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Economics & Finance

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published: 23 Feb 2015

  • Topic: Economics & Finance
  • Industry: Insurance
  • Region: Asia

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Abstract:
The case recounts the unanticipated trials and tribulations experienced by a Canadian insurance company, Manulife, when it tried to take over its local partner’s stake in their Indonesian joint venture.

Pedagogical Objectives:
To illustrate the problems that a foreign company may encounter in a country where the rule of law is weak or absent, discuss and identify the historical roots of corruption in Indonesia, and provide insights into why corruption may grow in post-authoritarian states.

Keywords:
Manulife, Dss ( Dharmala Sakti Sejahtera), Commercial Court, Police, Indonesia, Suharto Regime, Corruption, Legal System

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published: 19 Dec 2014

  • Topic: Economics & Finance
  • Industry: Economy
  • Region: Middle-East

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Abstract:
The case describes the economic and social transformation of the UAE over the last 60 years from a quiet backwater on the desert Gulf Peninsula into a fast-growing modern economy and one of the world’s largest melting pots of nationalities and cultures.

Pedagogical Objectives:
Instructors can use this case to discuss economic diversification strategies.

Keywords:
Economic Diversification, Abu Dhabi, Dubai, Middle-East, Sovereign Wealth Fund, Debt, Oil, Social Transformation

published: 29 Sep 2014

  • Topic: Economics & Finance
  • Industry: Various
  • Region: Global

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Abstract:
One of the biggest challenges for multinational corporations (MNCs) is to determine and consolidate their borders. In order to do so, MNCs increasingly strive to create value innovation, particularly within their internal capital market. Accordingly, their corporate treasury functions have witnessed three stages of major evolution in the 21st century.

Pedagogical Objectives:
This case aims to provide an in-depth analysis of MNCs' treasury evolution based on Blue Ocean Strategy and the Coase theorem. In particular, we discuss how corporate treasury can help MNCs to consolidate their borders and how its different stages of evolution can result in either value creation or value innovation.

Keywords:
Blue Ocean, Corporate Treasury, Coase Theorem, Globalization, In-House Bank, Re-Invoicing, Internal Capital Market, Shadow Banking

published: 29 Sep 2014

  • Topic: Economics & Finance
  • Industry: Mobile telecommunications
  • Region: Africa

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Abstract:
Vodafone, in partnership with Safaricom, the leading Kenyan mobile operator, launches a service that allows registered users to transfer money from their mobile phones to other mobile phone users. With 11 million registered users after just three years (50% of Kenya’s adult population),Vodafone is now rolling out M-PESA in Tanzania, Afghanistan, South Africa and Fiji. The case explores both the internal and external factors that underpinned the success story.

Pedagogical Objectives:
To examine how an innovation track pioneered by a major international corporate player outside the traditional corporate process can lead to the creation of new services for new markets. And how, once successful, it can be integrated into the core business for replication.

Keywords:
Vodafone, M-Pesa, Mobile Money, Innovation, Kenya, Csr Strategies

Prizes won:
- Runner Up for 2011 Oikos Case Writing Competition, Social Entrepreneurship Category

published: 25 Aug 2014

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Abstract:
In late 2011, Infineon (IFX), a German semiconductor company, is sitting on a €2.4bn cash balance representing 40% of its assets. As part of a financial policy review, management is receiving conflicting advice from different quarters as to whether to pay out some of the cash holdings, how much and by which methods.
Please visit the dedicated case website to access additional teaching material.

Pedagogical Objectives:
The issues covered include (1) the need to link financial policy to business fundamentals, (2) the costs and benefits of holding cash, and why highly cyclical, knowledge-based, capital-intensive companies like IFX need large cash reserves, (3) the mechanics and rationales for different payout methods (e.g., cash dividends, share buybacks, etc.).

Keywords:
Semiconductors, Technology, Cash Holdings, Capital Structure, Payout, Dividends, Repurchases, European Competitiveness Initiative, European Competitiveness, Europe, Strategy

Prizes won:
- Winner 2014 EFMD Case Writing Competition, Finance and Banking Category

published: 23 Jun 2014

  • Topic: Economics & Finance
  • Region: Asia

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Abstract:
China represents a significant share of global foreign direct investment but its currency comprises a mere 1.5% of all global foreign exchange transactions. This case describes the measures introduced by the Chinese government to promote the use of the renminbi (RMB) in cross-border trade, financing and other internationalization initiatives, as well as the associated challenges.

Pedagogical Objectives:
The case introduces and discusses: 1. Countries and currencies 2. China’s economic development and emergence on the global stage 3. Process and policies for the renminbi's internationalization 4. Key stakeholders and implications 5. Potential problems and challenges 6. 3 case scenarios involving the RMB

Keywords:
Renminbi, Currency, Treasury Globalization, Internationalization, Globalization, Monetary Policies, Economic Development, Cross-Border Finance, Corporate Governance, Corporate Governance for Family Firms

published: 28 Apr 2014

  • Topic: Economics & Finance
  • Industry: Infrastructure
  • Region: Other Regions

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Abstract:
BrisConnections won the bid to construct the Airport Link toll road under a BOOT (Build, Own, Operate and Transfer) PPP model just as the global financial crisis took hold in 2008. Soon the project would take its place among a string of Australian toll road project failures.

Pedagogical Objectives:
To examine the public infrastructure fund model, the Australian public private partnership (PPP) toll road model, and the roles of various public and private stakeholders in the Airport Link project. To value the project and examine the assumptions underlying the model. To trace the impact of the project's failure and re-examine the project structure.

Keywords:
Project Finance, Toll Road, Financial Crisis, Infrastructure Fund, Default, Underwriters, Public Private Partnership (ppp), Conflict of Interest

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published: 28 Apr 2014

  • Topic: Economics & Finance
  • Industry: Infrastructure
  • Region: Other Regions

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Abstract:
BrisConnections won the bid to construct the Airport Link toll road under a BOOT (Build, Own, Operate and Transfer) PPP model just as the global financial crisis took hold in 2008. Soon the project would take its place among a string of Australian toll road project failures.

Pedagogical Objectives:
To examine the public infrastructure fund model, the Australian public private partnership (PPP) toll road model, and the roles of various public and private stakeholders in the Airport Link project. To value the project and examine the assumptions underlying the model. To trace the impact of the project's failure and re-examine the project structure.

Keywords:
Project Finance, Toll Road, Financial Crisis, Infrastructure Fund, Default, Underwriters, Public Private Partnership (ppp), Conflict of Interest

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published: 28 Apr 2014

  • Topic: Economics & Finance
  • Industry: Securities, banking
  • Region: Global

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Abstract:
This case traces the history of Goldman Sachs from its origins as it grows from a partnership to one of the most valuable franchises in the global securities industry and ultimately a listed corporation, and its transformation into a bank holding company under the regulatory oversight of the Federal Reserve. Even by the standards of the financial services sector - significantly restructured in recent decades - Goldman Sachs has undergone transformative configurations while straining to hold on to the attributes that made it an industry leader. There are successes and failures, and the case focuses on the future direction of the firm in a market and regulatory environment very different from the past.

Pedagogical Objectives:
The objective is to apply tools of industrial organization and competitive analysis to an extraordinary firm in the financial services sector which, for internal and external reasons, has become a much more ordinary firm. The role of strategic positioning and execution are emphasized, as are the problems of institutional complexity, compliance and ethics, and corporate culture.

Keywords:
Investment Banking, Bank Strategy, Securities, Bank Culture, Regulation, Financial Ethics

Hermès Paris Award winner Prize Winner
published: 28 Apr 2014

  • Topic: Economics & Finance

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Abstract:
This case is about options for ownership design in family businesses. The Hermès family takes the firm public in 1993 with the dual aim of enabling individual members to exit via selling shares on the market and generating funds to finance the company's growth. Fifteen years later, as LVMH prepares a hostile takeover bid for control of Hermès, the family fights to protect its ownership by creating a family trust to keep minority ownership interests in check.

Pedagogical Objectives:
1) To explain the prevalence of family firms in the luxury industry. 2) To apply the 'Family Business Map' to design family-assets-based business strategies and governance to avoid roadblocks. 3) Why family firms go public and in what way being a public firm is different from a private firm. 4) To understand that the way a family firm lists its shares can have long-term consequences for ownership and governance. 5) To show how family firms can be protected from hostile takeovers by creating a family trust. 6) To underline the legal limitations on the defensive strategies that family firms can deploy against hostile takeover bids, which vary from one country to another.

Keywords:
Luxury Industry, Ownership Design, Hostile Takeover Attempt, Family Ownership, Family Assets, Family Roadblocks, Family Trusts, Corporate Governance, Corporate Governance for Family Firms, Wicfe, Fair Process, Communication, Psychology, Gender, Governance, Parallel Planning, Strategy, Boards

Prizes won:
- Highly Commended at 2013 EFMD Case Writing Competition, Family Business Category

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