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It has been long debated whether the three bottom lines of sustainability (economic, environmental and social) can be achieved simultaneously or whether achieving one adversely affects the others. This paper analyses the economic sustainability of an environmental initiative, namely, effluent treatment plant (ETP), adopted by an Indian textile industry.

Two situations have been considered for the analysis. First, pure economic view with the operating and installed capacities has been considered. Second, combined economic-environmental view using shadow prices of undesirable outputs (biological oxygen demand, chemical oxygen demand, total nitrogen, total phosphorous, etc.) has been analysed.

It has been found that when pure economic view is considered, the net present value (NPV) of the ETP with present operating capacity (10,200 kL/day) is negative, implying that it is not economically sustainable. However, if the ETP is operated with the full installed capacity (17,000 kL/day), it becomes economically sustainable except in the case of very high cost of capital (13%). Finally, when shadow prices of undesirable outputs are considered, the NPV becomes positive, bolstering the economic-environmental sustainability of ETP.

In future, multiple case studies should be conducted in similar organisations to extend the general applicability of the outcome of this study. This research considers the economic and environmental aspects of ETP. However, social benefits have not been considered in this research work, which can definitely be addressed in future endeavours.

Though very high capital investment of ETP acts as a barrier, the results of this study imply that the top management of textile and clothing organisations should look at it from the holistic economic-environmental viewpoint. The use of ETP also leads to social benefits by improving the health of local community and by reducing their hospitalisation, medical expenditure and absenteeism from school and workplace. The outcome of this research may enthuse the entrepreneurs to adopt environmental initiatives.

The paper provides a framework to evaluate the economic feasibility of ETP by considering the time value of money. It is demonstrated with a real case that the environmental initiatives can be economically rewarding.

This case study is designed to enable students to analyze the competitive landscape of a business impacted by technological disruption; evaluate the viability of an organic growth strategy using stakeholder analysis; evaluate the revenue and cost structure of Apollo 24/7 and decide on the future investment strategy; and analyze funding strategies of traditional hospitals versus pure digital players.

To extend its reach, Apollo Hospitals Enterprise (Apollo Hospitals), a leading private sector brick-and-mortar hospital chain in India known for using state-of-the-art technology, launched a unified virtual mobile platform Apollo 24/7 in February 2020, 45 days into the COVID-19 pandemic. The management believed that the digital platform had a unique ecosystem that could not be replicated. The analysts were optimistic about the impact of the decision on the future performance of Apollo Hospitals, as it was expected to lead to higher penetration and increased revenue. They also anticipated the unlocking of value, as and when the venture capitalist (VC) would invest in Apollo Hospitals. However, with increasing operating expenses on account of burgeoning technological and marketing expenses, things did not seem to go going as planned. Three years later, in February 2022 after the Q3 of financial year 2023 results. Suneeta Reddy, the company’s managing director found herself pondering whether the digital platform could boost Apollo Hospitals’ profitability in addition to expanding its reach and increasing affordability when the company missed the analyst estimates. In India, which was then the second most populous country, “incremental access” and “affordability” were what mattered to the patients, However, for the investors and analysts, it was quarter-on-quarter performance. The change in the macroeconomic environment stalled the company’s plan of raising money from VCs.

Furthermore, the financing dilemma also plagued Reddy. She knew there was a difference between financing for conventional businesses that for digital businesses. She also had to take decide between short-term profitability with which investors were obsessed versus long-term sustainability, which involved taking care of stakeholders’ interests.

This case study is basically aimed at postgraduate courses and executive management courses.

Teaching notes are available for educators only.

CSS11: Strategy.