IMD Annual Report 2019

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IMD ANNUAL REPORT 2019

Case-writing

Each year, IMD enhances its existing library of case studies with new, disruptive research that tackles emerging issues and trends in the business world, from sustainability to digital transformation.

In 2019, IMD case study highlights included:

PMI’S VISION OF A SMOKE-FREE FUTURE: CAN A TOBACCO COMPANY BE SUSTAINABLE? Vanina Farber, Natalia Olynec Philip Morris International (PMI) CEO André Calantzopoulos announced in 2016 a radical pivot in the Marlboro cigarette manufacturer’s strategy: the company would shift to “smoke-free” products in more than 180 countries around the world. One of these products was IQOS, a new “heat-not-burn” (HNB) device aimed at providing the world’s over 1 billion adult smokers with “better options”. The innovation of the products which, PMI claimed, were less harmful than cigarettes was welcomed bymany investors. Calantzopoulos and PMI’s Board of Directors believed that its sustainability strategy was critical to the company’s long-term success. Nevertheless, convincing important stakeholders that a tobacco company could be part of the solution to rid the world of cigarettes by offering better alternatives was a different matter. “I chose PMI as a case because it is a provocative way to introduce participants to sustainability issues and social innovation. Stakeholders have deeply rooted opinions about PMIs business model and tobacco so the case illustrates how companies in often exclusionary industries can build rapport and trust with diverse groups of stakeholders. The

case, as expected, elicited very passionate reactions from participants. In a sector that has historically been defined by low trust and low engagement, participants first had to decide whether to even engage in dialogue with PMI. The interesting part of the case asks participants to role play and think about the best course of action from their stakeholder perspective. Participants challenged PMI on the sustainability strategy and pushed PMI on how they are allocating resources to achieve their sustainability targets. This case make students reflect about sustainability and social innovation as a driver of business model transformation. They reflect on what social innovations are needed to confront the social and environmental impacts of their own operations.”

Vanina Farber IMD elea Professor of Social Innovation