Welcome to teachers’ elections, offering a cured selection of FT articles and so that the faculty of the Business School connects the classrooms with current events and develop the critical thinking of students.
Read all presentations in www.ft.com/bschoolpicks. Save this link in Myft to receive emails that alert each new edition. Look for the relevant topics to illustrate the teaching points.
Comments or contributions? Contact bschool@ft.com.
International Commercial Strategy
Apple proposes the Indonesian factory in the offer to reverse the prohibition of the iPhone 16
Tags: Technology, foreign direct involvement, local content requirements, Indonesia
Summary: Indonesia has imposed a local content requirement of 40 percent (CSF) on smartphones, and has prohibited sales of iPhone 16 due to Apple’s failure. Politics aims to boost local manufacturing, increase job creation and reduce import dependence. Initially, Apple offered to invest $ 10 million, then raising it to $ 1 billion, for an airplane plant, but Indonesia insisted that investments should contribute directly to iPhone production. Although CSFs can foster national industries, they can also deter direct foreign investment by increasing costs and regulatory uncertainty.
Classroom application: This example allows students to examine the role of local content policies in the configuration of investment decisions, exploring whether such regulations encourage industrial growth or act as barriers to trade. The faculty can also guide discussions about Apple’s strategic options: compliance, negotiation or output of the Indonesian market.
Questions
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What are the local content requirements and how do they affect foreign direct investment?
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What economic and political objectives are trying to achieve Indonesia by enforcing their local content requirement of 40 percent?
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Does the investment proposal of $ 1 billion of Apple align with the intention of the local content requirements of Indonesia? Why/why not?
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Taking into account the local content requirements in Indonesia, evaluate whether to enter a joint business (JV) would be a sensible strategy for Apple. What are the potential opportunities and challenges that could face? Does this strategy align with its long -term objectives in the Indonesian market?
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What lessons offers Apple’s experience for multinational companies entering markets with strong regulatory environments?
Geopolitics, global supply chains
Apple hires workers in India, since it seems to open the first flagship stores
‘A shot on the other side of the arch’: how the geopolitics threatens Apple’s dependence on China
Tags: Geopolitics, relations with US-China, China, Apple
Summary: In the midst of the growing tensions of US-China, Apple faces increasing challenges in China, where it manufactures most of its products and generates almost 20 percent of its global sales. A prohibition of the recent government of iPhones in certain agencies indicates the growing economic nationalism of Beijing and strategic reprisals against the restrictions of the United States to Chinese technology companies such as Huawei. In response, Apple is accelerating its diversification of the supply chain, changing production to India and Vietnam to mitigate the risks. The case highlights how geopolitical tensions are restructuring global trade and the strategic problems faced by multinational corporations in the host markets.
Classroom application: This case allows students to explore the effects of geopolitical risk in the multinational corporate strategy, focusing on the changes in the Apple supply chain and the risks of excessive dependence on a single market. The faculty can facilitate the debates on whether Apple should completely decoup from China or maintain strategic commitment, comparing it with other companies such as Tesla, Samsung and Tiktok that have faced similar dilemmas.
Questions
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What are the key promoters of Apple’s diversification strategy away from China and why is India an attractive destination?
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What does the phrase “an opportunity through the arch” imply on the nature of China’s response? Is China aimed at Apple specifically?
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What are the long-term implications for global supply chains if US-China tensions continue to increase?
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How do India’s ambitions see each other a global manufacturing center affected by its restrictions on direct foreign investment and bottlenecks in the processing of visas of Chinese technological workers, which according to the representatives of the Indian industry is “Critical for the development of the electronic industry” and the “”Skills flow“? What challenges do these policies pose for multinational corporations that change production from China?
Mohamed GenawiProfessor, Manchester Metropolitan University Business School
Microeconomics
Spotify reports the first annual gain as premium subscriber numbers increases
Tags: Microeconomics, price fixation power, profitability, transmission, music
Summary: Sixteen years after launch, Spotify published its first annual operational benefit. With 11 percent more customers who pay and a higher income per user, the company achieved a 16 percent increase in revenues. Pointing out new features, such as uninterrupted video podcasts, as well as personalized products, Spotify executive director Daniel EK is optimistic about continuous growth and improvement in margins in the future.
Classroom application: This article provides an opportunity for teachers and students to analyze the challenges to profitability in a high growth technology industry.
Questions
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Why did it take so much in Spotify to finally make a profits?
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What is the company’s greatest threat to profitability?
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Are cost cuts or innovative characteristics, such as personalized reproduction lists and videos of videos to be profitable?
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What logic supported Spotify’s decision from 2020 onwards to invest substantial amounts in podcasts?
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What lessons could I learn Spotify from Netflix, a company that is worth three times more and achieving an operational gain seven times larger?
Stefan LeggeProfessor, University of St Gallen
Automation
ISU’s self -service lesson for retailers about what robots do better
Tags: Automation, consumer behavior, human contact points, retail sale, customer service, data, leadership, differentiation, food sector
Summary: At a time when automation is increasing throughout the service industry and labor costs will increase dramatically, at least in the United Kingdom, the Sushi ITSU chain, famous for its early robotics adoption throughout the service experience To the client, he has announced that he must present more human services contact points in his restaurants. Founder Julian Metcalfe recently stated: “I think we have adopted technology too fast.”
Application: This can serve as a mini case study for discussion on the issues of human service experience in front of the machine; Client trip optimization (including the ability to collect different types of data at different contact points); Changes in consumer behavior in an increasingly automated world; human interaction as a differentiating factor in an automated world; and the power of bold and bold leadership decisions. The instructors must be creative in the way they use the questions below: organize a debate between two sides of the argument for or against more human interaction, playing the role of service employees in ITSU restaurants, designing a Training program for new service employees, etc.
Questions
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What do you have to win by putting more employees in your restaurants? How would each of these elements become economic value for STIs? How would you build a business case to present ITSU leadership team?
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How could you understand which specific contact points on the trip of a client’s restaurant would benefit from more human interaction and less machine? What steps would you take if they charged you to explore this question?
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Does the increase in human interaction offer an opportunity for a service brand to differentiate in the market? How could that be done? Do you think that the additional cost of hiring more service employees should be reflected in higher prices, or is there another way to cover additional costs?
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Thinking about your personal experience as a consumer, do you agree with Metcalfe that technology may have been adopted too fast throughout the service sector in general? Provide arguments for your views
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What other service environments would benefit from some rethinking of the machine/human relationship? How would you build the business case for this change if you submit it to the company’s executive team?
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How would you characterize Julian Metcalfe’s decision? What suggests this decision about your leadership skills? What are some of the immediate results and how would you characterize them by the positioning of their account and ITSU in an ethnic food market crowded?
Marie TaillardFaculty Chief, ESCP
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