GroupM India: The human dimension of digital transformation (B)

GENEVA (SWITZERLAND), AUGUST 2021. There was a lot at stake for Sébastien. This was the culmination of his 18-month NCA supported search journey to find a company to acquire. Instead of a single target, he was now faced with the prospect of acquiring 4 separate companies at once, consolidating them into a group. One, SAS, was bigger than the others but also faced significant financial issues. Hopefully he had identified three additional companies as acquisition targets, all profitable and with low levels of debt but individually a bit too small. Should he pursue all three as a single deal or add SAS for a four-company deal? In a last-ditch effort to figure out the best deal configuration, he ran some simulations about the potential returns of the group with and without the SAS turnaround. With those projections in hand, it was time to finalize the management buy-in proposal to present to the investment committee the following week.

The case focuses on Rede Mulher Empreendedora (RME), Brazil’s largest support platform for female entrepreneurship, and its founder, Ana Fontes. Founded in 2010, RME had grown into a significant network by 2023, impacting the livelihoods of over 12 million women in Brazil, a country with substantial gender disparities. The platform offers initiatives to empower women economically and provides knowledge and tailored content to help them manage their businesses and navigate Brazil’s entrepreneurial landscape. By 2023, RME was at a critical juncture. Although RME had clear objectives to empower women, there was uncertainty about how each initiative contributed to its mission. Financially, RME experienced a dramatic shift: In 2022, it raised US$6 million, but in 2023, fundraising efforts dropped to US$2.6 million – a 57% decrease. This decline exposed RME’s heavy reliance on corporate philanthropy, from organizations like Google.org, Visa and the Mapfre Foundation, which constituted 80% of its income. The remaining 20% of revenue came from projects funded by RME’s partners, which proved inadequate to sustain the organization’s ambitious goals. Besides, in 2023, the fundraising campaign fell far short of expectations. Reduced funds meant that new projects were postponed, and existing initiatives faced the threat of being scaled back. Fontes must ensure financial sustainability, identify new revenue streams and reduce dependence on philanthropy while staying true to RME´s mission. Her goal is to achieve self-sustainability while continuing to fulfill the mission. This involves analyzing whether RME should pivot to a for-profit enterprise, remain a non-profit or adopt a hybrid approach to balance its social impact with financial viability. Students must put themselves in Ana’s shoes and evaluate the potential benefits and trade-offs of these models to determine the best path forward.

Foxconn, a Fortune Global 500 giant and the world's largest electronics manufacturer, made headlines in 2023 by announcing a shift to a five-day, eight-hour workweek in its Chinese factories - a significant departure from its long history of extended work hours and grueling conditions. While this decision was celebrated by labor advocates as a critical step toward improving work-life balance, it sparked a complex debate among Foxconn employees. Many workers had come to rely on overtime pay just to make ends meet, as their basic wages barely covered essentials like rent and food. Foxconn had long faced criticism for pushing its workers to the brink, most notably in 2010, when 17 employees in China attempted suicide by jumping from company buildings, resulting in 14 tragic deaths. Despite this devastating toll, Foxconn's business growth remained unshaken. The company’s rise from a startup to the world’s largest electronics manufacturer is deeply intertwined with China’s massive influx of domestic migrant labor, where millions move to urban areas in search of better opportunities. This case delves into the reality of labor on Foxconn’s frontlines, exploring working conditions, compensation and living accommodations, as well as the far-reaching aftermath of the tragedies that shook both Foxconn and its clients, such as Apple. Beyond China, Foxconn’s global operations have faced similar scrutiny, and as the company expands into regions like India, it confronts new challenges. Cultural and regulatory differences further complicate its labor issues. This case highlights the critical tension between safeguarding worker dignity and well-being while meeting the relentless demands for productivity - whether in developed or emerging economies. As Foxconn continues to evolve and reshape its labor practices, the question remains: How can companies maintain profitability while ensuring the dignity, safety and well-being of their workforce?

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Grupo Inca, a conglomerate that owned Peru’s leading textile business with a long history of working with alpaca fleece, was at a crossroads regarding the conservation and commercialization of black alpaca fiber. Historically, black alpacas were as common as their lighter-colored counterparts, but market preferences drove them to near extinction. The Inoue brothers, fashion designers committed to social impact, expressed an interest in creating a luxury collection using rare black alpaca fiber. This presents Grupo Inca with both an opportunity and a dilemma: Should it invest in developing this niche market despite uncertainties of both supply and demand, or collaborate with local government and NGOs to ensure sustainable practices, or maintain its current direction and do nothing? This compact case explores the intricacies of actions vs. impact, ethical responsibility and long-term strategic thinking. It provides a rich context for discussing the impact of business decisions on biodiversity and sustainability, the role of corporate values in guiding strategy and the potential for innovation in sustainability. Students will explore Grupo Inca’s role in the decline of black alpacas, assess the ethical implications of the company’s actions and develop strategic recommendations through scenario planning. The accompanying teaching note also covers methods to leverage AI tools to generate ideas and explore solutions that enhance students’ learning.

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