Sinyi Real Estate in China: The Challenges of Maintaining an Ethical Business Culture

Terence Tsai, Michael N. Young, Bor-shiuan Cheng & Shubo Phillip Liu

Sinyi was one of the most successful real estate agent companies in Taiwan and China mainland. Sinyi’s founder, Chun-chi Chou, embraced Confucian perspective in his management and successfully cultivated a “people-centered” corporate culture for both Sinyi’s employees and customers. Mr. Chou proclaimed “trustworthiness and fair dealing” as the guiding principles for the company. This was in contrast to the immature environment of the real estate brokerage industry in China, where immoral real estate agents were common. Sinyi also signed a master franchise agreement with Coldwell Banker Real Estate Corporation (Coldwell Banker) as its China market entry strategy. However, large international competitors and local real estate agents were aggressively seizing market shares and it became difficult for Sinyi’s to sustain its vision and its unique management style with high-speed expansion. The case highlights the business ethics that has been a cornerstone of Sinyi’s success and outlines competitor and industry conditions in China’s real estate industry, focusing on the following questions: Should Sinyi adhere to its corporate philosophy of righteousness and trustworthiness among its staff? Did Sinyi need to change its business model in countering its competitors’ aggressive moves? What necessary measures must Sinyi take in the ever-changing market? What role did Chou’s responsible leadership play in Taiwan and would it be working in China mainland’s market?

Holista CollTech: Directions for Focused Growth

Adriana Mohd. Rizal, Khairul Akmaliah Adham & Mohd. Fuaad Said

In December 2009, Holista CollTech Ltd. was established as a biotechnology company and its core business was the production of ovine collagen and Kacip Fatimah extracts. The ovine collagen was used mainly in a broad range of food, health supplements, cosmetics, and medical products, while Kacip Fatimah extracts were ingredients for food and supplements products. Holista CollTech’s corporate vision was to be a global player in the multi-billion dollar collagen and herb extract markets. However, it faced fierce competition in the collagen market which was already dominated by a number of large multinational firms, and in the herb extract market in which competition was becoming increasingly intense due to the rising number of imitators. This was a challenging situation for Holista CollTech Ltd. since these competitions could prevent the company from achieving its objective to increase its control in these two markets. This case provides the opportunity to discuss Holista’s competitive environment and internal elements. The case analyst will recommend appropriate strategies to the newly appointed Chief Executive Officer.

Asia-Pacific Hotels International: Managing Short Term Case in the Derivatives Market  

Pat Obi & Jeong Gil Choi

This case deals with a cash management problem for an international hotel establishment based in Seoul, Korea. Although successful in its core hotel operations, the firm has not been as successful in managing its short term cash flow. Part of the firm’s operating and materials costs are in US dollars although all of its operating income are in the local currency, the South Korean won. This imbalance creates a currency risk exposure in the management of the firm’s working capital. To ensure that it has sufficient funds to pay its dollar-denominated costs, the firm is considering the investment in a sizeable amount of dollar-denominated time deposits. Pursuing this strategy, however, involves a two-fold global dimension: First, the firm must determine what exchange rate conditions would make it suitable to invest in dollar-denominated time deposits rather than in the local currency. Second, for any such dollar-denominated short-term investments, the firm must decide when and how to use the facilities of the Eurodollar futures market to hedge the currency risk exposure. The specific approach being considered includes a combined position in Eurodollar time deposits and Eurodollar futures contract. This case presents an opportunity to learn how firms can successfully combine short-term investments in a foreign currency-denominated time deposit with positions in the derivatives markets, the aim of which is to manage exposure to currency risk.

Oman National Dairy Products: The Rise and Fall of a Well-Known Company from the Arabian Gulf

Golam Mostafa Khan, Darwish Al Moharby & Yousef Al Busaidi 

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Strategic Planning at Brisbane Airport

Justin Paul & Eva De Groot

The CEO of Brisbane Airport Corporation (BAC), Koen Rooijmans, and his airport planning executive manager, Mark Willey, were preparing strategic plan for BAC's required development projects to facilitate the forecasted future demand of aircraft traffic movements at Brisbane Airport. This forecast, estimated an 80% increase of the total number of passengers who will use the airport by 2012-13. As a consequence, BAC's current facilities would not be sufficient to handle this increase in operations. Therefore, BAC had to expand its airport by constructing new roads, extending its terminals, and building a new runway.
This case takes a look at how BAC's airport planning department implemented its new projects. Before BAC was allowed to expand its airport, the company had to write an Environmental Impact Statement (EIS) and a Major Development Plan (MDP). In case of the new runway, all possible problems concerning the community, the environment, noise pollution, and the impact on its current operations had to be considered.

Another important issue is the diversification possibility of Brisbane airport as an airport city. In this way, airport become less dependent on their aeronautical-related revenues that tend to diminish in case of terrorist attacks, economic downturns, and collapsing airlines. Besides providing transportation means, airport city can also offer exhibition complexes, regional corporate headquarters, entertainment, and retail outlets.

Tata Steel: Financing the Corus Acquisition 

S. R. Vishwanath 

Tata Steel announced the acquisition of Corus group in October 2006. After a prolonged bidding war with the Brazilian steelmaker CSN, Tata Steel purchased Corus group for about $13b. The case considers the financing package put together by Tata Steel to fund the Corus acquisition. Students are asked to value the different securities offered and evaluate the financing package.

This case can be used in a Corporate Finance course in a module on Financing or in a Mergers and Acquisitions course or in a Financial Instruments and Markets course. The case has the following objectives:

1. To introduce students to the characteristics of preferred stocks and convertible instruments
2. To consider the factors relevant to the selection of different types of securities in financing
3. To introduce concepts like dilution, leverage, debt capacity
4. To introduce credit ratings
5. To introduce valuation of contingent claims
6. To build skills in designing and implementing an integrated acquisition and financing strategy

Instructors teaching this case could consider teaching Tata Steel (A): The Bid for Corus case first although these cases can be taught independently.

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