Asian Journal of Management Cases, Ahead of Print.
Abhay Khanna, an independent financial advisor based in Delhi, consistently seeks out companies with strong fundamentals and potential for long-term growth to benefit his clients. Recently, he assessed the financial records of Britannia Industries, a prominent Indian food company, wondering whether it might be undervalued in the current market. To assess this, he employed the widely used multi-stage dividend discount model to determine its intrinsic value. This involved forecasting Britannia Industries’ future financial statements and dividends, prompting Abhay to carefully consider various assumptions and predictions to identify a potentially undervalued investment opportunity. This scenario presents students with the role of equity research analysts tasked with evaluating Britannia Industries’ financial worth using dividend discount valuation techniques.
Category Archives: Asian Journal of Management Cases
Business Success, Philanthropy and Scandals: The Controversial Legacy of Malik Riaz Hussain of Bahria Town?
Asian Journal of Management Cases, Ahead of Print.
This case sheds light on the accomplishments and legacy of a Pakistani entrepreneur who rapidly established a business empire. Malik Riaz Hussain, the founder of Bahria Town, the largest privately held real estate development company in Pakistan, faced allegations of engaging in corrupt activities to sway the system in his favour. Additionally, he was actively engaged in philanthropic endeavours, frequently referring to Islamic principles of charitable giving. This case highlights the intricate and ambiguous nature of ethical conduct in business within a context where religious teachings hold significance despite the prevalent corruption problem.
This case sheds light on the accomplishments and legacy of a Pakistani entrepreneur who rapidly established a business empire. Malik Riaz Hussain, the founder of Bahria Town, the largest privately held real estate development company in Pakistan, faced allegations of engaging in corrupt activities to sway the system in his favour. Additionally, he was actively engaged in philanthropic endeavours, frequently referring to Islamic principles of charitable giving. This case highlights the intricate and ambiguous nature of ethical conduct in business within a context where religious teachings hold significance despite the prevalent corruption problem.
Oyo Hotel’s Expansion Spree: Too Much, Too Fast?
Asian Journal of Management Cases, Ahead of Print.
Established in 2013, Oyo Hotels & Rooms, an Internet startup in the Indian hospitality sector, experienced an astonishing journey, culminating in a valuation of USD 5 billion by the end of 2018. The remarkable success of Oyo left many observers astounded. This meteoric rise was attributed to Oyo’s innovative business model, strategically targeting the fragmented budget segment of hotels beset by inefficiency. Oyo addressed these challenges by providing access to hotel rooms in prime locations, ensuring standardized services and offering affordability to customers.Over the years, Oyo gradually diverged from its core business as a mere aggregator of hotel rooms. It ventured into leasing hotels in the mid and premium segments, tapped into the Indian wedding segment, acquired companies and expanded its footprint into numerous foreign markets. This case aims to scrutinize whether this accelerated growth strategy could compromise the fundamental service promise of standardization. Additionally, it investigates whether the financially robust company, particularly after securing a USD 1 billion investment in September 2018, risks losing touch with reality as it becomes entangled in various controversies.
Established in 2013, Oyo Hotels & Rooms, an Internet startup in the Indian hospitality sector, experienced an astonishing journey, culminating in a valuation of USD 5 billion by the end of 2018. The remarkable success of Oyo left many observers astounded. This meteoric rise was attributed to Oyo’s innovative business model, strategically targeting the fragmented budget segment of hotels beset by inefficiency. Oyo addressed these challenges by providing access to hotel rooms in prime locations, ensuring standardized services and offering affordability to customers.Over the years, Oyo gradually diverged from its core business as a mere aggregator of hotel rooms. It ventured into leasing hotels in the mid and premium segments, tapped into the Indian wedding segment, acquired companies and expanded its footprint into numerous foreign markets. This case aims to scrutinize whether this accelerated growth strategy could compromise the fundamental service promise of standardization. Additionally, it investigates whether the financially robust company, particularly after securing a USD 1 billion investment in September 2018, risks losing touch with reality as it becomes entangled in various controversies.
The Knight in Shining Armour: JSW Steel Ltd’s Acquisition of Bhushan Power and Steel Ltd
Asian Journal of Management Cases, Ahead of Print.
This case revolves around the acquisition of Bhushan Power and Steel Ltd (BPSL) by JSW Steel Ltd BPSL faced severe financial difficulties, prompting its lenders, including prominent Indian banks, to initiate insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code in 2019. JSW Steel Ltd entered the competition to acquire BPSL’s assets and secured the bid. However, complications arose as the Enforcement Directorate and BPSL’s promoters raised objections, leading to delays in the insolvency process.The case spotlights a significant Indian corporate reform represented by the Insolvency and Bankruptcy Code and the establishment of the National Company Law Appellate Tribunal (NCLAT). This reform proved essential as it provided an alternative to distressed companies, which previously had no choice but to cease operations, adversely affecting both employees and lenders. The NCLAT has since introduced a win-win solution for most stakeholders.Furthermore, the case delves into the crucial characteristics of the steel industry, an indispensable product utilized across various global industries, and how these features significantly impact strategic decision-making. It underscores the strategic value of JSW Steel Ltd’s acquisition of a struggling company. In summary, it offers a comprehensive perspective on the insolvency process, the roles of the NCLAT and Enforcement Directorate, and the value generated through the acquisition.
This case revolves around the acquisition of Bhushan Power and Steel Ltd (BPSL) by JSW Steel Ltd BPSL faced severe financial difficulties, prompting its lenders, including prominent Indian banks, to initiate insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code in 2019. JSW Steel Ltd entered the competition to acquire BPSL’s assets and secured the bid. However, complications arose as the Enforcement Directorate and BPSL’s promoters raised objections, leading to delays in the insolvency process.The case spotlights a significant Indian corporate reform represented by the Insolvency and Bankruptcy Code and the establishment of the National Company Law Appellate Tribunal (NCLAT). This reform proved essential as it provided an alternative to distressed companies, which previously had no choice but to cease operations, adversely affecting both employees and lenders. The NCLAT has since introduced a win-win solution for most stakeholders.Furthermore, the case delves into the crucial characteristics of the steel industry, an indispensable product utilized across various global industries, and how these features significantly impact strategic decision-making. It underscores the strategic value of JSW Steel Ltd’s acquisition of a struggling company. In summary, it offers a comprehensive perspective on the insolvency process, the roles of the NCLAT and Enforcement Directorate, and the value generated through the acquisition.
Transforming the Performance Management System at Sapient
Asian Journal of Management Cases, Ahead of Print.
In 2013, Alan Herrick, the CEO of Sapient, raised concerns with his HR leadership regarding the effectiveness of the existing performance management system (PMS). He tasked Kameshwari Rao, Vice President of People Strategy at Sapient India, with evaluating the current performance appraisal system, which relied on bell curving and forced ranking. Leading a core team, Rao explored alternative systems to replace the current one, eliminating the use of the bell curve.The team’s findings led to the proposal of a new approach named ‘enabling your potential’ (EYP), focusing on regular conversations throughout the year rather than a singular year-end effort for gathering and disseminating performance information. The EYP approach emphasized coaching and feedback. The case outlines the dilemma faced by Rao when confronted with feedback from various organizational stakeholders regarding the proposed EYP PMS. Rao must decide whether to persist with the bell curve system or adopt the proposed EYP approach.
In 2013, Alan Herrick, the CEO of Sapient, raised concerns with his HR leadership regarding the effectiveness of the existing performance management system (PMS). He tasked Kameshwari Rao, Vice President of People Strategy at Sapient India, with evaluating the current performance appraisal system, which relied on bell curving and forced ranking. Leading a core team, Rao explored alternative systems to replace the current one, eliminating the use of the bell curve.The team’s findings led to the proposal of a new approach named ‘enabling your potential’ (EYP), focusing on regular conversations throughout the year rather than a singular year-end effort for gathering and disseminating performance information. The EYP approach emphasized coaching and feedback. The case outlines the dilemma faced by Rao when confronted with feedback from various organizational stakeholders regarding the proposed EYP PMS. Rao must decide whether to persist with the bell curve system or adopt the proposed EYP approach.
Google and Jio: Tapping Growth Opportunities Through Strategic Alliance
Asian Journal of Management Cases, Ahead of Print.
Alliances are cooperative business relationships in which two or more entities collaborate to achieve a common objective while maintaining their individual independence. An example of such an alliance is the partnership between Google and Reliance Jio Infocom Ltd. This strategic alliance was formed to address the prevailing market challenges and capitalize on the growth opportunities in the Indian smartphone market.Within this case, we delve into the strategic objectives that motivated Google and Jio to embark on this alliance, explore the growth strategies employed by both partners and assess the advantages gained from this partnership. Readers of this case study will gain insights into the significance of value creation and learn how markets can be shaped through innovative value propositions. Additionally, readers will be equipped to apply the VRIO framework, enabling them to evaluate how each strategic partner benefits from the addition of resources and capabilities, as well as to comprehend the critical success factors inherent in strategic alliances.
Alliances are cooperative business relationships in which two or more entities collaborate to achieve a common objective while maintaining their individual independence. An example of such an alliance is the partnership between Google and Reliance Jio Infocom Ltd. This strategic alliance was formed to address the prevailing market challenges and capitalize on the growth opportunities in the Indian smartphone market.Within this case, we delve into the strategic objectives that motivated Google and Jio to embark on this alliance, explore the growth strategies employed by both partners and assess the advantages gained from this partnership. Readers of this case study will gain insights into the significance of value creation and learn how markets can be shaped through innovative value propositions. Additionally, readers will be equipped to apply the VRIO framework, enabling them to evaluate how each strategic partner benefits from the addition of resources and capabilities, as well as to comprehend the critical success factors inherent in strategic alliances.
ArcelorMittal Steel’s Essar Acquisition: A Long Legal Battle with Ramifications
Asian Journal of Management Cases, Ahead of Print.
Essar Steel India Limited (ESIL) participated in an auction under the new Indian Insolvency and Bankruptcy Code (IBC) of 2016 to recover outstanding dues totalling ₹545,470 million owed to financial lenders and operational creditors. The acquisition process, initiated in August 2017, concluded in December 2019, with ArcelorMittal paying ₹420,000 million. This marked the resolution of a prolonged two-year legal dispute. Essar’s case served as a significant milestone in the implementation of the IBC 2016, establishing legal precedents such as the non-interference principle regarding commercial decisions made by the Committee of Creditors by the National Company Law Tribunal. The National Company Law Appellate Tribunal and the introduction of Section 29A were additional developments. The case aims to assess the motivations behind ArcelorMittal’s acquisition of ESIL, evaluate the appropriateness of ArcelorMittal’s approach and examine the impact of the protracted legal battle spanning two years on the deal.
Essar Steel India Limited (ESIL) participated in an auction under the new Indian Insolvency and Bankruptcy Code (IBC) of 2016 to recover outstanding dues totalling ₹545,470 million owed to financial lenders and operational creditors. The acquisition process, initiated in August 2017, concluded in December 2019, with ArcelorMittal paying ₹420,000 million. This marked the resolution of a prolonged two-year legal dispute. Essar’s case served as a significant milestone in the implementation of the IBC 2016, establishing legal precedents such as the non-interference principle regarding commercial decisions made by the Committee of Creditors by the National Company Law Tribunal. The National Company Law Appellate Tribunal and the introduction of Section 29A were additional developments. The case aims to assess the motivations behind ArcelorMittal’s acquisition of ESIL, evaluate the appropriateness of ArcelorMittal’s approach and examine the impact of the protracted legal battle spanning two years on the deal.
Transforming HR Functions Through Shared Service: Insights from Indian Public Sector Power Major
Asian Journal of Management Cases, Ahead of Print.
The case is about a prominent Indian public sector power company involved in the entire power generation value chain, encompassing fossil, hydro, nuclear and renewable energy sources. The organization is geographically divided into eight zones/regions: Central Region, DBF Region, Western Region-I, Western Region-II, Eastern Region-I, Eastern Region-II, Northern Region and Southern Region.In a conversation between Mr Anuj Kapoor, the Director of HR at this major power company, and Ms Abhika Choudhary, a researcher and academician, the discussion revolved around implementing human resources shared services (HRSS) within the organization. Initially undertaken to address manpower optimization challenges within HR functions, the complete transformation of HR functions through shared services gave Mr Kapoor valuable insights. Reflecting on this journey during the meeting with Ms Choudhary, he explored the entire spectrum from idea generation to implementation, including navigating resistance to change and post-implementation feedback.While Ms Choudhary diligently recorded the discussion to gain practical insights into the technological intervention in organizational HR functions, the flow of the conversation encountered a hurdle when delving into one specific post-implementation feedback from employees. This feedback pertained to the dichotomy of face or faceless HR in the era of HRSS within the company.
The case is about a prominent Indian public sector power company involved in the entire power generation value chain, encompassing fossil, hydro, nuclear and renewable energy sources. The organization is geographically divided into eight zones/regions: Central Region, DBF Region, Western Region-I, Western Region-II, Eastern Region-I, Eastern Region-II, Northern Region and Southern Region.In a conversation between Mr Anuj Kapoor, the Director of HR at this major power company, and Ms Abhika Choudhary, a researcher and academician, the discussion revolved around implementing human resources shared services (HRSS) within the organization. Initially undertaken to address manpower optimization challenges within HR functions, the complete transformation of HR functions through shared services gave Mr Kapoor valuable insights. Reflecting on this journey during the meeting with Ms Choudhary, he explored the entire spectrum from idea generation to implementation, including navigating resistance to change and post-implementation feedback.While Ms Choudhary diligently recorded the discussion to gain practical insights into the technological intervention in organizational HR functions, the flow of the conversation encountered a hurdle when delving into one specific post-implementation feedback from employees. This feedback pertained to the dichotomy of face or faceless HR in the era of HRSS within the company.
Dismal Management of the Sales and Distribution System at GEM Food Products
Asian Journal of Management Cases, Ahead of Print.
The case illustrates the challenges a newcomer faces in a regional leadership role within an already well-established framework. His struggles in managing growth and market shares bring to light the vulnerabilities in the organization’s existing practices. Participants gain insights into management concepts such as review mechanisms, gaps in the recruitment process, mentorship of new recruits and the resilience of systems even amid a change in leadership. The path to recovery involves delving into the comprehension of various indicators within the context of sales and distribution.
The case illustrates the challenges a newcomer faces in a regional leadership role within an already well-established framework. His struggles in managing growth and market shares bring to light the vulnerabilities in the organization’s existing practices. Participants gain insights into management concepts such as review mechanisms, gaps in the recruitment process, mentorship of new recruits and the resilience of systems even amid a change in leadership. The path to recovery involves delving into the comprehension of various indicators within the context of sales and distribution.
The Sinking of HBOS: An Invaluable Lesson to the Contemporary Banking and Finance Sector
Asian Journal of Management Cases, Ahead of Print.
HBOS plc, a UK-based financial institution, initially appeared as a remarkable success story in the banking industry. 2001 marked a pivotal moment when Halifax and Bank of Scotland joined forces to create HBOS. For the subsequent six years, it achieved substantial double-digit profits, solidifying its position. In 2007, the bank’s market capitalization soared to an impressive £40 billion.While HBOS garnered accolades from analysts and brokers for its apparent success, beneath the surface, its business model proved susceptible to economic fluctuations due to what was identified as a flawed strategy and inadequate risk management practices. These critical shortcomings left the bank ill-prepared to navigate the global financial crisis. In October 2008, HBOS faced a severe crisis and ultimately merged with Lloyds Banking Group.This case delves into the intricacies of HBOS’s strategy, internal and external governance issues and the changing business environment. It serves as an invaluable tool for students seeking to comprehend the factors that led to the company’s downfall. Several pressing questions are raised, including the role of accounting improprieties, the effectiveness of the risk management system, internal governance and the inability of the board and auditors to foresee the impending challenges within the company.
HBOS plc, a UK-based financial institution, initially appeared as a remarkable success story in the banking industry. 2001 marked a pivotal moment when Halifax and Bank of Scotland joined forces to create HBOS. For the subsequent six years, it achieved substantial double-digit profits, solidifying its position. In 2007, the bank’s market capitalization soared to an impressive £40 billion.While HBOS garnered accolades from analysts and brokers for its apparent success, beneath the surface, its business model proved susceptible to economic fluctuations due to what was identified as a flawed strategy and inadequate risk management practices. These critical shortcomings left the bank ill-prepared to navigate the global financial crisis. In October 2008, HBOS faced a severe crisis and ultimately merged with Lloyds Banking Group.This case delves into the intricacies of HBOS’s strategy, internal and external governance issues and the changing business environment. It serves as an invaluable tool for students seeking to comprehend the factors that led to the company’s downfall. Several pressing questions are raised, including the role of accounting improprieties, the effectiveness of the risk management system, internal governance and the inability of the board and auditors to foresee the impending challenges within the company.