the acquisition, and the requisites for Kia Motors to normalize management within a short time. Hyundai, in acquiring Kia, enhanced its competitive power in both domestic and global markets, achieving economies of scale and scope and strengthening its global market basis. That said, Hyundai/Kia faced several pressing challenges, among them the cooperation of Renault and Samsung Motors, the unclear domestic treatment of Daewoo Motors, and M&As taking place among top motor companies worldwide. This case study asks students to analyze the process of post-acquisition restructuring and the resulting synergy effects, inviting them to think through the strategies by which Hyundai/Kia may thrive in the global automobile market. Further, it illustrates both the current state of the domestic Korean automobile industry and recent trends in the global automobile market.

Teaching Note: 8B09M15 (12 pages)
Industry: Manufacturing
Issues: Restructuring; Mergers & Acquisitions; Organizational Change; Integration; Ivey/Yonsei
Difficulty: 4 - Undergraduate/MBA

Stephen R. Foerster, W. Glenn Rowe, Heather Tobin

Product Number: 9B09N015
Publication Date: 9/24/2009
Revision Date: 5/11/2010
Length: 25 pages

BCE Inc. (BCE), one of Canada's leading integrated communications companies, faced numerous challenges. In the key wireless communications market, BCE was trailing its competitors on growth and revenue. BCE's share price was underperforming and shareholders, including the powerful Ontario Teachers' Pension Plan, were becoming concerned. In addition there were regulatory changes on the horizon that could have a serious impact on BCE's wireless division. BCE's chief executive officer (CEO) was faced with the task of improving BCE's competitiveness and shareholder value in a dynamic industry. What options did the CEO and his leadership team have, which ones were better for BCE and how could the better ones be executed in order to satisfy BCE's shareholders? The case provides a good opportunity to assess financial performance and assist in understanding the interaction of strategy and finance.

Teaching Note: 8B09N15 (13 pages)
Industry: Information, Media & Telecommunications
Issues: Value Enhancement; Strategy Development; Strategy Implementation; Financial Analysis
Difficulty: 4 - Undergraduate/MBA

Meera Harish, Sanjay Singh, Kulwant Singh

Product Number: 9B08M094
Publication Date: 2/2/2009
Revision Date: 5/3/2017
Length: 15 pages

In January 2004, the chairman of the India-based Tata Group, announced that the Tata Group would focus its efforts on international expansion to become globally competitive. This largely domestic vehicle manufacturing firm subsequently acquired a leading established South Korean firm, Daewoo Commercial Vehicle Company (DCVC). This case focuses on the background of the firms and the acquisition, and the bidding and acquisition process. It provides information on the interests of the acquirer and target, and how both came to see the value in the acquisition. The Tata Group acquisition presents an uncommon situation of how an Indian firm acquired a firm in South Korea while overcoming a series of cultural and other barriers. An analysis of this case provides the basis for determining what criteria should be considered to guide a successful acquisition. A companion case is also available, Tata Motors' Integration of Daewoo Commercial Vehicle Company.

Teaching Note: 8B08M94 (10 pages)
Industry: Manufacturing
Issues: International Strategy; International Expansion; Management Decisions; Market Entry; Mergers & Acquisitions; Corporate Strategy; Business Policy
Difficulty: 4 - Undergraduate/MBA

Chapter 10:

Christopher Williams, Ramasastry Chandrasekhar

Product Number: 9B11M041
Publication Date: 5/10/2011
Length: 16 pages

The managing director of Apollo Health Street (AHS), a health care business process outsourcing (BPO) company headquartered in Pennsylvania, United States, was pondering two dilemmas: achieving short-term growth for his company, and finding new ways to compete in a changing industry. AHS was itself a subsidiary of Apollo Health Enterprises Ltd., an integrated health care company located in Hyderabad, India. AHS had been growing at an 80 per cent compound annual growth rate since 2005 and aimed to reach $100 million in sales by March 2010. Its target was to increase annual sales to $500 million within three years in a highly competitive space, which if successful would move AHS into the top three BPO companies in the health care sector. How should it secure short-term growth? The second dilemma was how to plan for the future. Industry analysts had predicted that over the next five to ten years, health care BPO would become unrecognizable from its current form. The managing director believed that although scaling up would strengthen the company’s position for the short term, the company should also be looking for solutions to stay relevant to the customer. How should AHS influence the shape of health care BPO in the future? What new ways of competing could the company pursue?

Teaching Note: 8B11M041 (10 pages)
Issues: Securing Scale; Competitive Strategy; Health Care; Business Process Outsourcing; United States; India
Difficulty: 4 - Undergraduate/MBA

Marcus M. Larsen, Torben Pedersen, Dmitrij Slepniov

Product Number: 9B10M094
Publication Date: 12/1/2010
Revision Date: 5/10/2017
Length: 16 pages

The last year's rather adventurous journey from 2004 to 2009 had taught the fifth-largest toy-maker in the world - the LEGO Group - the importance of managing the global supply chain effectively. In order to survive the largest internal financial crisis in its roughly 70 years of existence, the management had, among many initiatives, decided to offshore and outsource a major chunk of its production to Flextronics. In this pursuit of rapid cost-cutting sourcing advantages, the LEGO Group planned to license out as much as 80 per cent of its production besides closing down major parts of the production in high cost countries. Confident with the prospects of the new partnership, the company signed a long-term contract with Flextronics. This decision eventually proved itself to have been too hasty, however. Merely three years after the contracts were signed, LEGO management announced that it would phase out the entire sourcing collaboration with Flextronics. This sudden change in its sourcing strategy posed LEGO management with a number of caveats. Despite the bright forecasts, the collaboration did not fulfill the initial expectations, and the company needed to understand why this had happened. Secondly, what could LEGO management have done differently?

Teaching Note: 8B10M94 (13 pages)
Industry: Manufacturing
Issues: Outsourcing; Management Control; Global Strategy; Supply Chain Management
Difficulty: 4 - Undergraduate/MBA

Chapter 11:
Organizational Structure

Christopher Williams, Wendelien van Eerde, Danielle The

Product Number: 9B12M076
Publication Date: 8/3/2012
Revision Date: 5/25/2017
Length: 12 pages

The president of Infusion Development Corporation was reviewing the progress of the new subsidiary the company had set up 15 months earlier in Krakow, Poland. The purpose of the subsidiary was to work with other Infusion offices around the world to provide innovative software development services to global clients. The investment, a big success, had grown in size from eight to forty staff in one year, and there were plans to double that by the end of the following year. The issues facing the president were threefold. Firstly, how could he work with the country manager to continue to grow the subsidiary? Attracting the right talent was vital to Infusion’s culture and business model. Initial growth in Poland was based partly on local referrals in the community of .NET professionals in Krakow. It was also based on being a new start-up with an entrepreneurial culture. The president and country manager were concerned that there were limits to these factors. Secondly, what role should Infusion Poland have in the wider company in the future? Should it become a global centre of excellence and a pivotal hub for the company’s innovative capability? If so, how? Thirdly, what kind of succession planning should be put in place for the country manager in Poland? If he moved to another post at Infusion, as expected, should the company seek a local country manager instead of transferring one from headquarters?

Teaching Note: 8B12M076 (11 pages)
Industry: Professional, Scientific, and Technical Services
Issues: Growth of a Subsidiary; Role of a New Subsidiary; Country Manager; Information Technology; Poland
Difficulty: 4 - Undergraduate/MBA

W. Glenn Rowe, Lyn Purdy, Unnat Kohli

Product Number: 9B11C033
Publication Date: 9/21/2011
Length: 22 pages

In the last two years, Ujaala Borderline had lost two key accounts and the bidding process for a third large account. Ujaala Borderline’s CEO and an executive VP had just left a meeting with the firm’s largest client, Sweekar Iron and Steel. Sweekar’s CEO had informed them that he was taking his firm’s business from Ujaala Borderline and going with another provider. He had pointed out several servicing issues that had occurred over the last two years and considered these issues to have been ignored. These problems included errors in policies and quotes, and inefficiencies in communication due to Ujaala Borderline’s many organizational changes and high staff turnover. As the CEO left the meeting, he wondered what had happened. He had recently been profiled in a national newspaper as the CEO of the leading general insurer in India, but now felt that he was embroiled in changes that he knew he had created. The CEO realized that Ujaala Borderline had many problems and knew that he had to act quickly and decisively to turn things around or else risk his job.

Teaching Note: 8B11C033 (4 pages)
Industry: Finance and Insurance
Issues: Rapid Organizational Change; Staff Turnover; Leadership Problems; Power Struggles; Insurance; India
Difficulty: 4 - Undergraduate/MBA

Tom A. Poynter, Paul W. Beamish

Product Number: 9B08M037
Publication Date: 4/15/2008
Revision Date: 5/18/2017
Length: 12 pages

Victoria Heavy Equipment (Victoria) was a family owned and managed firm which had been led by an ambitious, entrepreneurial chief executive officer who now wanted to take a less active role in the business. Victoria had been through two reorganizations in recent years, which contributed to organizational and strategic issues which would need to be addressed by a new president.

Teaching Note: 8B08M37 (7 pages)
Industry: Manufacturing
Issues: Growth Strategy; Organizational Structure; Leadership; Decentralization
Difficulty: 4 - Undergraduate/MBA

Chapter 12:
Leadership and Culture

Michael J. Fratantuono, David M. Sarcone

Product Number: 9B12M090
Publication Date: 10/29/2012
Revision Date: 10/6/2015
Length: 19 pages

In the summer of 2010, the members of the business development team of Target Systems were carefully considering the possibility of entering the Electronic Health Information (EHI) systems arena. The company had both breadth and depth of experience in providing logistics, project management and information technology (IT) services to clients in the public and private sector. Although the employees of Target Systems were experts in a full range of IT services, no one in the company had deep expertise about the way IT applications were being used to manage patient care or administer health care organizations. The lack of expertise implied that a movement by Target Systems into the EHI systems arena would call for the company to simultaneously develop new products and services for a new set of clients –– to engage in growth by related diversification. That strategy would stand in contrast to the growth by concentration strategy the team had employed throughout company history. To pursue a diversification strategy the team would have to decide if it should provide services to regional health information organizations, hospitals or individual physicians’ practices. It would also have to decide whether it would cultivate new capabilities by investing in internal development or by seeking a strategic partner that was already operating in the arena. Ultimately, the way the business development team weighed the opportunities versus the challenges of adopting a new growth strategy in the context of a still uncertain external environment would strongly influence its decision as to whether or not the company should enter this new arena.

Teaching Note: 8B12M090 (16 pages)
Industry: Information, Media & Telecommunications
Issues: Strategy formulation; diversification; United States
Difficulty: 4 - Undergraduate/MBA

Amit Gupta, Kshitij Saxena

Product Number: 9B11C036
Publication Date: 10/6/2011
Revision Date: 2/22/2012
Length: 23 pages

Sumeru Software Solutions was a software development consultancy firm headquartered in Bangalore, India, with offices in Washington, D.C., Dubai, and London. It began operations in July 2001 as a single project with two employees, and grew over 10 years into an organization with approximately 200 employees. The founding objective of Sumeru Software Solutions was to support Art of Living’s social development initiatives through profits earned from delivering high-quality services. Art of Living (AOL) was founded in 1981 by Sri Sri Ravi Shankarji as a not-for-profit, educational, humanitarian non-governmental organization engaged in stress-management programs, including yoga and meditation. Sumeru had developed a unique culture that combined corporate culture with the Art of Living principles of Seva, Satsang, Sadhana, and positivity even in the face of adversity. In line with the AOL principles, the four pillars of Sumeru culture were ethics, caring, sharing and trust. It purported to follow a peaceful yet aggressive way of doing business called “Serene Dynamism.” Harish Ramachandran, CEO of Sumeru Software Solutions, had created an enterprise that was different from other IT organizations. He was wondering how he would sustain the culture of the organization and make Sumeru a high-performing company over the next 10 years as it expanded its business and hired new employees.

Teaching Note: 8B11C036 (15 pages)
Industry: Information, Media & Telecommunications
Issues: Corporate Culture; Corporate Social Responsibility; Management Philosophy; Value-based Management; Work-life Balance; India; IIM-Bangalore/Ivey
Difficulty: 4 - Undergraduate/MBA

W. Glenn Rowe, John R. Phillips

Product Number: 9B02M038
Publication Date: 1/9/2003
Revision Date: 3/4/2011
Length: 9 pages

Paragon Information Systems is a small business unit owned by NewTel Enterprises Limited that manufacturers hardware for information technology and systems integration. The newly appointed chief executive officer is faced with a crisis. Days after his appointment, two vice-presidents resign and start a new company. The new company recruits the entire sales team, members of the technical unit and support staff from Paragon Information Systems, a loss of almost one third of Paragon's staff within two months. The new chief executive officer must meet short-term stakeholder needs, assess, formulate and implement long-term strategies, deal with the competitive threat of the new company, and consider the leadership style and control systems required to make the necessary level of change.

Teaching Note: 8B02M38 (7 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Leadership; Strategy Development; Strategy Implementation; Organizational Change
Difficulty: 4 - Undergraduate/MBA

Tom A. Poynter, Paul W. Beamish

Product Number: 9B01M004
Publication Date: 1/25/2001
Revision Date: 12/21/2009
Length: 12 pages

Victoria Heavy Equipment (Victoria) was a family owned and managed firm which had been led by an ambitious, entrepreneurial chief executive officer who now wanted to take a less active role in the business. Victoria had been through two reorganizations in recent years, which contributed to organizational and strategic issues which would need to be addressed by a new president.

Teaching Note: 8B01M04 (8 pages)
Industry: Manufacturing
Issues: Growth Strategy; Decentralization; Organizational Structure; Leadership
Difficulty: 4 - Undergraduate/MBA

Chapter 13:
Strategic Control

Dionne Pohler

Product Number: 9B11C042
Publication Date: 1/17/2012
Length: 16 pages

A new faculty member is engaged in a decision-making process surrounding the development of a points-based system designed to allocate merit pay at a business school. The process is forcing her to evaluate how she is structuring the allocation of her work, which is directly affecting her motivation toward coaching a student case competition team. Edwards has historically used a judgment-based approach to the allocation of merit. The case outlines the rationale used in the design of the new points-based system, discusses the potential advantages and disadvantages, and highlights the perspectives of different stakeholders throughout the process, including the union, the faculty, and senior administration. The union is opposed to merit, so has outlined fairly stringent criteria for the awarding of merit in the new collective agreement. Faculty opinion is mixed surrounding merit more generally, and the implementation of a points-based system versus a judgment-based system in particular. Senior university administration is committed to the continuation of the merit system at the university as a tool to reward outstanding performance and to retain star faculty. The individual departments at Edwards are in the midst of finalizing the standards and procedures for allocation of merit-based pay. The protagonist is uncertain about how her department will proceed in the design and allocation of points, and how it will result in her re-allocating her work tasks.

Teaching Note: 8B11C042 (13 pages)
Industry: Educational Services
Issues: Motivation; Compensation; Performance Measurement/metrics; University Administration; Unions; Saskatchewan, Canada
Difficulty: 4 - Undergraduate/MBA

Chapter 14:
Innovation and Entrepreneurship

Anand Nandkumar, Charles Dhanaraj, Mridula Anand

Product Number: 9B12M111
Publication Date: 1/17/2013
Revision Date: 1/11/2013
Length: 13 pages

This case presents complex managerial challenges that stem from the institutional context in emerging markets, particularly in relation to the intellectual property regime and its impact on business strategy. The case centres around a multinational pharmaceutical firm, Novartis International AG (Novartis), that is waiting on a major court decision regarding patent policy as it pertains to one of the firm’s products.

The case takes students through the company’s journey in marketing a promising anti-cancer drug that had global sales of US$3.9 billion in 2009. Novartis’ global success with this drug is being challenged by the changing institutional environment surrounding innovation and pharmaceutical patents. The company’s decision to patent the drug in India and challenge the institutional system of patent law is meeting significant resistance from those who argue that the drug is neither novel nor affordable for most patients. With key domestic players staking their claim to the large pool of patients who could benefit from the drug, the case focuses on a controversial patents law. Given the uncertainty of the court’s final decision on these matters, students are asked to develop an action plan for the company’s future.

Teaching Note: 8B12M111 (10 pages)
Industry: Professional, Scientific, and Technical Services
Issues: Emerging markets; intellectual property; business plan; India
Difficulty: 5 - MBA/Postgraduate

Nita Sachan, Prasad Kaipa, Anand Nandkumar, Charles Dhanaraj

Product Number: 9B11M065
Publication Date: 7/28/2011
Length: 18 pages

This case deals with the innovation challenges of a medium-sized firm (under $1 billion) in an emerging economy (India), particularly the challenges of product development and commercialization. The management has to decide how to proceed with a promising novel formula for oral insulin — promising both in terms of financial returns as well as social impact. The company has spent several years of research and development in getting the drug through Phase I and Phase II trials, and is entering the most critical stage, Phase III. The case is set in 2009, a period that was punctuated with a lot of economic uncertainty. Students are asked to decide if Biocon should go ahead with Phase III and, if so, whether it should be done locally or globally and with a partner or alone. The case also deals with transitioning research and development strategies in emerging markets, wherein firms that have traditionally focused on “imitation” (or generic drugs) are moving to high-risk drug discovery.

Teaching Note: 8B11M065 (11 pages)
Industry: Health Care Services
Issues: Innovation; Technology Commercialization; Technology Licensing; Research and Development (R&D); Pharmaceutical Industry; India; Ivey/ISB
Difficulty: 4 - Undergraduate/MBA

Verity Hawarden, Helena Barnard

Product Number: 9B10M099
Publication Date: 1/21/2011
Revision Date: 8/23/2012
Length: 15 pages

This case focuses on management innovation in the South African dairy industry, describing how an innovative new yoghurt product, Danimal, was created specifically for the market at the base of the pyramid. It explains how management of the product line embodied the various innovation opportunities and challenges presented. The concept was initially introduced in order to assess the feasibility of profitably servicing this market. However, the project was not simply about introducing a cheap brand to the poor but was more about creating brand awareness in the market at the base of the pyramid. The new product took into consideration the nutritional shortcomings in the diet of children in this market and also allowed for the lack of available infrastructure — electricity and refrigeration.

The case illustrates the importance of a product being affordable, relevant, and available to its market. Innovation went further than product design and also took into account the necessity of a lean distribution channel. This took the form of micro-distributors, referred to as Danimamas, who comprised township residents that were unemployed or part-time employed. The case offers insights into the complexity of doing business in developing countries. It concludes with the challenge of how to ensure that the project continued on its upward trajectory.

Teaching Note: 8B10M099 (17 pages)
Industry: Manufacturing
Issues: Positioning; Developing Countries; Innovation; Social Marketing; Brand Development; Dairy; South Africa; GIBS
Difficulty: 5 - MBA/Postgraduate