Case Study :1

Today, Apple exemplifies strong ecosystem connectedness and cause-and-effect

understanding of their brands, products, and services in the marketplace, but the value
propositions for Apple and all companies are a continual challenge .Tim Cook was the COO
of Apple when they launched the iPhone in 2007 , he shut down Apple’s own manufacturing
and factory units and outsourced the production processes to other companies like Foxconn
Ltd .90% of Apple’s current market cap was added after Tim Cook took over as the CEO in
2011 . In 2011 , Apple had a market cap of 350 Billion compared to their market cap at 3.48
trillion $ now. When Apple launched iCloud, it enabled the development of the Apple
ecosystem, allowing all Apple products to interact with each other. This integration is
seamless because both the hardware and software are designed by Apple. Apple announced in
2023 that it will become a carbon-neutral company by 2030. This will be achieved through
innovations in: • Clean Electricity: Increased electricity consumption through its electricity
generated by renewable energy. Apple has implemented the 'Radiansolar project' in Brown
County, Texas. • Innovation in Materials: Increased use of recycled materials. All products
will have more than 30% recycled material by weight. The Apple Watch series 9 uses 100%
recycled materials in many of its components, such as gold in plating, rare earth element
magnets, and copper foil in the main logic board. • Low-Carbon Shipping: Shipping an Apple
product by ocean emits 95% less CO2 than shipping by air. This initiative was introduced for
the Apple Watch, with 50% or more of the total weight of all carbon-neutral Apple Watches
being transported via ocean shipping. Apple creatingSamsung already supplies OLED panels
for iPhones. Now, Apple is planning to shift even MacBooks and iPads to OLEDs. Samsung
will start offering Apple TV and iTunes on Samsung Smart TVs. Customers with Samsung
TVs can download movies and apps from iTunes to their devices and stream them.

Q1) Explain Apple’s global value creation strategy to enhance customer satisfaction, foster
sustainability and create value for all its stake holders ?
Reading Material: PPT Apple Case Study
Sample Solution :
Introduction
In the ever-evolving landscape of technology, Apple stands as a beacon of innovation and
design, captivating consumers worldwide with its sleek products and user-centric approach.
With a global presence spanning over 150 countries and an estimated $383.29 billion in
revenue in 2023, according to Statista, Apple’s success is a testament to its astute global
strategy, a harmonious blend of differentiation, adaptability, and unwavering commitment to
quality. Apple was founded by Ronald Wayne , Steve Wosniac and Ronald Wayne in 1978
and Steve Jobs pioneered apples global value creation strategy . Apple created future profits
and growth not by exploiting existing demand, but by reconstructing industry boundaries to
create new market space and unlock latent demand. As a result, the company's value grew
exponentially as the total market value of a firm reflects not only today's performance but
also its future profitability. Under CEO Tim Cook, Apple became the first trillion dollar
market cap company, the first two trillion dollar company, and the first three trillion dollar
company. Since the COVID pandemic, Apple gained over 20% of the world smartphone
market and 50% of the U.S. market, making Apple the largest seller of smartphones in 2023.
Apple’s services revenues were exploding while it was actively diversifying its product line,
introducing their first spatial computer called the Vision Pro in June 2023. At the same time,
Apple was facing headwinds: smartphones were maturing in developed economies, revenues
were dependent on premium pricing for the iPhone, services were closely tied to iPhone
sales, and a new wave of regulations in the U.S., China, and Europe were casting a shadow
on Apple’s future.
I) Apple Global Value Creation Strategy
1. Global Retail Presence: Markets like Vietnam, India and Indonesia are becoming
more important for Apple as its growth in developed markets, including China, slows
down, prompting the company to focus on places where it’s traditionally been less
active. For decades, China was central to Apple’s extraordinary ascent to become
the most valuable company on Earth, serving as a backbone for both its production
and consumption. While the country remains key to Apple’s operations, the tech giant
is now hedging its bets Apple achieved all-time records in Mexico, Indonesia, the
Philippines, Saudi Arabia, Turkey and the UAE, as well as a number of March quarter
records, including in Brazil, Malaysia and India.
2. Focus on Customer Experience: Apple customer experience vision has consistently
invested in redesigning its products to customer-centric features. Apple customer
experience vision has consistently invested in redesigning its products to customer-
centric features. Apple's products are user-friendly and intuitive because of the brand's
inventive, clean, and straightforward design. The executive team at Apple has focused
its attention on consumer satisfaction levels for items like iPads, laptops, and
smartphones. For the purpose of perfecting the Apple customer experience vision, the
design team pays close attention to every detail. In order to maximize Apple's
customer experience strategy, the teams are focusing on the emotions of the prospects.
3. Apple Operates on the basis of a functional expertise: Apple relies on a structure
that centers on functional expertise. Its fundamental belief is that those with the most
expertise and experience in a domain should have decision rights for that domain.
This is based on two views: First, Apple competes in markets where the rates of
technological change and disruption are high, so it must rely on the judgment and
intuition of people with deep knowledge of the technologies responsible for
disruption. Long before it can get market feedback and solid market forecasts, the
company must make bets about which technologies and designs are likely to succeed
in smartphones, computers, and so on. Relying on technical experts rather than
general managers increases the odds that those bets will pay off.
4. Apple Eco system : Thanks to services such as iCloud, airplay, and airdrop, one can
start a task in on one Apple device and continue it on another and there is no need to
download or install anything. Moreover, Apple ecosystem offers features like
AirDrop, iMessage, and FaceTime on macOS; unlocking a Mac laptop with an Apple
Watch; or auto-pairing and finding lost AirPods, and the list goes on. Today, Apple
ecosystem is widely considered to be the best in the industry, and arguably in the
world.Theoretically, no one has to get locked into Apple ecosystem and you can
purchase and use only one Apple product; nevertheless, pairing different Apple
products can offers advanced user convenience and functionalities. For example, if
you use iPhone and Mac, you can get phone calls to your computer even when your
 iPhone is nowhere near you and you can also send and receive phone text messages
on your Mac.In other words, to make the most of an iPhone, you will have to use an
Apple computer, like a MacBook Air or a MacBook Pro. You can also use your Apple
watch to unlock your Mac, play music on your phone and then tap your HomePod
mini to play the music and receiving iMessages on all of your Apple devices. Using
iCloud data synching you can continue where you left off from one device to another,
you can seamlessly switch between devices during FaceTime call.
II)Apple Sustainability Strategy :
Under CEO Tim Cook, Apple became the first trillion dollar market cap company, the
first two trillion dollar company, and the first three trillion dollar company. Since the
COVID pandemic, Apple gained over 20% of the world smartphone market and 50%
of the U.S. market, making Apple the largest seller of smartphones in 2023. Apple’s
services revenues were exploding while it was actively diversifying its product line,
introducing their first spatial computer called the Vision Pro in June 2023. At the same
time, Apple was facing headwinds: smartphones were maturing in developed
economies, revenues were dependent on premium pricing for the iPhone, services
were closely tied to iPhone sales, and a new wave of regulations in the U.S., China,
and Europe were casting a shadow on Apple’s future
 The tech giant said 300 of its suppliers have committed to using 100% clean
energy by 2030 when manufacturing for the company. The commitments will help the
company decarbonize its supply chain and reach its goal of having a fully carbon-
neutral product lineup by the end of the decade, according to a September
announcement.
 The consumer electronics company also released its first carbon-neutral products
earlier in the quarter, with the newest Apple Watches designed to reduce product
emissions by over 75% for every carbon-neutral watch made.
 Apple first announced its 2030 goal of 100% carbon neutrality in its product
manufacturing and supply chain in 2020. Cook’s update represents an increase in
clean energy supply chain commitments compared to initiatives outlined in its 2023
Environmental Progress Report released in March. At the time, 250 suppliers
representing over 85% of the company’s manufacturing costs had signed onto its
Supplier Clean Energy Program.
 Apple creating value for all its stake holders
I. Consumers
Apple prioritizes customer satisfaction and loyalty through continuous innovation and
engagement:
Product Innovation: The launch of the M4 chip in 2024 and enhancements to existing
products like the iPhone and iPad demonstrate Apple's commitment to delivering cutting-
edge technology. In 2024, Apple and Samsung received an American customer satisfaction
index score of 81 and 82 out of 100 for cellular telephone/smartphone manufacturers/brands
in the United States. Those were the highest scores when compared to other companies.
Customer Engagement: Apple actively engages with consumers through social media and
customer service channels, gathering feedback to improve products and services. This
engagement fosters brand loyalty and encourages repeat business and fortifies the Apple
Ecosystem .
2. Employees : Apple is possibly “the greatest, most visible example of a fully engaged
company.” Apple employees are happy to show up for work, primarily because they believe
that they are doing the kind of work that “matters and has an impact on the world”

Case Study 2: https://hbr.org/2024/08/keep-strategy-simple?ab=HP-latest-text-8

At first, McDonald’s path into India was fraught with missteps. First, there was the nonbeef
burger made with mutton. But the science was off: mutton is 5% fat (beef is 25% fat), making
it rubbery and dry. Then there was the French fry debacle. McDonald’s started off using
potatoes grown in India, but the local variety had too much water content, making the fries
soggy. Chicken kabab burgers? Sounds like a winner except that they were skewered by
consumers. Salad sandwiches were another flop: Indians prefer cooked foods. If that was not
enough, in May 2001, the company was picketed by protesters after reports surfaced in the
United States that the chain’s fries were injected with beef extracts to boost flavor—a serious
infraction for vegetarians. McDonald’s executives in India denied the charges, claiming their
fries were different from those sold in America. Next, the Indian executives embarked on
basic-menu research and development (R&D). After awhile, they hit on a veggie burger with
a name Indians could understand: the McAloo Tikki (an “aloo tikki” is a cheap potato cake
locals buy from roadside vendors).
The lesson in the McDonald’s India case: local input matters. Today, 70% of the menu is
designed to suit Indians: the Paneer Salsa Wrap, the Chicken Maharaja Mac, the Veg
McCurry Pan. The McAloo, by far the best-selling product, also is being shipped to
McDonald’s in the Middle East, where potato dishes are popular. And in India, it does double
duty: it not only appeals to the masses; it is also a hit with the country’s 200 million
vegetarians.
Another lesson learned from the McDonald’s case: vegetarian items should not come into
contact with nonvegetarian products or ingredients. Walk into any Indian McDonald’s and
you will find half of the employees wearing green aprons and the other half in red. Those in
green handle vegetarian orders. The red-clad ones serve nonvegetarians. It is a separation that
extends throughout the restaurant and its supply chain. Each restaurant’s grills, refrigerators,
and storage areas are designated as “veg” or “non-veg.” At the Vista Processed Foods plant,
at every turn, managers stressed the “non-veg” side was in one part of the facility, and the
“vegetarian only” section was in another. As another example of positioning, also from a
well-known brand, catch this glimpse of McDonalds positioning on customer service: “For
individuals looking for a quick-service restaurant with an exceptional customer experience.”
Note that it is a position of the company not an action by an individual or an activity of a
department. McDonalds sees this as a key ingredient to its competitive edge. The protagonist
is Chris Kempczinski, CEO of McDonald's Corporation. McDonald's is the world's largest
hamburger fast-food restaurant chain, with 40,000 restaurants in over 100 countries, $23
billion in annual revenue, and a net income of $6 billion. Since being appointed CEO in
2019, Kempczinski launched the Accelerating the Arches strategic initiative (MCD, also the
ticker symbol): maximize our Marketing, commit to the Core Menu, and double down on the
4 Ds of delivery, digital, drive-thru, and development. Although McDonald's has significantly
outperformed the broader stock market for most of the past decade, Kempinski wonders how
long this can last. McDonald's faces significant headwinds, including recessionary pressure,
high inflation, supply chain problems, rising wages, and significant labor shortages.
Q2) Explain how Mc Donalds has adapted its business model in different geographic market
segments ? Explain the AAA framework in detail .

Sample Solution :AAA framework

The adaptation–aggregation–arbitrage (AAA) typology was developed by Pankaj Ghemawat
(2007) and demonstrates how managers can take advantage of heterogeneity between
international markets. Instead of framing international strategy development around the
challenge to find the right balance between local responsiveness and economies of scale, and
instead of assuming that global economies of scale are indicative of global strategies,
Ghemawat encourages managers to view heterogeneity as an opportunity. This can be
achieved by focusing on the revenue and market share potential connected to adaptation,
aggregation and arbitrage.
Adaptation seeks to increase profitability and market share through maximizing the local
relevance of the firm. The creation of largely autonomous subsidiaries in each national
market that manage their own supply chain would be an example. This strategy is frequently
used by firms in the early stages of their international expansion. Aggregation refers to
standardization of production or services, grouping of activities, or limiting of the offering,
and leads to economies of scale or scope. Arbitrage seeks to exploit national or regional
differences through locating separate parts of the value chain in different countries. This can
lead to corporate networks with IT centers in one country, manufacturing units in other
countries, and marketing or finance units located in still different geographies. While each
“A” stands for one type of strategy, any combination of two As, or all As, is possible. That
said, companies will usually prioritize one of the As, as any combination of two or three As
increases managerial complexity.
The reason for an increase in managerial complexity can be traced back to the classic
principle proposed by Chandler (1962) that structure follows strategy. Thus, a company
opting for an adaptation strategy most likely requires country-centered organizational units
with considerable decision-making autonomy. In contrast, companies opting for
an aggregation strategy tend to require an organizational structure with strong cross-
country coordination remits, such as global headquarters, global business units, global
product divisions, a global account management and the like. Finally, an arbitration
strategy is usually associated with functional organizational structures that can manage
vertical relationships in order to balance different demands within a supply chain.
Ghemawat refers to the AAA triangle when depicting the interplay between the three global
strategies. The AAA triangle turns his typology into a diagnostic tool, which guides
managers in assessing the importance of adaptation, aggregation and arbitration for their
respective settings. More specifically, he suggests looking at three ratios: advertising-to-sales,
R&D-to-sales and labor-to-sales. A company with a high advertising-to-sales ratio, such as a
fast-moving consumer good company, will most likely favor an adaptation strategy. When the
R&D-to-sales ratio is high, companies need to spread the R&D investments over large
volumes, i.e., need to achieve economies of scale through pursuing an aggregation strategy.
Finally, companies with a high labor-to-sales ratio may seek to take advantage of labor cost
differentials between countries and explore the merits of an arbitrage strategy. In this context,
it is interesting to observe how recent political and health crises led companies to question
their intense focus on the pursuit of cost advantages through labor-cost arbitrage. Instead, a
more balanced approach between efficiency and security of supply chains has become the
motto of the day. It has also been pointed out that advances in manufacturing technologies,
such as robotics, will lead to a further decline in the importance of labor-cost arbitrage.

MC Donalds Adaptation strategy:

Introduction

The American fast food franchise McDonald's was established in San Bernardino, California,
in 1940. One of the biggest (QSR) chains in the world, it serves 69 million people every day
across 119 countries. Along with other well-liked menu items including chicken nuggets,
salads, and breakfast items, McDonald's is well-known for its hamburgers, fries, and shakes.
The business uses a franchise system, in which individual franchisees run their own
McDonald's restaurants with the help and oversight of the corporate headquarters.
McDonald's is a well-known brand that has a sizable global following in the fast-food sector.
The following report is going to provide a thorough analysis on the Marketing Strategy of the
company and its different segmentation, Target market of the company and its market
positioning, we will also do a thorough analysis of the Political, Economic, Technological,
Legal and Environmental factors of the company, side by side we will also see various
operational challenges and post Covid Impact on the Organization and lastly we will be
looking into the various competitive advantages of the organization.
Adapting to price sensitive markets:
Their "Extra Value Meals," which provide clients with a bundled meal at a lower cost than
purchasing each item separately, is one of their primary pricing tactics. Their "Extra Value
Meals," which provide clients with a bundled meal at a lower cost than purchasing each item
separately, is one of their primary pricing tactics, thus customers feel that they receive a
better value for the money they are paying .
Geographic Market segmentation
Geographic segmentation is a marketing strategy that involves dividing a market into smaller
groups based on geographic location. This approach helps businesses tailor their marketing
efforts to specific regions, considering local preferences and cultural differences. Here's an
overview of the advantages and disadvantages of geographic segmentation:
McDonald's offers eateries in a variety of places, including shopping centres, airports, and
residential neighbourhoods. Also, the business customises its menu to suit regional tastes and
inclinations, such as by serving McArabia sandwiches throughout the Middle East.
McDonald's has successfully used geographic segmentation to target specific regions. For
example, in India, McDonald's offers a range of vegetarian options, such as the McAloo Tikki
burger, to cater to the country's large vegetarian population. In the Middle East, McDonald's
offers halal-certified food to cater to the religious dietary restrictions of the region.
Not only does geographic segmentation inform their menu items but it also informs their
marketing approach. In different regions around the world, McDonald's tailors their
advertising messages to local preferences and cultural differences.
For example, in the UK, McDonald's has a "Great Tastes of the World" campaign that offers
limited-time menu items inspired by different countries around the world. The campaign
includes advertisements that highlight the unique flavours and ingredients of each menu item
and is designed to appeal to UK consumers' love of international cuisine.
In contrast, in India, McDonald's has a "McAloo Tikki" campaign that promotes their
vegetarian options. The campaign includes advertisements that emphasise the Indian-ness of
the McAloo Tikki burger and is designed to appeal to India's large vegetarian population.
By tailoring their advertising campaigns to local tastes and preferences, McDonald's can
create more targeted and effective marketing messages. This helps the company build
stronger relationships with customers in different regions and improve their overall brand
awareness and loyalty.
Behavioural Market segmentation:
To appeal to the distinct buying habits and preferences of Indian consumers, McDonald's has
modified its menu and marketing tactics.Within the Indian market, they identify a number of
crucial segments, such as: o Vegetarians: Due to religious or cultural convictions, a sizable
portion of the population in India is vegetarian. For vegetarians, McDonald's has created a
special menu with dishes like the McAloo Tikki burger (made with a potato-based patty) and
the McVeggie burger (made with a vegetable-based patty). o Young urban consumers: For
young consumers in India's metropolitan areas, McDonald's has positioned itself as a stylish,
aspirational brand. The McAloo Tikki wrap and the McChicken Maharaja burger, which
feature regional flavours and ingredients, have been added to the menu.
Localisation
In the 1970s and 1980s, globalisation allowed them to sell the ‘American Dream’
internationally. They supplemented this by adapting ‘to the social context of each country by
franchising to local entrepreneurs.’
There are items on the menu in Japanese McDonald’s that you don’t find in the UK,
including the Grand Teriyaki Burger, Shrimp Filet and the Pork and Ginger Burger. In
Britain, their marketing focuses on ingredients, pushing the 100% Irish and British beef label.
With the shift towards healthy eating in recent years, they have once again pivoted by
expanding their product portfolio. McDonald’s now offer good quality coffee and healthy
drink options, taking on Starbucks’ ascendency.
Throughout all this, consistency has been a byword – the brand is instantly recognisable and
has a specific aesthetic, from their advertising to their physical restaurants.
For example, McDonald’s strategy in Japan is much different than it is in the U.S. “Initially,
McDonald’s in Japan retained the menu for the U.S. market. However, it gradually rolled out
new menu items such as the Rice Burger, Seaweed Shaker, Teriyaki Burger, Ebi (shrimp)
burger, green tea milkshakes, and ice cream to cater to Japanese preferences. Even the
product sizes are different in Japan than in the Americas. For instance, a large drink container
at a McDonald’s in Japan is significantly smaller than that in the U.S.” (catalystagents.com,
2020). In Germany, meat and beer are major components of the average consumer’s daily
diet. Therefore, McDonald’s created a burger that combines beef with Nürnberger sausages
and began to offer beer in their German locations
In India, McDonald’s customized menu offerings to cater to consumer preferences by
replacing beef with chicken, being that the majority of the Indian population consider cows as
sacred animals. McDonald’s also tried to appeal to vegetarians by creating more vegetarian-
friendly options such as the McAllo Tikki, Masala Grilled Veggie Burger, and McVeggie.
Overall, in order to be a successful global brand, organizations need to cater to the unique
cultures they are targeting while retaining their brand integrity. Despite McDonald’s global
brand recognition and cross-cultural marketing strategies, Mcdonald’s has continued to
provide its consumers with the same experience wherever they are in the world.

Increasing Strategic scope and strategic strength of the brand

As a fast-food restaurant, it can be hard to pin down a specific target audience. That’s why
McDonald’s has, since the start, looked to find ways to market themselves as a great option
for all ages, i.e. “the entire family. Options like the Happy Meal alongside bigger packages
and portion sizes make it easy for anyone who is hungry to turn to McDonald’s as a solution,
big or small.” Another driver of McDonald’s continued success is its commitment to its core
product offerings. This trend started way back with the original McDonald brothers, who
served an extremely limited menu so they could create high-quality products and quick
service times for all of their products.
Navigating through VUCA times and well informed consumers:
A major turning point for McDonald’s was the release of “Super Size Me,” which opened
many people’s eyes to the damaging effects of a diet relying on processed food like
McDonald’s. In response to this major PR issue McDonald’s expanded its menu to include
more health-conscious options. The company began publishing nutrition information on its
menu and products
Conclusion
Thus McDonald’s adapted to the Changning demands of the different markets and navigated
through VUCA problems highlighting the significance of the Adaptation strategy.
Case Study 3 :
US retail giant Walmart has signed a definitive agreement to acquire a 77% stake in India’s
largest e-commerce marketplace Flipkart with an investment of around $16 billion, making it
the largest transaction in the history of the online retail space globally. The deal, which wiped
away $10 billion of Walmart’s market capitalization as investors reacted negatively in early
morning trade on the New York Stock Exchange, stands out for several exits. The biggest was
Sachin Bansal selling his entire 5.96% stake for $1.23 billion and parting ways with Flipkart
that he had founded in 2007 along with a friend from IIT, Binny Bansal (not related). Sachin
was nowhere around at the Flipkart campus when the Walmart top team led by CEO Doug
McMillon addressed employees in a town hall meeting. Another significant exit is that of Soft
Bank, the largest investor in Flipkart. In a strange coincidence, the deal, valuing Flipkart at
$20.8 billion, was announced to the world by Soft Bank Chief Executive Masayoshi Son in a
webinar with investors hours before Walmart did so. He also confirmed that Soft Bank would
get about $4 billion from its $2.5-billion investment in Flipkart last August. Flipkart’s
valuation at $20.8 billion is a 75% increase over its previous valuation in the range of $11–12
billion last August. Out of the $16-billion investment, Walmart will put in $2 billion in new
equity funding, while the rest will be utilized to acquire stakes of existing investors in the
Bengaluru-based company. The case study focuses on Effect of regulatory restrictions in
Indian Ecommerce Markets for Global MNCs.

Q) Highlight Problems faced by Flipkart in the advent of VUCA times and Strategies
devised by Walmart to acquire Flipkart .
Sample Solution:
Walmart had first held talks with Flipkart in late 2016 with respect to acquiring a stake
in Flipkart, however Flipkart executives were convinced that Walmart was not serious
enough about investing in the company.
- From 2016 onwards as Amazon got aggressive in India losses at Flipkart started
mounting.
- Private Equity Fires Tiger Global held about stake in 4% stake in the company,
Flipkart bet by Tiger Global, looked in deep trouble and was losing ground to
Amazon.
- Eventually, Private equity Investors like Soft Bank, Ten Cent, Ebay, Tiger Global etc
took away the executive control of Flipkart from the founders Sachin& Binny Bansal.
They were sidestepped and Tiger global brought its own executive Mr. Kalyan
Krishna Murthy who was then ear marked to be the CEO of Flipkart.
- A year after Flipkart passed up on the investment proposed by Walmart. Walmart
proposed by interest, intention to acquire a majority stake in Flipkart.
- In 2017, Flipkart had raised 3 Billion $ into two financing rounds of from SoftBank,
Ten Cents, Microsoft & Ebay.
- Tiger Global had a dream of exiting Flipkart with a valuation of 50-100 billion $
however, due to mounting losses it was evidently
clear that Flipkart valuation would
be 2 much lower.
- Tiger Global then persuaded other private equity players including Soft Bank to let
the new CEO Kalyan Krishna Murthy to start talks with Walmart.
- From this we can analyse that commercial negotiations are often initiated at times of
necessity Walmart wanted a presence in India, Flipkart wanted a strong promoter &
private equity players wanted a profitable exit.
Win Win-Negotiation Strategy
- Amazon founder & CED at that time Mr Jeff Bezos spoke to Flipkart & Soft Bank
about the sale however Private Equity Investment Firms were convinced that a
Flipkart & Amazon combination would face regulatory hurdles.
- Google’s offer of 16 billion $ was considered too low and was declined.
- Further negotiations including the CEO of Walmart Dough Mackmillon, M&A Head
Emiley McNeal and International CEO Judith Mckenna visited Bengaluru to hold talks
with Flipkart executives.
- Flipkart executive chairman Sachin Bansal, asked for a bigger role after the sale, he
also asked for stronger rights in the new entity, however, Flipkart CEO + private
equity players opposed Bansal ‘s demand, misled to the ouster of one of the
best entrepreneurs from the firm he co-founded nearly 11 years ago.
- Walmart acquired a 77% controlling stake in Flipkart, the deal valued Flipkart at 21
Billion $.
- The Negotiations were held in a way that it was a win-win situation for all parties
concerned. The founders exited Flipkart and Sachin Bansal got Rs 6,700 Cr for his
stake. All private equity players made a profitable exit
- Walmart as of 31/1/2024 valued Flipkart at 35 Billion $ and as of August 2024 stands at 37
billion $ thereby almost doubling theirgains and gaining a foothold in the growing e-
commerce market.

US retail giant Walmart has increased its stake in Indian e-commerce subsidiary Flipkart as it
paid USD 3.5 billion (around Rs 28,953 crore) to acquire shares from its non-controlling
interest holders in six months to July 31, 2023.Additionally, during the six months ended July
31, 2023, the company received USD 700 million related to new rounds of equity funding for
the company's majority-owned PhonePe subsidiary, said the Bentonville-based retailer in a
US Securities & Exchange Commission (US SEC) filing. "During the six months ended July
31, 2023, the company paid USD 3.5 billion to acquire shares from certain Flipkart
noncontrolling interest holders and After this, Walmart's total holding in the Indian e-
commerce player Flipkart would increase to 80.5 per cent, some reports said .Walmart has
bought a stake from hedge fund Tiger Global and Accel Partners. Besides, the US retail major
also acquired the residual stake of Binny Bansal, Flipkart cofounder. PhonePe is a digital
payments company, in which Walmart has a majority stake following the takeover of parent
outfit Flipkart, which had shifted its headquarters from Singapore to India . Flipkart's Myntra
is the country's largest ecommerce marketplace for fashion and lifestyle products, offering top
brands to customers across India. Myntra now provides access to more than 6,000 brands on
its marketplace. “Both our businesses in India, Flipkart and PhonePe, had strong quarters as
well. A lot of that is driven from just really being close to the customer in those markets and
the combination of value and convenience that we're now able to offer," Walmart
International President & Chief Executive Officer Judith McKenna had said.

.
Case Study 4 :
If one assumes, as an economics textbook might, that consumers routinely calculate
opportunity costs, this anecdote should be revealing. All decisions involve opportunity costs,
but the way consumers reckon them has received little attention from decision theorists and
even less from marketers. Promotional messages often highlight the advantages of one
product over another (A is 50% faster than B; X is $300 cheaper than Y), but spelling out the
implications of those differences may be more persuasive: Price differences can look large or
small, depending on what else one imagines purchasing with that money. An ad by De Beers
did this brilliantly. It depicted two large diamond earrings with the tagline “Redo the kitchen
next year.” Clever. It implied that the cost of the diamonds was merely a slight delay in a
renovation. In fact, if a consumer spent the money reserved for the kitchen on the diamonds,
it might take him or her much more than a year to save that amount again. Investors
commonly neglect opportunity cost. In general, it refers to the hidden cost of failing to take a
different path of action. If a corporation follows a certain business plan without first weighing
the benefits of competing approaches, they may overlook their opportunity costs and the
chance that they could have achieved considerably well if they had chosen differently. The
possible gain that a consumer loses out on by opting one option over another is referred to as
opportunity cost. Since opportunity costs are invisible by nature, it is possible that they might
be ignored. Recognizing the benefits that may be lost when a person or company selects one
asset over another enables more informed decision-making. Simply said, the notion brings up
the point to consider all acceptable options before reaching a choice.
Investors commonly neglect opportunity cost. In general, it refers to the hidden cost of failing
to take a different path of action. If a corporation follows a certain business plan without first
weighing the benefits of competing approaches, they may overlook their opportunity costs
and the chance that they could have achieved considerably well if they had chosen differently.
Where, FO represents foregone option and Co represents chosen option.
When OC is negative, you clearly gain, implying that the option chosen (CO) provides you
with more benefits than the Forgone option (FO). Whereas you lose when OC is positive,
indicating that the Forgone option benefits you more than the CO. When FO and CO provide
the same advantage i.e. FO=CO, there is no loss and no gain.
Knowing if an event, investment, or transaction has a positive or negative OC might help you
make smarter decisions. Positive OC means that choosing the decision you've made may not
benefit you, while negative OC implies that the option you've selected is better than the
alternative you didn't pick. Consider the case of A, an employee who had a stressful week at
his place of work. Assume the weekend is approaching and now he has two choices. He can
binge-watch a popular web series to forget about his job stress or learn a new stress-
management skill. If he goes with Option 1 i.e. binge watching a web series, his foregone
option (FO) is learning a skill. As a result, his opportunity cost is FO - CO.
Simply put, the opportunity cost to his binge viewing is acquiring a skill that might help him
successfully handle stress and improve his work performance in the long term. Therefore, it
can be said that binge watching has a cost as the opportunity cost (OC) is positive.
To conclude, the notion beneath opportunity cost is that your resources as a consumer are
constantly restricted. That is, because you have limited time and other resources, you won't
be able to make most of all the options that come your way. If you choose one, you must
inevitably abandon the others. They can't exist at the same time. Opportunity cost is more
about the decisions you make than it is about money or resources. It's all about remembering
that one action or decision might prevent you from reaping the benefits of other possibilities.
Q) What is opportunity cost ? If you were a management consultant for de beers diamonds
how would you proposition the marketing campaign showcasing opportunity cost benefit the
consumer ?

Opportunity cost refers to the potential benefits an individual misses out on when choosing
one alternative over another. In the context of luxury goods like diamonds, consumers often
weigh their purchases against other significant expenditures, such as home renovations or
travel. By framing our marketing message around this concept, we emphasize that investing
in a diamond is not just a purchase; it’s an investment in a symbol of love and status that can
enhance their overall lifestyle.
Introduction
De Beers, a British multinational corporation founded in 1888 by Cecil Rhodes, played a
pivotal role in shaping the diamond industry. The company was established after the
discovery of large diamond deposits in South Africa, which significantly increased the supply
of diamonds in the market. To maintain the value and rarity of diamonds, De Beers sought to
control the diamond trade by consolidating mines and establishing a monopoly. Prior to the
1930s, diamond rings were rarely given as engagement rings. Opals, rubies, sapphires
and turquoise were deemed much more exotic gems to give as tokens of one's love, according
to the book "Twenty Ads that Shook the World" by James B. Twitchell. Twitchell goes on to
describe how De Beers changed the world diamond market.However, by the early 20th
century, the demand for diamonds began to wane due to various factors, including economic
instability and changing social norms. De Beers needed a new marketing strategy to revive
the interest in diamonds and maintain their high prices.
This led to the birth of the De Beers diamond hoax, a marketing campaign designed to create
an artificial demand for diamonds and elevate their perceived value.

1. Emphasizing Value and Scarcity: De Beers has historically controlled diamond

supply to maintain high prices and create an illusion of rarity. This strategy
reinforces the perception that diamonds are not merely commodities but valuable
assets that signify important life events
. By incorporating this into our tagline, we suggest that while consumers may consider
renovating their kitchens, investing in a diamond is a timeless choice that transcends
immediate trends
2. Targeting Modern Consumers: While the De Beers diamond hoax was undeniably
successful in terms of marketing and profit generation, it has also been met with
criticism and ethical concerns. These include the diamonds’ artificial scarcity and
market manipulation, conflict diamonds and human rights abuses, environmental
impact, and materialism in consumer culture. The current market dynamics show a
shift towards sustainability and ethical sourcing. De Beers has adapted by promoting
its natural diamonds as ethically sourced and sustainable, appealing to millennial
and Gen-Z consumers who prioritize these values. The tagline "You can do the
kitchen up next year" positions diamonds as a priority investment now, while still
allowing for future home improvements.
3. Creating Emotional Connections: Our marketing strategy will build on De Beers'
historical success in linking diamonds with emotional milestones such as
engagements and anniversaries
. By suggesting that consumers can defer other expenditures (like kitchen renovations) for a
year, we create an emotional narrative that elevates the diamond purchase above mere
materialism.
4. Leveraging Global Trends: The global diamond market is recovering from previous
downturns, with increasing demand for natural diamonds amidst declining
production This context allows us to position De Beers diamonds as not only
luxurious but also as wise investments in an appreciating asset, thereby enhancing
their perceived value against other potential expenditures.
5. Innovative Marketing Campaigns: The introduction of new marketing strategies,
such as collaborations with major retailers and targeted campaigns aimed at modern
consumers, will be key to our approach. These campaigns will utilize digital
platforms to reach wider audiences while reinforcing the message that investing in a
diamond today can lead to greater satisfaction than postponing such a meaningful
purchase for future renovations. De Beers may not have realized it at the time, but
their diamond campaigns completely revolutionized the diamond world. Their famous
slogan: ‘A diamond is forever,’ was coined by a young copywriter at the N.W. Ayer
advertising agency, Frances Gerety. This tagline, coupled with major advertisements
created not just a desire, but a need for diamond engagement rings. This marketing
campaign was seeking to create the parallels between a diamond and love. Diamonds
were being pushed as the most romantic purchase a man could make for his lover. In
a 1977 De Beers commercial, we see a black and white video edited with of a couple
on a beach. This beach and home look like it could be straight out of the Hamptons or
Cape Cod, places that are considered as symbols of wealth and status. The only color
throughout the film is when the man proposes with a gold solitaire diamond ring, a
De Beers ring. We then hear the narrator say, and see the words on the screen, “How
else could two months’ salary last forever? A diamond is forever. De Beers.” Not only
are they highly romanticizing the need for a diamond, but they are already putting a
 price tag on it. Men are being told what to spend and women are being told that this
is what they need in order to get engaged and having a loving relationship
6. Debeers and Lab grown diamonds : The recent JCK Las Vegas jewelry show was all
abuzz as De Beers’ CEO Al Cook announced it was pivoting to manufacture lab-
grown diamonds for industrial uses and focusing its jewelry marketing efforts behind
natural, mined diamonds.After testing the waters for six-years with Lightbox lab-
grown diamond (LGD) jewelry and pondering its post-divestiture future as owner
Anglo American spins it off, De Beers figures the economics of LGDs for jewelry
don’t add up.It has drawn a line in the sand to differentiate lab-grown diamonds from
natural stones in the jewelry market and lean into emerging opportunities for LGDs
in advanced technology and industrial applications.
7. Its reboot of the iconic “Diamonds Are Forever” tagline updated for modern
consumers marked the beginning, launched fourth quarter last year in the Seize the
Day campaign. Over 22,000 retailers ran with the campaign’s digital, out-of-home and
print assets that De Beers provided free of charge.
8. De Beers followed by announcing a collaboration with Signet Jewelers, the world’s
largest diamond jewelry retailer, to drive natural diamond demand. A similar
collaboration is in the works in China with Chow Tai Fook, owner of Hearts on Fire,
among other brands.
9. Also in the plan is to scale up the luxury De Beers Jewellers retail brand, now with
about 30 locations and a foothold in 16 markets worldwide. It will also refocus its
Forevermark brand in the Indian market where diamond jewelry demand is growing.
10. To help jewelers make the difference between LGD and natural stones apparently
clear, De Beers just introduced a retail-counter diamond verification device so that
consumers can see inside the stones in real time. The device’s digital screen can also
be used to play promotional and educational videos in support of the retail sales
process.
11. And to keep its supply of natural diamonds flowing, even as natural resources are
dwindling, De Beers is focusing upstream investments in South Africa’s Venetia and
Botswana’s Jwaneng underground mines, and sees potential for additional expansion
in Namibia and Canada. It also is investing in exploration activities in Angola.
12. Reclaiming Diamond Leadership
With De Beers’ future ownership hanging in the balance, Cook is exerting strong
leadership to assure no matter whether it is acquired by a new owner or goes forward with
an IPO, that the company’s strategic path to growth in natural diamonds is assured.
“We are reinventing every part of De Beers to grow value. Through delivery of our
Origins strategy, De Beers will be streamlined, focused and a leader in diamond
technology, provenance and luxury retail. We will recreate the magic of natural diamonds
for modern consumers,” he said in a statement.
“The outlook for natural diamonds is compelling,” he added. Key to realizing that vision,
is to position lab-grown diamonds as poser substitutes for the real thing. And De Beers
alone has the power and influence to draw the red line between LGD and natural stones,
if – a big if – consumers can be swayed.
Disrupt The Disrupter
13. Industry expert Edahn Golan tips his hat. “De Beers is the symbol of the diamond
industry and has a lot going for it. It possesses a unique understanding of the diamond
market and has operations in every aspect of it – from mining through diamond tech
to retail. Its internal knowledge base is unparalleled, and its mining assets are some of
the best and richest around.”
Yet lab-grown diamonds are relentlessly disrupting the jewelry industry. “LGD
pricing is heading south fast, and this is undermining their perceived value,” Golan
observed. “Currently, the key issue here is bridal, where nearly half of the diamond
engagement rings sold in the U.S. last month were set with LGDs.”
With the price of LGDs dropping so fast, Golan foresees a time – and it may not be
too far off – when brides will turn up their noses at an LGD engagement ring. “At
what point will a bride-to-be question if her partner is just too cheap?” he asks.
And De Beers has the answer – give her or him a precious, unique natural diamond.
Since perception is reality in the consumer market, De Beers is determined to shape
that future reality and be there when the tide turns. “We will create value as brilliant
as our diamonds,” Cook concludes.