The case addresses the birth of Tencent Music Entertainment Group, China’s music streaming leader. The case features two protagonists. One of them is Guomin Xie, a legally-trained senior executive at Sina.com, an early and highly influential Chinese internet company, employed in the period approximately from the beginning of that company’s existence in the late 1990s until 2012. It was a highly challenging period for China’s legitimate music market resulting in pervasive piracy. Among Guomin Xie’s corporate responsibilities at Sina.com was acting as the head of Sina Music, a fledgling music streaming platform, which in turn enabled him to gain an extraordinary familiarity with China’s struggling music market. Aided by his legal education and experience with China’s imperfect copyright enforcement, he became consumed with a vision to create a major new company which would help kill the piracy cancer. The business model of the new company would combine streaming of legitimate music with exclusive ownership or rental of music copyrights. As the top management of Sina.com was not interested in pursuing Xie’s vision, which would require major investments, he quit his job in 2012 and turned to entrepreneurship by founding China Music Corporation (“CMC”). He was faced immediately with three main challenges in his entrepreneurial career – (1) to enter into exclusive copyright agreements with music labels; (2) acquire two existing music streaming platforms; and (3) pursue fundraising. By September of the following year, he made good progress on the first two objectives, but still needed to close in on fundraising in order to complete challenge.
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Victory City International Holdings Ltd. (冠華國際控股有限公司) was principally engaged in the textile businesses and had subsidiaries in mainland China that manufactured and sold its own products. The company was founded in 1983 in Hong Kong, and it was listed on the main board of the Hong Kong Stock Exchange (SEHK: 539) in 1996. On 22 February 2021, Victory City announced that, on 22 January 2021, Deloitte had obtained two credit reports as evidence that two of its main subsidiaries in mainland China had outstanding bank loans in the aggregate amount of CNY946m (USD148m). According to the credit reports, Victory City’s mainland subsidiary signed bank facilities of CNY994m (USD156m) on 11 December 2020 with mainland banks, and a substantial portion of these loan amounts was not recorded in the consolidated financial statements of the company. If Deloitte’s findings were valid, the company’s management had possibly committed accounting fraud and embezzled funds by transferring a substantial portion of the unrecorded loan of CNY946m (USD148m) to their own pockets. After 22 January 2021, Deloitte, as the whistleblower, suggested remedial actions that the company should take, but no significant governance response was received and the management in Hong Kong denied any knowledge of the bank loans or the location of the funds.
On 11 February 2021, Victory City filed a winding-up petition; it stated as one of the reasons that it had defaulted on a scheduled bank loan repayment of approximately HKD290m (USD37m) to a syndicate of banks in Hong Kong. On 19 March 2021, the Hong Kong government’s Financial Reporting Council (FRC) initiated an investigation into Victory City’s financial statements to determine the extent of the unrecorded loans. In addition, FRC was investigating whether Deloitte had conducted its work in accordance with the relevant auditing standards. Victory City requested that the trading of its shares be suspended at SEHK, effective 22 March 2021. On 27 April 2021, the chairman and an executive director resigned from the holding company listed in Hong Kong.
HKTVmall, owned and operated by Hong Kong Technology Venture Company Limited (HKTV), is the largest online e-commerce platform in Hong Kong. Officially launched in 2015 as an “online supermarket”, HKTVmall has morphed into an “online shopping mall” in just five years, serving more than 1 million consumers and almost 4,000 merchants and suppliers. The company recorded its first ever net profit in mid-2020, one year prior to the company’s forecast, and became one of the few online shopping operators globally to make a profit in merely five years. Despite this success, Alice Wong, Group Chief Financial Officer and Company Secretary of the company, knew it was far too early to pop the champagne bottles and celebrate – as scores of dotcom businesses in the past had prospered and then subsequently gone bust, including in Hong Kong (e.g. adMart). The challenge now is how to sustain the company’s momentum and even expand the business further, especially for the post-COVID 19 era.
This case describes the business details of HKTV with a focus on its HKTVmall business. It traces the company’s history, retail, and e-commerce environments in Hong Kong as well as the business strategies for HKTVmall. It helps students to understand, analyze, and discuss the company’s key success factors, Hong Kong’s retail and e-commerce competitive landscape, as well as the post-COVID 19 era for the company’s development.
By the end of 2020, the world was still deeply affected by the COVID-19 pandemic and most countries were fighting, in many cases desperately, their second and third waves. China, on the other hand, had managed to effectively control the virus and as a result had succeeded in protecting both the health of its citizens and its economy.
China’s success in making the country almost free of COVID-19 was important for businesses as it meant a return to certainty and stability, and the ability to plan and work in an environment close to pre-pandemic times. However, as was the case in many countries, at the height of the pandemic, Chinese businesses—often with institutional support—had moved aggressively towards digital transformation as they struggled to find solutions to adapt to the new normal of lockdown.
By March 2020, Expo-One, a Chinese exhibition firm had seen its traditional business collapse as a result of the pandemic lockdown, travel restrictions and the resultant cancelation of events. In haste it launched a start-up project called ‘Cloud Expo’ to digitalize its business. The company’s owner and CEO, Irina Zhang, led this incredible digital transformation effort and it seemed that the company had adapted to the new reality. However, matters were not that simple. As China settled back down to normality it was not at all clear whether all of the efforts to establish a new online exhibition experience and develop new products made sense. Should Expo-One return to its traditional offline exhibition format and mothball the problematic digital model?
This case provides students an opportunity to learn how to assess the competitiveness and profitability of the global computer industry through the SWOT analysis framework. By analyzing the effectiveness of Lenovo’s business growth strategy, enabled by a dual supply chain approach for achieving both responsive and efficient objectives, students will also understand how Chinese companies can successfully transform themselves from operating merely as an OEM to OBM with a recognized global brand.
This case provides students an opportunity to learn about major concepts of statistical process control, particularly the process control charts, process capability index, and six sigma quality. The protagonist of the case is a third-year business student majoring in operations management, who was working as an intern at Germagic Biochemical Technology (GBT) during the summer of 2021. The intern was tasked with assessing the quality performance of the production process of Germagic 4H Hand Sanitizer, as measured by the actual filled volume within the specifications of 500 ± 10 ml. By using this case study, students can easily relate to the intern’s experience as he goes through the entire process of designing the control charts, collecting the data, ensuring the process is in statistical control and stable, and eventually computing the process capability index to determine how much improvement should be made in order to achieve the six sigma quality.
This case will cover many technical issues in developing process control charts and the process capability index. Students should be able to complete the necessary calculations to develop the X-bar and R charts to monitor the process mean and range. After the process is found to be in control and stable, students can move on to compute the process capability index with reference to the design specifications and then make conclusions about how capable is the current production process to produce quality products. More importantly, students should be ready to discuss many managerial issues that the intern would face, including how to communicate complicated statistical concepts and the implications of six sigma quality for both manufacturing and service businesses to his supervisor, who is interested in expanding the scope of six sigma quality to the company’s other business areas.
This case is based on the situation that SMIC has been facing in 2021 as the world economy attempts to return to normal in the midst of the COVID-19 pandemic. To get a better sense of crisis that the company is facing, a year earlier SMIC had received tremendous scrutiny from the US government due to concerns that the company’s increasing dominance in this industry threatened US interests. Through the discussions of the SMIC case, students will learn how to analyze the competitive situation of a company given the prevailing geopolitical factors as well as how to determine a company’s strategic positioning in its respective industry and then use this analysis to evaluate future strategic moves.
The key objective of this case is to review an innovative product’s supply chain, so as to identify its supply risks and to improve its supply chain resilience. When COVID-19 caught the world off guard in early 2020, Germagic Biochemical Technology (HK) Ltd. (GBT) was ready to introduce its disinfectant products that demonstrated long-lasting properties to eliminate more than 99% of infectious viruses and bacteria. Through testing and certification from different government authorities and health bureaus, the protagonist of this case, Hamilton Hung, co-founder of GBT has been working with partnering firms to build international recognition while exploring the export market.
As a family run industrial business, Chiaphua Industries Ltd. faces many challenges in promoting Germagic products. Without global uniform standards and protocols in long-lasting disinfectant products, some customers are skeptical about their effectiveness. Exploiting the market need, different suppliers have flooded the market with certain products that are less effective than what they claim, while COVID-19 continues its devastation for the foreseeable future. On the flip side, it is also possible that COVID-19 may just disappear like many previous pandemics in human history, and that will cause a big drop in demand of such products. Facing all these challenges and market uncertainties, how could GBT expand into the local and regional markets by creating a more forward-looking, resilient supply chain that allows the company to stay ahead of its competitors? And how can it improve the distribution channels to promote customer products?
The case is based on WeLab Bank (WLB), a virtual bank in Hong Kong, and can be assumed to be set at the time of its writing in mid-2021. WLB has launched its operations in Hong Kong and introduced its initial retail banking products, with additional products to be launched soon or in the pipeline. As one of eight virtual banks in Hong Kong, a market with a very mature banking sector and extensive financial service offerings, WLB is focused on democratizing financial services in Hong Kong. For many people in Hong Kong, managing their personal finances can be a daunting task. In addition to managing their daily expenses, it can be a challenge to sort through various savings and investment products and identify the ones that can best help them reach their long-term financial goals. Hong Kong also has the most expensive property market in the world, so making a wise property investment, either as a primary residence or as a rental property also requires considerable due diligence. Yet many Hong Kong people feel they do not have access to sufficient financial advice to be able to make informed decisions, whether investing in property, selecting savings or investment products or managing their daily finances. For high net-worth individuals in Hong Kong, however, the situation is different as large deposit holdings at a local bank, for example, provides one with access to professional financial advice. Recognizing this discrepancy in financial services locally, the Hong Kong Monetary Authority (HKMA), the defacto central bank in Hong Kong, was hopeful that the virtual banks could leverage their technology resources to provide Hong Kong people of all income brackets with improved access to financial tools to more effectively manage their personal finances.
For Ms. Janice Chung, WeLab Bank’s Manager for Growth Operations and Strategy, the key challenge was identifying the products and services delivered via digital channels that would best meet the needs of Hong Kong people and enable WeLab Bank to distinguish itself in a crowded banking sector in Hong Kong.
The case, based on WeLab Bank (WLB), is set in February 2021, following the Chinese New Year holidays in Hong Kong. WLB, one of eight new virtual banks in Hong Kong, began operations in July 2020 amid a global pandemic.
The de facto central bank in Hong Kong is the Hong Kong Monetary Authority (HKMA), which has been gradually implementing measures to support the development of digital banking in Hong Kong, including the introduction of Open Application Programming Interfaces (Open APIs), which, in principle, would allow Third Party Service Providers (TSP), including fintechs, to gain access to banking customers’ data and utilize that data to provide more targeted and innovative services to those customers.
Traditionally, banks extended their services to customers at their brick-and-mortar outlets, taking in deposits for which they provided interest earnings and generating income on a variety of loan products for which they charged higher interest than on its deposits. Virtual banks, by contrast, extended their services exclusively via digital channels, including mobile banking. With lower overheads, they could provide some services for free or with minimal charges, while offering financial products with higher earnings for customers. With a growing base of customers accessing financial services remotely, the opportunity existed to find new and innovative ways to serve customers through digital-only channels.
The challenge facing WLB and its manager for growth operations and strategy, Ms. Janice Chung, was how to firmly establish itself in a nascent virtual banking market in Hong Kong, while competing with strong traditional banks that were also moving to digitize their banking services. In assessing its strategic options, it could leverage its strong technology infrastructure, open APIs, and the examples of predecessor virtual banks and fintechs in other markets, such as Starling Bank in the UK, Tinkoff Bank in Russia, and Grab in Singapore.