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This case attempts to study one of the key problems faced by a multinational organisation in the globalised environment that exists today: whether to outsource or insource. Outsourcing deals with getting into a contract with an outside vendor/supplier (local to the region in question) to deliver services to the parent company as per the agreed deliverables. On the other hand, insourcing deals with setting up operations in the destination country and hiring local staff on behalf of the company to do the same tasks.

Historically, outsourcing has been considered a better choice because of several benefits such as the ease of setting up operations, a predictable costing model and reduced capital investment. However, it comes with its own set of disadvantages as well, including a high attrition rate and a sub-standard level of quality in the deliverables. Apart from the quantifiable parameters, there are several qualitative parameters as well, which encompasses the employees' passion/commitment towards the company, sense of achievement and performance management process.

This case considers an existing situation in First Telecom (henceforth, referred as FT), where they have outsourced one part of their operations to multiple providers in India and are now facing huge issues with the quality of the deliverables; as a result, FT are now looking to explore if an insourced solution would be more cost-effective and productive. It evaluates the two models against various parameters and makes a recommendation on the preferred model.

This case can be used as a teaching tool in the following courses: MBA/postgraduate programme in strategic decision-making; MBA/postgraduate programme in management in management accounting and management control systems; and executive training programme for middle- and senior-level employees to look at the various factors involved (in addition to cost) that should be taken into account while comparing outsourcing versus insourcing.

FT is a communication service provider and has presence in more than 170 countries around the world. The company is considered among the top three telecom companies around the globe and offers solutions to multinational customers in the areas of networks, IP telephony, security services and other managed services.

The company has more than 100,000 employees around the globe. In addition to the regular (on rolls) employees, the company also outsources a lot of its operations in various countries to local service providers. The services that this company outsources include software/tools development, solution pricing and in-life service management. Historically, the company has believed that outsourcing is a better alternative because of the ease of setting up operations and lower cost.

However, because of the recent changes in the global market, there is a huge pressure within the company to reconsider all the functions and find ways to contain costs to help the company's bottom line.

There have been numerous complaints about the quality of output from one of the outsourced functions, namely, the “Pricing Team”, which is being presently outsourced to two service providers in India. The lack of accuracy has cost the company a key opportunity valued at more than USD5 million and the COO is furious at this loss. He has tasked the head of business improvement to do a full review of the function and look at the possible alternatives the company can explore to avoid these issues in future.

FT now wants to do a cost-comparison analysis of the existing set-up with a new insourced set-up considering all costs that would come into play. This would help FT to decide the future course of action to ensure reduced costs and enhanced operational efficiency from the process.

Understanding of cost-comparison parameters involved as an effective tool for strategy development and achieving organisational objectives; understanding of SWOT analysis (organisation level and decision level) and its applicability in the organisation context; understanding the Porter's five competitive forces model to illustrate the effect of environment on an organisation; and understanding of outsourcing and insourcing models and the pros and cons of each model, which is a key management decision in most multinational organisations.

Historical reports of the concerned unit in terms of the costs incurred, rate of attrition and operational efficiency achieved. Cost Accounting: A Managerial Emphasis, 14th ed., Charles T. Horngren, Srikant M. Datar and Madhav Rajan, Publisher: Prentice-Hall, 2012.Practical implications Based on the option (outsourcing versus insourcing) found to be better, appropriate actions would need to be taken in terms of either renewing the contracts with the outsourcing partners or preparing to terminate the existing contracts and hiring of talent from the market to replace the outsourced staff.

For nearly two decades, India as a country has grown considerably and one of the key contributors in that growth has been “Business Process Outsourcing” from all across the world to India. While the outsourcing wave has provided the initial push to the economy of India, it would not be able to help sustain the momentum primarily because of two reasons: the first is the growth of other countries, such as Hungary, the Philippines and China, as alternatives for outsourcing (and equally may be more cost-effective at times); and the second reason is the shift in various companies towards an insourcing model for critical functions.

Therefore, as a country, India needs to move ahead and, instead of only focusing on providing resources to do the tasks outsourced by global companies, focus should now shift to promoting innovation and creativity among the workforce. A lot of companies nowadays are realising the importance of product innovation and are investing huge amounts in R&D to come up with breakthrough technologies that can help them create a sustainable development model. However, this should in no way be considered an end of the outsourcing era. Although there needs to be an effort towards improving the interlock process, outsourcing is here to stay because of the benefits it brings.

In this case, the situation is a classic duopoly. Two shipping firms are in a price war over the market for containerized shipping to and from a small Caribbean island. The case presents a table of contributions to both firms as a function of their prices. This table serves as a basis by which the class can explore the concepts of Nash equilibrium, price leadership, and prisoner’s dilemma. It is also available with the case as a student spreadsheet (QA-0355X). See also “Lesser Antilles Lines (B)” (UVA-QA-0641) and “Lesser Antilles Lines (C)” (UVA-QA-0670).

The learning outcomes of this study are as follows:

1. the benefits of differential pricing over uniform pricing;

2. the differences between second- and third-degree price discrimination;

3. the rationale for charging different prices for segments having different willingness to pay; and

4. how different prices for the same product can lead to perceptions of unfairness and how companies might manage such an issue.

This case outlines the decisions that Adar Poonawalla, the CEO of Serum Institute of India (Serum), had to make in late April 2021 concerning its pricing for the COVID-19 (Covid) vaccine. Serum was the world’s largest manufacturer of vaccines, and its Covishield vaccine had received regulatory approval, but faced an unusual challenge and opportunity. In most countries, governments had procured Covid vaccines from manufacturers and then delivered the vaccines to consumers free of cost. But in India, there was a three-tier pricing system. While the Government of India had committed to free vaccines in government-run public hospitals, it also allowed vaccine makers to directly sell vaccines to state governments, as well as private hospitals, who were at liberty to charge consumers for the vaccines. This created an interesting pricing dilemma for Serum: as different customers had different willingness to pay, should Serum use differential pricing? Would such a tiered pricing system be considered fair? How many different price points should Serum maintain? By exploring these and related decisions that Poonawalla had to make, the case is intended to teach price discrimination.

The case is intended for graduate-level courses in marketing, pricing and economics. This case illustrates the principles of differential pricing/price discrimination. More specifically, it highlights pricing strategies motivated by second- and third-degree price discrimination in an emerging market’s health-care context. From the information in the case, the student can learn to apply the concepts of second- and third-degree price discrimination in marketing. After working through the case and assignment questions, instructors will be able to help students understand the following concepts:

Teaching objective 1: the benefits of differential pricing over uniform pricing.

Teaching objective 2: the differences between second- and third-degree price discrimination.

Teaching objective 3: the rationale for charging different prices for segments having different willingness to pay.

Teaching objective 4: how different prices for the same product can lead to perceptions of unfairness and how companies might manage such an issue.

Teaching notes are available for educators only.

CSS 8: Marketing

On completion of the case study, students will understand the following learning objectives: the characteristics of quantitative easing (QE) and when it may be appropriate to implement QE; how QE differs from a conventional bond purchasing programme; the impact of direct financing of the fiscus by the central bank on its independence; how the macro-economic and political environments affect and influence national economic policy; the difference between traditional and unconventional monetary policies and potential implications for an economy like South Africa. The learnings from this case study can be used in other global economic environments, particularly in emerging markets. This case study provides valuable insights into decision-making, institutional independence, policy coordination, deficit financing, causes and consequences of price inflation, risks relating to monetary instability and the correct application of monetary policy.

After the announcement of the COVID-19-related lockdown in March 2020 and the subsequent slow-down of economic activity in South Africa, the South African Reserve Bank (SARB) had to consider appropriate macro-economic tools to ensure both price and financial stability in South Africa. The macro-economic policy tools had to be considered in light of the South African economic context, which included acknowledgement of South Africa’s debt crisis and slow economic growth. The central bank responded by introducing the following measures: reducing interest rates to a record low of 3.5% to give consumers financial relief and to promote spending in the economy; purchasing government bonds in the secondary markets to stabilise financial markets; facilitating the loan guarantee scheme that was aimed at providing financial relief to small- and medium-sized enterprises; relaxing the capital and liquidity adequacy requirements that commercial banks are required to meet; and ensuring availability of liquidity to banks through facilities such as the weekly repo auctions. However, despite introducing these interventions, the SARB faced calls from politicians, analysts and academics to do more. Various commentators argued that the SARB could introduce QE and directly finance government spending by purchasing government bonds. Some commentators argued that the reluctance of the SARB to pursue these suggestions was a result of the close alignment and relationship between the SARB and National Treasury. The dilemma faced by Governor Lesetja Kganyago of the SARB was threefold, namely, whether it was appropriate for the central bank to pursue the initiatives and, if so, whether the bank could pursue them without compromising its independence, and if the introduction of those initiatives would not adversely affect the ability of the central bank to fulfil its mandate of price stability and financial stability. In this regard, the governor and his executive team were required to consider the long-term implications of introducing the initiatives on consumer price inflation, independence of the SARB and the appropriate use of monetary policy tools to fulfil the central bank’s mandate. But the question was: What policies should the governor favour?

This case study is based on various macro-economic theories. Therefore, it would be useful to teach this case study in macro-economic courses in the following programmes: master’s in business administration, bachelor of commerce, bachelor of economic sciences and business science studies, as well as on executive education programmes, which consider macro-economic policy. In general, students who undertake economics, business and general management, finance, legal, commerce and banking studies could learn from this case study.

Teaching notes are available for educators only.

CSS 3: Entrepreneurship.

Five carefully constructed problems illustrate the concepts of second-market discounting, price skimming, limit pricing, random discounting, premium pricing, and bundling.

This case is one of a pair of cases used in a merger negotiation. It is designed to be used with “British Petroleum, Ltd.” (UVA-F-1263). One-half of the class prepares only the British Petroleum (BP) case, and one-half uses this case. BP and Amoco are considering a merger, and are in the process of negotiating a merger agreement. Macroeconomic assumptions, particularly forecasting future oil prices in an uncertain environment, and assumptions about Amoco's ability to reduce exploration and production costs make Amoco's future cash flows difficult to predict.

This case is one of a pair of cases used in a merger negotiation. It is designed to be used with “Amoco Corporation” (UVA-F-1262). One-half of the class prepares only the Amoco case, and one-half uses this case. BP and Amoco are considering a merger, and are in the process of negotiating a merger agreement. Macroeconomic assumptions, particularly forecasting future oil prices in an uncertain environment, and assumptions about Amoco's ability to reduce exploration and production costs make Amoco's future cash flows difficult to predict.

The Indian telecom market was witnessing a fierce price war, especially from an aggressive entry of a new player Reliance Jio Infocomm Limited (Jio) with a predatory pricing strategy. To react to the increasingly intense rivalry and maintain top positions, the second and third largest telecom operator like Vodafone India and Idea Cellular Limited (Idea) decided to merge together. The combined entity would become the largest wireless carrier in India. Was the merger the right competitive strategy for Vodafone India and Idea to fight against the wars? What synergies could the merger bring about? Given Vodafone India and Idea agreed to maintain their respective brands after the merger, would the two brands compete and cannibalize each other’s market share? As the Indian telecom industry was undergoing the liberalization of airwaves, how should the merged entity overcome potential regulatory hurdles? If this mega merger went through, what could be the impacts on the Indian telecom industry? If not, how should the companies move forward with the competition?

This case study research is based on published information of the focal companies and their operating environment. The case is written in such a way that can be depicted by related theoretical perspectives available from leading journals and books. There is no disguise of any actual persons or entities and no personal relationship between the authors and the organizations or individuals mentioned in the case.

The case study is intended for senior undergraduate and graduate level business school students in courses, including mergers and acquisitions, competitive strategies, industry analysis and marketing strategies.

The case is grounded on the industrial organization and resource-based theories, where the actions and reactions of competitors in the market are driven by their awareness, motivation and capability toward the competitive situation. Leveraging on a highly competitive and consolidated, unique Indian telecom market, the authors analyze competitive situations of the industry, evaluate potential synergistic benefits and market power from the merger of competitors, and give recommendations for the merged entity to overcome regulatory hurdles in the industry that is undergoing deregulation and to move forward with effective strategies to compete and strengthen market positions in such industry environment.

Via this case, students are introduced to several alternative methods of valuation, including the valuation based on the “real options” theory. The novelty of the case is the link between valuation and the type of innovation that the company represents. The suggested valuation frameworks, which include both quantitative and qualitative assessments, are applicable not only in the context of an IPO valuation but also in the context of any kind of M&A activity.

This case was prepared mostly via secondary research. All the information about Uber and the industry was collected via publicly available sources. No internal documents of the company were used in the preparation of this case. The primary research consisted of an interview with the protagonist Catherine (whose name is disguised). Other disguised elements in the case include the name of the Value Investor conference organizer (Spyros Spyrou, not his real name), the country of the Value Investor conference (omitted) and the conference venue (Princess hotel, not any actual venue).

In 2019, Uber, the famous ride-sharing company, made waves in financial markets as the most controversial IPO valuation. With a wide range of proposed values, Uber puzzled investors, once again living up to its fame of a rebel and a disruptor. When Uber finally went public in May 2019, its IPO valuation stood at $82.4bn. The heated discussion in the media continued even after the IPO: “Is Uber worth this amount? Is there an upside potential for the investors who bought shares at the IPO price? What if this is a hype and markets are simply embracing higher valuations?”

This case can be used at the undergraduate, graduate (MBA) or executive level in finance-related courses such as Company Valuation or Valuing Innovation, which cover the topic of valuation and specifically the topic of valuing innovative companies.

Marketing, Banking.

Post Graduate Programme, MBA, BBA.

On 27 June 2011, Abhyudaya Bank, a leading urban cooperative bank, opened its 101 new branch at Diva, which is on the outskirts of Mumbai city in India. Diva area is populated but has less number of bank branches. The bank planned to surpass its earlier record of customer acquisition in branches which were newly opened at Marve Link Road and Jogeshwari in Mumbai. According to Mr Morye, Managing Director, Abhyudaya Bank, “With the expanding horizons, continuous developments and competition, the bank proposes to become full-fledged financial service provider, fulfilling requirements of customers and other stakeholders by providing all allied services, as permitted by the regulatory authorities. The Bank has adopted advanced technology for providing faster and convenient services to clients. These major long term proposals will enable the bank to increase its market share and better fulfillment of expectations of all the stakeholders.” The case introduces the structure of urban cooperative banks of which Abhyudaya Cooperative Bank is a part. The case provides the key highlights of the bank and discusses the catalyst role of planning and marketing department for branches to achieve its target and how the bank implemented unique and differentiated strategy involving employees of the banks. Employees form an important asset for banks, and banks need to utilize their potential in creating long-term and sustainable relationships with customers. The case examines how the branch can benefit from detail area-wise planning capturing the potential. Branch area planning is a unique exercise covering the branch potential analysis and a new branch manager must utilize it for acquiring higher number of customers. Regardless of the branching, a bank seeking to expand its branch operations faces a number of important decisions. As the area develops, a bank branch decides to take up appropriate strategy with an objective to move its base of operations to attract new customers in a new area and thereafter maintain its existing ones.

The case is suitable for students pursuing a post-graduate course in bank marketing, banking postgraduate and MBA course in strategic management and marketing management. The case presents an opportunity to assess the strategy adopted by the bank for new branch launch and evolving role by a marketing function in a bank.

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