Subject area of the teaching case:
The case is particularly relevant for students studying elements of business strategy with an interest in strategic decision-making, competitive strategy, and growth strategy. The case leverages several strategic frameworks taught throughout business courses and illustrates a real-world application of these frameworks to support sound strategic decision-making. Furthermore, the case examines the relevance of sustainable competitive advantage and the linkages to the appropriate growth strategy for a business. It is recommended that this case be taught once students have covered the applicable theory and frameworks in class.
Student level:
This case is designed for business administration students, in particular MBA, EMBA, speciality Masters, or executive education students.
Brief overview of the teaching case:
MWEB is a leading first-tier South African internet services provider, with an operating history spanning over 22 years. The MWEB brand is a household name across South Africa, seen as one of the pioneers of the internet industry and accredited with bringing the internet to ordinary consumers across the country. The state of competition in the market, however, has intensified and MWEB's traditional operating model has not evolved fast enough to meet the changing landscape. The market is in the midst of a price war, to which MWEB has responded by reducing market pricing and offering attractive deals, undercutting all its competitors. The results have been positive; sales have increased and churn has reduced, but competitors have already started to follow. The dilemma facing CEO Sean Nourse and his management team is how to accelerate growth in a highly commoditised market with intense competition while ensuring the long-term profitability of the business. The case encourages the consideration of the strategic decision-making process by analysing the competitive landscape, evaluating the options, and reaching a decision on the most viable growth strategy for the business.
Expected learning outcomes:
To analyse the competitive landscape and the forces at play
To conduct a competitor analysis, appraise long-term profitability in the industry, identify profitable strategic positions, and determine how MWEB may achieve and protect its competitive advantage
To identify and analyse the key parameters that, in combination, represent a company's business model
To critically analyse the contextual factors that are presented as business challenges, evaluating and understanding the impact and scale of these challenges
To critically assess relevant growth strategy alternatives for MWEB and analyse the viability of the alternatives presented
To conduct an informal valuation to determine a purchase price for an acquisition target for the business
Firms’ Strategic Pricing and Network Externalities