Putting knowledge into action with the IMD Case of the Month series

From major multinationals like Nestlé to family businesses like Firmenich, IMD’s cases serve as a key learning tool for senior executives worldwide. Highlighting the work of IMD faculty, the cases – both new and classic – take on topics including strategy, leadership, general management and sustainability in a diverse range of organizations.
The “Case of the Month” appears the first Monday of every month and is explored with a highlights video and executive summary of the lessons learned as well as the insights garnered from this specialized research.

The case method is an established pedagogical tool that boots real-life decision-making as well as business and management theory, while at the same time helping to develop a wide range of vital skills. These include negotiation, analysis, team and individual work, and avoiding making decisions based on too little information.

Throughout its long history, IMD has been at the forefront of case writing and teaching; the institute’s cases have unique international focus and serve as a timeless tool for developing the leadership capabilities of executives and participants.

Creation of a new European Super League: dilemma or opportunity for FC Bayern Munich?

July Case of the Month, by Adjunct Professor Jim Pulcarno, Quoc-An Dinh, Pranav Shashank Khot, Marco Plattner, Anil Sonmez and Ivan Sokolov.

When chairman of Bayern Munich and honorary chairman of the European Club Association (ECA) Karl-Heinz Rummenigge became caught up in a push for the creation of a breakaway European Super League, he found himself with a conflict of interest, both personally and for his beloved club.

Should he avoid rocking the boat and maintain his current position as respected pillar of the ECA and UEFA, or should he join forces with other elite European clubs in pushing for the new league and thereby potentially increase revenues for his club?

Bayern Munich’s revenues were primarily generated from commercial activities, broadcasting rights and match days.

Bayern’s stakeholders included the German National Federation (a member of UEFA who was in turn a member of FIFA), the ECA, commercial stakeholders; including club sponsors, sponsors and broadcasters of the Bundesliga and UEFA Champions League (UCL), players and their agents and the club’s fans.

Bayern’s revenues – which grew from €166 million ($ 206 million) in 2003/04 to €750 million in 2018/19 – were very much dependent on continued success on the pitch, which depended in turn on the ability to attract and retain the best players and staff. If the club was to maintain its current business model, while still staying competitive against major European rivals like Chelsea and Manchester City, who were often financed by foreign investment from Russia and the Middle East, the club would have to find ways of further increasing their revenue.

But doing so via brand awareness and marketing, improving broadcasting deals and match day revenues was not without its complications, and these would all require additional funding.

It seemed that the only way Bayern Munich could substantially increase revenues would be by changing the rules of the game or negotiating a better deal with UEFA. Both of these options placed Rummenigge in an awkward position.

Ultimately Rummenigge would have to weigh up his responsibility as chairman of Bayern Munich – to guarantee the clubs continuing financial profitability and success on the field – with his roles within the various European football committees and organizations of which he was a part. He would need to consider the positions and possible actions of the stakeholders of all concerned.

We all know how this ended. In April 2021 the formation of a Super League was announced by way of a press release on behalf of 12 participating clubs, excluding Bayern Munich. 48 hours later the plan was thrown out. Whether by coincidence or design, UEFA has implemented changes that benefit the big clubs and that are likely to see them increase their revenue. But with the desire for a super league seeming to persist, it remains to be seen how things play out and on which side of the fence Bayern Munich will fall.

ECOALF: because there is no planet B

June Case of the Month, by Thomas Brochier, Professor Benoit Leleux.

In 2010 entrepreneurially-minded Javier Goyeneche set off on a mission to “transform what others call waste into amazing products.”

ECOALF, a truly sustainable fashion brand that sources its raw materials from recycled products harvested from the ocean, officially launched in 2012, with € 2 million raised from family and friends, a concept store, showroom and office in Madrid.

ECOALF’s selling proposition was to create fashion pieces that were timeless in terms of design and quality and would last as long as they were taken care of (versus the planned obsolescence of fashion in most people’s minds). The company uses mechanical recycling with an emphasis on fishing nets, plastic bottles from the oceans, used tires and coffee recycling in sourcing their raw materials.

While sustainability of the value chain was a challenge at first, as the company scaled suppliers MOQs (minimum order quantities) became less of a concern.

ECOALF’s quest for a new injection of cash in 2016 meant it was time for this start-up to scale up. The company set out to recruit new talent – more specifically professional management with retail experience.

From ECOALF’s initial focus on down jackets, the fashion brand went on to produce a full lifestyle collection – outerwear, swimwear, casual apparel, shoes and accessories.

While the company grew quickly, it nonetheless faced a number of issues and challenges that a fashion start-up in the sustainability sector would expect to face, including:

• How to balance breadth with financial margins and logistical requirements?
• How integral a part the company’s sustainability credentials would play to the brand?
• How would the company handle its own sustainability, when producing more fabric than it needed?
• The ecological issues around producing garments in Asia, transporting and then selling them in Europe.
• Pricing – while garments should be affordable they also needed to be expensive enough to ensure consumers treated them with care over the long term.
• Disappointing sales of ECOALF’s innovation of 2018, the new sneaker in the Ocean Waste collection. While there was an abundance of great media coverage, this wasn’t translating into sales. Was the product too innovative for the market or was there another consumer usage problem they weren’t aware of?
  A limited communication budget.
• Why was the online e-commerce store not performing as expected?
• Should the company expand their product portfolio or focus on a limited set of capsule products that would best symbolize the brand’s sustainability credentials.

While there was no shortage of opportunities, ECOALF had to be cautious not to become overloaded and grow too fast.

SAM100: Will construction robotics disrupt the US bricklaying industry?

May Case of the Month, by Professor Dominique Turpin, Douglas Quackenbos and Martin S. Roth.

SAM (or Semi-Automated Mason) is a bricklaying robot designed and engineered by Construction Robotics, a New York-based company founded in 2011 by Nate Podkaminer and Scott Peters.

Construction Robotics vision was to develop world leading robotics and automation equipment for the construction industry, starting with SAM100, the first commercially available bricklaying robot for onsite masonry construction.

SAM100 launched, to some excitement, in late 2014, even going so far as to win the “World of Concrete’s 2015 Most Innovative Product” award. While market awareness for SAM100 was strong, with videos of the machine in action often making the rounds on social media platforms, the accompanying comments weren’t always positive, with most centering around the “scientific marvel” of the machine and fear of the job losses that would result from its widespread adoption.

After three years in the market, SAM100 still wasn’t meeting sales targets. Scott Peters instructed Rafael Astacio, director of sales, marketing and business development at Construction Robotics, to put together a plan that would turn things around, and fast.

Traditionally, robotics in the construction industry faced an uphill battle, with low rates of acceptance and adoption due to the high cost of initial investment, complexity in operating the machinery and the relative abundance of low-cost labour.

After spending time in the field with the customer base Astacio started to wonder if the machine’s human-sounding name (SAM) could be a contributing factor to the poor sales numbers? And while SAM100 was considerably more expensive than the better-selling MULE, another machine sold by Construction Robotics, MULE buyers often bought multiple machines for a single job, resulting in a similar cash outlay to one SAM100.

Not to mention that the physically challenging demands and long-term physical effects of being a mason meant a shortage of available labour in some parts of the US, which should make SAM100 more attractive in these areas.

All this led to Astacio believing that the SAM100 should be doing better than it was.

After careful consideration Astacio identified the following key areas he would need to address:

• Identify customer segments and select which would be best to target
• Determine how best to generate interest in and adoption of bricklaying automation
• Resolve potential naming issues
• Craft an optimal value proposition that would kickstart both sales and referrals

Climeworks: (A) A Visionary Business to Help Stop Climate Change and (B) Business Modeling – Creating New Market Opportunities

April Case of the Month, by Professor Peter Vogel and Head of Sustainability Natalia Olynec

Christoph Gebald and Jan Wurzbacher founded Climeworks to help resolve the climate change crisis They aim to remove 1% of global CO2 emissions from Earth’s atmosphere by 2025.

Their vision, to capture and sell carbon dioxide, was not only bold, but would require massive company growth, the birth of a new industry and creation of new markets.

Christoph and Jan would need to bring production costs down low enough to allow for the massive rollout required to make their lofty ideal viable, prove that their plan was technologically feasible and create market opportunities for their product.

Roche Diagnostics Belgium: (A) Changing a Winning Formula and (B) Cultural and Digital Transformation

March Case of the Month, by Professors Heather Cairns-Lee and Tawfik Jelassi

Three months after stepping into the role of General Manager at Roche Diagnostics Belgium, Anna-Maria Heuchel-Reinig started to question whether the mature and successful organization was fulfilling its potential. The gap between what Anna witnessed and the organization’s narrative was perplexing.
After a period of questioning and sensemaking of whether to change a ‘winning formula’, Anna set a number of clear goals and priorities that would initiate the organization’s transformation.

The intensive cultural and digital transformation program had the ultimate goal of readying RDB to become more agile and a more customer-centric organization.