The Proposed Merger of GK Goh and Vickers Ballas

Singfat Chu and Guan Hua Lim

The opposition of some shareholders to the proposed merger of stockbrokers GK Goh and Vickers Ballas in Singapore highlights a number of interesting issues pertaining to the valuation of companies in mergers and acquisitions.  In particular, what are rationalisations for market capitalisation versus book value?  The case also discusses the appropriateness of schemes of arrangement as a means to effect a merger and the judiciousness of appointing independent financial advisors to advise minority shareholders.

MTV vs. Channel V

Paul Ellis

The American music channel MTV was the first to broadcast music television in Asia when it entered the market via Star TV's satellite feed in 1991.  However, when Rupert Murdoch's News Corporation acquired Star TV two years later, MTV left the scene over a disagreement regarding the amount of local programming and a new player emerged in the form of Star TV's own Channel V.  In contrast to the global approach of MTV, Channel V placed more emphasis on local artists and VJs and for a while enjoyed a monopoly position in the market.  Later, in 1995, MTV returned to Asia with a new strategy of adapting the content while projecting a common brand image.  MTV has since enjoyed rapid growth in the region resulting in fierce competition between the two channels.  In 1999 the rivalry manifested itself in a escalating war of words between Steve Smith of Channel V and Frank Brown of MTV with each alleging that the other was misrepresenting distribution figures.  The case documents this feud and its effect on advertisers in the context of the emerging Asian market for televised music.

The Boston Trading and Manufacturing Co. Ltd. (HK): Hemp, Fashion and the Environment

Gerald E Fryxell, Marinilka Kimbro and Terri Mottershead

The Boston Trading and Manufacturing Company (Hong Kong) or (BTC-HK) highlights some of the dilemmas facing an entrepreneur who is operating in a multinational and multicultural context and who is differentiating a major product as being environmentally-friendly.  The core idea behind the Boston Trading Company was simply to access low-cost labor and materials in Mainland China in order to manufacture backpacks for sale within Germany.  Later, Andree conceived the idea of using hemp material and designs that would reduce waste and permit the products to be marketed as being environmentally-friendly.  This "PUREĀ®" product line timed the market well and has been very successful - allowing much higher mark ups than had been possible with the more traditional nylon product line.  However, the hemp content in this product line had been permitted to drop to questionable levels and it was clear that its appeal had as much to do with its relationship with marijuana as its ecological advantages.  Andree is also aware that his products are being marketed to two very different types of customers - environmentalists and marijuana users.  The case touches on multiple themes, but is probably best used either in a business ethics subject or to highlight international management issues in an entrepreneurship subject.

Sitaram Textiles Limited

Sanal Kumar Velayudhan

Sitaram Textiles is a state-owned textile mill in India.  It serves a regional market with a limited product-line of cotton fabric.  The mill was set up as an integrated textile mill.  Severe price-competition from the unorganised powerloom sector has restricted its operations to producing yarn and processing of grey cloth.  The weaving activity is contracted out to the small powerloom units.  Competition for certain types of fabric is from large players.  Changes in the environment have an adverse effect on its performance.  New channel arrangements, evolving consumer tastes and an increase in competition are the noticeable changes in the environment.  It has not been able to fully utilise its processing capacity.  This has affected its profitability.  The mill is planning modernisation of its facilities and is examining the option of entry into blended fabric market.  The case examines the influences on product line decisions.  The product line decisions are influenced by Sitaram Textiles' ability to compete, the requirements of the market and company objectives.

Pawnbroking in Singapore

Ghee-Soon Lim and Soo-Choon Lye

Started in 1875, pawnbroking was a unique small business sector in Singapore.  Its core business activity comprised giving out loans to walk-in pawners who presented valuables as collateral (pledges).  Pawnbrokers made most of their profits from the interest differentials between the interests charged on the loans and the cost of capital of providing the loans.  They were allowed to auction off unredeemed pledges through approved auction houses to recover their losses.  Pawnbrokers were also allowed to purchase unredeemed pledges that had been pawned with themselves at the auction.  About 90% of the pledges accepted by pawnbrokers thus were gold and jewelry.
This case provides a detailed description of the pawnbroking industry in Singapore and the operations of pawnbrokers.  The case is useful for teaching in areas such as industry analysis, company operation and human resource management.

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