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This paper aims to present an opportunity to explore the opportunities and challenges involved in running a business with a strongly ingrained social vision in the complex, multi-dimensional environment of an emerging economy. Key learning areas are as follows: How the concept of inclusive innovation applies to the real-world difficulties faced by businesses operating in informal economies. By exploring the tensions between growth and inclusivity in Silulo’s development, students will grasp the challenges entrepreneurs face as a business starts to gain momentum and change, and gain appreciation for the trade-offs that occur when choosing between franchising and organic growth. The challenges of a rapidly evolving technological environment, the need to adapt service offerings at pace, and the importance of balancing financial considerations with deeper social values will find application far beyond the informal economy context of the Silulo story.

This teaching case looks at Silulo Ulutho Technologies via CEO Luvuyo Rani and the challenges he faces in balancing expansion and profitability with its mission of empowering disenfranchised communities – challenges exacerbated by a changing telecommunications environment, with more widespread internet availability, mobile phones and online training courses encroaching on Silulo’s traditional service offering.

This case focusses primarily on the processes of inclusive innovation and is suitable for graduate courses in social entrepreneurship, business model innovation, sustainability, business and society, strategic management, emerging markets, business in Africa and organisational studies in general. The case is suitable for Masters of Business Administration (MBA) and Executive MBA academic programmes and delegates on Executive Education programmes.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 3: Entrepreneurship

This case and its companion, UVA-F-1560, were awarded the 2012 Wachovia Award for Excellence in Teaching Materials - Innovative Case. In November 2006, Alec Berg, a successful hedge fund manager, must decide whether to invest in the initial public offering (IPO) of the Hertz Corporation. The IPO followed a leveraged buyout (LBO) of Hertz that was completed in December 2005 by three prominent private equity firms that had combined to purchase Hertz from the Ford Motor Company for $14.9 billion. The LBO sponsors had borrowed an additional $1 billion on top of the buyout financing to pay themselves a special dividend in June 2006. This loan would be repaid with the IPO proceeds and any remaining proceeds from the IPO would go to the sponsors. The IPO generated widespread criticism with respect to the speed with which the IPO was conducted and the payment of special dividends. In the face of this criticism, the demand for the Hertz IPO weakened, and the offer price was reduced from the initial file price range of $16–$18 to just $15. Berg must assess whether at $15 per share, Hertz offers an attractive investment for this fund. The case provides the necessary information for students to analyze the sponsors' returns on their investment in Hertz and the attractiveness of the $15 offer price to public shareholders. The case also offers an opportunity for students to discuss the controversy surrounding the payment of special dividends and the claim that private equity sponsors invest with a long-term perspective that creates value for the company.

The Case takes place at the headquarters of Genesee & Wyoming, Inc. (GWI), one of the leading short line railroads in the United States. The Case revolves around three executives - Mortimer B. Fuller III, Chairman and CEO, Mark Hastings, CFO and Treasurer, and Alan Harris, Senior Vice President and Chief Accounting Office - and the dilemma over whether to pursue international expansion.

GWI has generally pursued a strategy of diversification through acquisition. However, there are other approaches to diversification, including international expansion. With increasing deregulation and privatization of railroads around the world, GWI and its competitors must weigh the risks of internationalization with the rewards. GWI fears that a failure to move quickly might result in missed opportunities as competitors acquire railroads around the world.

An opportunity has recently arisen in Australia, where the government is selling Australian National Railway. GWI believes Australia might be a good initial foray into the international market given the similarities of the country and its railroad industry to the United States and its railroad industry. The Case asks the question, “Should GWI enter the bidding?”