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The case explores information technology (IT) company Mindtree’s journey of 20 years from the time it was founded in 1999 to be different from others, and how it became a target for acquisition by an Indian diversified conglomerate in 2019. It offers insights into developing organizational culture and values in an organization, threats faced by a company when promoters dilute their shareholding, and the strategies followed by the acquirer and the target firm. It also deals with the challenges in the acquisition of a knowledge service digital firm. After working through the case and assignment questions, students will be able to: identify the circumstances under which a company can become a target for hostile takeover; describe motivations of the acquirer firm in an acquisition; distinguish between acquisition and hostile takeover, and discuss salient features of Securities and Exchange Board of India (substantial acquisition of shares and takeover) regulations, 2011; list the defenses a target firm can adopt to ward off hostile acquirer; explore strategies followed by acquirer and target firms; analyze important ingredients of organization culture, and importance of cultural congruence in an acquisition; and discuss challenges faced by an acquirer in India, namely, legal, retention of clients and key people in the target firm particularly in hostile environment.

The case explores how ten IT professionals founded mid-tier IT services company Mindtree in 1999 in Bengaluru, India (home to Infosys and Wipro) to be different from others – by inserting themselves at a higher level in the value chain, being philanthropic as a part of broader business strategy to attract a certain kind of employee and customer. It developed a culture of equality, consideration and respect. Its attrition rate of 12 to 13 per cent was significantly lower than the Industries. Mindtree crossed annual revenue of US$1bn for FY 2019 and was growing at twice the industry’s growth rate. The most attractive part was that its proportion of revenue from digital services was about 50 per cent as compared to 25-35 per cent of other services vendors. With time, the share of promoters/founders declined and increased one investor’s shareholding of V. G. Siddhartha and his related entities. In early March 2019, the promoters’ stake was 13.32 per cent while Siddhartha had 20.32 per cent. Larsen and Toubro (L&T) one of India’s conglomerate entered into a share purchase agreement on March 18, 2019 with Siddhartha to acquire his 20.32 per cent stake. Immediately, L&T asked its broker to purchase up to 15 per cent of share capital of Mindtree at a price not exceeding INR 980 per share (each share of face value INR 10). This would trigger an open offer by L&T to purchase additional 31 per cent shares of Mindtree. The action of hostile takeover bid by L&T evoked emotional criticism from Mindtree founders. Mindtree efforts to defend itself could not materialize. L&T’s stake crossed 26 per cent on May 16, 2019. After Indian regulator SEBI’s approval, L&T’s open offer to buy shares from Mindtree shareholders commenced on June 17, 2019. The case examines motivation of the acquirer firm particularly when it is a conglomerate, and how a well-performing company became a target for hostile takeover. It looks at vulnerabilities of a target firm, and defensive steps a firm can take to fence itself against such takeover. The case also explores how organizational culture is built in a people-oriented business, namely, digital services, and what role it plays in a merger of two firms.

The case is suited for postgraduate students of management, as well as those undergoing executive courses in management.

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CSS 11: Strategy.

The Government of India established Competition Commission of India (CCI hereafter) through an act promulgated in 2002 to shift regulatory focus from curbing monopolies to promoting competition. The organization became fully functional in 2009 and gained recognition for its proactive stance when it slapped a penalty of Rs. 6400 crore on eleven cement companies for anticompetitive behavior. While CCI's proactive stance increased expectations of stakeholders and of the general public at large, it also became apparent that going forward the organization would need enormous resources and a clear identification of priority areas so as to emerge as an effective regulator. With this objective, the organization invited a team of professors from the Indian Institute of Management, Ahmedabad, India to help them with formulating a vision and mission statement. This case describes the process of creating a new vision and mission statement for a regulatory body.

Pebble Technology Corporation (Pebble) was an early entrant into the smartwatch industry. Pebble’s Founder, Eric Migicovsky, began thinking about creating a smartwatch in 2008 while still an undergraduate engineering student. After selling about 1,500 prototype watches, he was accepted into Silicon Valley’s prestigious Y Combinator business start-up program. Finding it difficult to attract investors, Migicovsky launched a crowdfunding campaign that raised a record-breaking $10.27m on Kickstarter. The case concludes shortly after Apple’s unveiling of its soon-to-be-released Apple Watch. The case provides an opportunity to evaluate Pebble’s various strategic options at the time of Apple’s announcement.

The authors observed over 30 h of video and audio recordings of speeches, interviews and other events involving Pebble’s founder, other Pebble executives, investors and competitors. These recordings are all publicly available. Whenever possible, the authors also reviewed the Twitter feeds, Facebook sites and personal websites of Pebble’s top executives over time. Similarly, the authors followed Pebble’s official website, corporate blog and Kickstarter campaign websites. The authors also drew from numerous media reports. Due to the public nature of the data, no company release is provided nor has any information been disguised in any way.

The case is designed for both undergraduate and graduate students for courses in strategic management.

The first across-the-table negotiation between Google and China concluded successfully in 2006, when Google received a license to establish a local domain (google.cn) targeted at Chinese Internet users and not subject to the “Great Firewall.” During these negotiations both Google and the Chinese government struggled to reach an outcome that would be acceptable to their constituents. Google was caught between pleasing its shareholders and preserving its reputation for free access to information, while China was balancing the desire for cutting-edge search technology and the concern that liberal access to information would undermine its political-economic model. In the end, the negotiation resulted in Google operating two domains in China: Google.com and Google.cn. In early 2010, Google announced that its corporate infrastructure had been the target of a series of China-based cyber attacks and accused the Chinese government of attempting to further limit free speech on the web. These incidents led to a public conflict and private negotiations between Google and the Chinese government, which culminated in July 2010 when the Chinese government renewed the google.cn license knowing that Google was redirecting all Chinese customers search to its google.hk.com site This case concerns the changes in Google and the Chinese government's environment that led to Google withdrawing services from google.cn and the Chinese government saving face by renewing the google.cn license. The case is based on the publicly reported events surrounding two series of negotiations between the U.S. technology giant Google and the Chinese Government regarding Google's license in China.