Search results

This case can be used to help students achieve the following objectives: To project financial statements and assemble different pieces of financial information to create a valuation model (objective #1, create), To calculate a value for Arcor shares, supporting the estimated value with the chosen assumptions and methodologies (objective #2, evaluate), To draw connections between four different approaches to valuation (DCF, EVA, RV and VI), contrasting them and weighting their advantages and limitations (objective #3, analyze), To examine the relationship between forecasted financial statements and valuation (objective #3, analyze), To discuss the calculation of the Weighted Average Cost of Capital in a new situation as is an emerging economy, with the corresponding country-risk adjustment (objective #4, apply), To discuss the sources of value creation in a family-owned private company in a developing economy (objective #4, apply), To understand the dilemma that the head of a company was facing, identifying the three possible financing alternatives discussed in the text as follows: corporate bonds, earnings reinvestment and an IPO (objective #5, understand). To recall basic facts, as the main character’s opinion on the direction of the local economy or the fact that Arcor already complies with the information requirements of a public company (objective #7, remember).

This case is based on the valuation of the world’s largest candy maker, Arcor S.A.I.C., originally a Latin American company, which remains a private family business. The key problem presented by the case is the use of different valuation approaches to price Arcor shares, in view of a possible Initial Public Offer. The case illustrates the application of four main valuation approaches as follows: Discounted Cash Flow (DCF), Economic Value Added (EVA), Relative Valuation (RV) and Value Investing (VI). Additionally, it includes a fundamental analysis of eight years of historical financial information and the preparation of forecasted financial statements. Set in a developing economy, the Arcor case introduces the complexities of calculating the cost of capital with the inclusion of country risk, as well as the financial analysis distortions caused by an environment of high inflation.

The Arcor case is appropriate to be used in graduate courses of Corporate Finance, Valuation or Private Equity.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

GMR Infrastructure Limited (GMRIL) had to make a decision on its continued role in the 555.48 km Kishangarh Udaipur Ahmedabad (KUA) Expressway Project, India's then longest road public-private partnership (PPP) project. GMR had terminated the contract citing NHAI's failure in fulfilling Conditions Precedent (CP) of providing (i) environment clearance (EC), (ii) revised toll free notification and (iii) 80% of required land. The case intends to educate the reader on the concessionaire-authority dynamics in typical Indian infrastructure PPPs. Taking into account its internal strategy, the extant unfavourable investment climate, the Central Government's steps to revive private interest in the highways sector and NHAI's quick turnaround in fulfilling CP, GMR had to decide how to respond.

It was December 13, 2010. The Government of Uttar Pradesh announced their plan to urbanize the entire area along the Yamuna Expressway (YE) in order to prevent haphazard growth of urban sprawls on the flanks of the YE. The YE was conceived in 1997 as a dream project of Ms Mayawati, the then Chief Minister of Uttar Pradesh, with the idea of reducing the travel time between Delhi (and the larger National Capital Region) and Agra. It was a 165 km long expressway and was proposed to run from Greater Noida to Agra via Mathura. Amidst issues concerning land acquisition, and various protests and litigations, the deadline for completion of the project had extended beyond its original completion date of February 8, 2010 to April 2013. Meanwhile, the project cost had escalated from Rs 2500 crore (cr) in the year 2000 to about Rs 10,000 cr as of December 2010. By then, about 80% work on the expressway had been completed. The project was finally expected to be completed around April 2011. This was, however, subject to the pending court judgements and mitigation of risks as perceived by Jaypee Infratech, the concessionaire of the project.

IFCI Limited-a non-banking financial corporation in India was struggling with issues of negative Capital Adequacy Ratio and high non-performing assets till 2007. The company had not done any business for a decade until 2007. July, 2007 was the time when Atul Rai joined the company as the CEO. This case revolves around the various strategic initiatives taken by Rai and his team to help the firm turnaround. The main focus of the case is on the implementation of some of the key strategic decisions. The case gives opportunity to review IFCI's strategy and make recommendations for future expansion.

Business environment, international business management.

The case is suitable for students of the business environment, and of international business management.

The case revolves around the reaction of the Finance Ministry of India on Vodafone's tax case and its implications on FDI and the foreign investors who are investing in India. The core issue is the political risk(s) faced by Vodafone even after having won the tax case in the Supreme Court, the highest judiciary body in India. The Government of India has amended the law to bring the tax into retrospective mode and it signifies the impact of political decisions on business organizations.

The case can aid in understanding the effects of changes in a political system and legal framework on the efficacy of business entities; and the importance of, and intricacies involved in, the formulation of political risk mitigating strategies while entering into new markets. The key learning outcomes are: understanding various types of political risks faced by multinationals; assessing the political risks involved in foreign investments; and appreciating the possible mitigating strategies to handle such risks.

Teaching notes are available, please consult your librarian for access.

Business Administration (Marketing).

MBA.

Although it has become fashionable to talk about how things business are changing at a nanosecond pace owing to hyper-competition, disruptive technologies and empowered consumers; the real change has been based on digital revolution and management of information. Most of the new introductions are entering a phase of facelessness from being innovative within a year of their appearance; whereas, as per one estimate, the breakeven volume is achieved after three years. This puts insurmountable financial pressure on marketing companies. In order to remain ahead of competition, they are introducing more and more new products in growth areas. In this paradoxical, complex situation; a reputed marketer in the pharmaceutical arena like Artichem entered a maturing market of Omeprazole whereas growth areas like Lansoprazole, Pantoprazole and Esomeprazole were still open to them. Did they make a mistake? Was it a bad idea to embark upon? Should they go for introducing new molecules even after a successful launch in the same segment?

The student shall be able to: explain the term “positioning” and shall be able to explain why he should go ahead with introducing a brand in an existing and maturing product category; explain the term “product life-cycle” and shall be able to take rational decision in the midst of pressing circumstances to manage a new product in a likely to decline market; and explain the term “new product development” and shall be able to apply the theories of new product development for brand success.

Nil.

This case is meant for MBA/MS/executive MBA students.

Entrepreneurship development, leadership.

This case is about the successful entrepreneurial journey of Kiran Mazumdar-Shaw, founder of India-based biotechnology company Biocon Limited. Mazumdar-Shaw established Biocon in 1978 as a joint venture company. As a woman entrepreneur, Mazumdar-Shaw faced many challenges and setbacks during her initial days. She overcame these and took Biocon to new heights. Later, Mazumdar-Shaw decided to make a strategic shift in Biocon’s business model – going from manufacturing enzymes to biopharmaceuticals with the vision of making an impact on global health care by providing access to affordable, life-saving drugs.

The learning outcomes are as follows: understand the ecosystem of women entrepreneurs in developing countries; examine the challenges faced by women entrepreneurs in their entrepreneurial journey and how successful entrepreneurs convert challenges into opportunities; and analyze what entrepreneurial leadership is and understand how these leadership qualities play an important role in the success of entrepreneurial ventures.

Mazumdar-Shaw was able to break through the gender barrier that was highly prevalent in Indian society then and successfully established her entrepreneurial venture in biotechnology, a discipline that was still nascent in the1970s. Though she has scaled great heights in the biotechnology area and developed her business, she has remained sensitive to the problems of those who are unable to get affordable medicines. Firmly believing that she should share the prosperity of the company with the poor and the marginalized, Mazumdar-Shaw, through her philanthropic venture, Biocon Foundation, started providing essential drugs at affordable prices to them.

CCS 3: Entrepreneurship.

Rajan Overseas was founded by Rajan Makhija in the year 2014. It was into export of handloom products like rugs, throws, etc. Makhija wanted the company to grow from INR 7.6 crores to 100 crores in the next five years. However, the plan hit a roadblock as one of the largest customer of Makhija wanted him to sign an exclusive contract. Makhija was evaluating various growth options in the light of this new hurdle. The case can be taught in courses on entrepreneurship, internationalization and strategy for SMEs to teach topics related to effectuation and challenges of international business.

Delhi Metro Airport Express Line (AEL) from New Delhi Metro Station to Dwarka Sector 21 linked the Indira Gandhi International Airport. The line was operated by the Delhi Airport Metro Express Pvt Limited (DAMEPL), a subsidiary of Reliance Infrastructure (RInfra), the concessionaire of the line. The AEL was opened on February 23, 2011. Due to defects with the civil structure on the elevated section of the line, it was temporarily shut down on July 8, 2012. DAMEPL had been unable to run the AEL profitably ever since it started operations due to poor ridership and high operating costs. After three months in October, 2012 with the repairs nearly completed, RInfra had to take a call on the way forward.

The case study aims to provide students with an understanding of the challenges businesses face expanding into the home market after having an international presence through exports. It also throws light on operations in an emerging market economy – both rural and urban. The key objectives are to understand the leather footwear business operation in India, understand the challenges of expanding business in India, analyse strategies adopted to sustain and compete in India and identify the possible distribution strategies for the leather footwear business in India.

The case study focuses on Tata International Limited’s (TIL) leather and leather products business in India. The leather and leather products division was present in India since 1973 (Anand, 2020) and exported to more than 35 countries across the world (Anand, 2020). TIL did not want to miss the opportunity available in India and planned to expand its leather footwear business in the country. The company opened retail outlets in major Indian cities and an experience store in Dewas (Madhya Pradesh) in 2019. It aimed for a domestic presence along with the existing export business. However, the biggest challenge that was in front of V. Muthukumaran, head of leather products division at TIL, was how to go ahead with the idea of domestic expansion (Anand, 2020). Should the company expand the market through sister companies (Westside and Tata CliQ) in India? How and in what way should TIL plan for going through Westside and Tata CLiQ? Should Muthukumaran think of either the brick-and-mortar route or the online route or both?

This case study is designed for use in undergraduate and graduate early-stage programmes. This case study is primarily designed for use in Master of Business Administration and/or Bachelor of Business Administration programmes. The case study is ideal for courses on understanding the expansion in the domestic market, strategy, retail and international marketing. The teaching note discusses theoretical frameworks such as external environment analysis and SWOT analysis to devise distribution strategies. The case study mapped the distribution channel and decision alternatives for the company.

Teaching notes are available for educators only.

CSS 8: Marketing.