Global MBA Business Trip to New York

Several participants from the MBA cohort of 2019 had a chance to head to New York to gain an understanding of the broader aspects of the finance industry. During the trip, we visited Goldman Sachs, KKR, Ardian, Morgan Stanley, JP Morgan, Candriam Asset Management, Clifford Chance, Natixis, BNP Paribas, White Star Capital, Federal Reserve. 

Visit to KKR

One company that we visited was Kohlberg Kravis Roberts, better known as KKR, a global leader in the investment and private equity business.

Our aim was to understand the private equity (PE) business from the eyes of the experts. The presentation began with an overview of the PE industry before delving into two KKR acquisition case studies in the entertainment and manufacturing industries.

Within the entertainment industry, we analyzed a case study on the Ultimate Fighting Club, UFC, which agreed to sell itself to a consortium with the equity financing coming from KKR. The $4bil investment to acquire UFC was a significant appreciation from the $2mil cost of the previous acquisition in 2001. The case study went through the current entertainment market, the revenue drivers in the industry and moving to the negotiation of the license, a key component of the deal.

An opportunity to apply what we learnt in the classroom
Reflecting on my firm valuation course, I could see the connect and importance of understanding the market. The entertainment industry was going through a transformation. Increase in revenues from pay per view subscription and growth opportunities of viewers in China made this a promising business. The second aspect was analyzing the business growth drivers. One such driver was the contract negotiation with Fox which was renewed in 2018. The importance of the contract ensured a significant increase in UFC’s revenues further providing an appreciation to the firm value.

From entertainment, we moved to manufacturing, where we analyzed KKR’s acquisition of C.H.I. Overhead Doors, a leading manufacturer of overhead garage doors in North America. The role of differentiation was key in this acquisition. C.H.I.’s business model was unique as it was working on a made-to-order basis. Linking back to our Operations lecture, I could understand that a made-to-order meant no inventory (or little inventory) being held. The second interesting piece was the inexpensive real estate where the factories were present. This meant that scaling up would not be too costly. Its unique business model led to significant growth with limited capital expenditure, making it a cash cow from KKR’s perspective. From a strategy perspective, I could see the key differentiation that C.H.I. had in comparison to all other firms, driving its value proposition.

Overall, both these case studies gave me a perspective of market drivers and business drivers to drive financials. The role of these drivers was crucial to understanding where the business was heading to in the future. While the discounted cash flow was important, the prediction of future cash flows was driven by market and business drivers. I had a macro-perspective of the connection between our strategy, finance, marketing, and operations classes to the financials and modeling to understand and forecast the business, and this is a key process within the private equity industry.

Visit to the New York Stock Exchange
We also had a chance to visit the New York Stock Exchange (NYSE). When I think
of a stock exchange, I think of charts, graphs, piles of paper, ears glued to the phone and constant hustle and bustle. My mother, being a former stockbroker in Bombay, would explain to me the functioning of the share market. Keeping both of these in mind, I was very excited to discover the biggest stock exchange in the world.

A stock exchange, in essence, is a market place to connect buyers and sellers of securities. NYSE is the world’s largest stock exchange with a market cap of ~30 trillion. My preconceptions of a stock exchange were changed as I walked into the NYSE. The hustle and bustle were replaced by computers and piles of papers were replaced by software for buy and sell side orders. Technology has played a key role in automating many of the processes. A trading floor of what was ~5000 traders had come down to ~500, with many of the deals being done through the various systems. We got a demo of the system and what is it that the traders look for. It ran through the algorithms that run in the background for buy and sell orders along with all up to date news on various companies.

I could understand the efficient market hypothesis just with the speed of transactions and information that was being analyzed, reflecting on stock prices with all available information. The speed of decision making was clearly evident as the traders explained what they look for at the end of the day.

Considering there are many trading firms, how does one differentiate from the other players? Relationships and service were key. Despite all the complexity and technical expertise, the role of relationships was clearly evident to build an effective firm.

As we got an understanding of J.P Morgan and their trading system, I could understand the idea of the relationships between the market makers. However, building an effective relationship when you have two parties with different KPIs and sometimes contrasting objectives is difficult. I could see our negotiation class in action here as the traders worked with one another on buy and sell orders for their clients while determining the volume and price. Dealing with millions of dollars, negotiations were crucial especially considering the price volatility and volume of trade.

Overall, the visit to the NYSE was a great opportunity for us to understand the technical aspect of finance combined with technological advancements. This was put together with a strong emphasis on business negotiations and relationship building. I could relate back to the wisdom my mother provided when she was a broker. “You have to know trades and who to trade with at your fingertips”, in other words, quick and accurate decision making is crucial.

Global MBA – Digital Week Competition

by Anirban Paul, Global MBA Ambassador 2018-2019, Strategy and Management Major

After a hectic week of globetrotting for the business trips, the Global MBA cohort came together in Cergy for the most awaited Digital Week Competition 2019. It was the perfect occasion to welcome our Singapore-based classmates to Cergy, and this competition offered an ideal platform for participants from both locations to work together.

The Format

In its second edition for the Global MBA batch, the Digital Week Competition is an intense, week-long competition where seven companies across industries, including some major ESSEC partners, share real-life real business cases and strategic issues related to digital transformation. A total of 21 teams (three teams assigned to each company) were expected to perform the role of digital consultants, part of a digital agency competing against other teams to share the best approach and solution to the cases shared by these companies.

The preparation and approach

After an introduction to the Digital Week Competition by the managing committee, teams worked closely with the assigned companies to understand the cases and start working towards a solution. Coaches with extensive industry experience were assigned to work closely with teams and provide guidance. The preparation for the finals was a journey filled with an ebb and flow of emotions and a crash course on how things work in the business world.

The grand finale

An intense week of preparation was followed by the presentation of digital solutions by the teams to representatives of their assigned companies. After a thorough review, each company selected one team that would represent them at the grand finale. The stage was set for the grand finale, with seven teams ready to showcase their skills as digital consultants. All the presentations were an excellent mix of strategy, marketing, emotions and humor. At the end, the team from Moët Hennessy (Giulia, Kristine, Malek and Christophe) won the Grand Prize, with the team from Candriam (Antoine, Anirban, Rodney, and Kailash) winning the Special Prize and the team from Y-experience (Shreya, Paul, and Faye) winning the Participant’s Choice award.

Grand Prize: The Moët Hennessy team

Special Prize: The Candriam team

Participants' Choice: The Y Experience Team

The importance of this event

The Digital Week Competition provides an insight into the business world and the key challenges companies face in the digital world. The opportunity to participate in an intense and competitive environment simulates real-world challenges and prepares students to get a glimpse of the environment they would be working in post MBA. Apart from showcasing strategic and digital skills, students are also given the opportunity to develop their people management skills, which are extremely critical to succeed in the professional world. The Digital Week Competition also sets the tone to the longer Capstone project where teams would work with companies to resolve more complex problems and design more impactful, long-term solutions for the client.

Presentation by Nicole Comeau, General Manager and Chief Strategy Officer of Olivier Theyskens

By Emilia Wilson, Global MBA Ambassador 2018-2019, Luxury Brand Management Major

During our weekly Alumni Conference, the Luxury Brand Management participants had the wonderful opportunity to meet Ms. Nicole Comeau (MBA in International Luxury Brand Management Class of 2006), General Manager and Chief Strategy Officer of the fashion house Olivier Theyskens. A woman with a wealth of experiences in the luxury industry, Ms. Comeau was able to share with us her career path, which provided us with another great success story of a graduate of this program. Further to hearing about her story, we learned about Olivier Theyskens, the man and the label, as well as her take on the global market of luxury retail.

Volunteering at the FAB school in Pokhara, Nepal

At the end of March 2019, I had the opportunity to embark on a fascinating and highly rewarding experience in Pokhara, Nepal. This was thanks to Jean-Gabriel Pérès, ESSEC alumnus and member of the Global MBA Alliance of Strategic Leaders. While Mr. Pérès was CEO of Mövenpick Hotels & Resorts, he participated in the funding and establishment of Right4Children, a Pokhara-based association which aims to improve the lives and living standards of Nepalese children, youth and their families through education, protection, and livelihood.