Case-based Approach
November 20, 2023 2024-10-16 11:25Case-based Approach
Asia Case Research Centre
Case-Based Approach
The HKU MBA programme adopts an experiential learning approach, with the extensive use of business cases published by the renowned Asia Case Research Centre (ACRC). Written by eminent professors from the HKU Business School faculty and prominent industry leaders, the business case studies encourage critical thinking that enables students to become effective problem-solvers and decision-makers in today’s rapidly changing business settings. The programme’s relatively small class sizes allow for extensive interaction and collaboration.
ACRC
Examples of these cases
Amazon’s Last-Mile Delivery Service for Groceries, Medicines, and More
Since late 2013, Amazon has been launching a distribution network of delivery stations. These delivery stations are positioned within larger metropolitan cities across the country. The delivery stations’ primary role is to sort packages for outbound routes to enable last-mile delivery to customers within a tightly defined urban area. Multiple local courier companies contracted by Amazon and independent Amazon Flex drivers have often performed last-mile delivery services. These deliveries may consist of multi-temperature fresh food being delivered on a same-day basis to markets where AmazonFresh is up and running.
The expansion of Amazon’s last-mile delivery service threatens traditional drugstores. This case aims at teaching students to evaluate the impact of Amazon’s last-mile delivery service on a medium-sized pharmacy chain in NYC and Long Island, and what the pharmacy can do to respond to Amazon’s future expansion in the Long Island region.
ACRC case link: Click here
Can Blockchain Help Château Lafite Fight Counterfeits?
Château Lafite Rothschild produces some of the world’s most expensive wine, making the product an attractive target for counterfeiters. Fighting these counterfeiters has proven difficult for Château as the traceability in the wine supply chain is insufficient and stakeholders have different interests and capabilities in identifying fake wine. As traceability is the key to preventing counterfeit wines from entering the wine supply chain, how to use advanced technologies to fight counterfeiters has received increasing attention.
Besides existing technologies such as barcodes, Quick Response Codes (QR codes), Radio Frequency Identification (RFID), and Electronic Product Codes (EPC), blockchain as an emerging technology has also come into play. The case provides an opportunity for students to understand the benefits and limitations of using different technologies, especially the emerging blockchain technology, to improve traceability in the supply chain. Students will learn how to assess the feasibility of using blockchain in supply chain management and discuss different blockchain strategies.
Can The Bank of Japan Continue to Maintain Yield Curve Control with Rising Inflation?
This case presents a comprehensive overview of the BOJ’s ultra-easy monetary policy which started in 2012.
After years of sustained government and central bank intervention, Japan’s monetary policy has reached a critical stage. Then world questioned how the BOJ’s new Governor, Kazuo Ueda can find a way to extricate the nation from years of economic inertia, stimulate domestic consumption, boost GDP growth, and stabilize inflation at a 2% threshold. And world questioned this could be achieved without damaging the global economy.
On March 19, 2024, with prices seemingly on track toward the bank’s goal of sustained 2% inflation, Japan’s persistently weak yen and robust wage hikes offered by Japanese companies, the BOJ ended the negative rate policy (NIR) and raised interest rates for the first time in the past 17 years. The BOJ also ended its yield curve control policy (YCC) of keeping 10-year Japanese government bond yields at around 0%. It has fulfilled their roles but will continue the large-scale monetary easing (QE).
The BOJ’s policies have stood in contrast to other central banks, which have raised rates sharply over the past two years to combat inflation sparked by the COVID pandemic, the Ukraine war and supply chain issues
ACRC case link: Click here
Cathay Pacific’s Customer-Centric Design Thinking Journey, From Business Transformation to Digital Innovation
Cathay Pacific employed design thinking as a tool to innovate and enhance the customer experience after a few pioneers introduced the concept to the airline. Technology was a key enabler.
ACRC case link: Click here
Coffee Wars: Luckin vs. Starbucks
A cup of Starbucks was a middle-class symbol in China. Since the opening of its first store in China in 1999, Starbucks had conquered the Chinese coffee market with its experience driven philosophy. Nonetheless, a few ambitious and well-funded Chinese tech entrepreneurs had decided to challenge Starbucks. Founded in October 2017, Luckin Coffee expressed a desire “to be part of everyone’s life, starting with coffee.” Leveraging its core competence in technology and a business model focussed on delivery and heavy discounts, Luckin scaled up rapidly. By 2020 it operated more stores in China than Starbucks. But Starbucks was responding to the new threat, forging an alliance with Alibaba backed Ele.me. In this situation, what should both firms do to do to win the war for China’s coffee consumer?
ACRC case link: Click here
Connecting Wall Street Capital with Main Street Small Businesses in China: The Case of Micro Connect
Micro and small businesses were considered the lifeblood and backbone of the economy, but financing difficulties impeded their ability to survive, grow, and thrive. Micro Connect was founded in 2021 to connect micro and small businesses in China with global investors. At the core of its business model was the distinctive system of daily revenue contracts (DRCs) whereby an invested store shared an agreed percentage of its revenue on a daily basis with Micro Connect in exchange for the up-front lump-sum capital investment. As a super connector, Micro Connect identified sustainable sources of global capital to channel into micro and small businesses in China. The Micro Connect Exchange would provide a platform where micro and small businesses could capitalize on their revenue streams by listing their DRCs, and investors could deploy their capital efficiently by leveraging liquidity and price discovery. Charles Li and Gary Zhang, the two founders of Micro Connect, were considering further steps they should take to meet the enormous financing demand from micro and small businesses in China and attract more global investors to the Micro Connect Fund and the Micro Connect Exchange.
ACRC case link: Click here
De Beers: Building on “Building Forever”
The De Beers, the world’s leading diamond company, specializes in diamond exploration, mining, grading, marketing and retail. Operating globally, it controls nearly 80% of the rough diamond distribution. As a leader in the diamond industry, De Beers places an emphasis on upholding high standards throughout the value chain, from mining to retail. This emphasis is demonstrated through De Beer’s unique framework, “Building Forever”, which highlights four pillars of sustainability: leading ethical practices across industry, partnering for thriving communities, protecting the natural world, and accelerating equal opportunity.
In this case study, students are required to take on the perspective of the senior management team of the De Beers Group. Students will examine how De Beers can improve sustainability practices across its value chain and throughout the diamond industry. They will also consider how to provide more information about a diamond’s origin and history to the end consumer, and how to communicate ongoing sustainability initiatives to its stakeholders.
ACRC case link: Click here
Diversity in a Global Context: Making the Right Hire to Lead Asia
As organizations have grown more aware and focused on diversity, equity, and inclusion (DEI) issues, it is important to consider how such initiatives translate in a global setting. Many DEI policies are considered and interpreted through a Western social and business lens. Though such policies strive to address undoubtedly important DEI issues, how do such policies and related practices influence business decisions in a non-Western business setting is an important consideration that often goes unnoticed.
In this case, Jarom Stuart, the CEO of Prime Toys Global (“Prime”), a listed toy company needs to make a hiring decision for a senior person that will lead Prime’s Asia business, which is strategically important to the company. He is picking between two very qualified candidates, Isabella Zhou and Caleb Young. On its face, hiring Isabella would seem to enhance Prime’s diversity, however, given Caleb’s background and the nature of the Asian business, Caleb could also be considered to contribute to diversity, albeit in a way that is not typically captured in DEI metrics. Given the above, the case focuses on Jarom’s hiring decision, which requires him to interpret and grapple with what diversity means in a more global, non-Western context.
ACRC case link: Click here
Gigafactory Shanghai: Can Tesla Create a Win-Win Situation in China?
As Tesla’s first overseas factory and China’s first wholly owned foreign automotive factory, Gigafactory Shanghai has developed rapidly, thanks to the series of industrial reforms in China and strong support from the Shanghai local government. Gigafactory Shanghai has bolstered Tesla’s manufacturing capacity rapidly and significantly, enabling the company to tap into the growing global demand for electric vehicles, especially after the COVID-19 pandemic. Tesla’s investment has also contributed to the advancement of China’s electric vehicle industry and aligned with the broader goal of technological development and carbon neutrality.
Nevertheless, Tesla’s investment has risks, such as the deterioration of US-China relations, changes in government regulations and policies, competition from other automakers, and the threat of technological obsolescence. The student question revolves around Tesla’s ability to defend its leading position in both the Chinese and global electric vehicle markets, with a view to creating a mutually beneficial partnership with the Chinese government.
This case allows students to explore how host country industrial policies affect corporate investment decisions and how to deal with the uncertainties of foreign direct investment. After studying this case, students will be able to discuss the intricate relationship between industrial policies and foreign direct investment.
ACRC case link: Click here
India's Alibaba: IndiaMART's Network Effects
Dinesh Agarwal and Brijesh Agrawal (“DA & BA”) established IndiaMART with around US$1100 savings in 1996. By 2014, IndiaMART.com was “India’s largest online marketplace for Small & Medium Size Businesses”. Its revenue for the year ended March 2014 reached US$32 million. “The company offered a platform and tools to over 1.5 million suppliers to generate business leads from over 10 million buyers… (It had) over 2600 employees located across 40+ offices in the country”.
In keeping with its growth plans, the company evaluated various capital raising activities from time to time, including public or private placement opportunities. Factors that would benefit the company’s valuation included a strong track record of year-on-year growth, a sustainable revenue base from diversified product categories, a strong, large and active user base as well as a solid conversion rate of buyer-leads to revenue dollars for its suppliers. The downside, though, was that the company had not been generating operational profits for five years since 2010.
From scratch to US$32 million revenues, DA & BA led the company’s many evolutions; what were the major considerations in building the present business model? How did they ensure the development of strong networks in every product category of the multiple-sided platform? One criticism of IndiaMART’s weakness was easy replicability – what was the founders’ response to mitigating risks presented by this weakness? What should IndiaMART do to attract a fair valuation?
ACRC Case: Click here
iPhone’s Supply Chain Under Threat
The outbreak of COVID-19 (coronavirus disease, 2019) posed unprecedented challenges to the global supply chains. As a leading and innovative supply chain that achieved just-in-time manufacturing, Apple’s performance was put in the spotlight. This case describes how Apple’s supply chain has coped with the COVID-19 pandemic.
Apple’s supply chain has weathered natural disasters, such as earthquakes, fires, floods, and SARS; the risks and challenges brought by the outbreak of COVID-19 were unprecedented and complicated. Unlike the symptoms of SARS patients with high fever, the symptoms of COVID-19 varied; some patients had no symptoms at all, which made them difficult to identify. Moreover, the pandemic complicated supply chain planning because it was difficult, if not impossible, to predict where the next epicentre would be and what measures local governments might take to prevent the further spread of the virus. Social distancing was effective to control the pandemic, but it brought both challenges and opportunities for companies like Apple. On the one hand, social distancing slowed the manufacturing process and had a negative impact on the economy, which could dampen consumer confidence and reduce demand. On the other hand, social distancing boosted the demands for electronic devices, as many people had to work at home.
Using this case study, students will understand the importance of risk management in supply chain management and learn the challenges and opportunities of the disruption posed to business operations. The case provides an opportunity for students to discuss and understand why some companies can recover from the disruptions better than other companies and how a resilient supply chain can improve a company’s competitiveness.
ACRC case link: Click here
Louis Vuitton Moët Hennessy: Expanding Brand Dominance in Asia (MNC)
This case explores the predicament Louis Vuitton Moët Hennessy (LVMH) faced with respect to brand management when expanding its operations in China. In 2004, Asia accounted for about 40% of the sales of LVMH, however, it faced several challenges. One of its primary concerns was protecting its valuable brand against dilution. In China, phoney branding is particularly endemic. In addition, LVMH’s expansion plans in Asia also opened up the issue of private ownership versus franchising with regard to the profitability of companies in the luxury goods industry.
ACRC case link: Click here
Next Capital: Leveraging Opportunities in the Hong Kong IPO Market
The case introduces IPOs in Hong Kong from the perspectives of both issuers and investors. Hong Kong was a popular choice among many local and nonlocal companies for listing. It ranked as first globally in terms of total proceeds raised for 5 out of 10 years between 2011 and 2020.
The case is set in the fourth quarter of 2020, when the Ant Group entered Hong Kong for its IPO. Students take on the role of Lin Wong, head of the investment team of a new investment fund under Next Capital Investment Limited. Students have the opportunity to learn about IPOs from various perspectives: as pre-IPO investors in a fund’s investment that is ready to go public, as retail investors to subscribe for high-profile IPOs in the market, and as potential cornerstone investors to subscribe for a portion in the global offering of an IPO.
ACRC case link: Click here
OpenAI: Competitive Strategy And Governance
In November 2023, OpenAI, a prominent artificial intelligence (AI) research lab, announced the unexpected removal of its co-founder and CEO, Sam Altman, which sent shockwaves through the AI industry.
The case first delves into OpenAI’s journey from its inception as a non-profit organization aimed at developing artificial general intelligence (AGI) for the betterment of humanity, to its transformation into a capped-profit entity, along with the value chain and competitive dynamics of the generative AI industry. In the second section, the case documents in detail Sam Altman’s sudden dismissal. In the last section, the case concludes with a look into the broader implications for the generative AI industry, including the race for AGI, the ongoing challenges of AI development, and new developments.
The case is suitable for MBA, EMBA, and undergraduate students who are interested in competitive strategy, industry value chain, technology and innovation, entrepreneurship, corporate governance, stakeholder governance, and the AI industry. The case can be used in a core strategy course at different levels as it covers various topics.
ACRC case link: Click here
OPPO: Where to Find Growth Beyond China
OPPO, the mobile phone brand created by China’s BBK Electronics Corp Ltd (BBK), launched its second-generation foldable smartphones Find N2 & N2 Flip in December 2022. Find N2, available only in China, was priced at more than USD700 cheaper than Samsung’s Galaxy Z Fold 4. Market analysts predicted the global launch of OPPO’s Find N2 series would bring foldable smartphones to a much more accessible price point worldwide, and “truly take a bite out of Samsung’s market share”. In 2022, OPPO was China’s largest smartphone brand, and ranked fourth in the world. Following sanctions against Huawei by the US in May 2019, there was a reshuffling in the industry’s market leadership line-up. BBK, Xiaomi and Apple all gained market share. In 2021, BBK, the parent company of Vivo, OnePlus and Realme, surpassed Samsung’s longstanding position and became the world’s largest mobile phone company. In Q3 2021 OPPO merged with sister brand OnePlus in an expected market move. At the same time, OPPO, as BBK’s flagship brand was searching for strategic options to further its product and market dominance.
ACRC case link: Click here
Tencent Music Entertainment Group: Melding Music with Social Experiences
In November 2019, almost a year after it went public, Tencent Music Entertainment Group (“TME”) announced its third quarter financial results. Market investors had had high expectations for TME since it was the strategic music arm spun out by Tencent Holdings Limited (“Tencent”), one of the world’s most valuable technology, gaming and social media companies. When TME made its debut on the New York Stock Exchange in late 2018, many individual investors were mystified by its “music-centric social entertainment” business model.
Was it just the Chinese version of Spotify, which operated the world’s most popular music app? Or was it a truly different business model which might generate more lucrative and diversified business revenue than its international counterparts? Some market analysts and investors also wondered if TME presented a more attractive investment opportunity than similar music streaming platforms in the world, including the global leader Spotify. As the global and domestic market became more competitive, how could TME sustain its competitive advantage by leveraging its synergies with Tencent’s dominant position in social networking? Would TME’s atypical music and social entertainment business model be easily replicated by its industry rivals or adopted beyond the music industry? What role would music streaming platforms play in driving the growth of the music industry and how would it affect the ecosystem of the global entertainment industry?
ACRC case link: Click here
The FTX Collapse: Due Diligence and Counterparty Risk Mitigation When Investing in Crypto Companies
This case study examines the pivotal role of centralized exchanges in today’s digital asset ecosystem and emphasizes the importance of thorough due diligence for institutional investors when assessing digital asset companies. It underscores the need to recognize potential warning signs, such as inadequate regulatory oversight, inexperienced management, or intricate corporate structures. Furthermore, it delves into effective practices for Sovereign Wealth Funds (SWFs) and other institutional investors venturing into the digital asset landscape to adeptly manage risks.
In this case, students assume the role of Raffi, an analyst at a prominent Middle Eastern SWF. The SWF contemplates digital asset investments as part of its portfolio diversification strategy but is wary of associated risks, especially in the aftermath of the FTX collapse. Consequently, they assign Raffi the task of investigating the FTX collapse, extracting essential lessons, and formulating a robust due diligence framework to mitigate risks in future digital asset investments.
This case aims to provide students with a comprehensive understanding of the factors contributing to the FTX collapse and acquaint them with best practices for institutional investors navigating the digital asset space, focusing on the identification and mitigation of counterparty risks.
ACRC case link: Click here
Toyota's New Business Model: Creating a Sustainable Future
Many companies study the management strategies of others, adapting and learning from the experiences of large multinationals. But global corporations also need strategies that are capable of adapting to changing markets and profitability. Is it possible for these corporations to develop new and powerful insights from smaller firms?
The Toyota Motor Corporation’s philosophy and business strategy, known as the “The Toyota Way” is globally recognized as an industry leader, and its managerial values and business methods are regarded as benchmark practices, guiding the processes and strategies of organizations worldwide, e.g., Toyota’s Kanban method, of inventory control which facilitates just-in-time manufacturing, is seen as the optimal approach to inventory control.
Founded in Japan in 1937, the company grew rapidly. But a series of issues, resulting in a drop in vehicle sales and profitability left Toyota’s president, Akio Toyoda, considering how the company could find a more sustainable way of growing and how to incorporate this new philosophy into its existing business model.
Toyoda is now a strong advocate for an alternative philosophy known as the “Nenrin or tree ring” strategy. He credits a small company, Ina Food, which makes agar, a traditional ingredient in Japanese food, as the source of Toyota’s ongoing success.
Finding inspiration in Ina Food’s 55 years of sustainable growth and profit, Toyoda now follows many of its key initiatives.
The corporate giant has become one of the largest corporations globally, while still promoting the virtues of slow and steady growth on an ongoing basis.
ACRC case link: Click here
Uniqlo: A Supply Chain Going Global
In less than 20 years, Uniqlo has become the leading fast-fashion retailer in Japan and a strong player in other Asian countries like China, Korea and Taiwan. Since 1998, the company has expanded sales at double-digit rates, thanks to an aggressive pricing policy combined with a high level of quality, a mix that proved hard to resist for Asian customers. Key to Uniqlo’s strategy and success was an agile supply chain inspired by the “fast-fashion” model pioneered by Inditex and also utilized by H&M, the two largest fashion retailers in the world.
While Uniqlo demanded competitive prices from its suppliers, it also offered them continual technical assistance in developing and perfecting their manufacturing techniques, and supported them with a high flow of orders.
Nineteen ninety-eight was an important year for Uniqlo, as the opening of a flagship store in one of the hottest fashion districts of Tokyo projected the brand in Japan at a national level. At product level, a partnership with Toray, one of the world’s leading producers of composite and synthetic fibers, resulted in garments that had performance and properties no natural material could match. Working with Toray forced Uniqlo to refine its supply chain further, that became “just-in-time,” mimicking that of other highly competitive Japanese companies.
With an efficient but regional supply chain, Uniqlo faced rising manufacturing costs in China and was experimenting with new supply chain models in low-cost locations like Bangladesh. Uniqlo’s supply chain had proved effective in the Asia Pacific region, but could the same model be scaled worldwide? Was the low growth rate Uniqlo experienced in the US, and particularly Europe, also due to the limitations of its current supply chain?
ACRC case link: Click here
Walmart China: Challenging Alibaba’s New Retail
Walmart miscalculated when it entered China using its “Every Day Low Prices” strategy. It struggled with value proposition, local regulations, staff incentive schemes, logistics, and significant economic and cultural differences between regions. After two decades it developed successful operations in China. With Chinese led disruption labelled as “New retail,” that meant full integration between online and offline commerce, Walmart had to ensure its continued success in this new environment.
ACRC case link: Click here
WeWork’s Pre-IPO Value: USD47bn Or USD8bn?
The We Company (WeWork) rented office spaces for long-term leases, turned them into hip offices, and then offered them for short-term leases. Its charismatic co-founder and CEO Adam Neumann, explosive growth funded by significant cash injections from SoftBank and its USD100bn Vision Fund, and a pre-IPO valuation of USD47bn ensured the company was one of the most talked-about unicorns in August 2019.
WeWork’s valuation was similar to that of a high-tech stock with high price multiples. From FY 2016 to FY2018, its losses totalled USD3.3bn, outstripping revenue at USD3.1bn. After the release of Form S-1 pre-IPO filing documents, numerous financial analysts and the press scrutinized WeWork. In addition to its lower than expected financial performance, some questioned WeWork’s business model, its governance model, and its valuation. In the weeks that followed, the IPO was withdrawn, WeWork announced plans to lay off 2,000 staff, Neuman was removed as CEO, and Softbank doubled down on its bet in order to keep the company going. This latest share purchase by Softbank valued the company at USD8bn, compared to USD49bn two months earlier.
ACRC case link: Click here
Xiaomi: At a Crossroads
Investors had lost confidence in Chinese smartphone maker Xiaomi.
It was once one of the world’s most valuable private technology companies, valued at USD45bn after four years of operation. With Xiaomi, founder Lei Jun had created an internet company with an online business model that made tech-driven products with minimal margins. It focused on building value around the phone with products and services. Consumers quickly became fans. In 2014, Xiaomi became China’s best-selling smartphone brand and also the world’s third largest. Investors anticipated continued growth. But the excitement around the company did not last long. In 2016, Xiaomi’s overall smartphone shipments fell 36% from the previous year after a series of supply chain issues. To revive investor confidence, Lei adjusted the company’s strategic direction and led a series of internal restructurings.
Its long-awaited IPO in 2018 was priced at the bottom of the range and raised USD4.7bn, less than half of its initial target. Worse, six months after the IPO, the company’s market capitalization had dropped by half. According to some analysts, the company had been “overhyped” and Xiaomi was “just a hardware company.” But the image of Xiaomi as a value-for-money brand stuck. Some even gave it the nickname “assembly house.” What could Xiaomi do to revive the confidence of investors?
ACRC case link: Click here
