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7 Days Inn: An Entrepreneur’s Dilemma between Public and Private Ownership

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Description

Alex Zheng, co-chairman and CEO of 7 Days Inn, the second largest economy hotel chain in China, ponders over possible growth strategies for his company. Since its inception in 2005, 7 Days Inn had grown from a fledgling start-up to a leading budget hotel chain. In late 2009, despite the uncertain economic climate, Zheng saw the company through an initial public offering (IPO) where 7 Days Inn became the first Chinese budget hotel chain to be listed on the New York Stock Exchange. The IPO greatly enhanced the company’s credibility, and helped establish the 7 Days Inn brand across China.

Two years later, Zheng felt that the company had been enslaved by the stock market. He had grand plans to expand the business but the board and US institutional investors were more focused on shorter-term quarterly earnings. He was further aggravated by the lacklustre performance of the company stock price. 7 Days Inn had tried numerous means to prop up the share price, but nothing seemed to work.

In this case students will analyse the company’s capital position and growth strategy. It suitable for undergraduate, graduate and executive education classes.

Inspection copies and teaching notes are available for university faculty. To receive an inspection copy and teaching note, please email cmpshop@smu.edu.sg with your registered faculty email ID and a link to your contact information on the faculty directory at your university as verification. An inspection copy and teaching note will then be sent to your faculty email account.

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SMU Faculty/Staff can download the case & teaching note on iNet with your SMU login ID & Password via the following links:

·       The Case (SMU-14-0040)

·       Teaching Note (SMU-14-0040TN)

For purchase of the case and supplementary materials via The Case Centre, please access the following links:

·       The Case (SMU-14-0040)

·       Teaching Note (SMU-14-0040TN)

Published Date

16 Jun 2015

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