Business school professors’ picks

Welcome to professors’ picks, providing a weekly curated collection of FT articles by and for enterprise school school to attach school rooms to present occasions and to develop college students’ essential considering.

Learn all submissions at www.ft.com/bschoolpicks. Save this hyperlink in myFT to obtain emails alerting you to every new version. Search the tags for related matters as an instance educating factors. Encourage college students to affix the controversy within the feedback part beneath the article.

Feedback or contributions? Get in contact at profpicks@ft.com

Provide Chain Administration

Denmark’s Maersk buys Panama Canal railway

Abstract: The Panama Canal Railway serves as a land bridge for delivery visitors between the Pacific Ocean and the Atlantic Ocean. It serves as an alternate route between the 2 ends of the Panama Canal, which is very helpful throughout a drought, and cuts the delivery time from three weeks (going round South America) to a mean of lower than a day. Railway capability is as much as about 10 per cent of that of the Canal, which handles about 5 per cent of world maritime visitors, in comparison with 15 per cent for the Suez Canal and 30 per cent for the Malacca Straits.

Maersk is a worldwide chief in built-in logistics and container delivery. It additionally builds and operates port terminals, runs freight railway strains, manages storage providers and gives provide chain providers akin to contract administration. It’s the second largest delivery firm on the planet with a 14 per cent market share, behind the Mediterranean Transport Firm (MSC) with 20 per cent.

Classroom software: The Panama Canal and Railway are complementary. With the containerisation of cargo, which permits for simpler intermodal delivery, utilizing these property collectively turns into simpler. From a provide chain perspective, the acquisition presents benefits and disadvantages which college students can discover. They will talk about strategic and aggressive views on the acquisition.

Questions:

What benefits does the choice of utilizing the Panama Canal Railway between Balboa and Colón present to Maersk?
What are the restrictions and disadvantages of utilizing the Panama Canal Railway?
Previous to the Maersk buy, the Panama Canal Railway was owned by US-based Lanco Group and Canadian Pacific Kansas Metropolis, which operates throughout North America. Any shipper might use the Railway. Ought to Maersk permit others together with MSC to proceed to make use of this Railway?
Strategically, is Maersk’s acquisition of the Panama Canal Railway justifiable?

Prakash Mirchandani, Professor, Katz Graduate School of Business

Management, Sustainability

BP pivots back to oil and gas after ‘misplaced’ faith in green energy

Tags: Accountable Management, Sustainability, ESG, EnergyTransition, CorporateStrategy, ParadoxMindset, PolarityThinking

Abstract: BP’s strategic shift raises questions on accountable management and the paradox of balancing company objective with sustainability. Growing oil and fuel investments by $10bn whereas scaling again renewables prioritises short-term monetary stability however dangers undermining BP’s web zero commitments. It challenges investor confidence, stakeholder belief and BP’s place in a shifting power market. A paradox mindset and polarity considering are essential in recognising that revenue and sustainability are interdependent, not opposing forces. Accountable management calls for a balanced strategy, leveraging fossil gas revenues to drive clear power innovation. To stay aggressive and credible, BP should align profitability with environmental and social duty, making certain resilience in a world transitioning in the direction of sustainability.

Classroom software: College students can discover how a paradox mindset and polarity considering assist leaders navigate the strain between company objective and sustainability in strategic decision-making.

Questions:

How does BP’s technique replicate accountable management in balancing revenue and sustainability?
What moral issues come up when prioritising short-term monetary features over long-term environmental commitments?
How would possibly BP’s management apply polarity considering to stability monetary efficiency with sustainability?
What are the dangers and advantages of BP adopting a extra built-in power transition technique?
How can company leaders develop a paradox mindset to drive each sustainable innovation and profitability?

Dimitrios Spyridonidis, Affiliate professor, Warwick Business School

Business

Can international aid survive in a crumbling world order?

Tags: Worldwide Assist and Business, Humanitarian, Business and Authorities

Abstract: Warfare, battle, political tensions and local weather change are escalating humanitarian crises to unprecedented ranges. Equally regarding is a big international funding hole to handle these crises. This text presents a complete overview of the evolving worldwide help panorama, highlighting how the US and lots of different Western governments are drastically lowering help budgets. Future help is more likely to be more and more tied to and influenced by geopolitical pursuits.

The article presents contrasting viewpoints: some specialists warn of a bleak future with out strong worldwide help, whereas others say market-driven mechanisms might finally change conventional help, probably reaching higher long-term impression.

Business school college students typically have restricted publicity to the construction, scale and results of international help. Whereas they might encounter some humanitarian case research, they don’t at all times grasp how help can facilitate long-term enterprise entry, success and ecosystem growth in areas with dysfunctional markets. This text serves as a basis for discussing these pathways. It additionally opens the door to exploring modern, market-based fashions that would change standard help approaches, presenting potential alternatives for enterprise and social enterprises.

Questions:

Ought to enterprise leaders be involved concerning the speedy adjustments within the dimension and construction of international help? Why ought to they care? What are the pathways by which international help impacts companies that don’t instantly obtain help funding?
Is the way forward for help centred on international government-to-recipient authorities programmes or international government-to-NGO packages? Which one is extra in contact with the on-the-ground realities of the top beneficiaries? Which achieves scale extra quickly? Which presents higher effectivity, measured by the variety of beneficiaries reached per greenback spent?
Can concessional loans, fairness mortgage ensures and monetary de-risking mechanisms successfully change help grants? Or is unrestricted grant capital important for frontier markets to perform, notably in socially related sectors?

Luk Van Wassenhove, Emeritus professor, Insead; and Prashant Yadav, Senior Fellow, Council on International Relations

Finance

Could Manchester United really be worth £7bn?

Tags: Acquisitions, Model Worth, Relative Valuation, Soccer

Abstract: In November 2022, the Glazer household introduced they had been exploring “strategic alternate options” for Manchester United, together with a possible sale. The membership’s inventory value surged, reflecting investor optimism that new possession might unlock higher worth. The staff, which claims the biggest fan base within the Premier League, hoped to fetch a valuation near £7bn.

The sale course of finally attracted two severe contenders: Sir Jim Ratcliffe, the British billionaire and founding father of Ineos, who careworn long-term funding and a dedication to restoring United’s footballing legacy; and Sheikh Jassim bin Hamad Al Thani, representing Qatari pursuits, who submitted a number of bids to amass full management of the membership.

What adopted was a drawn-out bidding course of marked by uncertainty over whether or not the Glazers would pursue a full or partial sale. On 15 October 2023, Sheikh Jassim withdrew his supply, triggering a pointy fall in United’s share value. Two months later, Ineos finalised a deal to amass a 25 per cent stake within the membership, at a valuation of roughly £6bn.

Classroom functions: This case presents wealthy floor for discussing M&A transactions, notably within the sports activities trade. It prompts dialogue across the rising involvement of personal fairness and sovereign wealth funds in soccer membership possession, and staff sports activities extra usually. Manchester United’s contested sale presents a chance to discover the challenges of valuing iconic sports activities manufacturers, particularly when monetary efficiency doesn’t absolutely replicate model potential. It additionally permits college students to analyse bidding methods, deal constructions and market reactions all through the transaction course of. Lastly, college students can use relative valuation strategies to aim a valuation of the goal and critically assess whether or not the Glazers’ £7bn price ticket was grounded in monetary actuality.

Questions:

Market response: How do you interpret the preliminary inventory value surge and subsequent drop following Sheikh Jassim’s exit? What function do threat arbitrageurs play in M&A conditions like this?
Valuation vs fundamentals: Does Manchester United’s model worth and monetary efficiency help the £7bn valuation the Glazers had been in search of? Is the membership undervalued relative to its friends?
Valuation strategies: estimate a valuation for Manchester United utilizing precedent transactions (Chelsea, Newcastle and PSG: Qatari owners of Paris Saint-Germain target valuation of over €4bn) in addition to comparable groups (information out there from the Swiss Ramble and Forbes)
Acquisition premium: If the Glazers had bought at £7bn, what would the implied acquisition premium have been? How does this examine to the empirical proof on premiums in M&A transactions within the sports activities trade and extra broadly?

Sonia Falconieri, Professor, Bayes Business School

Worldwide enterprise

TSMC profits jump 54% on back of AI chip boom

Disciplines: International Commerce, Finance, Worldwide Technique, AI

Tags: TSMC, ASML, Amazon, Microsoft, Nvidia, Apple. AI, capital funding, chip competitors.

Abstract: Taiwan Semiconductor Manufacturing Firm (TSMC), the world’s largest chipmaker, expects a virtually 30 per cent income achieve in 2025 resulting from rising AI demand and a rebound in smartphones, industrials and automobiles. It reported a 54 per cent year-over-year web revenue enhance to NT$325.3bn for Q3, above forecasts. Suppliers to Amazon, Microsoft, Nvidia, and Apple, the enterprise expects AI chip gross sales to triple this yr, accounting for 15 per cent of income.

Regardless of latest considerations concerning the semiconductor sector, primarily after ASML reported disappointing orders, TSMC stays resilient due to its deep shopper base and scale benefits. Whereas it anticipates spending simply over $30bn in 2025 on capital expenditures, it has solely spent $18.5bn by September 2024. Analysts imagine TSMC’s energy will stabilise the market, particularly in comparison with Intel and Samsung, that are fighting subtle chip manufacturing.

Classroom software: This text gives a chance for school to debate present occasions within the classroom by a enterprise lens and the true definition of aggressive benefit. For instance, over the previous yr, and as direct opponents, TSMC’s inventory has been up almost 17 per cent, with Nvidia posting a 21 per cent enhance over the identical interval. Against this, Intel is down 48 per cent and competitor AMD is down almost 43 per cent.

Questions:

What strategic benefits allow TSMC to outperform opponents like Samsung and Intel in semiconductor manufacturing?
How does TSMC perform as a “foundry” for greater than 500 companies, and the way does it help its scalability and resilience?
What gives TSMC with its sustained aggressive edge from its place within the AI worth chain?
How does TSMC’s model and market dominance change resulting from its service to tech behemoths like Nvidia, Apple, Amazon, and Microsoft?
What conclusions can we draw from TSMC’s larger capital expenditure plan, and what potential long-term results can it have on its monetary efficiency?
How does the market reply when bullish projections (like TSMC’s) battle with monetary outcomes (like ASML’s lacklustre orders)?

Case dialogue positioning: The Lex column argued that TSMC can efficiently climate geopolitical tensions, whereas one other article recommended Taiwan can take consolation within the strategic significance of its Silicon Shield — the second largest semiconductor trade worldwide — to guard it from a Chinese language invasion. However whereas TSMC’s pledge to spend $100bn within the US is an efficient step, the previous Intel CEO doesn’t imagine it should advance the US’s place unless next-generation transistor technology is designed domestically. As the tutorial Chris Miller argued: “This funding cements America’s place as a big participant in superior chipmaking, behind solely Taiwan and South Korea. TSMC’s prospects — principally huge US chip designers like Nvidia, Apple, and AMD — will welcome the additional geographic diversification of its manufacturing operations.”

Within the background is President Trump’s name to remove the $52bn Chip Act, which is able to scale back subsidies for firms like TSMC. CEO CC Wei said he was not afraid whereas Taiwan’s president Lai Ching-te mentioned he was “solely demanding equity” vis-à-vis any political selections or their fallout.

Gregory Stoller, Grasp Lecturer, Boston College Questrom School of Business

International Commerce, Finance, Worldwide Technique, AI

Ethereum faces ‘midlife crisis’ as rivals play catch-up

Tags: Ethereum, Ether, Stablecoin, Memecoin, Cardano, Solana, Bitcoin

Abstract: The Ethereum blockchain’s underlying cryptocurrency Ether has misplaced 40 per cent of its worth within the final three months, underperforming different well-known tokens like Cardano, Solana and Bitcoin. The market’s disappointment with Ethereum’s “decentralised finance” (DeFi) promise, rising competitors from faster and cheaper alternate options like Solana and waning investor enthusiasm all contribute to this decline.

Ethereum was previously thought to supply the muse for in style monetary blockchain initiatives, however it’s presently confronted with dwindling person exercise, inside management conflicts and an identification disaster. As a result of layer 2 networks siphon off transaction charges, builders discover it troublesome to carry out technical updates with out jeopardising the platform’s profitability.

Ethereum has been overshadowed by speculative buying and selling in memecoins, that are primarily housed on Solana. Though nonetheless sturdy, Ethereum’s group is fighting inside conflicts and a decline in momentum amongst institutional and crypto-native traders. In response to critics, it’s now “simply one among many speculative crypto initiatives,” and its future within the wrestle for supremacy is unknown.

Classroom software: This text gives a chance for school to debate present occasions within the classroom by a enterprise lens and the way Ethereum might be repositioned. There are additionally moral issues with a societal impression associated as to if meme-driven tokens dominate blockchain exercise and what this would possibly imply for the unique mission of decentralisation and monetary inclusion.

Questions:

Up to now, Ethereum dominated the blockchain and sensible contract market. What strategic errors may need led to its current issues?
In response to the article, Ethereum goes by a “midlife disaster.” What does this imply within the framework of the innovation lifecycle?
The Ethereum Basis is split, with builders arguing concerning the platform’s course. What obstacles should decentralised teams overcome to protect cohesion and imaginative and prescient?
The main target of traders has switched to “consideration financial system” tokens and memecoins. What does this point out about monetary market hypothesis?
Ethereum was designed to accommodate additional makes use of, akin to tokenised property and stablecoins. Is the platform benefit being misplaced?

Case dialogue positioning: Kelly Hampaul, founding father of Everett Capital Advisors, argues “even optimistic advocates should acknowledge that digital asset markets presently fall brief in how counterparty threat is assessed.” The FT mentioned (Quantum Blockchain mines Bitcoin with AI, and we have more questions): “Bitcoin makes use of a calculation lottery to find out which miner creates the following block for the blockchain and takes the reward,” with firms like Quantum Blockchain Technologies promising sooner outcomes utilizing AI. Crypto celebrated Trump’s victory as a kindred spirit in November in accordance with Cornell professor Eswar Prasad, with a fair stronger shot-in-the-arm coming from President Trump naming tokens included in the strategic reserve.

Gregory Stoller, Grasp Lecturer, Boston College Questrom School of Business

Bought suggestions on professors’ picks or keen to contribute? Get in contact at bschool@ft.com or add your chosen articles and questions within the feedback beneath.

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