This case highlights Whirlpool’s problems in China during the 1990s and contrasts competitive advantage between global firms and local competition in the appliance industry. The case briefly discusses what went wrong in China for Whirlpool like not managing distribution channels, bribery problems, wrong product decisions, not understanding local competition and so on.

Case Contents

1. Introduction – Whirlpool’s entry into China
2. What went wrong in China?
3. Working with local partners and system hassles
4. Bribery Scandal
5. Numerous small local firms that dominated the market
6. Competing with Chinese Appliance Makers
7. Underestimating Local Competition
8. Not managing the distribution channels efficiently
9. Wrong product decisions – Not keeping local needs in mind
10. Foreign Managers not understanding Chinese management culture
11. Market Saturation
12. Distribution System and labor hassles
13. Whirlpool in Asia
14. Whirlpool – Quick Facts
15. Bibliography
16. Exhibit 1 – Whirlpool’s joint ventures with local companies in China in 1995
17. Exhibit 2 – Whirlpool’s leadership position in various regions in 1999
18. Exhibit 3 – Whirlpool – Globalization – Entry into Foreign Markets
19. Exhibit 4- Competitive Advantages of Global firms in the appliance industry
20. Exhibit 5- Whirlpool and GE between 1995 and 1997

Sample Case Page

1. Introduction – Whirlpool’s entry into China

“We entered China pretty early compared to most companies. It was pretty much an unknown.”
- Michael Todman, president of Whirlpool International in 2007

Since 1988, Whirlpool has followed an aggressive globalization strategy under the leadership of former CEO, David Whitman. China had been one of its main entry targets and also fit into its global strategy of becoming the market leader in Asia. Whirlpool formed several joint ventures in China and India in the mid-1990s signaling a big push into the Asian market. However, in 1996, revenues from Asian operations were far from being profitable and accounted for only 6 percent of the total revenues of $8.5 billion. The company made losses to the tune of $70 million in Asia alone that year. Between 1994 and 1997, it invested over $300 million in four JVs in China. Two joint ventures in China were unsuccessful and loss-making. A year later, in 1997, with tough competition in China’s market and continued losses, Whirlpool decided to pull out of two joint ventures in China as part of a global restructuring exercise. (See Exhibit 5- Whirlpool and GE between 1995 and 1997 on page 8 ) Whirlpool’s efforts in the world’s most-populous country were not fruitful. Whirlpool’s then CEO David Whitman remarked, “We are taking steps to align the organization with the marketplace realities of our industry.”

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This case study analyzes the global mindset at Ford Motor Company, a leading multinational manufacturer of cars and trucks. The case also discusses a number of potential risks and challenges that Ford faces or may face in future and how it is responding to it. Ford’s global strategic management and strategies like ONE Ford, Aligned Business Framework (ABF), and matched-pairs are also briefly discussed.

Table of Contents

• Introduction – Ford’s Global Mindset
• Ford – Quick Facts
• Risk Factors in the Automobile Industry
• Financial Crisis and recession
• Oil Crisis, Changing consumer habits and Environment standards
• Investing in R&D and New Technology
• Assessing Risks in a global environment
• Early Years – From a market-seeking to a resource-seeking strategy
• Expanding capacity in markets where it is lagging behind
• Using new technology
• Local Sourcing
• Other Risk factors
• ONE Ford Strategy
• “Matched-pairs” system
• Aligned Business Framework
• Ford’s Global Manufacturing Strategy
• Standardization and Sharing Best Practices
• Ford’s Global product strategy
• Bibliography
• Exhibit 1 – Ford’s five key priorities in operating as a globally integrated team
• Exhibit 2 – Ford’s Facilities around the World
• Exhibit 3 – Ford’s Business Segments based upon its organizational structure
• Exhibit 4 – Industry sales volume – 2005 to 2009
• Exhibit 5 – Factors affecting Ford’s profitability
• Exhibit 6 – ONE Ford plan that Ford Motor Company is using to transform its business
• Exhibit 7 – Key elements of Ford’s Aligned Business Framework (ABF) agreements
• Exhibit 8- Main elements of Ford’s Flexible Manufacturing Strategy

Reverse Innovation is the strategy of innovating in emerging (or developing) markets and then distributing/marketing these innovations in developed markets. Many companies are developing products in emerging countries like China and India and then distributing them globally.

Who coined or introduced the ‘reverse innovation’ concept?

Vijay Govindarajan. He is the Earl C. Daum 1924 Professor of International Business at the Tuck School of Business and founding director of Tuck’s Center for Global Leadership.

Examples of Reverse Innovation:

Tata Motors – Tata Nano

While companies like Ford set up its global automobile platform in India and catered to the niche premium segments in India, Tata introduced the Tata Nano for the price conscious consumer in India in 2009. Tata plans to launch Tata Nano in Europe and U.S. subsequently.

GE – GE MAC 800

GE’s innovation on the GE MAC 400 to build a portable low-cost ECG machine to cater to the rural population who cannot afford expensive health care was launched as an improved version a year later in 2009, in U.S. as MAC 800.

Procter and Gamble (P&G) – Vicks Honey Cough – Honey-based cold remedy

P&G’s (Vicks Honey Cough) honey-based cold remedy developed in Mexico found success in European and the United States market.

Nestle – Low-cost, low-fat dried noodles

Nestle’s Maggi brand – Low-cost, low-fat dried noodles developed for rural India and Pakistan found a market in Australia and New Zealand as a healthy and budget-friendly alternative.

Xerox – Innovation Managers

Xerox has employed two researchers who will look for inventions and products from Indian start-ups that Xerox can use for North America. The company calls them as ‘innovation managers’

Microsoft – Starter Edition

Microsoft is using its Starter edition’s (targeted at not so technically savvy customers in poor countries and with low-end personal computers) simplified help menu and videos into future U.S. editions of its Windows operating system.

Nokia – New business models

Nokia’s classified ads in Kenya are being tested as new business models. Nokia also incorporated new features in its devices meant for U.S. customers after observing phone sharing in Ghana

Hewlett-Packard (HP) – Research Labs in India

HP intends to use its research lab to adapt Web-interface applications for mobile phones in Asia and Africa to other developed markets.

Godrej – Chotukool Refrigerator

In February 2010, Godrej Group’s appliances division, Godrej & Boyce Manufacturing Co Ltd test-marketed a low-cost (dubbed the world’s lowest-priced model at Rs 3,250) refrigerator targeted mainly at rural areas and poor customers in India. The product runs without a compressor on a battery and cooling chips. The company wants to use a community-led distribution model (as an alternative channel of distribution) to push for product growth.

Tata – Swacch – World’s cheapest water purifier

Swacch means clean in Hindi. Tata launched the water purifier – Tata Swacch targeting the rural market in India with the cheapest water purifier in the market. The product does not require running water, power or boiling and uses paddy husk ash as a filter. It also uses silver nanotechnology. It can give purified water enough to provide a family of five drinking water for a year. The company feels it will open a whole new market.

Pepsico – Kurkure and Aliva

Pepsi is planning to give developed markets (particularly West Asia) a taste of its salted snack Kurkure (and also another snack Aliva). The product enjoys huge success in India and has become a Rs 700 crore brand within a decade of its launch. The success is attributed to product innovation and a good marketing strategy. E.g. Made from corn, rice and gram flour, zero per cent trans fats and no cholesterol, Rs-3 small packs for pushing sales in the lower-tier towns.

Bharat Forge – Maintenance Management Practice

The best practices group at Bharat Forge, a large Indian manufacturer and exporter of automobile components implemented a maintenance management practice it developed in India (developed over 15 to 18 years) in its units it acquired in countries (known for sophisticated engineering) in Germany, Sweden and U.S. The maintenance management process focused on minimizing downtime during machine maintenance and has an advanced information system that predicts problems before they happen. Consequently, Bharat Forge plants globally are very efficient and have an average down time of less than 10 per cent.

KFC – Taco Bell – Yum! Restaurants

KFC test-marketed Krushers, a range of chilled drinks in the cold beverages segment in India and Australia and plans to introduce it to other markets. The launch in India was very successful as ‘Krushers’ accounts for 8 per cent of KFC’s beverage sales in India.

Yum! Restaurant’s Tex-Mex chain Taco Bell has one Indian-designed dessert (tortilla filled with melted dark chocolate) on Taco Bell’s US menus.

Husk Power Systems

In India, Husk Power Systems brings light to rural population (over 50,000) by using locally grown rice husks to produce electricity (a unique and cost-effective biomass gasification technology). The company has also received seed capital from Shell foundation in 2009 to scale up operations.

LG – Low-cost Air Conditioners (AC)

South Korea based LG Electronics (LG) planned to develop low-cost air conditioners targeting the middle and lower-middle classes in India. Their goal was to manufacture air conditioners at the cost of air coolers which were very common.

Renault – Logan

Renault designed a low-cost model of its brand Logan for Eastern European markets. It also sold in the Western European markets later on.

Better Place – Smart Grid of Battery charging/Swap terminals

In Israel, Better Place, a electric vehicle (EV) services provider (creates systems and infrastructure that support the use of electric cars), created an intelligent grid of battery-charging terminals and battery-swap stations. The company is now present in many countries like China, Japan, Australia, the U.S., Canada, France and Denmark.

GE India – Steam Turbines

In 2010, GE’s Indian arm tied up with Triveni Engineering and Industries Ltd to manufacture steam turbines in the 30-100MW range. The company plans to then take advantage of lower input costs incurred in manufacturing and export these products to markets in West Asia, Indonesia, Europe and Latin America.

P&G’s old strategy for innovation was based on the invention model where innovation comes from within the company – ‘invent it ourselves’ model. Earlier, innovation at P&G meant building global research facilities and having the best talent in the world develop unique products or inventions. But with the times and technology changing and P&G growing enormously, the old model was not working. P&G needed a new approach.

New innovation model – Connect and Develop

P&G knew that for every researcher it had, there were many others who existed outside the organization. So, rather than sourcing for innovation from within, P&G wanted to identify potentially good ideas throughout the world and apply its own capabilities to them to develop better and cheaper products, faster. The model was called “Connect and Develop”. The new model allowed P&G to shift its centralized approach to a globally networked internal model.

The term ‘Tick Tock’ has been referred to a music group from Puerto Rico, a novel by Dean Koontz, a fictional character in Marvel Comics Universe and even a dance step, but did you know it is the name of Intel’s go-to-market strategy as well.

The global economic downturn hit the semiconductor industry bad. And for a company like Intel which wants to push the latest technology at a rapid pace, it’s go-to-market strategy is even more critical in a downturn.

A few years ago, Intel was lagging behind competitor Advanced Micro Devices (AMD) on multicore technology. Intel wanted to speed up innovation by lowering product development cycles, flawless product road map execution and meeting yearly targets. The company laid put a new plan. They called the new strategy "tick-tock." The company’s CEO, Paul Otellini backed and also led the new strategy.

‘Tick’ refers to various improvements to Intel’s silicon fabrication process. E.g. doubling of the number of transistors on integrated circuits.
‘Tock’ is a more recently quantified process. E.g. architectural upgrades made to the client and server processors.

1. Introduction
2. Manufacturing – The first Dell ‘Made in India’ desktop
3. Dell’s Market Share in India
4. The Indian consumer and Local competition in India
5. DELL – Key Facts about the company
6. Dell – Company Overview
7. Dell – Business Segment Information
8. Dell Products and Services
9. Dell’s new retail strategy and Direct-only model
10. Dell’s New Marketing Strategy in India
11. Dell’s New Advertising Campaign for SMBs
12. Testimonial Advertising instead of Transactional
13. Dell’s CSR, Green Initiatives in India
14. Questions for discussion
15. Bibliography

Sample Page

“India is a great place to be in. It is growing faster than China for us.”
“We’re in 180 countries and I don’t track all of them because that can make you a bit dizzy. But I do follow our top 10 markets. India is in the top 10. In fact, it’s the fastest growing market of our top 10, ahead of everybody, including China. There are plenty of opportunities in India and we couldn’t be more excited.”
-Michael Dell in 2010

‘‘We’re very strong in the large enterprise segment, but over the next three years, we’ll also focus on consumers and small and medium (Indian PC market growing faster than China: Michael Dell news, 2010) businesses. That’s where we see a big part of the next billion dollars in India coming from.”
- Sameer Garde, India country manager in 2010

Introduction

Dell’s presence in India is no surprise. India is one of the most important emerging markets in the world. For years, selling PCs in Asia largely meant China . However, PC makers have recognized the importance of the giant Indian market , its booming economy and annual growth at more than 9%.

Dell started in India about seven or eight years back by opening a customer contact center at Bangalore in 2001. In 2003, the second contact center opened at Hyderabad. The company operates its services from four centers based at Bangalore, Hyderabad, Chandigarh and Gurgaon. Dell started in Bangalore providing customer support to English speaking countries and later also began providing technical support, procurement of financial back office and Knowledge process outsourcing. After the U.S., Dell India is the second biggest center with 23,000 employees. The strategic importance of India to Dell is evident from the fact that India was one among three locations (the other two being US and UK) where Dell’s Latitude E series and Precision notebooks were launched. In India, Dell already has a 23,000-strong workforce in about 10 years of operations and business from India is closing in on the $1 billion mark. Dell has nearly 13 per cent share of the Indian market.

Case Updates/Snippets

• Dell’s channel strategy is to make technology more available to small and medium businesses (SMBs). Dell’s channel partners contribute 22% to its total revenue globally. Out of 10 million SMB customers across the globe, Dell caters to 12,000 SMB customers in India. As per estimates, SMB market in India has over 7 to 13 million customers. Among the BRIC countries and U.S., India is ranked second for the number of SMBs.
• Stiff competion between Dell and HP in the Indian PC market: According to IDC, since 2005, HP has held the number one position in the Indian PC market every quarter (for the past six years). However, in the second quarter (April-June, 2010), Dell replaced HP for the first time with a 15.2 percent share. HP followed at 14.3 percent and Acer at 11.5 percent, though HP still led in the desktop segment. Dell was helped by strong marketing and its channel partners base while HP was disrupted by its move from a national distribution model to a network of regional distributors.
• PC Market in India:In 2009, 75 lakh PCs were sold. In 2010, the expected PC sales are 90 lakh. For the first six months ended June 2010, sales totaled about 45 lakh. [Note: 10 lakh=1 million, PCs include desktops and notebooks.]

1. Introduction
2. A Direct Approach
3. Dell’s Leadership Style
4. No excuses – quick and effective decisions
5. First step in a marathon – No victory laps
6. Watch each dime and turn it into at least a quarter
7. Every product should be profitable from Day One
8. Direct To Customer Service
9. Two-in-a-box Management
10. DELL Company Overview and Time-line
11. Dell Products and Services
12. DELL – Key Facts about the company
13. Michael Dell – Personal Profile and Achievements
14. Michael Dell – Entrepreneurship Skills – Early Years
15. Quotes by Michael Dell
16. Questions for discussion
17. Bibliography
18. Exhibit 1 – Managing the Dell Way
19. Exhibit 2 – Five key strategies in Dell’s Direct Model
20. Exhibit 3 – Dell Inc. – Historical Income Statement
21. Exhibit 4 – Dell Inc. – Historical Stock Chart

Sample Page

“There are a lot of things that go into creating success. I don’t like to do just the things I like to do. I like to do things that cause the company to succeed. I don’t spend a lot of time doing my favorite activities.”

“What matters is our future plan of action. We are systematically moving to increase efficiencies, improve execution and transform the company.“-Michael Dell, CEO Dell Inc.

Introduction

DELL Inc., based in Round Rock, Texas, was a company remarkable at balancing growth and profitability since its inception. DELL’s direct-sales business model had worked incredibly well over the years. However, towards the end of the decade (2000-10), the company’s struggles over pricing and profitability contrasted with market leaders, Hewlett-Packard (HP) and Acer . In recent years, DELL’s PC-sales growth lagged behind those of its competitors. DELL’s rivals were able to better take advantage of demand from consumers. DELL was struggling with dismal earnings and a fast eroding market share.

In 2007, Michael Dell (Dell) returned to revive the company he had started in his college dormitory. Majority of the analysts praised the idea of Dell’s return as CEO without a clue about what it is that he would actually do to turnaround the company. In the past, DELL Inc. was recognized as one of the best-managed companies in technology and under Dell’s leadership had transformed itself from a no-name PC player into a powerhouse brand. Michael Dell’s value to the company can be gauged from the fact that, in 2008, the company spent $1,164,625 on personal and residential security.

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1. Introduction – Restructuring at Lenovo
2. The Indian Challenge
3. Rationalizing Operations in India
4. About Lenovo – Background note, Business and Strategic Facts
5. Lenovo – Top Leadership Team, Key people
6. Lenovo: Quick Facts
7. Reorganization Strategy and the Boxer analogy
8. Lenovo’s Indian focus
9. Lenovo’s ‘half moon’ strategy for its emerging markets business
10. Lenovo’s three core competitive strengths
11. A unique dual business model
12. Lean cost structure
13. History of innovation
14. Marketing Strategy
15. Global Marketing Hub – India-based multicultural marketing communications team
16. Product positioning – Leveraging icons in the Indian Market
17. Five-Year Financial Summary
18. Bibliography
19. Figure 1 – Lenovo – Sales Analysis by Geography
20. Table 1 – India Client PC Market: Vendor Rankings and Market Shares
21. Table 2 – India Client PC Market – 4Q 2007, 4Q 2008
22. Exhibit 1 – Market share in the overall PC market
23. Exhibit 2 – Celebrity Endorsement by PC Brands in India
24. Exhibit 3 – Lenovo’s corporate values

Sample Page

“We have restructured our global business and have divided markets into the emerging and developed market categories. Our thrust remains on the emerging market because of the tremendous potential, and we will bring in the best practices from China to these markets. India remains on the top of the pack in our emerging markets business.”- Amar Babu, Lenovo India MD.

“It’s possible to double our share in Indian market in 3-4 years.” – Yang Yuanqing, CEO, Lenovo in July 2009.

“The company’s (Lenovo’s) market share has been on the decline in India for over a year. In the quarter ended Dec. 31, it ranked fifth behind Hewlett-Packard, Dell, Acer, and a local vendor HCL Infosystems.”- Diptarup Chakraborti, principal research analyst at Gartner.

1. Introduction – Restructuring at Lenovo

In January 2006, Lenovo the world’s fourth-largest PC maker restructured its global operations from four regions (Americas, Europe, Asia-Pacific and China) to five . India was a major part of Lenovo’s strategy and it was listed as a separate region to be managed. India had just 7.5 million PCs compared with China’s 40 million. This presented a huge opportunity for Lenovo and it wanted to double its market share in three to four years. The company was expected to find natural success in India as the Indian market was similar in nature to the Chinese market. In China, Lenovo had built a reputation as market leader. Lenovo’s market share in China was over 30% in the Chinese domestic market. According to data compiled by Bloomberg, China accounted for 48% of the company’s revenue for the first half of 2009. However in India, Lenovo was lagging behind competitors like Dell, HP (Hewlett-Packard) and local brands like HCL (Hindustan Computers Limited). Lenovo had a 7.3 per cent share in the Indian PC market.

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Case Contents

1. Introduction
2. Background Note
3. Rewards and recognition programs – Motivating Employees
4. FedEx “purple promise,” – a simple corporate philosophy – people, service, profit
5. Promotion from Within – Employee engagement
6. ‘Purple Pipeline’
7. Excel program for FedEx officers
8. Survey, Feedback, Action
9. Survey – Annual associate survey every spring
10. Feedback – Feedback to joint employee-management discussion
11. Action – Future work unit and manager activities
12. The FedEx “purple” pipeline – Leadership Development Program
13. Components of the "Purple Pipeline" program – Strengths assessment, Coaching, Job rotation and Capstone Exercise
14. Additional Reading and References
15. Exhibit 1 – FedEx – Now and Then
16. Exhibit 2 – List of Innovative HR Practices and Programmes launched by FedEx since its early years
17. Exhibit 3 – Elements of FedEx’s HR Programmes
18. Exhibit 4 – Five Attributes of the FedEx Brand
19. Exhibit 5 – FedEx reputation as being one of the Best Places to Work around the World
20. Exhibit 6 – Four Basic Employee Requirements at FedEx
21. Exhibit 7 – The FedEx Definition of Management
22. Exhibit 8 – Guaranteed Fair Treatment Procedure
23. Exhibit 9 – A sample leadership evaluation question
24. Exhibit 10 – FedEx Leadership Traits
25. Exhibit 11 – FedEx’s Secrets of Success
26. Exhibit 12 – FedEx’s Management by PSP Objectives program
27. Exhibit 13 – People-Service-Profit (PSP)
28. Figure 1 – FedEx BravoZulu
29. Figure 2 – SFA – Survey Feedback Action
30. Figure 3 – FedEx’s simple HR friendly philosophy “P–S–P” – People, Service and Profit

Sample Page/Content

"Federal Express, from its inception, has put its people first both because it is right to do so and because it is good for business as well."- Frederick W Smith Founder, Chairman & CEO, FedEx Corporation

“At FedEx, our people are our greatest asset. We truly believe that. Our founder and CEO rooted the company in this philosophy and we continue to stand by it… HR today has the capabilities to be that strategic partner to business whether it’s in recruiting, talent development, performance management, employee relations or compensation, all of those functional areas have the opportunity to really help the business achieve strategic objectives” – Judith Edge, Corporate VP of Human Resources of FedEx

1. Introduction
In 2008, when FORTUNE magazine and the Great Places to Work Institute released the 100 “Best Companies to Work For” list, FedEx (NYSE: FDX), a leading global logistics solutions provider, was one among them. It was the largest employer in the 2008 list and the only shipping company included. The Memphis, Tennessee-based company ranked 97th overall and had now figured in this list in 10 of the past 11 years. In 2005, the package-delivery company was named to the “Best Companies to Work For” Hall of Fame.

FedEx like its main rival United Parcel Service (UPS) is considered a bellwether of U.S. economic health…

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Case Updates/Snippets

Federal Express: The word ‘Federal’ in the company’s original name came from founder Fred Smith’s proposal to carry checks of the Federal Reserve overnight to approximately 36 locations. ‘Express’ indicated speed in doing so.

FedEx began operations in the year 1973 and became not only the first company to deliver overnight packages but also went on to become the first company to grow to a billion dollars in 10 years of its existence.

Contents

1. Introduction – Wal-Mart’s first store in India
2. Joint venture with Bharti Enterprises
3. About Wal-Mart
4. Wal-Mart – Background Note
5. Wal-Mart – Timeline
6. Wal-Mart – Quick Facts
7. The world’s largest retailer isn’t new to India
8. India’s first special skills training centre
9. Exhibit – Wal-Mart’s business model in India
10. Mera Kirana programme
11. Exhibit – Foreign hypermarket chains in India
12. Wal-Mart Internationally
13. Exhibit – Wal-Mart and Expansion into International Markets
14. Wal-Mart’s imperfect success record in a foreign country
15. Cost-Leadership Strategy- Wal-Mart’s core philosophy – EDLP (every day low prices)
16. Will Wal-Mart succeed in expanding outside the U.S.?
17. Best Practices and lessons from the International Markets
18. Wal-Mart India – Plans and Challenges
19. Wal-Mart’s Strategy and Supply Chain tuning for India
20. Physical and Regulatory Challenges
21. The Indian Consumer
22. Bringing private label suppliers to India
23. Will the kirana store go out of business?
24. Advantages of a small Indian shopkeeper – The Kirana store
25. Exhibit: Wal-Mart – Store Formats
26. Exhibit: Wal-Mart – International operating formats
27. Questions for Discussion

Sample Page/Content

"India is a price sensitive market and therefore we will be devising our strategy for her very carefully…Retailing is like a game of three dimensional chess where we operate as a local, regional and global player, so depending on the needs of the market we shall change our format and adapt." – John B Menzer, President and CEO, Wal-Mart International.

"India is not a homogeneous market, so ours is not a cookie-cutter approach from the U.S. …Wal-Mart is in no hurry to unfurl the Wal-Mart flag nationally. The easiest thing is to roll out stores, but the most difficult is to sustain and feed them." -Raj Jain, President of Wal-Mart India in May 2009.

"Wal-Mart operates with multiple private brands around the world. In each market that we operate, we look to be local. We treat each market as unique and India, in this respect, is no different." -Arti Singh, vice-president of Corporate Affairs at Bharti Wal-Mart.

1. Introduction – Wal-Mart’s first store in India

In December 2006, Wal-Mart Inc. believed that by the year 2015, 35% of India’s retail sales could be from chain stores . This was a radical increase from the prevailing 2%. In May 2009, Wal-Mart was ready to open its first store in India. The reason for Wal-Mart’s entry in India was clear – The Indian middle class . The world’s biggest retailer had been silently working on its strategy for India for around two years. Mom-and-pop stores and traditional distribution networks dominated the $375 billion Indian retail market. Wal-Mart’s first outlet was set to launch in the city of Amritsar, Punjab in North India. The first store air-conditioned and built over 50,000 sq. ft. was on the outskirts of the city, Amritsar. The store employed 200 locals and was likely create 500 indirect jobs. In the first few weeks itself, the company had managed to sign on close to 35,000 members. However, the debut outlet was not to carry the familiar Wal-Mart brand. Did this mean Indian consumers could not benefit from Wal-Mart’s everyday low prices?

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Case Updates/Snippets

• 50:50 joint venture: In India, Wal-Mart has a 50:50 joint venture with Bharti Enterprises in the wholesale cash-and-carry segment.
• Direct Farm Program: Multinational retail giant, Wal-Mart’s Direct Farm Program in India is a partnership with 110 small and marginal farmers near Ludhiana in Punjab where it encourages cultivation of safe, high-quality, seasonal vegetables. Farmers are advised at every stage of cultivation by field agronomists. Farmers learn about nursery management, transplanting, nutrient management, as well as harvest and post-harvest practices.
• Wal-Mart India in 2010: In 2010, Bharti-Wal-Mart plans to launch seven Best Price Modern Wholesale Cash-And-Carry stores across India. These stores will be 100,000 sq ft in size and each store will involve an investment of $6-7 million.
• Sourcing from India: Wal-Mart has a large sourcing business in India. The retail major sources goods worth $125 million a year from Punjab. In 2010, Wal-Mart is planning to increase sourcing from India to strengthen its global business.
• Preference for Kirana/local retailers: According to a survey by ASSOCHAM in early 2010 in which it interviewed 5000 shoppers in various cities in India, kirana stores (mom and pop stores) and local retailers were the preferred destination for shoppers as compared to shopping malls. The survey found that goods were less expensive (as much as 25%) in local kirana stores as compared to big shopping malls. Smaller stores also offered more variety and affordable options with sustainable quality at a negotiable price (reduced margins).
• Training centers: Inheriting a model from its U.S. parent, Bharti-WalMart (Best Price Modern Wholesale) intends to set up its own training centers to train less-privileged youth to work in retail stores.
• FDI in retail in India: In India, the Government presently does not allow foreign investment in multi-brand retail. It allows 51% FDI in single-brand retail and 100% in wholesale venture. In 2007, Walmart Stores and Bharti Enterprises entered into a joint venture and began cash & carry stores under the brand Best Price Modern Wholesale.

McDonald’s

In the UK, McDonald’s strategy is to listen more to local consumers and then act on it. The company strives to do this around the world. Some if its local favorites around the world include the McItaly burger in Italy, Maharaja Mac in India, the McLobster in Canada, the Ebi Filit-O in Japan.

McDonald’s has novelty items on its menu in Japan like the Teriyaki McBurger with Seaweed Shaker fries, Ebi Filet-O, Croquette Burger and Bacon Potato Pie. McDonald’s signed model Yuri Ebihara (known as Ebi-chan in Japan) to market Ebi Filet-O. Ebi means shrimp in Japanese.

Starbucks

Starbucks is trying out locally designed franchises in stores. The stores are non-Starbucks branded in order to recapture the feel of a local coffee shop, which would otherwise be threatened by the existence of Starbucks in its vicinity.

KFC

To increase visits from local residents, KFC has initiated a five-year plan to upgrade its UK restaurants with new contemporary designs. Designs will be based on ‘look and feel’ of the area and in collaboration with local property developers.

KFC has a vegetarian thali (a mixed meal with rice and cooked vegetables) and Chana Snacker (burger with chickpeas) to cater to vegetarians in India.

Tesco

When Tesco expanded globally in countries such as Thailand, Hungary and the Czech Republic it kept it’s usual name and branding. However, when it entered the United States, it named it’s stores "Fresh & Easy Neighborhood Market".

Nokia

Nokia responded to local customer needs with the introduction of dust-resistant keypad, antislip grip and an inbuilt flash light for Indian rural consumers (specifically targeting truck drivers).

Hindustan Lever Limited (HLL)

HLL identified the importance of rural customers and invented the shampoo sachets priced at almost a rupee which were an instant hit.

Ford

In 1904, Ford was one of the first automotive corporations to go International with the opening of Ford Motor Co. of Canada. Even Henry Ford II had opined that in order to further the growth of its worldwide operations, any purchasing activity should be done after considering the selection of sources of supply not only in its own company but also sources located in other countries. When Ford had set up its first plant outside U.S., in Canada, it gained considerably from the geographic and cultural proximity.

Viacom’s MTV localized strategy with localized programming

MTV has catered to local taste in East Asia in South Korea, China, India and Japan. E.g. MTV broadcasts on two channels with Chinese music in China and Hindi pop in India. Using joint ventures with local partners, channels are branded accordingly as MTV India, MTV Korea, MTV China and MTV Japan and use more local employees with use of local language.

Whirlpool Corporation

Whirlpool Example 1: Domestic appliance maker, Whirlpool incorporated specially designed agitators into its washing machines when it sold them in India. This helped Indian women wash saris without the five-foot long sari getting tangled. Whirlpool formed a joined venture with a local partner to produce the redesigned washing machine to suit local taste and culture. Whirlpool also makes its refrigerators in bright colors like red and blue as many Asian consumers placed their refrigerator in living rooms as a sign of status. Whirlpool believes in standardizing worldwide what it can and adapting what it cannot.

Whirlpool Example 2: As part of Whirlpool’s global strategy, the company wanted to develop products based on consumers tastes and needs. Whirlpool had done extensive research and found that European customers wanted a microwave oven that could brown and crisp food. Whirlpool then designed and introduced the VIP Crispwave which could fry crispy bacon and cook a pizza with a crisp crust. The product was successful in Europe and later launched in U.S. as well.

KFC – Yum! Restaurants

Global chain, KFC has introduced ‘Krushers’ in the cold beverages segment in India. The range of flavors of Krushers has been altered to suit the Indian taste buds.

Subway

The Subway chain does not have beef in its stores in India.

Taco Bell

The Taco Bell menu in India has crunchy potato tacos and extra-spicy burritos filled with paneer (cottage cheese). Taco Bell has hired employees who explain what burritos and quesadillas are to customers in India.

Coca Cola

In 1955, a Coca -Cola advertisement or documentary (almost 20 mins long) referred to as the “Pearl of the Orient” shows Coca-Cola’s popularity in Philippines and how Coke has merged itself into the Philippines economy and culture.

Heinz

In 2010, Heinz plans to launch packaged food products in India which will suit the Indian taste. Heinz, which entered India in 1994, plans to Indianise the flavors offering condiments, juices and snacks to the Indian consumers.

Strengths:

• What do we do well?
• How are we better than our competitors?

Weaknesses:

• What could be done better?
• What is being done badly?

Opportunities:

• What are the opportunities that can be exploited?
• What are the interesting trends?

Threats:

• What obstacles are being faced?
• What is the competition doing?
• Are the specifications for the products or services changing?
• Is changing technology threatening our business?

SWOT Analysis Example

Sample SWOT Analysis for CONMED Corporation: (for illustration purposes only)

Strengths	Global Presence, International Sales approximated 29%, 33%, 35% in 2002, 2003 and 2004 respectively Strong Manufacturing base Clinicians and administrators desiring non-invasive procedures New product introductions Acquisition of key technology like ECOM	Certain products like surgical suction tubing and ECG electrodes are commodity products with little differentiation possible Higher incremental costs in 2005 until manufacturing of the acquired products is integrated	Weaknesses
Opportunities	Scope for new product or technology introductions Current research focus on reflectance technology products which permits non-invasive analysis of blood oxygen levels in clinical situations	Continued cost containment pressures in highly competitive market Change in regulatory environment Patent Litigation risks	Threats

CONMED Corporation (CONMED) (NASDAQ: CNMD) develops and produces medical and surgical procedure instruments.

"If GE’s strategy of investment in China is wrong, it represents a loss of a billion dollars, perhaps a couple of billion dollars. If it is right, it is the future of this company for the next century." – Jack Welch

The significance of strategy in driving the success or failure of a business has gained increased recognition in recent years. Business and Strategy case studies provide an in-depth and clear insight to this important management subject, simplifying the business jargon and abstractions that often surround business education and strategy. Business Strategy cases generally include:

• Identification of strategic objectives
• Studying the business environment
• Identifying Strategic Opportunities
• Comparison of Strategic Alternatives
• Strategy Implementation

"Relativity applies to physics, not ethics." -Albert Einstein

Business Ethics can be described as the combination of business practices and social values/responsibilities (along with environmental factors relevant to business).

Case Studies in Business Ethics introduce and put forth the ethical practices which should be incorporated in business decisions. The business cases, study the responsibilities of all stakeholders involved in an organization.

Business Ethics case studies:

• Put forth the idea of moral responsibility
• The ground for such responsibility
• Highlight the extent to which organizations pursue ethics to making profit..

Available Business Ethics Case Studies:

• Corporate Social Responsibility at Tesco
• The Siemens scandal…

• Organization Culture at Wal-Mart

These cases are intended to provide wide-ranging information, management education, background information and leadership on the most relevant topics in business. Illustration from published and other sources, a case study is carefully designed to offer a highly practical resource for readers with all levels of experience. To assure quality and accuracy each case study is carefully reviewed. A case study is a written or recorded, detailed analysis of some targeted management issues, for the purpose of noting success or failure to used as a benchmark for education, research, and/or planning.

Download a Supply Chain Management Case Study in pdf format:

• H&M’s Low-cost, High-fashion Supply Chain
• Dell’s Supply Chain Management Strategy
• Wal-Mart’s Supply Chain Management Practices

A case study is a written or recorded, detailed analysis of some targeted management issues, for the purpose of noting success or failure to used as a benchmark for education, research, and/or planning. A case study is an in-depth exploration of one particular case (situation or subject) for the purpose of gaining depth of understanding into the business/management issues being investigated.

Download case study (available):

• Cafe Coffee Day (CCD) – Brand Strategy in India

• Meg Whitman and eBay – A Leadership Case Study
  This case study on Meg Whitman discusses eBay’s success and her leadership qualities.
• Warren Buffett – The Investment Leader
  This leadership case study on Warren Buffett outlines the entrepreneurial skills of the world’s most successful investor.

All cases are compiled from published sources, and are intended to be used as a basis for class discussion.

An IT case study focuses on successes with the deployment of information technology, in addition to failures as a result of inefficient use and management of IT resources in companies. Cases deal with a variety of issues pertaining to the management of IT in organizations around the world..

All cases are compiled from published sources, and are intended to be used as a basis for class discussion.

Please note: Case studies are compiled from published sources, and are intended to be used as a basis for class discussion.

Dominant in the telecommunications services market, Bharti Enterprises, the telecom giant has unveiled its vision for 2020. Its latest brand identity attempts to reflect its intent to grow its other businesses such as financial services, retail and agri-business.

New Brand Identity and Brand Essence

In early Novemeber (2008), Bharti Enterprises, the Indian business conglomerate with revenues at over Rs. 30,000 crore, unveiled a new brand logo and brand identity. With its new brand identity, Bharti plans to announce its strategic intent to create a conglomerate of the future. The new brand essence – "Big Transformations through Brave Actions" will drive the company’s core values – empowering people, being flexible, making it happen, openness and transparency and creating a positive impact.

Eighty per cent of the group’s current revenues come from Bharti Airtel (a leading mobile operator – India’s leading integrated telecom company with with over 80 million customers and voted as India’s most innovative company by The Wall Street Journal. In October 2008, GSM player Bharti Airtel outperformed all CDMA players (like Reliance Communications, Tata Teleservices, HFCL and Shyam Telecom) put together in terms of mobile revenues, net subscriber addition and revenue share. ). The group now wants to focus on its other retail, agri-business and financial services ventures where it has partnerships with other companies like Wal-Mart, Del Monte and Axa. The group is looking at revenues of $10 billion in around two years with non-telecom business generating at least 50 per cent of the revenues.

New Brand Logo

The group also introduced a new fresh and youthful brand logo which the company believes will depict its multi-dimensional character and its strategy to grow with new avenues.

Bharti’s New Brand Logo and its significance


Bharti’s Old Brand Logo

The Bharti Group

The Bharti Enterprises group includes companies like Bharti Airtel (telecommunications services), Bharti Teletech (telecom & allied products company), Telecom Seychelles (telecom services in Seychelles), Bharti Telesoft (VAS products and services to telecom carriers), Bharti Del Monte India (fresh and processed fruits and vegetables), Bharti Retail (multiple consumer friendly format stores in India), Bharti AXA General Insurance, Bharti AXA Life Insurance, Bharti AXA Investment Managers (asset management company), Bharti Learning Systems (end-to-end learning and development solutions organisation), Jersey Airtel (mobile services in Jersey (Channel Islands)), Guernsey Airtel, Bharti Foundation, Bharti Realty (Real Estate Arm).

With slowdown in developed markets, companies like PepsiCo and Coca-Cola are looking at emerging markets like India and China for growth. PepsiCo is aiming to triple its businesses in India over the next five years (and also setting up a new leadership structure in India). The Coca-Cola Company (Coke), the world’s largest nonalcoholic beverage company, is not one to be left behind. Coke has a new strategy and has renewed its focus on semi-urban and rural markets in India.

Market Focus – Targeting rural India

The soft drink consumption market in India is mainly concentrated in urban cities. Even, market research data suggests that consumers in urban cities spend ten times more than consumers in semi-urban and rural markets. However, Coca-Cola has renewed its focus on the rural market in India and believes there is huge opportunity with vast growth potential in these markets. Coke is targeting small towns (tier II and III towns like Agra, Bilaspur and Lucknow) and rural markets in India.

The ‘parivartan’ program – Training small town retailers

Coke’s new strategy involves training retailers (around 6,000 of them) in a program launched by the Coca-Cola University. [In 2007, the company launched Coca-Cola University — a virtual, global university for all learning and capability-building activities.]

The company calls this the “parivartan” program (meaning “Change” in English). Shop owners (traditional retailers) are given training on displaying and stocking products well. The goal of the innovative training program is to provide traditional Indian retailers with the skills, tools and techniques required to succeed in a constantly changing retail scenario. Presentations (including audio/visual technology) in local Hindi language help small retailers (with stores less than 200 square feet in average size) to better understand the concepts involved. Each retailer also receives a Coca-Cola “Certified Retailer” certificate at the conclusion of the program.

Adapting to local culture and taste

Last year, PepsiCo set up a research facility in India. Last month, Coke too set up an R&D faculty in India to develop beverages that suit local taste and increase focus on localizing its portfolio of beverages. Earlier, Coca-Cola India had been outsourcing all R&D functions from its facility in Shanghai. Some examples of local flavors include Maaza aam panna by Coca-Cola and Pepsi has locally-produced flavors under its Tropicana juice brand (with nimbu pani (lemon water) in the pipeline).

Moving from a price strategy to stepping up distribution

In the past (in 2002-03), Coke had already targeted rural consumers by bringing down the entry price (Rs 5 a bottle) for its product. Now, it has stepped up distribution of its 200-ml (priced at Rs 7 and Rs 8 ) returnable-glass-bottles.

Dell’s Entry in India

Dell International started in India about seven or eight years back by opening a customer contact center at Bangalore in 2001. In 2003, the second contact center was opened at Hyderabad. The company operates its services from four centers based at Bangalore, Hyderabad, Chandigarh and Gurgoan. Dell started in Bangalore providing customer support to English speaking countries and later also began providing technical support, procurement of financial back office and Knowledge process outsourcing. After the U.S., Dell India is the second biggest centre with 13,000 employees. The strategic importance of India to Dell is evident from the fact that India was one among three locations (the other two being US and UK) where Dell’s Latitude E series and Precision notebooks were launched.

Manufacturing – The first Dell ‘Made in India’ desktop

“The Chennai operation reaffirms the strategic importance of India to Dell, providing significant impetus to our growth plans and prospects here, where we are already among the fastest growing computer systems suppliers.“- R Anandan, VP & GM, Dell India

In July 2007, Dell began production at its new manufacturing facility in Chennai (Dell’s third manufacturing location in Asia-Pacific and Japan region and eighth overall). The Sriperumbudur plant (50-acre site with a planned five-year investment of about US$ 30 million) was chosen for manufacturing in September 2006. The planned initial capacity was around 400,000 desktop computers per year. The company has doubled its production capacity since then from 400,000 in 2007 to the 1 million units in June 2008. Infosys, one of Dell’s largest customers in the country, was presented with the first ‘Made in India’ desktop computer system.

Dell’s Market Share in India

“India is the fastest growing market for Dell worldwide and laptops have emerged as the fastest growing form factor.” – Rajiv Ahuja, Director Communications of Dell APACS

“By 2015, the number of PCs in India will grow 10 times and in the last year our personal computer sales in India grew by 99% compared to the previous year” ” – Michael Dell.

“We have gone from zero to 10 per cent share in the government segment and we’re the largest player in the large enterprise space” – Sameer Garde, India General Manager for Dell.

In March 2007, Dell was roughly a half a billion dollar enterprise in India and has expectations to touch revenue of $1 billion within the next year. (Within three years of launching its products in the Indian market, Dell crossed the $1-billion sales mark in India.) In 2008, Dell ranked third in the Indian market with a 7.6 percent market share compared to about 4 percent market share two years ago. In Q2, 2008, Dell had a 16% share in the Notebooks segment and 6% share in Desktops segment as compared to 8% and 4.5% share in Q2, 2007 respectively.

Dell’s new retail strategy and Direct-only model

Dell’s innovative direct- sales model with good sales growth had been successful until the mid-2000s when the company’s profits and share prices began dropping considerably. Dell was selling PCs directly to customers by phone and online. On May 24, 2007, Dell disclosed its plans to sell PCs in the US, Canada, and Puerto Rico through Wal-Mart and Sam’s Club retail stores. This announcement came soon after Michael Dell returned as CEO replacing Rollins.

In India, as part of the retail initiative, Dell tied up with Tata Croma (the Tata-owned electronics retail chain) in July 2008 and with select Staples stores. By the end of 2008, Dell planned to increase its presence to100 Indian cities by increasing its channel partners. In October 2008, Dell announced the opening of the first Dell exclusive stores in India at New Delhi and Coimbatore. Dell also tied up with 600 systems integrators all over the country who could take orders on its behalf.

Dell’s New Marketing Strategy in India

Dell is targeting the small and medium businesses (SMB) in smaller towns in India as its main driver for growth as the company believes this market sector is growing rapidly and is not exposed to global shocks making it a much more stable market. Dell India is focusing on simplification of the business processes (basic areas to improve cost efficiencies) as part of its new rollout plan. It has even tied up with Tally to offer accounting solutions online. For an initial period, customers get a Tally subscription free along with select Dell Vostro systems. Dell has also increased its SMB team to 200 and expanded its presence to about 600 tier-II and tier-III cities. Dell will also introduce a portal titled “Dell 360″ (with discussion forums) where SMBs can educate themselves on benefits of IT to their businesses.

Dell’s New Advertising Campaign for SMBs

First launched in India, Dell’s new advertising campaign is titled – “Take Your Own Path”. The campaign targets Indian SMBs with a new range of laptops.

Testimonial Advertising instead of Transactional

In December 2007, Dell partnered with WPP (after withdrawing its advertising responsibilities from over 800 different agencies worldwide) which launched its own specialist unit Enfatico with Dell as its only customer. Enfatico’s first international campaign for Dell targeted SMBs featured successful Indian faces (like P Rajendran – NIIT’s co-founder and COO, Raman Roy – CEO of Quattro among others with their testimonials) and aimed at establishing an emotional connect with brand Dell.

Related Reading:
Download PDF file on:

• Dell’s Supply Chain Management Strategy

Dell’s new retail business and supply chain approach

Dell is taking steps to turnaround its business and recovering from losses and decline in its profit margins. Dell had first announced cost-cutting measures as early as May last year. In 2007, Dell changed its direct-sales model to offer computers in retail outlets, after losing the title of top PC maker to Hewlett-Packard Co (HP). Dell is now beginning to supply similar products to retailers like Wal-Mart, but as a smaller percentage of its business. Dell is currently the second largest computer retailer in the world behind HP.

Dell’s well-established direct-sales model allowed buyers to custom-build and purchase computers online or by phone. Customers could choose custom PCs (almost 500,000 configuration options or combinations that were assembled) direct from its factory. On the other hand, competitor HP also sold configure-to-order models but also supplied fixed-configuration PCs direct to retail.

Dell’s new retail business is not profitable as of now. So Dell aims to make its retail computer business cost-effective by aligning (reducing) manufacturing costs (cost of goods sold) with its competitors. But this will be challenging since Dell does not have the same volume in retail globally (as competitors), and therefore a smaller fixed base to spread costs. Secondly, Dell’s supply chain had not exactly been designed for mass distribution. HP uses a diversified supply chain unlike Dell’s one supply chain approach. [Download Case Study on Dell's Supply Chain Management Strategy
(pdf file)]

The return of Michael Dell and the Turnaround Plan

Michael Dell, the founder of Dell returned as the CEO in January 2007, and the company has a turnaround plan which it promises will yield $3 billion in annual savings over the next three or four years. Dell’s plans include depending more on resellers and contract manufacturers to cut costs and boost sales of which the consumer personal computer business is expected to contribute more than the current 15 percent of total revenue. (At HP, consumer sales of PCs and printers account for about one-third of revenue. Industry-wide sales of consumer PCs are growing at about twice the rate of PCs for businesses.) Contract manufacturers who manage large volumes of orders for big PC makers like HP will be given more work. But apart from concentrating on designing and manufacturing to cut costs, supply chain and logistics (distributing PCs for retailers) are key focus areas as scale is less of an issue. The cost-cutting exercise would also include restructuring of its logistics network and outsourcing more of its manufacturing operations. Dell also announced its intentions to install a logistics hub in Dubai to cater to the emerging market regions and also into the east African regions. Developed economies like the US (though the biggest) are the slow in growth. Last year, the EMEA region made up less that 25 per cent of its total revenues (70 per cent growth) and is estimated to be $61 billion in 2008.

Dell’s Turnaround Plan:

Cutting costs: Cutting costs is very important because competitors like HP use the money from profitable printers operations and take more market risk with designing innovative products. Moreover the prices of computers keep going down. One can buy a Dell laptop now for less than $500.

Moving away from computers internally and outsourcing more of its manufacturing operations: Dell has manufacturing facilities in Texas, North Carolina, Tennessee, and in Malaysia, Penang, China and Poland. Its manufacturing operation in Austin, Texas will shut down. Also HP, IBM and Sun Microsystems already have long-standing partnerships with outside manufacturing partners. These partners offer customers bundles of computer hardware, software and services. Dell on the other hand is relatively a new player in this field and has traditionally depended on its own businesses to design and make computers.

Moving into indirect sales channels like computer resellers and retailers.

Introducing more products: New product introduction is vital since major PC manufacturers realistically only make money in the first three months (or six in some cases) of a new product.

Analysts predict that it will take Dell one more year for its PCs to be as cost-effective as its competitors and stage a recovery.

“Within our business, we’re being very disciplined in managing costs, generating profitability and cash flow, and investing in ways that separate Dell from others today and when the economy inevitably improves.“
– Founder and Chief Executive, Michael S. Dell.

In February 2009, Dell Computers announced that it would strive to cut an additional $1 billion a year from the company’s costs by 2011. Earlier in 2007, Michael Dell, had returned as CEO and began an aggressive cost-cutting program to turnaround the company. To counter the economic downturn,
Dell’s strategy was to try and keep profits high even if it meant missing out on some sales. The company also wanted to increase its services and software businesses by making
acquisitions. Dell is also looking at reducing the cost of its components. The average cost per computer has fallen by 5% in the past year.

However, Dell is facing the heat as businesses and other customers are sharply cutting spend in technology. Sales in all of its major hardware businesses fell (Dell’s server, software and services businesses declined as well, while storage sales rose). Other leading companies in the PC business like
Hewlett-Packard, reported a drop in PC sales during (19% drop in its fourth quarter revenues of $8.8 billion). Dell reported a 48 percent drop in net income of $351 million from $679 million for the same period last year. Dell’s revenue in the quarter ended Jan. 30, dropped by 16% to $13.4 billion from the $16 billion reported last year. Since 2005, this is Dell’s lowest total and the lowest fourth-quarter profit since 2002.

Related Case Study on Dell:
• Dell’s Supply Chain Management Strategy
• Dell in India – Business and Marketing Strategy

How are foreign retailers like Zara, Hennes and Mauritz (H&M), Mango, Uniqlo, Kira Plastinina and Topshop performing in the U.S.? What are their expansion plans and their entry year in the U.S.? Can they compete with The Gap, the U.S. local retail chain which has more than 3,000 stores and has been a preferred shopping destination for U.S. customers. Some of them have defied global recession and are faring well. Here’s a snapshot:

Keywords: Retailing, Zara, H&M, Hennes and Mauritz, Mango, Uniqlo, Kira Plastinina, Topshop

Related Articles and Case Studies on Retailing (PDF files)
• H&M’s Low-cost, High-fashion Supply Chain
• Hennes & Mauritz, H&M in Japan – Hit or Mistake?
• Wal-Mart’s Supply Chain Management Practices
• Tesco takes on US Wal-Mart
• Of Wal-Mart price cuts, Struggling Retailers and Weak 2008 Retail Sales Forecast
• Wal-Mart’s Marketside or Tesco’s Fresh and Easy stores in US
• Wal-Mart’s Great Value Brand Makeover

Since its formation in 2001, GlaxoSmithKline (GSK), the pharmaceutical giant, for the first time will run from its London headquarters. GSK will continue to operate from its dual headquarters, in London and Philadelphia. GSK’s CEO, Andrew Witty (who joined Glaxo UK in 1985) has decided to remain in London, partly for family reasons. CEO Witty will travel to the U.S. regularly. It is believed that the highly and increasingly regulated U.S. market offers less lucrative returns for large pharmaceutical firms. Big pharma companies are looking to expand in other regions like the Asia-Pacific region. Perhaps, GSK’s move is indicative of this growing belief which is one of UK’s biggest businesses. GSK UK business is worth about £76 billion.

GSK Struggling

Despite annual sales of £20 billion and one of the strongest drug pipelines in the industry, GSK is struggling. Sales of GSK’s second biggest selling product Avandia (diabetes drug) collapsed, after the drug was linked to a significantly increased risk of heart attack last year. GSK is also currently undertaking a £1.5 billion cost-cutting drive. This cost-cutting plan includes cutting workforce by at least 5,000 jobs from 102,000, closing a few sites from its 99 sites and outsourcing drug manufacturing partly.

GlaxoSmithKline GSK, Pharmaceutical Industry

How is HP dealing with a challenging economy?

Leading tech companies (including Intel and Cisco) believe that given the constraints of the economy today and the likely global recession, customer spending on technology will decline rapidly impacting both consumer and corporate purchases. Declining sales figures in October and November (2008) reflected on this fact. Hewlett Packard (HP) on the other hand has delivered a contrastingly optimistic forecast and expects significant growth with respect to the negative outlook for the coming quarter. How is it able to do so? A look at some components of HP’s business strategy:

HP and its Business Strategy

Wide Variety

H.P. offers a wide variety of products to consumer and corporate customers which means that strength in some businesses can offset weakness in others.

Repeat/Recurring Sales and Long-term deals

HP’s stable revenues come from a large amount of recurring sales – about 40 percent (65 percent of its profits) from long-term deals.

Declining sales of major printer and PC products

At HP, printers are often sold at a loss. Fewer printers sold imply higher HP profits. On the other hand, PC losses have a marginal effect on H.P.’s overall profits.

What the CEO and Analysts say?

Mark Hurd, Chairman and CEO of HP remarked that HP’s ability to execute in a challenging marketplace helps it to differentiate against its competitors and therefore it is able to increase its market share and earnings. Other analysts opine that HP is a really well-run company perticularly from a cost perspective.

Cutting costs and layoffs

The company was aggressively cutting costs and even began laying off workers (around twenty-five thousand) before the declining economy had its effect on the tech industry.

HP is optimistic, but will it be able to match its 5 percent (approx.) growth in recent quarters. Given the economic gloom, at least it has done well competitively and probably will emerge from the current economic environment as an even stronger force.

Related Articles

• Hewlett-Packard’s retail channel advantage over Dell
• Is Dell’s Retail Strategy paying off?
• Download PDF file on Dell’s Supply Chain Management Strategy

HP’s retail channel strategy is working

Hewlett-Packard (HP), the world’s largest personal-computer maker (based in the Palo Alto, California), beat Dell in PC sales for the sixth straight quarter and posted a fiscal first-quarter profit (February, 2008). The results which topped analysts’ estimates on orders for PCs, servers and storage show that HP’s retail channel strategy (to rely on a network of retailers) is working. The option to view and touch the machines before buying is helping HP win customers. Furthermore, HP’s PCs and notebooks are sold in about 110,000 stores; 10 times as many stores as Dell. Dell has its PCs selling in more than 10,000 stores. Even in terms of desktop and notebook models offered through retailers, HP offers twice as many as Dell does. Shoppers, therefore have more choice. Last year, Dell discarded its much renowned direct-sales strategy and began forging partnerships with retailers in an attempt to win back shoppers.

Dell’s unique ‘direct build-to-order’ sales model?

Dell had been following its unique ‘direct build-to-order’ sales model for more than 20 years. Dell’s customers could plan their own configuration and place orders directly with the company via the phone or its Web site. Over the years, Dell’s supply chain efficiencies and direct sales gave it a competitive advantage. In 2006 however, Dell faced several problems. Many customers complained about long delays in supplies. Increasing discontent of customers led to a slowdown in sales. Consequently, Dell lost its market leadership to Hewlett-Packard Co. (HP). Dell will have to bear additional costs with its foray into retail distribution thereby minimizing its cost advantage. Besides, profit margins of Dell will drop further since it will have to offer incentives to compete with HP in retail stores. Read full-text of this case study on Dell’s Supply Chain Management Strategy.

Strong order book lifts profit at Hewlett-Packard

HP’s first-quarter net income increased 38 percent to $2.13 billion from $1.55 billion. Chief executive Mark Hurd who succeeded Carly Fiorina in April 2005 has topped his profit forecasts in each quarter since taking over. This only underscores the huge challenge Michael Dell has in turning around Dell.

First-quarter sales increased 13 percent to $28.5 billion. PCs account for about a third of Hewlett-Packard’s sales and it benefited from a decline in the cost of parts for PCs (memory prices fell by almost 45 percent last quarter). Even concerns about reduced U.S. spending were partly offset as Hewlett-Packard gets more than two-thirds of its revenue from fastest-growing economies outside the U.S. Countries like Brazil, Russia, India and China account for approximately 9 percent of the HP’s sales.

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Is Dell’s Retail Strategy paying off?
HP and Green Environment Initiative
Lenovo new European production facility
Dell gets serious about storage services

keywords: Computers, Dell, HP, PC Manufacturing, Retailing

IBM and importance of small and medium businesses

Out of IBM’s total sales, Small and medium business (SMB) revenues account for about 19%. In the fourth quarter 2007, IBM reported that SMB revenues increased by 11% to $5.4 billion. Overall, IBM reported that fourth quarter revenues increased 10% year-over-year to $28.9 billion. Michael Rodin, GM for IBM’s Lotus Notes unit said that, “Small businesses need superior collaboration technology as much as large companies do.”

IBM’s second announced acquisition in 2008

With sales to small businesses becoming increasingly important to IBM, the company announced that it had made its second acquisition of 2008. IBM acquired Toronto-based Net Integration Technologies (NIT). NIT is a developer of an all-in-one business server aimed at small- and mid-sized companies. Financial terms of the deal were not disclosed. IBM expects to close the acquisition in the first quarter of 2008.

Nitix, NIT’s small all-in-one business server, (Linux based system ) is for companies with little or no in-house IT support. It includes Lotus Notes e-mail, file management, directory services, back up and recovery tools, and optional business applications. NIT’s mainly sells to small business environment customers (small- and mid-sized companies) like auto dealerships, law offices, real estate agency branch offices, and others.

IBM recently acquired XIV Ltd., a Tel Aviv-based manufacturer of high-performance digital storage systems earlier this month. Last year, IBM had also acquired Cognos, a Canadian developer of business intelligence software in a $5 billion deal. In 2007, IBM made nine acquisitions.

IBM, Mergers and Acquisitions, small and medium businesses, Net Integration Technologies (NIT)

Larsen and Toubro (L&T), the engineering and construction giant wants to reposition itself and be a more focused value-added engineering company. L&T is a USD 8.5 billion company and has 12 operating companies and three subsidiaries. The company was mainly into engineering, procurement and construction segments. It also has a large exposure to commodity businesses such as cement and ready-mix concrete. In the year 2000, L&T began implementing its business restructuring exercise with its first two five year plans. The restructuring plans had set a target to reach a business volume of Rs 35,000 crore annually which the company achieved and exceeded by 15-20%. As per the restructuring plans, L&T had divested its cement business in favour of the Aditya Birla Group and its ready-mix concrete business in favour of Lafarge SA. The third five-year plan of the company will be executed from 2010 to 2015.

L&T’s operating divisions

• Engineering & Construction Projects (E&C)
• Heavy Engineering (HED)
• Engineering Construction & Contracts (ECC)
• Electrical & Electronics (EBG)
• Machinery & Industrial Products (MIPD)
• Information Technology & Engineering Services

As part of its Business restructuring exercise L&T plans to:

• Revise the status of each of its 12 operating companies, depending on financial performance, size and strength. A threshold value of Rs 5,000 crore has been fixed for identifying size. Only a company having a certain size and strength will be called a “L&T-promoted company”.
• Executive vice presidents running operating companies will be upgraded to senior VPs based on performance.
• A succession plan, with chairman A M Naik retiring in September 2012.

In August 2009, L&T had announced an internal restructuring exercise wherein it planned to form a new entity within the company to cater to the growing opportunities from the railway sector. The new entity was to be formed from L&T’s existing arms which were currently involved in railway work, including the manufacturing, design and marketing arms. The company had also announced plans to enter the general insurance business.

Keywords: L&T, Business Restructuring, engineering and construction

McDonald’s, the fast-food retailing giant has a proven formula for doing well in a recession – courting consumers globally by targeting local tastes with global menus. McDonald’s has expanded its global appeal which has resulted in good results, even though almost every type of industry is seeing widespread sales dips and tougher times.

While still strong in the United States, McDonald’s sales growth has dipped but has been saved by strong international sales. More than half of the McDonald’s total sales have come from abroad since the late ’90s. In 2008, of the total revenues of $23.5 billion, sales abroad accounted for more than 60%. McDonald’s did particularly well in Europe where even the analysts were not expecting good results. McDonald’s has managed to improve its image in France where earlier it was traditionally met with disdain and seen as a symbol of global capitalism. The company also did well in the U.K. which is seen as a tough market with strong competition and the most skeptical customer base. The company’s sales also rose in Asia/Pacific, Middle East and Africa segment.

Download Case Study PDF

Download Management Case Study on McDonald’s – Business Strategy in India
17 pages, PDF file

Keywords: McDonald’s, fast-food retailing, global menus, Innovation, globalization, adapting to local tastes, International expansion strategy

In the emerging markets, Nokia’s business strategy is to:

• Increase mobile usage in rural areas
• Reduce the mobile phone ownership and operating costs
• Bring the benefits of mobile telephony to people in emerging markets
• Bring the power of the Internet to these markets

An end-to-end player with a product for everyone

Nokia caters to the mass-market and also the high-end market and has a product for everyone. The company’s focus would continue to be driving demand and foster brand aspiration.

In November 2008, in India, Nokia introduced handsets (prices ranging from €25 to €90 – Nokia’s lowest cost handset to date at €25) and a range of services (available from first-half of 2009). The services will be expanded to other countries in Asia and Africa later.

Nokia’s Market Positioning: Different price points and value propositions

Nokia’s service offerings

The services being introduced include:

• Nokia Life Tools: Farmers and students can get relevant local information on seeds, crops, markets and weather through SMS. Advantages include information in two languages simultaneously, easy icon-based user interface and availability of critical information without a GPRS connection.
• Mail on Ovi: An email service directly on the mobile phone. No PC required.
• Education Services: Users can opt for an English word a day and learn how it is pronounced and its meaning in their native language.

Finnish cellphone maker, Nokia is planning to close its mobile devices plant in Bochum, Germany by mid-2008, stating that it is not competitive enough. Nokia, the world’s top cellphone maker, may cut up to 2,300 staff. Nokia is moving production to lower-cost regions and to its existing plants, mainly in Romania. Even with additional investment, Nokia’s German plant was proving uncompetitive chiefly because labor costs were almost ten times higher in Germany as compared to Romania. All non-production operations will be closed.

Read case study on Nokia’s Business Strategy in India (pdf file)

In March, last year, Nokia had announced its plan to set up a mobile phone plant in Romania. Nokia had invested 60 million euros ($89 million) in its Romania plant. A majority of Nokia’s cellphone production is in lower-cost countries like Hungary, Bulgaria, Romania, China and India. Nokia also has manufacturing operations in high-cost country Finland. However, the Finnish manufacturing site has been re-focused onto high-end production, and research and development. So it is unlikely to be closed any time soon.

Market changes and cutthroat price competition in the production of mobile devices has led to this move. To the German mobile devices/telecommuniations manufacturing industry, Nokia closing its manufacturing plant is another setback after 3,000 employees lost their jobs at BenQ which declared bankruptcy about a year earlier. By 2010 end, Nokia Siemens Networks is also aiming to cut almost 15 percent of its global workforce. Around 2,290 of these are likely to be in Germany. Nokia also plans to sell its automotive accessory business and is in talks with India’s Sasken Technologies to sell its research and development unit.

Meanwhile, the union [IG Metall and member of the supervisory board of Nokia GmbH (Germany)] are planning action against Nokia. Deputy Economy Minister Hartmut Schauerte said understood the anger of workers at the plant. He further said that, “Germany is globally competitive, Numerous success stories of German export-oriented firms testify to this. Unfortunately, Nokia has evidently not managed to take advantage of this potential despite considerable state support. The German government is in permanent contact with the company and is ready for intensive discussions if the company is prepared to reconsider its decision.” He vowed to stop Nokia getting financial assistance from the European Union to carry out the relocation.

Mobile Devices, Nokia, Motorola, iPhone

Nokia with 40% market share in the fourth quarter of 2007

In what is being regarded as the much-awaited and psychologically important milestone, Nokia (NOK), the Finnish handset maker and global giant, announced that it had achieved a 40% market share in the fourth quarter of 2007. This lead in the global handset business was achieved by Nokia while also becoming more profitable. Nokia increased profit in the fourth quarter of 2007 by 44%, to $2.68 billion, on sales of $23 billion. Increasing sales in emerging markets, coupled with growth in high-end phones were two important factors responsible for the boost in profits. Nokia plans to increase its market share further in 2008.

Read case study on Nokia’s Business Strategy in India (pdf file)

In times of global economic uncertainty…

According to market tracker ABI Research, last year, Mobile phone sales grew 15.8% to 1.15 billion units. But in times of global economic uncertainty, Nokia’s growth is commendable largely aided by the fact that consumers regard phones as necessities and they keep buying new handsets. Nokia has the right products and a distribution strategy to reach the customers. Nokia’s rivals are struggling to match Nokia’s marketing and distribution networks. Nokia can leave its’ competitors further behind by leveraging the increased sales volume, greater economies of scale, and investing more in new product introduction and research and development.

Motorola’s market share dips in the fourth quarter.

Meanwhile, a day earlier, Motorola announced that its profits plunged 84%, to $100 million, as sales declined almost 19%, to $9.6 billion. Motorola’s market share shrank to 12.4%, from 13%, in the fourth quarter. Motorola, the biggest U.S. maker of mobile phones, is also struggling with its inability to deliver phones that can match the popularity of its bestselling Razr. Motorola suffered in places such as Europe and emerging markets with sales of low-end phones and also high-end, multifeature 3G smartphones. However, it did sell more than 8 million Razrs, 3 million Krzrs, and 1.5 million Razr2s. Even established competitors like Samsung Electronics and Sony Ericsson are are yet to match Nokia in emerging markets, where basic phones sell for less than $40. Nokia sold 133.5 million phones in the quarter, more than its three closest rivals combined.

Apple’s iPhone sales are impressive and Nokia is paying attention

Since its launch in March 2007, Nokia has sold more than 5.5 million units of its multimedia handset N95. This is more than the iPhone with sales of about 4 million units. But the iPhone is not available in many parts of world and costs more than an N95. Nokia is aware of iPhone’s popularity and has plans to launch a handset with the same touch-screen technology that made iPhone popular.

Mobile Devices, Nokia, Motorola, iPhone

Nokia is the world’s largest handset manufacturer and the maker of four out of every 10 mobiles sold worldwide. In the past few months (fourth quarter 2008), the mobile phone market slowed dramatically and Nokia’s competitors Motorola and Sony Ericsson announced quarterly losses and even the sales of Apple’s iPhone slowed down. The slowing down could hit other handset manufacturers more severely and force them away from the market. However, this isn’t reason enough for Nokia to cheer as its sales also dipped particularly in large markets like China where sales came down by almost 35% from the last quarter. Some analysts even reported that the company’s operating profit margin on handsets was at its lowest point in 10 years.

Why Nokia’s sales and profits dipped?

• Slowdowns in both developed and developing markets.
• Nokia’s price strategy: Nokia’s refusal to be drawn into a price war in developing countries. Nokia is clearly struggling to maintain its dominance in the face of aggressive price competition from its rivals.
• Cash-strapped consumers: In China, which is regarded as the company’s largest market, consumers are now increasingly being price conscious (due to the faltering economy, slowing exports and slumping real-estate market) and are preferring non-branded inexpensive phones.
• Competition: The total market for high-end devices increased. But, Nokia’s high-end handsets did not do well as compared to Apple’s iPhone and Research In Motion’s BlackBerry.
• Increasing sales of cheap lower-margin devices: In the fourth quarter of 2008, margins dipped because a large proportion of sales was of cheap lower-margin devices.

Can Nokia turnaround? Nokia’s Strength and Opportunities

Analysts feel that Nokia is in the best position to make a turnaround. With a huge market share it can manufacture at a lower cost per unit. It’s wide range of products can give it an edge over any competitor and it has one of the best distribution networks in the world. Nokia can certainly capture back share in the vital high-end devices market with new products such as it’s 5800 Xpress Music (a lower priced iPhone like touchscreen phone) and making more consumer oriented phones.

Oprah Winfrey, the world famous Talk show host and top-earning US celebrity will launch a new television network channel (to debut in 2009 in more than 70 million homes) with Discovery Communications, which owns the Discovery Network and Animal Planet, among others. In a joint statement release, the company said that the new network will be a “natural extension” of her show and that The Oprah Winfrey Network (OWN) will be a multi-platform media venture “designed to entertain, inform and inspire people to live their best lives.”

Oprah said that she had written in her diary that she would set up her own television network one day. Oprah also said that the new network is the evolution of the work she has been doing on television all these years and that it is a natural extension of her show. Oprah Winfrey will have full editorial control over the joint venture and will be responsible for OWN’s programming, branding and creative vision.

In a recent US poll on most admired women, Oprah Winfrey was ranked second to US presidential candidate Hillary Clinton. For five consecutive years, Oprah Winfrey has led the Harris Poll’s favorite television stars list for five consecutive years. However, in a latest poll, Ellen DeGeneres, comedian and daytime TV host replaced Oprah Winfrey as the U.S.’s favorite television personality. Ellen was eighth last year.

Oprah Winfrey, Ellen Degeneres, Discovery Communications, Talk show host, The Oprah Winfrey Network (OWN)

P&G – Being where future customers are

In December 2008, Procter & Gamble Co. (P&G), announced an aggressive expansion plan to build 19 production plants to cater to future consumers in developing countries (where the GDP has grown quickly and which have vast populations). By 2010, P&G wants to reach an additional 1 billion consumers. Presently, it caters to 3.5 billion people out of 6.5 billion globally.

Being cost-effective in hard-to-reach and hard-to-serve environments

P&G already has its presence in around 80 countries where it has 145 facilities. As per the new plan 18 new facilities will be built in developing countries like Malaysia, Romania, India and Pakistan. Competitors Unilever and Colgate-Palmolive already have a presence in emerging markets. Therefore, expansion is one thing, but doing so cost-effectively becomes paramount for P&G. Economic crisis and corruption pose additional pressures.

Exhibit: P&G’s target markets (future consumers) in developing countries

P&G’s strategy to be cost-effective

Extending competitive advantage

• Enter markets with products with less competition
• Establish state-of-the-art facilities (In most cases by providing P&G technology to low-cost machine builders instead of buying a complete production unit)
• Produce more affordable goods for low-income consumers.
• Leave competition far behind

A struggling Starbucks

Starbucks, the leading coffee retailer has been struggling amidst a faltering US economy, its own rapid growth and increased competition from cheaper rivals. In the first three months of 2008 its net income fell to $108.7m (£54.7m) down 28% from the same period of 2007. Its stock price has been falling steadily for the past two years (see exhibit 1). The stock has plunged more than 46% over the past year due to concerns about the weak economy and increased competition.

Exhibit 1: Stock performance graph of Starbucks for past five years (NASDAQ: SBUX)

Slowing down US Expansion plans

In July 2008, it announced closing of 600 of its stores (company-operated) across various locations in the U.S. Earlier, Starbucks had plans to shut only 100 of its stores, while 500 were on its internal watch list. Not great news for a company which revolutionized the coffee industry and transformed an everyday ordinary product into extraordinary business success. The reasons: Starbucks has struggled to maintain its differentiation in the face of growing competition. The company says its research shows it is not losing customers to competitors such as the privately-held Dunkin’ Doughnuts, but that consumers are simply not spending as much in Starbucks stores as they used to. The company had 125 stores when it went public in 1992, now has over 15,000 stores in 44 countries. The stores which are being closed are not profitable and are not expected to be profitable in future.

Starbucks forced to change strategy

Starbucks has always followed a strategy to blanket a region with its new stores. This means that by opening multiple stores in the same street or close by locations, it could reduce the customers’ rush in one store and also increase its revenues through new stores. This helped the company to reduce its distribution costs and the waiting time for customers in its stores, thereby increasing the number of customers. When a new store opens nearby, between 25 to 30% of revenue is cannibalized. Shutting down the stores would help return lost revenues.

Out of the 600 stores being closed, 70% had opened after start of 2006 which implies that Starbucks is closing down 19% of U.S. company-operated stores that opened in the last two years. Around 12,000 of its workforce will be affected by the closings.

Will Starbucks regain its past success?

Starbucks wants to turnaround its business by providing customers with the distinctive ‘Starbucks Experience’ and building on Starbucks legacy of innovation. Howard Schultz returned in early January 2008 as Chairman and Chief Executive and laid out several new “customer-focused” initiatives and a restructuring plan to restore an authentic coffeehouse experience back to its’ stores. Read
management case study (PDF file) on Starbucks’ Turnaround Strategy and restructuring plans. So will Starbucks be able to recreate its magic? Perhaps a recent news item that coffee can do more than just wake one up in the mornings and prevent auto-immune diseases such as lupus and rheumatoid arthritis (perhaps also cure multiple sclerosis) will help bring in more customers to Starbucks.

Starbucks, US Expansion, Coffee Retailing, Howard Schultz

Will a ‘transformational product’ help Starbucks turnaround?

Starbucks will begin selling a new product, called Via. Via is an instant coffee product wherein coffee loving consumers can brew the coffee by emptying the granules into hot water (which will replicate the taste of Starbucks coffee).

Starbucks CEO Howard Schultz had already cited this announcement as a game changer which would deliver innovation, competition, and value in
Starbucks’ turnaround strategy. Starbucks’ top management is confident that Via is a ‘transformational product’ in the $17 billion instant coffee market and the new product had significant potential for Starbucks.

Starbucks’ falling profits and consistent Innovation

In recent years, Starbucks’ profits had started to decline. This was due to over-expansion and ever increasing competition from competitors like McDonald’s and Dunkin Donuts. With consumers spending less Starbucks had to close its stores.

The company’s efforts to attract customers with new products such as breakfast foods, Vivanno smoothies, Pike Place Roast have not taken off in a manner that it had expected. (Also read: Starbucks for a dollar, Storm in a coffee cup?)
This recent attempt with instant coffee may take the same path with soluble coffee being deemed as poor quality. Starbucks however claims that Via tastes just as good as brewed coffee. Analysts feel that the attempt will generate only short term revenues for the company.

The new product will be put to test soon. If it also fails then Schultz will have to rethink re-franchising, or selling existing stores to employees which till now he and other Starbucks management feel will result in brand dilution and losing control over the brand.

Case Studies in Coffee Retailing (PDF files)

• Will restructuring help Starbucks Turnaround?
• Cafe Coffee Day (CCD) – Brand Strategy in India

UPS reported a fourth-quarter (2007) net loss of $2.58 billion, compared with a net profit of $1.13 billion, a year earlier. The quarterly loss was mainly due to a $6.1 billion pension-related charge.

United Parcel Service Inc (UPS), the world’s largest package delivery company has come a long way from being a private messenger and delivery service in 1907 to becoming an integrated supply chain management and logistics solutions provider. It has been so successful in transforming itself from a small regional parcel delivery service into a global company that today (like FedEx), UPS is seen as an indicator of U.S. economic health. The reason of course is that companies and consumers ship more packages in a healthy economy.

A bit of UPS History

In 1907, James E. (“Jim”) Casey (James Casey) felt that there was an increasing need for private messenger and delivery services. Casey started his company in Seattle, Washington and named it ‘American Messenger Company’. In 1913, Casey merged his company with a competitor, Evert McCabe, to form Merchants Parcel Delivery (MPD). In 1919, the name was changed to United Parcel Service when the company made its first expansion beyond Seattle to Oakland, California. ‘United’ implied that operations in various cities were part of the same organization, ‘Parcel’ identified the nature of the business, and ‘Service’ what was offered.

By 1992, UPS was delivering 11.5 million packages and documents a day for more than one million regular customers to more than 200 countries. In 2002, this figure reached more than 13 million packages and documents per business day with delivery volume, 3.4 billion packages and documents.

UPS – Many firsts

In 2007, UPS became the first package carrier to offer its customers a paperless international shipping option as well as a package return capability to 98 countries and territories. But the series of firsts started much before. In 1922, UPS became one of the few companies in the United States to offer common carrier service, a service that many other private carriers, or even the parcel post did not offer. Common carrier service was like retail store delivery service and mainly featured automatic daily pickup calls, acceptance of checks made out to the shipper in payment of C.O.D.s, additional delivery attempts, automatic return of undeliverables, and streamlined documentation with weekly billing. In 1924 UPS introduced the first conveyor belt system for handling packages. In 1995 UPS acquired a company called SonicAir, making UPS the first company to offer same-day, “next flight-out” service and guaranteed 8 a.m. overnight delivery…

Polman wants to increase the speed of decision-making in the sprawling company, which is known for its cautious culture. “Thirty-Day Action Plans” introduced under his reign, for example, are designed to make executives act quickly to fix problems with individual products. – The Wall Street Journal, August 2009.

New Business Strategy at Unilever – drive volume with lower prices and aggressive marketing spending

Unilever’s mission statement reads “add vitality to life”. For now, the Anglo-Dutch consumer goods giant has added vitality to its own operations with “Thirty-Day Action Plans”. These plans introduced by Mr. Paul Polman, the new chief executive of Unilever were intended to make executives take quick action to fix problems with individual products. Paul Polman in fact reversed the strategy of his predecessor.

Polman took over the company in January 2009. He was the first CEO who was not promoted form the internal ranks. He spent most of his career at Procter & Gamble Co. His first job at Unilever was to fire up dwindling sales volumes at Unilever. Earlier last year, Mr. Patrick Cescau, former CEO had increased prices to counter recession. However, this drove sales down as consumers stopped buying Unilever’s products. Polman initiated a different strategy. He wanted to drive volume with lower prices and aggressive marketing spending. In the past few years, Unilever had already cut down on its massive portfolio of brands. The company now wanted to concentrate its efforts at innovation on a smaller number of bigger brands. With the new idea of “30-day plans”, a plan was meant for each product innovation or attempt at troubleshooting. If the plan did not yield results after a month, it was very likely to be discarded.

How does Unilever’s “Thirty-Day Action Plans” work?

In South Africa, Unilever’s laundry detergent sales had dipped. On analysis, company executives found that the product was under threat with competition from a cheap local brand. Unilever executives immediately framed an action plan to counter the threat. The company very quickly introduced a cheaper version of its Surf detergent with fewer features. This plan worked as the brand proved very popular.

Download Case Study PDF

Download Management Case Study on Restructuring at Unilever

Keywords: Unilever, Thirty-Day Action Plans, Paul Polman, Patrick Cescau, Consumer Goods Giant

What is ‘Great Value’ brand?

In 1993, Wal-Mart launched the Great Value store brand. ‘Great Value’ is the largest grocery brand and the biggest brand that Wal-Mart has with thousands of products spanning 100 categories. Wal-Mart has more than 5,250 of its Great Value private-label products.

What did Wal-Mart do to its store brand?

Wal-Mart improved its private label offering – the Great Value line of products. Wal-Mart worked with both the suppliers and its customers for over a year to assess the quality of more than 5,250 of its Great Value private-label products against top national brands.

Features of Wal-Mart’s Brand Makeover:

• Altered the formulas for 750 everyday items, mostly foods. E.g. The kids’ breakfast cereal was made crisper.
• Product Innovation: Introduced new products which were designed using consumer feedback. Wal-Mart trained customers to do comparisons and give feedback on what they were looking for. E.g. New unusual flavors like mocha mud slide and cake batter introduced in the Great Value all-natural ice cream range. 80 new products under the Great Value line, such as thin-crust pizza, fat-free caramel swirl ice cream, and organic cage-free eggs.
• New packaging design to provide a more consistent, consumer-friendly image. E.g. More prominent nutritional information with nearly all labels in both English and Spanish languages.

Why did Wal-Mart overhaul its oldest and biggest store brand?

Private Label Store Brands vs. National Brands

Consumers prefer buying private label store brands instead of national brands in times of economic uncertainty. Why? Simple, because they match the quality of national brands and that too at lower prices. Data tracker Nielsen reported that, in 2008, sales of private-label items increased 10% compared to a 2.6% increase for branded goods. An industry trade group, the Food Marketing Institute found that, in 2008, around 64% of buyers (59% in 2007) said they often or always preferred a store brand as compared to a national one. This is an indication that the initial hesitation shoppers had towards store brand products is disappearing and very quickly.

Advantages of Private-label brands/products

• Typically cost less (5% to 20%) than name-brand products.
• Higher profit margins for retailers owing to lower overhead costs and zero marketing expenses.

How private labels are faring at other retailers?

• Kroger’s private-label collection set a new record when it touched 27% of overall sales in its most recent quarter.
• Safeway’s ‘O Organics’ store brand is very successful. The retailer is now licensing it for use by other retailers.

Keywords: Wal-Mart, groceries, retailing, generic label, private label store brands, brand strategy, national brands

Related Articles and Case Studies on Wal-Mart (PDF files)
• Organization Culture at Wal-Mart
• Wal-Mart’s Supply Chain Management Practices
• Tesco takes on US Wal-Mart
• Wal-Mart in Japan
• Of Wal-Mart price cuts, Struggling Retailers and Weak 2008 Retail Sales Forecast
• Wal-Mart’s Marketside or Tesco’s Fresh and Easy stores in US


Other Articles on Brand Makeover:

• Bharti Gets a Brand Makeover

Adidas plus Reebok is equal to better competition with giant Nike

In 2006, Adidas (the German athletic apparel and the world’s second-biggest sports goods maker after Nike) acquired Reebok in a US$3.1 billion deal. The merger was aimed at helping Adidas increase its share in the U.S. market and better compete with market leader Nike Inc. and fourth ranked Puma AG. At the time experts felt that the merger made sense. But the key challenge was to unite Adidas’s German culture of control, engineering, and production and Reebok’s U.S. marketing- driven culture.

The Reebok acquisition was seen as a key factor in growing the Adidas brand in developing and fashion-oriented markets of Asia like China, Korea, and Malaysia. Moreover, Reebok already had marketing tie-ups in China (with Yao Ming) and Adidas did not have to cover all China segments. Read a blog post Adidas and Reebok Merger Case Study

Download full-text of management case study on adidas and Reebok merger (PDF file)

Adidas – Fourth Quarter 2007 performance

Adidas AG reported its fourth quarter results for 2007 (October-December, 2007). The results were helped by lower purchasing costs resulting from its acquisition of Reebok and improved sales.

Its net income rose to €21 million (US$31.9 million) from €13 million a year earlier. Sales increased to €2.4 billion (US$3.7 billion) compared with nearly €2.3 billion in 2006. In 2007, total yearly earnings were €551 million (US$837.9 million), up 14 percent from €483 million in 2006. Sales for the year rose marginally to €10.3 billion (US$15.6 billion) from €10 billion in 2006.

Adidas vs. Reebok unit performance

The Adidas brand had sales worth €7.1 billion (US$10.8 billion) while Reebok had sales worth €2.3 billion (US$3.5 billion). Last year, in 2006 the Adidas brand had sales worth €6.6 billion to Reebok’s €2.5 billion.

Year-end order backlog represents firm future revenues from contracts signed up to that date. Order backlog is a key indicator of future sales for retailers and Reebok’s lower order backlog remains the key question mark. Order backlog of brand Adidas was excellent up 17 percent which can be partly attributed to the Euro 2008 soccer championship and Beijing Olympics this year. However, Reebok’s order backlog was down 8 percent (down 20 percent in North America). Nike reported worldwide futures orders for athletic footwear and apparel (scheduled for delivery from December 2007 through April 2008) totaling $6.5 billion, 13 percent higher than such orders reported for the same period last year.

Meanwhile, Nike announced (Mar 3, 2008) that it has completed its acquisition of Umbro Plc. Nike’s Umbro takeover is an effort to consolidate its position in the football market where Adidas has performed well. Last year, Nike’s CEO Mark Parker outlined a brave plan to increase the company’s business to $23 billion in revenue by 2011. Will Nike do it or will the Adidas-Reebok merger spoil its plans, still remains to be seen.

Keywords: Adidas, Athletic Apparel and Sporting Goods, Mergers and Acquisitions, Nike, Reebok

Warren Edward Buffett, Chairman and Chief executive of Berkshire Hathaway Inc. and admired by many analysts for his shrewd business acumen is primarily known for his investing success. Over the years, Buffett developed his own tenets of buying a business or stock. Not only his investments, but companies acquired by Berkshire Hathaway also performed consistently over the years. Berkshire owns more than 60 subsidiaries including insurance, clothing, furniture, jewelry and candy companies, restaurants, natural gas and corporate jet firms and has major investments in such companies as Coca-Cola Co., Anheuser-Busch Cos. and Wells Fargo & Co. Also read Leadership case study on Warren Buffett (10 pages, PDF file).

He is known as the "Oracle of Omaha" and generally considered to be the world’s most successful investor with a net worth around U.S. Dollars 62 Billion. He has figured consistently among the top five in the Forbes magazine’s list of the 400 richest Americans (the elite Forbes 400). Buffett is also known for his philanthropy and in 2006, he announced his plan to give away the bulk of his nearly $49 billion fortune over time.

It may then not come as a surprise, that last year, $650,100 was the price for a lunch with the great leader in an auction on eBay. Buffett has been auctioning off lunches online for six years. He offers only one lunch a year. The auction benefits the Glide Foundation, which provides social services to the poor and homeless in San Francisco. It is anybody’s guess how high the bidding will go this year. Well to end the surprise, in the most expensive charity auction ever held on eBay, a Chinese investment fund manager (Zhao Danyang) won the chance to have lunch with billionaire Warren Buffett by bidding $2.1 million. The most expensive charity item ever sold on eBay earlier was a Harley Davidson motorcycle for $800,100. The motorcycle was autographed by celebrities that TV show host Jay Leno offered in 2005 for tsunami relief.

Warren Buffett, Leadership, Investment Leader, Oracle of Omaha

Daimler 2007 Profit Rises

Mercedes-Benz maker, Daimler AG and the world’s second-largest maker of luxury vehicles reported profits in its fourth-quarter results for 2007. The good results this quarter have come after selling the Chrysler division in the U.S. and cutting jobs at Mercedes-Benz Cars. Without Chrysler, Daimler reported profits of 1.7 billion euros (£1.3 billion) for the fourth quarter and a net profit of 4 billion euros for the year (3.8 billion euros in 2006). Sales rose to 99.4 billion euros ($144.98 billion) from 99.2 billion euros, with 2.1 million automobiles sold globally. In May last year, after a decade of disappointing results, Daimler finally sold Chrysler to private equity firm Cerberus Capital for £3.74 billion.

With the North American car and truck market struggling this year from the impact of falling house prices in the wake of the sub-prime crisis, Daimler is banking on demand from China, India and Russia. Daimler, the Stuttgart-based company expects the North American truck market to recover in the second half of the year.

Daimler Chrysler Merger Failure

In 1926, the merger of two German automobile manufacturers Benz & Co. and Daimler Motor Company formed Stuttgart-based, German company Daimler-Benz. Its Mercedes cars were arguably the best example of German quality and engineering.

In 1998, Daimler-Benz and U.S. based Chrysler Corporation, two leading global car manufacturers, agreed to combine their businesses in what was perceived to be a ‘merger of equals’. Jurgen Schrempp, CEO of Daimler-Benz and Robert Eaton, Chairman and CEO of Chrysler Corporation met to discuss the possible merger.

The merged entity ranked third (after GM and Ford) in the world in terms of revenues, market capitalization and earnings, and fifth (after GM, Ford, Toyota and Volkswagen) in the number of units (passenger-cars and commercial vehicles combined) sold. In 1998, co-chairmen and co-CEOs, Schrempp and Eaton led the merged company to revenues of $155.3 billion and sold 4 million cars and trucks. But in 2000, it suffered third quarter losses of more than half a billion dollars, and projections of even higher losses in the fourth quarter and into 2001. In early 2001, the merged company announced that it would slash 26,000 jobs at its ailing Chrysler division.

Daimler, Chrysler and cultural differences

The Daimler Chrysler merger proved to be a costly mistake for both the companies. Daimler was driven to despair, and to a loss, by its merger with Chrysler. Last year, the merged group reported a loss of 12 million euros.

Analysts felt that though strategically, the merger made good business sense. But contrasting cultures and management styles hindered the realization of the synergies. Daimler-Benz attempted to run Chrysler USA operations in the same way as it would run its German operations. Daimler-Benz was characterized by methodical decision-making. On the other hand, the US based Chrysler encouraged creativity. While Chrysler represented American adaptability and valued efficiency and equal empowerment Daimler-Benz valued a more traditional respect for hierarchy and centralized decision-making.

Related Automotive Updates:
Nissan and Chrysler joint relationship
Toyota overtakes Ford Sales

Automotive, Chrysler, Daimler, Mergers and Acquisitions

Dell’s Turnaround Strategy working…

Ever since founder Michael Dell returned as CEO a year ago, Dell has forayed into retail, made more acquisitions and focussed on cutting costs. IDC reported that Dell is back to double-digit percentage growth in global PC shipments in the fourth quarter. Dell’s worldwide shipments shrank 8.4 percent last year.

Dell leaves behind HP as Largest PC Supplier in the U.S.

One of Dell’s Turnaround move was switching from a direct sales model to selling PCs through retailers like Best Buy and Wal-Mart. Dell’s new retail sales strategy is starting to pay off in the U.S. where Dell sold 15.2 percent more PCs than a year earlier. This figure is more than overall U.S. market growth of 8.8 percent and HP’s 9.8 percent. Dell shipped 5.5 million units in the U.S. Competitor HP’s (Hewlett-Packard)growth slowed. HP shipped 4.5 million units. But still Dell remained in the No. 2 market-share spot globally (Dell shipped 14.6 percent of the global PC market; a total of 11.3 million units). HP kept the No. 1 market share spot with 19 percent. HP remained the world’s largest PC dealer, topping Dell, Acer and Lenovo, according to figures from both firms. Taiwan’s Acer held 9.6 percent of the worldwide PC market and is aggressively expanding. Acer in October 2007, purchased Gateway Inc in the United States after which Acer’s PC shipments increased 60.3 percent. Apple Inc, held 5.7 percent of the U.S. market with its computers sales increasing by 30.9 percent in the fourth quarter. Lenovo made slower growth in the global market and is struggling to retain its core audience of business users.

Acer, Dell, Direct to consumer model, HP, Lenovo, PC Manufacturing

EBay and Ethical sourcing

In September 2008, EBay, the online auction giant, launched an ethically sourced online marketplace for selling products that have a positive impact on people and the planet. The project is a collaboration of eBay and World of Good. It includes a nonprofit development organization along with a corporate arm called World of Good Inc.

Socially responsible shopping – Tailored shopping impact

The online marketplace aims to give socially responsible shoppers a chance to buy great products that also help mankind and the planet. Customers can also customize their shopping impact (regardless of the social causes most important to them) by shopping for items with different attributes spanning 15 categories. Items are broadly classified as People PositiveTM and Eco PositiveTM.

Products for sale – Organic, made from recycled material and animal friendly

Sellers at the website (www.worldofgood.com) are verified by third parties known as trust providers. The goal is to meet a core set of ethical and environmental standards. Items for sale on the site include clothing, jewelry, coffee, tea, pottery, accessories and home decor items. These items are organic (e.g. organic clothing) and made from recycled materials. Beauty products sold on the site are ‘animal-friendly’ and some products are made by artisans from developing countries. Even food items are offered on the site.

Ethical consumer experiences with Unique GoodprintTM labeling system

A labeling system known as GoodprintTM gives each product on the site a unique nutritional label. This helps customers easily identify the positive social and environmental impact on each buy/purchase they make. They can assess if their purchase aids: economic empowerment, helps preservation of animal species, conserves energy, or is made of recycled, organic and/or sustainable materials.

Facilitating ongoing dialogue between buyers and sellers

The marketplace, an online community, not only helps bring together products, people, and organizations all in one place but also facilitates a dialogue (about ethical shopping) between them and Trust Providers via related blogs, articles, and forums.

EBay, founded in 1995, has more than 84 million active users worldwide. The items offered on WorldofGood.com are also made available on eBay.com.

Download related PDF files of management case studies on eBay:

• eBay in Japan
• Meg Whitman and eBay – Leadership Case Study

Margaret Whitman, the chief executive (CEO) of eBay, is planning to retire so as to breathe fresh life into the company and a much needed radical reinvention of eBay. In March, Ms. Whitman, 51, will have served in the position for 10 years.

Whitman, ranks 22nd on Forbes.com’s list of the world’s most powerful women. In October 2002, Fortune Magazine ranked Whitman, as the world’s third most powerful women in business, after Carly Fiorina and Oprah Winfrey. Under her leadership, eBay’s revenues and profits doubled every year.

Whitman, joined eBay as chief executive in 1998. Under her leadership and her strong belief in eBay’s business model and its customers, Revenues increased from $4 million to $1 billion by late 2002. Whitman led eBay towards success even when many dotcoms crashed.

“In the beginning, I was certainly not an entrepreneur who came up with the idea, but I think I was fairly entrepreneurial in trying to figure out how to bring that idea to life and build a backbone for the company that could take it to the next level,” Whitman commenting on her journey from a novice to a leader in the dotcom world.

Margaret C. Whitman was born in August 1956. She was popularly known as Meg Whitman and ‘darling of the Internet’. Whitman, a studious and clever student, and the youngest child of a Wall Street executive grew up in Long Island, New York. She graduated in Economics from Princeton University. She received an MBA from Harvard Business School in 1979. Whitman began her working career at Procter & Gamble from 1979 to 1981 and then worked for companies like Bain & Company and Walt Disney Company. Meg Whitman accepted the 2007 Lifetime Achievement Award for the community of buyers and sellers that make up eBay.

eBay, Leadership and Entrepreneurship, Margaret Whitman

Exxon Mobil and 2007: Record Profits

Oil companies like Chevron and Royal Dutch Shell reported strong profits in 2007. Chevron, the second-largest American oil company, reported profits of $18.7 billion (increase by 9 percent compared to last year). Royal Dutch Shell reported the best figure ever for a British company when its net income rose by 23 percent to $31 billion. Most oil companies, benefited from a near doubling of oil prices. In early January, the cost of crude oil passed the $100-a-barrel mark for the first time and has stayed above $90 for most of the time since then.

Exxon Mobil’s net income increased by 3 percent to $40.6 billion and sales figure was more than $404 billion. The fourth quarter of 2007 was the most profitable quarter ever in its history with net income increasing by 4 percent, to $11.7 billion. Revenue for the fourth quarter increased 30% to $116.6 billion. Exxon Mobil beat its own record for the highest profits ever recorded by any company to become the world’s most profitable publicly traded corporation.

But the main question is, Will Exxon Mobil face controversy again like it did last time in 2005, when it reported highest quarterly profits in the corporate history of the US. Already, the Foundation for Taxpayer and Consumer Rights, has called the profits unjustifiable and at the cost of an economy tipping into recession.

History of Exxon Mobil Corporation

In 1870, John D. Rockefeller (Rockefeller) along with his associates formed Standard Oil. In about 40 years time period, Rockefell went on to become the richest man in the world after he built Standard Oil into one of the largest integrated oil producing, refining, and marketing organizations in the world. However, US politicians and journalists accused Standard Oil of monopolistic practices and stifling competition. In 1911, after a US Supreme Court ruling Standard Oil Trust was dissolved into 34 separate companies.

Two of the thirty four companies formed by the dissolution, Jersey Standard and Socony went on to become Exxon and Mobil respectively.

In 1999, Mobil Corporation became a wholly-owned subsidiary of Exxon Corporation, and Exxon changed its name to Exxon Mobil Corporation.

Fourth Quarter 2005 – Record profits and Controversies

In 2005 (fourth Quarter), Exxon Mobil recorded profits of US$ 10.71 billion. This was the highest ever quarterly profits in the corporate history of the US. However, with rising oil prices there were problems. A few US policy makers and consumer activist groups accused Exxon Mobil of price gouging (pricing above the market when no alternative retailer is available) and corporate greed. In May 2006, the US House of Representatives passed a price gouging bill that would penalize any oil company found guilty of price gouging with penalties of up to US$ 150 million.

Even environmental activist groups were unhappy with the Exxon’s Valdez oil spill and oil drilling in the Arctic National Wildlife Refuge. In March 1989, Exxon Valdez, the oil tanker owned by Exxon, had caused major ecological and financial damage when it spilled 11 million gallons of crude oil in the Alaskan region.

Exxon Mobil maintained that though the rise in prices helped record profits, its ability to complete projects on time as well as keeping its costs in check was also a main contributing factor. The oil industry and American Petroleum Institute (API) too defended Exxon’s record profits. An advertisement in the media by API stated that the profitability of America’s oil and natural gas industry was far less than many other major industries, like banks, pharmaceuticals and real estate on an average in the past five years. And the US$ 10.7 billion fourth quarter profits of Exxon was a reasonable rate of return.

Read similar articles:
Mattel in 2007, the year of the product recall and the rebound

Starbucks for a Dollar, Storm in a coffee cup

Business Ethics, Chevron, Exxon Mobil, Oil Companies, Scams and Controversies

Chairman and chief executive of Caterpillar Inc, Jim Owens, expects to see record results again in 2008, in what he thinks will be a challenging year. But he hopes to see the world’s biggest maker of earth-moving equipment have all-time record results again fuelled by growth in markets outside the U.S.

Last quarter Caterpillar’s sales rose more than 10 percent inspite of a difficult domestic market. However, a very strong global footprint ensured record sales and profit for the whole year.

Caterpillar’s Turnaround Story

Until 1982, Caterpillar or ‘CAT’ (as most people refer it to) enjoyed a long-standing record of profitability and market leadership. However, with increased competition it was almost out of business. It then turned around its business from near-bankruptcy to profitability in a space of a few years. Jim Owens (now CEO), who started as a mid level manager at Caterpillar believed that it was a spectacular transformation of a kind of sluggish company into one that actually has entrepreneurial zeal. What made Caterpillar different was how it reshaped its DNA in a way that permanently changed the culture and capabilities of the enterprise. Caterpillar focused on its decision rights, organizational structure, motivating factors and metrics and measures – the four essentials of organizational DNA. CAT delivered 12 straight years of profit after that. It nearly tripled both its top and bottom lines since1993. In 2005, Forbes had listed Caterpillar as the best-managed industrial corporation in America. …

Caterpillar, Corporate Restructuring, Turnaround Strategies

“Jacked Up: The Inside Story of How Jack Welch Talked GE into Becoming the World’s Greatest Company” is a 315-page book written by author Bill Lane. Bill Lane is none other than Jack Welch’s former speechwriter. In his book Bill recounts how John Francis Welch Jr. (Jack Welch) built upon the straight talk culture and insisted on it. He mentions how Welch was sometimes brutally direct and drove out muddy thinking. Perhaps his nickname “Neutron Jack” comes from this passion or like some felt sometimes rude boss.

GE from an old-economy manufacturer into a modern conglomerate

GE’s turnaround from from an old-economy manufacturer (US$13 billion in 1981) into a modern conglomerate (US$480 billion in 2000) is because of this straight talk culture Jack Welch insisted upon. Jack was quick to praise people whose ideas he liked and ready to pounce on those who did not meet his standards. During Welch’s tenure between 1981-2001, GE’s stock price increased 50 times and Jack Welch’s leadership is well illustrated in the fact that GE’s stock has shown little growth after his retirement (Jack Welch retired after spending 41 years with GE in September 06, 2001) and not to forget the 9/11 attacks.

GE Managers – No five-year strategic plans

Under Welch’s leadership, five-year strategic plans were done away with as he believed no one could could plan four or five years into the future. Bill mentions in his book that any such person who planned for four or five years was considered a ‘bullshitter’. Welch wanted GE managers to give simple and clear explanations of the
business challenges they were facing and their plan to overcome them.

Restructuring GE

Jack Welch joined GE in 1960 as a Junior Engineer. Jack Welch quickly rose to become the head of the plastics division in 1968. He became the GE’s youngest CEO in 1981. Jack Welch initiated a restructuring plan in his initial years as the chief executive. This restructuring plan included massive job cuts, positioning the various businesses as number one or number two in the respective segments, and selling off unprofitable ones. The 29 layers of hierarchy were dismantled. GE then transformed into an informal company…

General Electric Co (GE), Leadership and Entrepreneurship

FedEx (NYSE: FDX), is among the 100 “Best Companies to Work For” in the US announced by FORTUNE magazine and the Great Places to Work Institute. FedEx (the largest employer in 2008 list and only shipping company included) now figures in this list in 10 of the past 11 years after being named to the “Best Companies to Work For” Hall of Fame in 2005. FedEx was ranked as 97th overall. FedEx already has a reputation of being one of the most employee-friendly companies in the world.

A History of Employee Commitment at FedEx

The history of FedEx goes back to 1971, when Frederick W. Smith felt the need for an airfreight system which could deliver documents overnight. He decided to setup his own company to effectively serve this need. Smith always believed that since FedEx was essentially a service organization, employees were largely responsible for ensuring success.

FedEx was incorporated as ‘Federal Express Corporation’ in June 1971 at Little Rock, Arkansas, US. Since it began in 1971, its’ management focused on providing a suitable work environment that encouraged employees to come up with innovative solutions. Such was the commitment of the employees to the company that, when FedEx was going through severe financial difficulties during the first couple of years, the employees were prepared to sell their personal belongings. They were also prepared to use their own credit cards to purchase fuel to deliver the packages to the customers. Even when the employees didn’t receive their salary on time, they continued working with FedEx.

Human Resource Management (HRM) Best Practices at the FedEx Corporation

FedEx has developed several innovative human resource programs over the years. These programs have served as a benchmark for many companies.

FedEx’s ‘People-Service-Profit’ (PSP) philosophy

In 1973, Founder and CEO, Smith had developed and implemented FedEx’s ‘People-Service-Profit’ (PSP) philosophy. This philosophy was based on the fact that if FedEx took proper care of its employees, they would provide efficient service to the customers. This in turn would benefit the company by generating more profits.

Survey-Feedback-Action Program or SFA Program at FedEx

The SFA program (a key employee relations and satisfaction program) helped management take decisions regarding romotions. From its inception, the SFA was administered manually, but that changed in 1992 with the introduction of online survey system in the US and other automations. Each April, every employee is asked to participate in the on-line survey. After the results are gathered, managers hold feedback sessions with their employees to discuss the survey findings and identify problems within and outside of their department.

Leadership Evaluation and Awareness Process’ (LEAP)

In 1988, FedEx devised a program known as ‘Leadership Evaluation and Awareness Process’ (LEAP) to encourage non-managerial cadre employees to move to the managerial level within the company.

Employee Communication Program

The employee communication programs implemented by FedEx included the SFA program, Guaranteed Fair Treatment Procedure and Open Door Policy. FedEx also devised a mechanism to address and resolve employee grievances. This was apart from employing a formal communication system to inform employees about the major events taking place in the company.

Job Change Applicant Tracking System (JCATS)

JCATS is an on-line computer job posting system that allows hourly employees to post for any available job.

Recognition and Reward Program

FedEx rewards employees for their work with awards such as the ‘Bravo Zulu’ and the ‘Golden Falcon Award’.

FedEx is an example of an organization that has created an effective HR strategy that supports productivity and profitability.

Read related post on UPS: A bit of UPS history, some UPS and some downs

FedEx, HR Best Practices

For Mattel, 2007 was dubbed “the year of the recall.” ‘How will Mattel fare in the aftermath?’, was a question put forth by many. Analysts were divided over whether the leading toy maker was able to handle the crisis situation effectively.

About Mattel

Mattel Inc (MAT), the world’s largest toy company, with its headquarters in California was founded in 1945. The company designs, manufactures, and markets toys worldwide. Its well known brands include Barbie dolls, Fisher-Price items, American Girl dolls, Hot Wheels, Matchbox, and others.

Product Recall Crisis in Mid 2007

In the middle of year 2007, Mattel had to deal with a product crisis, the worst-ever in its history. Mattel feared that its toys had toxic lead content higher than the permissible level. This could lead to a risk of health hazards for kids. Mattel was heavily criticized for allowing Chinese made toys with unacceptably high levels of lead paint to enter U.S. stores. In August 2007, Mattel recalled about 1.5 million Chinese-made Fisher-Price infant toys. These toys included characters such as Dora the Explorer, Elmo and Big Bird. A second recall followed soon after, when Mattel withdrew approx. 9.3 million Chinese-made toy sets. This time Mattel feared that these toys with small magnets and other parts, could be dangerous if swallowed by kids. This was followed by a third recall of its toys withdrawing more than 800,000 toys across the globe. Mattel even announced that a significant portion of the toys were recalled because of a design flaw and not substandard manufacturing. During this crisis, Mattel’s stock plunged by as much as 25 percent from its year-to-date high.

Mattel Turnaround

Robert A. Eckert, Chairman and CEO of Mattel Inc. had then stated that, Mattel was at the forefront of responsible corporate citizenship and the recent challenges have presented it an opportunity to again be an industry leader. Many analysts would not have been that optimistic. But Mattel, posted a better-than-expected fourth-quarter profit. Mattel was helped by stronger international demand for its Hot Wheels cars and Fisher Price line and by $47.3 million in tax benefits. And of course not to forget the significance of the fourth quarter for toy companies because it includes the holiday shopping season. Research firms like NPD have reported that the toy industry makes nearly half its annual sales during the holiday season. The results included charges and costs of about $42 million stemming from a spate of recalls last year. Worldwide gross sales of Barbie increased by 4 percent, Fisher Price segment by 4 percent and overall Mattel’s girls and boys brands by 9 percent. Mattel’s Wheels business, which includes Hot Wheels and Matchbox cars, increased 15 percent. Net income grew to $328.5 million, from $286.4 million, a year ago.

Mattel, Scams and Controversies, Toy Industry, Turnaround Strategies

RyanAir: The ‘Southwest’ of European Airlines in 2007

Download Case Study on Ryanair in pdf format

The low point…

Ryanair, Europe’s biggest low-cost carrier reported its third quarter results with net profits dropping 27 percent compared to a net profit of 48 million a year earlier. Ryanair cited poor market conditions, fuel costs (oil prices at $90 a barrel) and concerns on recession in the UK and many other European economies for its current performance and not so strong future profit expectations. With average winter fares dropping almost 5 percent its’ underlying net profit in the three months to end December fell to 35 million euros ($52 million). Other factors that contributed included doubling of airport charges combined with reduction of winter capacity at Stansted, significant cost increases at Dublin Airport combined with longer sector lengths and staff costs which increased by 18 pct to 67 mln euros. Ryanair’s net profit figure excludes a one-off gain of 12.1 million euros ($17.99 million) arising from the disposal of 5 Boeing 737-800 aircraft.

A year earlier and a different story…Ryanair, hedged fuel and had a performance to envy

The high point

Last year, in February 2007, British Airways (BA) had announced that its third-quarter earnings had plummeted 14%. BA attributed its poor performance to fuel charges, fog-related delays and the cost of heightened security requirements at London’s Heathrow Airport. Ryanair on the other hand reported enviable results. Its third-quarter earnings had increased by 30% to 47.7 million euros ($61.8 million), while sales rose 33% to 492.8 million euros ($638.4 million). While fuel costs had so dragged on the earnings of BA, Ryanair had a string of advance supply contracts that had adeptly locked in prices.

History of Ryanair

Ryanair which was set up in 1985 is one of the oldest and most successful low-cost airlines of Europe. In fact Ryanair was one of the first independent airlines in Ireland. In 2001, many compared Ryanair and drew similarities with Wal-Mart and Southwest Airlines. Ryanair transformed the Irish air services market where other airlines like Avair failed to compete with the more powerful national carrier Aer Lingus.

Airline Industry, European markets, Low-cost airlines, Ryanair

Starbucks (SBUX) is famous for its frappuccinos and mochas and has always concentrated on premium coffee, typically costing more than £2 a cup. But now Starbucks Corp is testing $1 coffee and free refills. Starbucks says that this test is not indicative of any new business strategy. Well, new strategy or not it surely makes business sense. Over the past year, Starbucks’ shares have lost about half their value. Analysts feel that this is due to over-expansion, increasing competition from fast-food rivals, and concerns about lower U.S. consumer spending. There is stiff competition from fast-food rivals such as McDonald’s Corp and Dunkin’ Donuts, a unit of Dunkin’ Brands Inc.. Both offer specialty coffees and regular coffee prices at both start in the low $1 range.

Download full-text of Case Study:
Will restructuring help Starbucks Turnaround?

Earlier this year, Starbucks had announced management restructuring. Howard Schultz, was brought back back into the CEO position. Howard Schultz is once again looking after day-to-day operations of the business. His return follows after the sudden departure of chief executive Jim Donald. Scultz has immediately felt the need to fix important things, particularly in the US like over enthusiastic expansion, large queues in stores and bureaucracy. Starbucks started 2,571 new stores globally last year, taking its total to 15,011. According to Starbucks’ estimates there was scope for 20,000 more stores in the US and a further 20,000 internationally. Schultz is expected to scale back such ambitious expansion strategy and concentrate on reviving the popular brand after transactions in its 10,600 US stores slowed down. Schultz commented in an interview to the Fortune magazine, “Yes, we became less passionate about customer relationships and the coffee experience. We spent time on efficiency rather than experience. We never wanted to be transaction driven.“

Starbucks: A contrast in 2003

When Fortune came out with its annual list of ‘Fortune 500 companies’ in March 2003, Starbucks featured in the list. For Howard Schultz, Chairman of Starbucks Corp (Starbucks) and Seattle based entrepreneur it was like a dream coming true. Afterall, Starbucks announced a 31% increase in its net earnings and a 23% increase in sales for the first quarter of 2003. This inspite of many retail majors reporting losses and applying for bankruptcy. The US economy was reeling under recession. For Starbucks it only showed that a quality product speaks for itself. Also the fact that Starbucks spent less than 1% of its sales on advertising and marketing was indicative of its popularity. Many analysts felt that the success of Starbucks was primarily due to its profitable domestic operations. They felt that Starbucks’ international operations were not as well planned as its US operations.

Starbucks History

In 1971, Jerry Baldwin, Zev Siegl and Gordon Bowker had launched a coffee bean retailing store named Starbucks to sell specialty whole-bean coffee in Seattle. The three partners, took the name “Starbucks” from mate Starbuck in the novel Moby Dick. In ten years, by 1981, Starbucks had five stores and a small roasting facility in Seattle. In 1982, Schultz joined Starbucks as marketing manager. In 2001, Interbrand (a brand management consultancy) had named Starbucks as one of the 75 global brands of the 21st century. In 2002, Starbucks had 5689 outlets in 28 countries. By early 2006, Starbucks had more 11,000 stores around the world. Starbucks had turned coffee from a commodity into an experience to savour.

Keywords: Coffee Retailing, Retailing, Starbucks, Howard Schultz

Starbucks, the leading retailer, roaster and brand of specialty coffee in the world, has been struggling amidst a faltering economy, its own rapid growth (international expansion and growing presence in 43 countries) and increased competition from cheaper rivals. Starbucks wants to turnaround its business by providing customers with the distinctive Starbucks Experience and building on Starbucks legacy of innovation.

The return of Schultz and the Starbucks success story

Howard Schultz returned in early January as Chairman and Chief Executive. Schultz had served as chief executive officer from 1987 to 2000, a period where Starbucks enjoyed exceptional U.S. and international growth. Schultz is acknowledged as the architect of Starbucks brand image and a coffee visionary . In 1982, he joined Starbucks Coffee Company as director of operations and marketing. At that time Starbucks had only four stores. In August 1987, Schultz purchased Starbucks Coffee Company. In 1992, under his leadership, Starbucks was the first specialty coffee company to become a public company. The growth of Starbucks has been amazing: from 17 stores in 1987, to more than 15,000 worldwide today.

The Restructuring Moves

Ever since his return, Schultz outlined a series of initiatives to help transform Starbucks. These initiatives were largely governed by the principle – ‘getting back to the essence of what drove Starbucks past success’.

Soon after Schultz returned as CEO, quite a few top management jobs were shuffled and some new posts were created like the chief creative officer to lead efforts to improve the experience customers have in the stores. For the first time, Starbucks unveiled plans to start offering limited free wireless Internet service. The partnership with T-Mobile – which only offered a paid subscription service – ended with switching over to AT&T Inc.

Commenting on the recent reorganization efforts Schultz said, “We realize that we are operating in an intensely challenging environment, one in which our customers and (employees) have extremely high expectations of Starbucks. And we have to step up to the challenge of being strategic as well as nimble as our business evolves. Unfortunately, we have not been organized in a manner that allowed us to have a laser focus on the customer.” He added that the company will be reorganized from two to four U.S. field divisions, in an effort to “enable the company to align our leaders closer to our customers and partners.” The East and West divisions will be replaced with four new ones: Western/Pacific, Northwest/Mountain, Southeast/Plains and Northeast/Atlantic.

No warm breakfast sandwiches and job cuts

In January 2008, Starbucks announced that it will stop selling warm breakfast sandwiches. The reason: the egg, cheese, bacon and ham competed with the coffee aroma in stores. Perhaps to re-ignite the emotional attachment with customers and restoring the connections customers have with Starbucks® coffee, brand, people and stores. A three-hour training session for all employees on making espresso was also scheduled.

In 2008, Starbucks will open hundreds fewer U.S. stores than initially planned and will close about 100 poorly performing domestic stores. It will ramp up its expansion overseas to increase the profitability of Starbucks outside the U.S, even redeploying a portion of the capital originally earmarked for U.S. store growth to the international business.

Also, in February 2008, Schultz announced 600 job cuts (about one-third who worked at the company’s Seattle headquarters in the US) in an e-mail to Starbucks’ more than 170,000 employees, calling it a difficult decision aimed at sharpening the company’s focus on customers. Some analysts felt the move was to remove bureaucracy and lower costs.

More restructuring changes will be announced at the company’s annual meeting on March 19.

Related Stories:
Starbucks for a dollar, Storm in a coffee cup?

Keywords: Brand Strategy and Management, Coffee Retailing, Corporate Restructuring, Starbucks, Turnaround Strategies

Wal-Mart Stores Inc (WMT) announced a price cut on thousands of items including groceries, popular electronics and other items. Price cuts range from 10 percent to 30 percent. Though Wal-Mart announces such price cuts during the holiday shopping season, this promotional move (just before the Super Bowl football championship game) is aimed at winning sales from limited budget shoppers ahead of the Super Bowl. Besides, forecast for retail sales in the US for 2008 is believed to grow slowly, the slowest in six years. Retail analysts opine that holiday sales rose by no more than 4 percent, one of the slowest rate increases since 2002. The National Retail Federation (NRF) in its 2008 economic forecast, predicted that retail industry sales (which exclude automobiles, gas stations, and restaurants) will increase 3.5 percent from last year. According to the NRF report, the slow pace in sales growth will continue before picking up in the second half of the year.

Retailers must turn to promotions to lure cash strapped shoppers into their stores, and at the same time try to keep inventory lean at the start of the season. There is a lot of pressure to give more discounts to clear unsold merchandise which hurts profit margins.

Others like Best Buy Co Inc and Circuit City Stores Inc are charging no interest on their websites on electronic items (like no interest for three years on all Samsung flat panel TVs $999 and up) ahead of the Super Bowl weekend.

Weak holiday sales

But, are such promotions working. One would certainly think so, specially after Wal-Mart’s December sales at U.S. same-store rose 2.4 percent, beating Wall Street’s forecast for a 2.1 percent gain. However, consumers are reluctant to spend. If one looks at Wal-Mart’s sales, necessary products drove sales. Shoppers spent mostly on cheap grocery and pharmacy items. Most U.S. retailers reported disappointing holiday sales in December. No. 1 wholesale club Costco Wholesale Corp. was another rare bright spot, benefiting from budget-conscious consumers seeking bargain electronics and buying bulk-food items.

Lackluster traffic levels in the weeks leading up to Christmas drove increased promotional activity. Many analysts feel that the reasons for shopper’s spending less and being more budget conscious are:

• Concerns for higher gasoline prices or higher energy costs
• Higher food costs
• Slow Job Growth
• Declines in the credit and housing markets.

Year 2008 is definitely going to be a struggle for most retailers, even for the well-established and the best-known brands.

Related Stories: Wal-Mart’s Marketside stores (smaller Neighborhood Markets) will compete with competitor and British retailer Tesco. Read: Wal-Mart’s Marketside or Tesco’s Fresh and Easy stores in US

Retailing, Wal-mart

Whirlpool’s fourth-quarter results 2007

Whirlpool, the appliance maker announced its fourth-quarter results. Its net income rose 72% to $187 million up from $109 million, a year earlier. Revenue increased 7.5% to $5.33 billion from $4.95 billion. Gross profit margin rose to 15.7% from 14%.

Chairman and Chief Executive Jeff M. Fettig of Whirlpool Corporation said, “We delivered record financial results in the face of both the most challenging U.S. industry demand environment in more than two decades and unprecedented global material price inflation.”

Whirlpool benefits from strong International sales and its 2006 Maytag Acquisition

Whirlpool benefited from its Maytag acquisition, an improved product mix, and robust international sales. Whirlpool’s had bought Maytag for $1.68 billion in order to gain market share and ward off competition from Asian manufacturers like Samsung Electronics and LG Electronics. When Whirlpool acquired Maytag in March 2006, Maytag was struggling with high fixed costs and nothing to show as investments in product innovation. In 2005, even retailer Best Buy had stopped selling Maytag appliances. But it was a turnaround this quarter, as Maytag gained market share after it received a boost when retailer Best Buy began selling Maytag appliances again last year. On the other hand, sales dropped in 2007 from 14% last year to 12% with its biggest retail customer, Sears Holdings Corp. (Also see: Restructuring at Sears, Can the retailer turnaround its business) Whirlpool makes some appliances that are sold under Sears’ proprietary Kenmore label.

Whirlpool’s North American earnings rose 41% to $175 million (benefiting from cost-cutting as part of the 2006 acquisition of Maytag and sales of higher-margin products), European earnings rose 22% (benefiting from higher sales on favorable currency exchanges) and Latin American 73% (benefiting from volume, pricing and an asset sale gain). North America sales dropped less than 1% compared to the 6% drop industry-wide. Other American manufacturing companies which benefited from strong International sales include Caterpillar (Also See: From a sluggish Caterpillar to an alert CAT) and Honeywell International, benefiting from strong international results. IBM also reported strong International figures.

Expensive name-brand home products are having a tough time with rising product prices and the home credit crisis risk affecting the market badly. Then there are other macroeconomic challenges like increasing raw material costs, unprecedented global material price inflation and expected lower product demand in U.S. and Europe. Companies need to adjust their cost structure to the lower expected industry demand levels.

Last month, Whirlpool had announced that it would get rid of two of its North American factories to face the challenges better and counter the economic downturn. Whirlpool is planning to offset increasing material and oil-related costs through cost-based pricing adjustments and productivity improvements.

Whirlpool expects 2008 appliance industry shipments for Latin America to increase 5% to 8%, Europe to be same as in 2007, U.S. to decrease 3% to 5% and Asia up by 5% to 10%.

Whirlpool is in a better position to counter any economic downturn than many as a major portion of its business is not new home-oriented, but essentially a replacement business. Moreover, many of the products it makes are not considered optional items anymore like the vacuum cleaners, dishwashers and refrigerators are necessities to any home. And if an old washing machine breaks down, then it can supply customers a new washing machine, which in many cases might be a better bargain for customers than high repair costs.

History of Whirlpool

In 1911, Whirlpool was a small firm manufacturing wringer washers. It was founded by three brothers – Frederick, Louis and Emory Upton in Michigan, USA. In 1916, Upton entered into a business partnership with Sears, Roebuck and Co. Sears marketed the washers manufactured by Upton under the brand name ‘Allen’. By early 2000, Whirlpool became one of the most well-established brands and leading manufacturer and marketer of home appliances. Whirlpool manufactured refrigerators, microwave ovens, washers, dryers and air conditioners. It then marketed its products under the names Kenmore, KitchenAid, Roper, Inglis and Speed Queen, in addition to the brand name ‘Whirlpool’. Whirlpool’s other brands included Amana and Jenn-Air.

Appliance Makers, Maytag, Mergers and Acquisitions, Whirlpool

Wal-Mart Stores Inc (WMT), the world’s largest retailer, will open small-format grocery stores named ‘Marketside’. These stores to be set up in Arizona will be roughly 20,000 square feet in size to begin with. This in comparison to Neighborhood Markets, Wal-Mart’s existing stores which are almost double in size. Neighborhood markets sell fresh produce and other groceries and are much smaller than a Wal-Mart Supercenter.

Wal-Mart’s Marketside stores (smaller Neighborhood Markets) will compete with competitor and British retailer Tesco. Tesco recently entered in the U.S. retail market setting up ‘Fresh & Easy’ markets. Some of the Marketside stores Wal-Mart plans to open are quite close to where Tesco is planning its grocery stores.

Wal-Mart’s ‘Marketside’ logo

Wal-Mart entered the grocery market in 1988. Since then Wal-Mart has grown into being the single largest grocer in the U.S. and has a market share of around 20 per cent. Wal-Mart’s new Marketside stores are the first new store banner to be used by Wal-Mart in the US in two decades.

Wal-Mart has unveiled its logo for Marketside, its new store format to take on UK’s Tesco’s new small-format Fresh & Easy discount grocery stores. Wal-Mart though says that the stores represent just another variation on its existing neighborhood market format.

Reports suggest that Wal-Mart’s Marketside logo includes lower-case green lettering, next to a stacked pile of pile of fresh food items – a fancy tomato, egg and grape.

Related Reading:

• Tesco in US Retail Market
• Tesco takes on US Wal-Mart [Download pdf file]

Retailing, Tesco, Wal-mart. Marketside logo

This case study highlights the merger between German sportswear-maker Adidas and Reebok to take on market leader Nike in 2005. Will Adidas’ $3.7 billion takeover of Reebok in 2005 be successful or is it hampering the German sportswear-maker’s performance?

Table of Contents

1. Introduction

Taking on Nike – market leader in the U.S.
Regulatory Issues – EU clears the Adidas-Reebok merger
Adidas plus Reebok is equal to better competition with giant Nike
Post-Merger and Integration Issues
Adidas-Salomon Group five-point strategy in 2005

2. Exhibit I: Adidas major locations in 2005



3. Adidas-Reebok combo synergy – Did the merger make sense?

Affordable shoes
Growing the Adidas brand
Cost Efficiencies
Cutting-edge technologies, innovative products and celebrity brand ambassadors
New business opportunities
A more geographically balanced sales mix


4. M&As in the sporting goods industry during the late 1990s and the early 2000s
5. Adidas Reebok Merger Fact sheet
6. Exhibit II: The Reebok acquisition according to Herbert Hainer, Chairman and CEO of adidas-Salomon AG
7. Industry Analysis – Athletic apparel and footwear industry, Sporting Goods in the U.S
8. Competitive Landscape in 2005/6 – Sporting Goods Industry
9. Is the merger successful?

Strong competition from Nike
Adidas – Fourth Quarter 2007 performance
Adidas vs. Reebok unit performance in 2007


10. Reebok History – Timeline
11. Adidas History – Timeline
12. Financial Analysis – Nike, Reebok, and Adidas in 2004
13. Exhibit III: Market Analysis – Nike, Reebok, and Adidas in 2004
14. Exhibit IV: Adidas-Salomon – Five year financial summary
15. Adidas-Salomon – Financial Data – 2004, 2005
16. Adidas Group – Financial Data – 2007, 2006
17. Reebok – Financial Data

Case Study Keywords: Adidas, Reebok, Nike, Mergers and Acquisitions, M&A, Sporting goods, Athletic Apparel, shoes, corporate takeover

Case Questions for Discussion

The focus of this case study is the entry strategy of UK’s successful fast-fashion retailer Topshop in the U.S. This case briefly discusses Topshop’s business strategy, its early years and its success in UK fashion market. Can Topshop replicate its success in the U.S. market?

Table of Contents

1. Introduction – British retail chain Topshop’s U.S. debut
2. The Topshop Brand – a destination for pioneering British fashion
3. Background Note – Topshop in its early years
4. Topshop – History/Timeline/Important Events
5. Topshop’s entry and strategy in the US
6. Competition – Where will Topshop fit in the US retail scene?
7. Exhibit I: Typical Business Strategy of Fast-Fashion retailers
8. Topshop – Awards and Reputation
9. Exhibit II: Foreign Retailers in the United States
10. Exhibit III: Future expansion plans of foreign retailers in the U.S.
11. Exhibit IV: Services offered by Topshop
12. Exhibit V: Topshop Collections
13. Exhibit VI: Facts about the Arcadia Group
14. Exhibit VII: Fashion Brands under the Arcadia Group
15. Questions for discussion

Case Study Keywords: Fashion Retailing, Sir Philip Green, Topshop, Topman, Arcadia Group, Retailing in US, Fast-Fashion Market, entry strategy, international expansion

Case Questions for Discussion

1. Analyze Topshop’s entry strategy in the United States. Do you think it is the right move?
2. Compare and contrast your experience from your visit to a fast-fashion chain and other retail chains. What can Topshop do to add more value to its customers?

Case Snippets/Updates

• Topshop is present in around 30 countries. The Arcadia Group owned by billionaire Philip Green owns Topshop, Topman and Miss Selfridge brands. Arcadia also owns the Dorothy Perkins, Wallis, Evans, Outfit and Burton chains. By 2009, the Arcadia Group had 3,115 owned and franchised outlets in 34 countries.
• In 2006, Sir Philip Green, owner of Arcadia Group was knighted by Queen Elizabeth II. In 2002, he bought Arcadia for 850 million pounds. He and his family own about 90 percent of Arcadia. In 2001, he bought department store British Home Stores (BHS) and is known for successful turnarounds in the retail industry.
• In 2009 (12 months to August 29, 2009), Arcadia posted a 13% rise in pre-tax profits to £213.6 million. The growth marks a turnaround in performance after profits declined in the previous two years by 5% and 1.6% respectively.

This case study discusses how McDonald’s India managed to buck the trend in a struggling economy, its early years and business strategy to get more out of its stores in India. The case also briefly discusses how McDonald’s adapted to local culture in India, its localization and entry strategy, its strong supply chain and pricing strategy.

Table of Contents

1. Introduction
2. McDonald’s entry into India
3. Exhibit I: McDonald’s – Country – Entry Year
4. The Indian Market – Top 10 per cent of the busiest markets globally
5. Localization Strategy
6. McDonald’s JV in India
7. Initial Challenges – ‘Culturally Sensitive’ Food



8. Understanding Indian Customs and Culture
9. An Indianized Menu, Re-engineered operations and no beef burger
10. Competition – Major Competitors in India and Globally
11. McDonald’s – Quick Facts
12. Time line of McDonald’s in India
13. Pricing Strategy – The Rs-20 trap and ‘Purchasing Power Pricing’
14. Kiosks at store entrances for customers in a hurry
15. Home Delivery – McDonald’s Delivery Service or McDelivery



16. Out-of-home Breakfast – International McDonald’s format with local taste
17. McDonald’s Supply Chain Management (SCM)
18. Unique cold chain
19. Cutting costs
20. Exhibit II: McDonald’s Suppliers in India
21. Exhibit III: The Menu at McDonald’s India
22. Exhibit IV: McDonald’s – Early History and Growth
23. Exhibit V: Principles to McDonald’s business success
24. Questions for Discussion

Case Study Keywords: Fast-food Retailing, McDonald’s India, Joint venture, Amit Jatia, Vikram Bakshi, localization strategy, pricing strategy, McIndia, quick service restaurants, cultural adaptation, local culture, supply chain management, SCM, McDelivery, unique cold chain

Case Questions for Discussion

1. McDonalds has become the poster brand for recession-resilient business. What is McDonald’s doing right in India? What elements of its business strategy are working for it and how does it manage to get more out of its stores?
2. Does local adaptation contribute to business growth in a country? Explain McDonald’s efforts to adapt to the local culture in India. What challenges did McDonald’s face in India?
3. Have you ever visited a McDonald’s store? Compare and contrast your experience with another quick-service restaurant or fast-food joint you visited earlier. How can McDonald’s improve? Should it alter its strategy?

Case Updates/Snippets

• World’s leading food service retailer – McDonald’s has more than 32,000 restaurants serving over 50 million customers each day in more than 119 countries.
• McDonald’s competitors in India – McDonald’s competes with fast food chains like Pizza Hut, Domino’s Pizza, Papa John’s, Nirula’s and KFC in India.
• McDonald’s Supply Chain – McDonald’s has a dedicated supply chain in India and sources 99% of its products from within the country. The company has strong backward integration right up to the farm level.
• Quick service restaurants in India – By October 2009, McDonald’s India had more than 170 quick service restaurants in India. Domino’s Pizza, which began operations in India in January 1996, has over 275 stores across 55 cities in the country. KFC has 46 restaurants across 11 cities in India. (KFC is one of the 5 brands owned by Yum!. KFC is a $12 billion global brand and a leading quick-service restaurant (QSR) in many countries.) Nirula’s, one of India’s oldest food chains (completed 75 years in service in March 2009), has a network of around 62 outlets in five states across Northern India. Nirula’s, established in 1934 has interests in hotels, restaurants, ice cream parlours, pastry shops and food processing plants. Nirula’s was the first to introduce burgers in India.
• Food Industry in India – In India, food industry and particularly informal eating out market is very small. In India, over quarter of a million customers visit McDonald’s family restaurants every day. The Indian fast food market is valued at $1-billion (Rs 4,547 crore) aprrox.
• MFY (Made for You) food preparation platform – MFY is a unique concept (cooking method) where the food is prepared as the customer places its order. All new upcoming McDonald’s restaurants are based on MFY. This cooking method has helped McDonald’s further strengthen its food safety, hygiene and quality standards. McDonald’s has around 10 MFY restaurants in its portfolio.
• How McDonald’s manages to keep its prices down? – Fast-food chains face a tough time balancing between margin pressures and hiking prices which can hurt volumes. Consequently, the chains have to increase rates or rework their strategies. Affordability has been the cornerstone of McDonald’s global strategy. Some of its measures to achieve this include – Bulk buying, long-term vendor contracts, and manufacturing efficiencies.
• McDelivery Online – In India, McDonald’s first launched home delivery of meals in Mumbai in 2004. McDonald’s now has plans to launch web-based delivery service in India (across 75 McDelivery cities) in 2010, a pilot for which has already been tested by it in Hyderabad. The company hopes to add 5 per cent to sales via Web delivery. McDonald’s web-based delivery model will be based on serving the customer quickly wherein the drive time does not exceed seven minutes because its food has to be eaten within ten minutes of preparation. The footfalls in India are amongst the highest in the world, but the average bill is amongst the lowest. At present (March 2010), Domino’s Pizza (operated by Bhartia Group-promoted Jubilant Foodworks under a master franchise agreement) has a 65% market share in the home delivery segment.
• Most Preferred Multi Brand Fast Food outlets: In 2009, McDonald’s India won the CNBC Awaaz Consumer Awards for the third time in the category of the Most Preferred Multi Brand Fast Food outlets.
• McDonald’s India in 2010 – In 2010, McDonald’s India plans to open 40 more outlets. The company has also earmarked a budget of Rs 50-60 crore to market its new products and initiatives for consumers. Its new marketing campaign is titled – ‘Har Chotti Khushi Ka Celebration’ – in other words ‘celebrate little joys of life’ where it positions McDonald’s as a venue for enriching life of consumers. In South India, McDonald’s has 29 outlets and plans to add 10 more by end of 2010.
• Taco Bell in India – In March 2010, Taco Bell, the Mexican specialty chain owned by US-based fast food brands operator Yum! Restaurants launched its first outlet in Bangalore, India. The company which also operates brands like Pizza Hut and KFC plans for contract farming to open up to 100 outlets by 2015 and also expand into Tier-II and -III Indian cities eventually.
• Local Vegetarian Menu: In India, McDonald’s does not offer pork or beef-based products. It’s menu is more than 50 per cent vegetarian. The fast food retail chain has separate production lines and processes for its vegetarian and non-vegetarian offerings.
• High Real-Estate costs in India: In many countries, in a Quick Service Restaurant (QSR) a customer comes in, buys and then leaves. This is known as a revolving door concept. But an Indian customer believes in a dine-in culture. This adds to the real estate costs which goes as high as 20-25 per cent as compared to 10-15 per cent globally.
• The most important meal for QSRs- Morning Meals (Breakfast):According to market research company, the NPD Group, breakfast accounted for nearly 60 per cent of the restaurant industry’s traffic growth over the past five years in the U.S. Quick service restaurants sold 80 per cent of the over 12 billion morning meals served at US restaurants for the year ending in March 2010.
• OOH Branding: According to Rameet Arora, senior director – marketing, McDonald’s India (West and South), McDonald’s India may be the largest out-of-home branding (OOH) in the country. McDonald’s India has restarted OOH (out-of-home branding) after a 7 to 8 year break to reach to their target group.

The focus of this case study are the innovative strategies adopted by leading Indian organized book retailing chain – Crossword Bookstores Limited. This case discusses the constant innovations brought about by the bookstore and how it has brought international standards of book retailing to Indian customers.

Table of Contents

1. Introduction
2. About the Company
3. Background Note – A dream of an India-based world-class bookstore
4. Exhibit I – Most Frequently Visited Book and Music Stores in India
5. Exhibit II: Achievements and recognitions for Crossword
6. Crossword – Quick Facts
7. Crossword – Market Positioning



8. Exhibit IV – SWOT Analysis of the Indian Book Market
9. Exhibit V – Book retailing scenario in India
10. The ‘print then distribute’ model
11. Driving factors for Market growth in India
12. Typical Characteristics of the Indian book market in the 80s
13. Exhibit VI: Journey of Organized Retail in India
14. Exhibit VII: Population Growth rate and ROI on Retail real estate in India
15. Exhibit VIII: Typical Bookstore classification in India
16. Innovations at Crossword
17. What has shifted shoppers’ loyalties to the up market bookstore?
18. Crossword – Breaking the rules – Much more than a bookstore
19. The inaccessible ‘U’ shaped first store
20. Exhibit IX: Simple innovations at Crossword Stores
21. Keeping the customers in mind – Understanding buying readers’ psyche
22. Improving window displays
23. A welcoming café
24. Reading tables and chairs
25. Helping booklovers – ‘Books once sold WILL be taken back’
26. Crossword Children’s Hour – Book Reading and story-telling sessions
27. Unique Product Mix
28. Increasing margins with non-book business category and own private label business
29. Innovative marketing strategies for book retailing in India
30. The Crossword Book Award
31. Exhibit X- Crossword Book Award winners
32. Shop-in-shop model
33. Investment in an ERP
34. Design Innovation – High-and low-impulse sections, Adjacencies
35. Crossword – Store Formats
36. Competitor Oxford’s – Store Formats
37. Exhibit XI: Retailing formats available in India
38. Summary of Financial Performance of Crossword Bookstores (2007-08)
39. Competitor Analysis – – Crossword vs. Oxford Bookstore
40. Crossword – Store Locations in India
41. List of major book retailing chains in India
42. Exhibit XII: Book Exports to India from the UK and the USA, 2000–2006
43. Exhibit XIII: India – Lifestyle, Demographic and economic indicators
44. Exhibit XIV: India’s income classes (1994-2006)
45. Exhibit XV: Organized Retail Penetration in India across categories
46. Popular Book and Author choices in India
47. Crossword – Best of 2008 list
48. Overview of the U.S. Bookstore industry
49. Questions for Discussion

Case Study Keywords: Organized Book Retailing, Crossword, Shopper’s Stop, Landmark, Oxford bookstores, book retailing in India, leading bookstore, retail formats, R Sriram

Case Questions for Discussion

1. “You can’t take books as any other commodity. If every store has the same kind of books, what’s the fun? In this business you have to know how to select books and build customer relationship.” – How did Crossword change the book retailing scene in India? Analyze the growth of Crossword as a world-class book retailer.
2. Compare and contrast your experience from your visit to a local bookstore to the innovative services being offered by Crossword at its stores. What can Crossword do different to add more value to its customers?

Case Snippets/Updates:

• Crossword Bookstores Ltd. is a wholly owned subsidiary Company of Shopper’s Stop Ltd – India’s leading department store chain. Crossword has 55 stores across 11 cities in India.
• In 2006, Businessworld rated Crossword as the 6th Most Respected Retailer in the country
• In Dec 2009, Crossword launched its 55^th store in India. The store, launched in Hyderabad was the 5^th one in the city by the leading lifestyle bookstore chain.
• According to Assocham, an industry chamber, organized retail in India accounts for $9.23 billion (around Rs 42,000 crore). This is around 5% of the overall retail market. This figure will reach $13 billion (approx. Rs 60,375 crore) by 2010.
• Organized book retail in India: Organized retail has only a 7% share in the approximately Rs 3,000 crore Indian book retail industry. According to Technopak, the contribution of book retail is only about 1% to the overall retail industry and is expected to grow by approximately 15% yearly.

The focus of this case study is the supply chain of fast-fashion giant, H&M. H&M – the world’s third-largest retailer by sales – has grown into a profitable force in the global apparel market by offering clothing that is seen as both fashionable and reasonably priced. This case discusses the supply chain management practices of H&M and how it responds quickly to changing fashion trends by renewing its lines. H&M’s logistics, inventory management process, design collaborations, sales channels, online branding and best price strategy are briefly covered.

Table of Contents

1. Introduction – Fast Fashion and Supply Chain Management
2. Background Note
3. H&M Quick Facts
4. Elements of H&M’s Innovative Supply Chain
5. Double Supply Chain



6. H&M’s Three Sales Channels
7. Logistics
8. Efficient Central Distribution Center
9. H&M’s Best Price Strategy
10. H&M’s rapid reaction supply chain – Flexible Purchasing and the ICT platform
11. Branding online and the Virtual retail experience
12. Design Collaborations
13. ‘The shock of the new’ every day – Building a continuous consumer supply chain
14. Exhibit I: H&M’s Growth (1974 – 2007)
15. Exhibit II: H&M’s Global Expansion
16. H&M Timeline
17. H&M’s Financial Performance Summary (Revenue and Net Income)
18. Exhibit VI: Comparison with major global specialty clothing retailers
19. H&M: Sales Graph by country, 2007
20. H&M: Store Locations, 2007
21. H&M: Sales by Country, 2007
22. Questions for Discussion

Case Study Keywords: Hennes and Mauritz, H&M, Supply Chain Management, SCM, Erling Persson, rapid-reaction, Madonna and Kylie Minogue, Rei Kawakubo, founder of the Comme des Garcons fashion chain, Zara, Gap, Apparel Retailing Case Study, Logistics and Distribution, IT enabled supply chain, supply chain integration, information sharing, inventory management, fast fashion, continuous consumer supply chain, best price strategy, major global specialty clothing retailers, Design Collaborations, sales channels

Case Questions for Discussion

1. In the past, apparel pipelines in the fashion industry have infamously been long, complex and inflexible. How did H&M improve its buying cycle and responsiveness of its supply chain?
2. “In modern retailing it is the supply chains that compete rather than companies.” Support this statement using examples from H&M’s supply chain and business model.
3. Which of the following do you think is the driver of fast fashion that has a distinct impact on the supply chain – the Manufacturer, the Retailer or Consumer Demand?

Case Updates/Snippets

• Reduced time to market – Photos of fashion shows are available online immediately after a show. This has enabled fast-fashion retailers like Topshop and H&M to cut the time span between catwalk and store. Designs of luxury brands can be interpreted to the general public quicker than before. Earlier, it took months for retailers to interpret designs by luxury labels for the general public. Many designers feel that this has led to shoppers desiring for frequent refreshing of stock.

1. Introduction
2. Background Note
3. Exhibit I: H&M’s Growth (1974 – 2007)
4. Exhibit II: H&M’s International Expansion
5. H&M’s Supply Chain
6. Exhibit III: H&M’s Best Price Strategy
7. H&M’s Financial Performance Summary (Revenue and Net Income)
8. Exhibit IV: H&M’s Three Sales Channels – Stores, Internet and Catalogues
9. Exhibit V: Table showing some major retailers with # of stores in Japan
10. Exhibit VI: Comparison with major global specialty clothing retailers
11. H&M Quick Facts – Brief Company profile – Revenues, Industry, Employees, Operations, Total Stores, Sales Channels, Major Competitors, Major Brands/Labels, Business/Growth Strategy, Key Executives
12. H&M’s Entry Strategy into Japan
13. Hurdles when entering the Japanese market
14. Channel Issues – Will H&M’s strategy to go alone work in Japan?
15. Product Quality Issues — Will H&M’s fast fashion work in Japan?
16. Design Collaboration, Designer Brands
17. Understanding the Japanese consumer – group oriented culture, the price factor and the Japanese H&M fan club
18. In conclusion
19. Additional Reading and References

1. Introduction

"It has been H&M’s dream to open in Japan. I am very proud to say that we now have our very first store in Tokyo. Japan is a very strategic and exciting market with great fashion awareness. We hope that we can offer our Tokyo customers added value through fashion and quality at the best price. We’re not in a hurry in Japan but we see huge potential if we succeed. We’ll go step by step."
-Rolf Eriksen, CEO of Hennes and Mauritz at the ceremony to open the Japan flagship store.

"Our business concept is really what attracts the H&M customer: Fashion and quality at the best price. Because we do carry all these different lines in our stores, we allow our customer to address [his or her] personality, and that’s really important."
- Karen Belva, public relations manager and spokesperson of H&M in 2002.

"With H&M’s opening, everybody – the Gap and Zara – will have come to Japan"-
Tadashi Yanai, Chief Executive, Fast Retailing, referring to Inditex’s Zara apparel chain.

In April 2007, Stockholm-based Swedish fashion giant Hennes & Mauritz (H&M) opened its first flagship store in China. About a year later (in September 2008), this strategic move was followed by another first H&M outlet in Tokyo, Japan, the world’s second-largest economy. The H&M store – a four-storey shop was strategically located just a few buildings down from competitors Zara and Gap Inc stores. The new store with a floor space of more than 1,000 square meters was first in a series of stores that H&M planned to open in Japan. The world’s No. 3 clothing retailer had aggressive plans to open stores in Japan, as well as sites in regional shopping centers.

With the European markets saturating, H&M was pursuing a rapid international expansion strategy. But the timing of H&M’s entry strategy into Japan, especially when the economy was struggling with recession and customers were tightening their purse strings was open to discussion. Besides, Japan was regarded as one of the world’s most competitive fashion markets. Market reports also suggested a declining market for clothing and footwear. Some observers called it the toughest trading conditions in decades. However, H&M was confident of differentiating itself and competing with expensive brands like Christian Dior, Giorgio Armani and Chanel, as well as the more reasonably priced Gap and Japan’s hugely popular Uniqlo chain.

Background Note

H&M was founded in 1947 by Erling Persson, a salesman from Västerås – a small town in Sweden. He began his career working for his father delivering cheese to restaurants in Stockholm on a bicycle. He was attracted by the concept of clothes stores selling stylish garments at low prices when he once visited the U.S. He was amazed at the success of retailers like Macy’s in New York. He opened a similar store in Västerås selling clothes for women. He named the store ‘Hennes’ which stood for ‘hers’ in Swedish…

…Today, H&M is the world’s third-largest retailer by sales with around 1,600 stores in 32 countries with 68,000 employees. In the past two decades, H&M grew at an average rate of 20% annually. It managed to grow quickly into the world’s third largest clothing retailer by offering clothing that is seen as both fashionable and reasonably priced. It made its mark on the apparel industry, mixing the latest trends with fashion classics. H&M is popularly known as the king of “fast fashion” and the purveyor of quick-to-market trendy clothing. H&M’s business model is based on "Fashion and quality at the best price."

Will H&M be successful in Japan?

"I believe that the interest in a new change would be big in Japan. It’s one of the biggest countries we have entered. If we succeeded as we have done in all the other countries,[Japan] could be a huge market for H&M."- CEO, H&M

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Related Case Studies

• H&M’s Low-cost, High-fashion Supply Chain

Case Keywords: Hennes & Mauritz, H&M, Entry Strategy, Japan, Expansion into global markets, International Business, Competitive Strategies, local culture, Japanese apparel market, Fast Fashion, Best Price Strategy, H&M’s Three Sales Channels, Channel Issues, Product Quality Issues, Design Collaboration, Designer Brands, Japanese H&M fan club, Erling Persson, Zara, Uniqlo, Fast Retailing, Supply Chain

Case Updates/Snippets

• H&M in Asia- H&M has over 1,800 shops in more than 30 countries. H&M’s principal markets are in Germany, the United Kingdom and Sweden. In Asia (2009 figures), H&M has four stores in Japan, 15 stores in China and 6 stores in Hong Kong. It plans to set up its first store in Korea, sees potential in Taiwan and wants to up its store count in China by 30% in 2009. H&M’s top management considers Asia to be the newest and biggest market for H&M in future.
• H&M’s business model and focus on low-cost, fast-moving fashions, and geographic spread helped it to weather the economic downturn better than its competitors. During 2009, the Swedish fashion retailer H&M was the top-ranked global fashion retailer.
• In fiscal year 2009, H&M added a total of 250 new stores, 25 more than originally planned.

1. Introduction
2. Wal-Mart – Company Background
3. Sam Walton and Wal-Mart’s culture
4. Exhibit: Unique values that support Wal-Mart’s three basic beliefs
5. The 10-Foot Rule – Wal-Mart’s secret to customer service
6. The Sundown Rule
7. Open-Door Policy
8. Servant Leadership
9. Rank-and-file profit sharing
10. Grass Roots Process – Associate Opinion Survey
11. The Wal-Mart Cheer
12. Wal-Mart’s efforts to make the company an even better place to work



13. Employee Development programs
14. Combining Technology and empowerment
15. Awards and Recognitions received by Wal-Mart
16. Wal-Mart – Timeline
17. Wal-Mart – Quick Facts
18. Wal-Mart – Various Store Formats
19. Wal-Mart – International operating formats
20. Sam Walton’s ten rules for building a business

Introduction

"Wal-Mart continues to execute well and deliver solid results in a challenging economic environment"- A Goldman Sachs analyst

"What makes ordinary people do extraordinary things?" Sam Walton once asked. "Aren’t we a group of ordinary folks? We really are. And I think we, together as a team, have done extraordinary things. We’ve all grown, we’ve all accomplished much more than any of us ever thought that we could."- Sam Walton, founder of Wal-Mart

"We are a people association supported by one million associates. Much of what we do centers around individual stores. We’re in a labor-intensive customer service business. Associates can’t treat customers as number one if they are not treated that way." – Susan Oliver, Wal-Mart’s SVP of human resources in 2005

In August 2008, Wal-Mart Stores announced that its profit rose 17 percent in the second quarter and that it is raising its full-year forecast. In a challenging economy, the world’s largest retailer benefited from low prices and its moves to cut costs. Wal-Mart’s President and Chief Executive Lee Scott said that, "While inflation and higher fuel costs are pressuring suppliers, retailers and customers worldwide, we’re confident that Wal-Mart is well positioned for this economy.” Chief Financial Officer Tom Schoewe attributed the better second-quarter profits to tighter inventory controls, which led to fewer markdowns on merchandise. One of Wal-Mart’s goals – which it successfully met – was keeping inventory growth at half the rate of its sales growth which it successfully met. In contrast, sales at department stores and specialty retailers were lagging behind.

What is the key to such good results? Wal-Mart overhauled its strategy. Instead of announcing any price increases to cope with the tough economy, the company slashed its expansion plans. It refocused on lower prices, improved the mix of merchandise offered, cleaned up its stores and provided friendlier and faster customer service. But there is more to Wal-Mart’s success over the years than just tighter inventory controls and lower prices.

Wal-Mart is truly a great company. A strong organizational culture is the foundation for making a good company a great one. The secret to Wal-Mart’s success has long been attributed to its strong culture. Analysts like Jim Collins believe that Wal-Mart had the kind of ‘cult-like’ culture that is shared by all great companies. Wal-Mart employees are referred to as ‘Walmartians’ which is a sign of a unique culture shared by them. This culture is responsible for a company of this magnitude to be able to sustain its entrepreneurial spirit decade after decade.

Since its early days, Wal-Mart achieved remarkable growth rates and was the first trillion dollar company in the world. In 1999, Wal-Mart became the largest private employer in the US with 1,140,000 Associates. But with amazing success also came criticism. Wal-Mart was sued many times and even held the record for being sued the maximum at one time. Its practices and culture were held responsible for killing small local retailers. It was also criticized for gender-based discrimination, its overtime policies and using sweatshop products.
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1. Introduction – eBay CEO Meg Whitman plans to retire
2. Meg Whitman – Early years and Career Growth
3. Meg Whitman and Leading eBay
4. Hiring the right people
5. Quickly understanding the new business model
6. Leading eBay’s IPO – a hands-on approach
7. Changing eBay’s policy
8. Building one of the most powerful e-commerce systems in the world
9. Focus on Metrics
10. Customer Focus – ‘Voice of the Customer’ program
11. Strategic Decision Making
12. Exhibit I: eBay stock performance graph
13. Exhibit II – Quick Facts/Key Information on eBay
14. Exhibit III – Awards Received By Whitman
15. Exhibit IV – Major Awards Received By eBay

Case Study Abstract

Introduction – eBay CEO Meg Whitman plans to retire

“In the beginning, I was certainly not an entrepreneur who came up with the idea, but I think I was fairly entrepreneurial in trying to figure out how to bring that idea to life and build a backbone for the company that could take it to the next level.“
- Whitman commenting on her journey from a novice to a leader in the dotcom world.

At the beginning of the year 2008, Margaret Whitman (Whitman), the chief executive (CEO) of eBay, announced plans to retire so as to breathe fresh life into the company and also provide a much needed radical reinvention of eBay. By March 2008, Ms. Whitman, 51, had served in the position for 10 years. Whitman joined eBay as chief executive in 1998. She was popularly known as Meg Whitman and ‘darling of the Internet’. In 2007, she accepted the Lifetime Achievement Award for the community of buyers and sellers that make up eBay. Whitman ranked 22nd on Forbes.com’s list of the world’s most powerful women. In October 2002, Fortune Magazine ranked Whitman, as the world’s third most powerful women in business, after Carly Fiorina and Oprah Winfrey.

However, some analysts called Whitman old-fashioned, a low-key manager and a ‘slow-footed CEO’ because even during the dotcom boom, she avoided risk and focused on financial fundamentals. Some felt that she did not possess the ‘star quality’ of Carly Fiorina, CEO of Hewlett-Packard, or the electric energy and charisma of Jeff Bezos, the founder of Amazon.com. But the performance of eBay silenced her critics. When many dotcom businesses crashed in the late 1990s and early 2000s, Whitman steered eBay towards success. EBay was the only Internet Company that had registered continuous growth and profits since its inception in 1995. Under her leadership, eBay’s revenues and profits had doubled every year. With her strong belief in eBay’s business model and its customers, revenues increased from $4 million to $1 billion by late 2002. She truly succeeded where many had failed.

Meg Whitman – Early years and Career Growth

Margaret C. Whitman, the youngest child of a Wall Street executive and popularly known as Meg Whitman was born in August 1956. She grew up in Long Island, New York. She was smart, studious and academically oriented since childhood. She graduated in Economics from Princeton University. Her penchant for business was evident when she had The Wall Street Journal delivered to her dormitory at Princeton University – unusual during the disco era of the 1970s. The business inclination took her to Harvard University, where she received her Masters in Business Administration.

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Case Study Keywords: eBay, Meg Whitman, Leadership case study, Internet auction market, darling of the Internet, powerful women in business, entrepreneurship, eBay’s business model, Pierre Omidyar, eBay’s IPO and policy decisions, metrics and measuring performance, Customer Focus – ‘Voice of the Customer’ program, ‘Buy It Now’ feature, iBazar, PowerSeller program, regional auctions, eBay Motors

1. Introduction
2. CCD – an established brand image in India
3. CCD’s wide network – the anytime, anywhere cafe
4. Exhibit 1: Total number of stores/cafes of Café Coffee Day and its competitors
5. 1996 – 2008, CCD’s first store launch to building a strong competitive advantage
6. Innovative formats to woo new customers
7. Reinforcing brand image with the cluster approach strategy
8. Company-owned stores instead of franchises to not dilute brand value
9. Lower pricing and ‘no-segmentation’ approach
10. From a largely south Indian retail chain to a national brand
11. Co-branding
12. Reinvigorating the brand and taking it to the next level
13. Projecting a feeling of togetherness
14. Silent brew masters – special employee program
15. Background Note (History of Cafe Coffee Day)
16. Café Coffee Day – Quick Facts
17. Exhibit 2: Various store/café formats of Café Coffee Day
18. Exhibit 3: Different divisions of Café Coffee Day
19. Exhibit 4: Brand Logo of CCD and its significance
20. Exhibit 5: Sample Consumer profile by Age group at Café Coffee Day

Case Study Abstract

This case study covers the following issues:

• Examine and analyze Cafe Coffee Day’s brand strategy in India, its success and future challenges

Introduction

“CCD today has become the largest youth aggregator, and from a marketing stand point, the success has come by focusing on the 3As: Accessibility, Affordability and Acceptability.”- Bidisha Nagaraj, the Marketing president of Cafe Coffee Day

“Although demographically, a typical consumer would be male or female between 15-29 years of age, belonging to middle or upper middle class, we call our consumers young or young at heart. We are about juke boxes, good and affordable coffee and food. The brand fit is with youth or the young at heart. So we often look out for brands that are aspirational in nature.” – Sudipta Sen Gupta, Marketing head, Café Coffee Day.

CCD – an established brand image in India

Cafe Coffee Day (CCD) has an established brand image in India and ranks No 2 in the Brand Equity’s Most Trusted Brands 2008 survey – in the food services category. Rival Barista is at No 5. CCD has been able to make a connection with the Indian consumers, predominantly among the youth. CCD is the market leader in India and was awarded the ‘Exclusive Brand Retailer of the Year’ by ICICI Bank in its Retail Excellence Awards 2005 for the organized retail sector.

CCD’s wide network – the anytime, anywhere cafe

CCD has been able to make its brand presence felt through the sheer number of stores. CCD has 620 cafes at present and it has ambitious plans to launch more than 900 cafes by the end of the current financial year. This means launching one store every other day which is not surprising from a company which launched a cafe (in 2005) in Vienna, the coffee capital of the world. CCD also has three cafes in Vienna, and two in Karachi, Pakistan. Lagging behind CCD in the Indian market, Barista has about 200 cafés, Java Green (around 75 cafés) and Mocha (around 25 cafés). The Indian organized sector has potential for around 5,000 cafés but fewer than 1,000 cafés exist currently.

Exhibit 1: Total number of stores/cafes of Café Coffee Day and its competitors

Download case study pdf to read more

Case Study Keywords: Cafe Coffee Day, CCD, Amalgamated Bean Coffee Trading Company Ltd., ABCTCL, V G Siddhartha, Café Beat, Brand Equity’s Most Trusted Brands 2008 survey, Bidisha Nagaraj – Marketing president, brand image, brand management, Exclusive Brand Retailer of the Year, Barista, Java Green, Mocha, company owned stores, national brand, south Indian retail chain, Chikmagalur, Co-branding, international brand consultant Landor, Silent brew masters – special employee program, a feeling of togetherness, Coffee Day Exports, Coffee Day Xpress, Coffee Day Take Away (coffee vending machines), Coffee Day Fresh ‘n Ground (ground coffee retail outlets), Coffee Day FMCG (packaged filter coffee powder)

Case Updates/Snippets

• CCD’s vision: To be the only office for dialogue over a cup of coffee
• CCD’s Expansion Strategy: Cafe Coffee Day has around 821 outlets in 115 cities in India. CCD plans to take the total number of cafes to 1,000 by March 2010 and double it to 2,000 by 2014. In October 2009, CCD announced that it will increase its international presence from the current six outlets in Vienna and Pakistan to a total of 50 stores across Europe and Middle East in two years time.
• International coffee chains in India – Recent entrants in the Indian market include Gloria Jeans, Coffee Bean & Tea Leaf and Illy Café.
• Operating Formats – Café Coffee Day operates in both regular (Coffee Day Square) and premium formats (Lounge).
• Highway Cafes: In 2004, CCD began cafes on highways. By 2009, the total number of Café Coffee Day highway cafes rose to 30 owing to the overwhelming response it received from travellers.
• CCD’s new brand identity: In October 2009, CCD unveiled a new brand logo, a Dialogue Box, to weave the concept of ‘Power of Dialogue’. In accordance with this new brand identity, CCD planned to give all its existing outlets a new look by the end of 2009. Cafés would be redesigned to suit different environments such as book, music garden and cyber cafes suitable for corporate offices, university campus or neighborhood. The change plan included new smart menu, furniture design, among others.
• Coffee consumption in India is growing at 6% per annum compared to the global 2% plus.
• Milk production in India – India is the largest producer and consumer of milk in the world with 98% of milk being produced in rural India.
• Coffee production in India – India ranks sixth as a producer of coffee in the world accounting for 4.5% of the global coffee production. India has about 170,000 coffee farms cultivating around 900,000 acres of coffee trees.
• CCD’s International Expansion Strategy – In June, 2010 Cafe Coffee Day chain acquired Emporio for Rs 15 crore. Emporio is a Czech Republic-based café chain present at 11 locations. CCD plans to co-brand the chain as Café Coffee Day Emporio and later transition it to Café Coffee Day. CCD is also present in Vienna. The company wants to expand in the East European region, West Asia and the Asia-Pacific region.
• Cafe Market in India – According to Technopak Advisors, the café market in India is estimated at $150 million (Rs 678 crore) and growing at 40 per cent over the last five years.

1. Introduction
2. eBay – Company Background
3. Pierre Omidyar – The founder of eBay
4. Early Days – From AuctionWeb to eBay
5. Meg Whitman and the growth of eBay
6. eBay – Quick Facts
7. eBay’s International Expansion
8. Exhibit I – eBay’s Net Revenue by Territory
9. eBay and its entry in Japan
10. Exhibit II – Yahoo Japan and eBay comparative data (in 2001)
11. Why eBay failed in Japan?
12. Stiff competition from Yahoo Japan
13. Not adapting to local culture and practices
14. No first-mover advantage
15. Low-key Marketing and Advertising
16. The return of eBay to Japan
17. Questions for Discussion
18. Exhibit III: Selected Financial Data for five years
19. Exhibit IV: eBay stock performance graph

Case Abstract

Issues/Information Covered

• eBay’s entry strategy in Japan
• eBay company background
• Why eBay failed in Japan?

Introduction

“We were late to the market and entered when Yahoo!/Softbank had gained a lot of momentum through its Internet portal. eBay is committed to the Asian market and may return to the Japanese market when economic conditions are better and when they have a strategy that addresses the issues they currently face in Japan.”
– an eBay spokesperson in 2002.

Ever since its entry in Japan in 2000, eBay, the US online auctioneer was struggling. By the end of 2001, many analysts felt that eBay Japan should admit defeat and sell a majority stake in the venture to a bigger local player. But even then, eBay would face an uphill struggle. In February 2002, eBay, announced its decision to exit from the Japanese market after it failed to gain a foothold in Japan lagging behind market leader, Yahoo Japan. The company also announced that its Japanese language site would be closed and 17 jobs would be cut. All its Japanese customers would be directed to its US based auction operations/site. At the time, eBay was the number one auction site in all of the other 18 countries in which it operated and one of the few successful internet companies, having seen its profits soar even amid the dot-com implosion. eBay’s strategy in Japan had failed. Japan was a rare failure for the company.

Japan was critical to eBay’s success because it was the world’s second-largest Internet market. The gap had to be closed soon otherwise Yahoo Inc. could easily beat it in the rest of Asia. Yahoo Japan was the No. 1 or No. 2 portal everywhere except China. In December 2007, Yahoo Japan and eBay made a deal to link their auction sites and make it easier for their respective users to bid on and buy goods available on each other’s sites. A new website by name “Sekaimon” (‘gateway to the world’ or ‘global shopping’ in Japanese) – www.sekaimon.com – was launched in December. The site allowed Yahoo Japan users to bid on items listed on eBay’s US site using their Yahoo Japan ID. The deal made cross-border bidding easier and gave eBay another chance to woo Japanese consumers…

Keywords: eBay, Japan, International Expansion Strategy, Entry Strategy, local culture and practices, Yahoo Japan, Pierre Omidyar, Meg Whitman, first-mover advantage, AuctionWeb, Sekaimon, Internet Auction, Online selling and bidding, Online Marketplaces, PayPal, Skype, Half.com, Rent.com, Shopping.com, StubHub, Alando AG, iBazar S.A., NeoCom Technology Co Ltd., EBay’s international operations, online shopping business, Sanook, TOM Online

This leadership case study on Warren Buffett, Chairman of the Berkshire Hathaway, outlines the leadership (entrepreneurial) skills of the world’s most successful investor. The case covers Buffett’s childhood years, the initial years of his career and how he went on to become one of the richest men in the world with his investing skills. His role in building Berkshire Hathaway and his investing style (understand the investment tenets followed by Buffett) is also briefly covered.

Case Study Contents

1. Introduction
2. Warren Buffett – Early Days
3. Buffett’s tenets of buying a business or stock
4. Buffett’s Investing Strategies
5. Buffett’s Management Style and Criticism
6. Questions for Discussion
7. Exhibit 1: Berkshire Hathaway – Operating companies – Insurance and non-insurance businesses
8. Exhibit 2: Selected Financial Data for the Past Five Years
9. Exhibit 3: Subsidiaries of Berkshire Hathaway
10. Exhibit 4: Common Stock Investments by Berkshire Hathaway (12/31/2007)
11. Exhibit 5: Berkshire’s Corporate Performance vs. the S&P 500

Introduction

Warren Edward Buffett (Buffett) is the 77-year-old CEO of Berkshire Hathaway Inc. and regarded by many as the world’s greatest investor. He is among the richest persons in the world and his estimated net worth is about $62 billion. He is known for his investing style “value investing” and is the most famous disciple of value investing’s inventor Benjamin Graham .

A simple, honest man with grandfatherly looks, Buffett is considered an intellectual genius who makes rapid decisions and decides on a major purchase with just a few days of research. He has figured consistently among the top five in the Forbes magazine’s list of the 400 richest Americans (the elite Forbes 400). In the early 90s he was number one and was the only person in the top five ……

Case Updates/Snippets

• Buffett’s Biggest Acquisition – In November 2009, Buffett acquired US railroad company Burlington Northern Santa Fe Corp (BNSF) in a USD 26 billion takeover. BNSF is one of the biggest US transporter of products such as corn and coal. Buffet’s company Berkshire had already owned 23% of the nation’s second-largest railroad operator. This acquisition was the biggest Buffett had made in his career of 44 years running Berkshire. Buffet believed that the acquisition was a good asset for Berkshire to own over the next century as it was a business that was going to be around for 100 or 200 years.
• In the 1960s, Warren Buffett bought Berkshire Hathaway, a working textile mill in New England. Later, he shut down production realizing that it could never be a profitable business. However, he retained its name for his holding company. Berkshire has major investments in companies (and household names) such as beverage giant Coca-Cola (1988), US bank Goldman Sachs (2008), the world’s largest retailer Wal-Mart, Nestle and oil giant Exxon Mobil..

Keywords: Warren Buffett, Leadership, Investment leader

1. Introduction
2. Exhibit I: Stock performance graph of Starbucks for past five years
3. The Starbucks Story
4. Starbucks – Early Days and Background Note
5. Building of the Starbucks Brand
6. Entry into International Markets
7. Starbucks – Quick facts
8. Starbucks – Timeline
9. The Restructuring Moves
10. Reorganization
11. No warm breakfast sandwiches but new beverages
12. Transforming the in-store experience
13. Renewed customer rewards program and a social network, my starbucksidea.com
14. Retraining Employees – The Baristas
15. Slowing down expansion in the U.S.
16. Job Cuts
17. Reorganizing the Entertainment Unit
18. Questions for discussion
19. Exhibit II: Selected Financial Data

Introduction

“Fiscal 2008 is a transitional year for Starbucks and, while our financial results are clearly being impacted by reduced frequency to our U.S. stores, we believe that as we continue to execute on the initiatives generated by our transformation agenda, we will reinvigorate the Starbucks Experience for our customers.”

- Howard Schultz, Chairman, President and Chief Executive, Starbucks.

Starbucks, the leading retailer, roaster and brand of specialty coffee in the world, has been struggling amidst a faltering economy, its own rapid growth (international expansion and growing presence in 44 countries) and increased competition from cheaper rivals. In the first three months of 2008 its net income fell to $108.7m (£54.7m) down 28% from the same period of 2007. Starbucks wants to turnaround its business by providing customers with the distinctive ‘Starbucks Experience’ and building on Starbucks legacy of innovation. As Starbucks shares have tumbled over the last year, (see exhibit I) a very important question is: Is Starbucks still the romantic coffee shop it used to be?

Starbucks has struggled to maintain its differentiation in the face of growing competition. The company had 125 stores when it went public in 1992, now has over 15,000 stores in 44 countries. Customers are simply not visiting Starbucks stores at the rate they once did. In recent times, Starbuck’s has suffered the effects of the crisis in the housing market, which has put a pinch on sales. Starbucks has also suffered from rising costs of storefront space and wholesale prices for coffee and dairy products. In the second half of last year, Starbucks’s same-store sales — a significant number watched by Wall Street — declined for the first time.

Howard Schultz (Schultz) returned in early January as Chairman and Chief Executive and announced a series of changes as part of Starbucks's Turnaround plan. …. This management case study highlights Starbucks strategy to turnaround its business by providing customers with the distinctive ‘Starbucks Experience’ and building on the Starbucks legacy of innovation

Keywords: Starbucks, Turnaround Strategies, Corporate Restructuring, Coffee Retailing, Specialty Eateries, Howard Schultz, Baristas, retraining employees, mystarbucksidea.com, customer rewards program

Case Updates/Snippets

• Starbucks “Via” the instant coffee market – In September 2009, Starbucks unveiled a brand of instant coffee called “Via” across all U.S. locations made with 100% natural roasted arabica coffee. The company believes the “ready brew” coffee will change the way people drink coffee. The global instant coffeee business is valued at $21 billion and instant coffee constitutes 40% of overall global coffee sales.
• Starbucks CSR – Starbucks buys 40% of its coffee beans through fair trade. As its commitment to Corporate Social Responsibility, the company pays a price well above the market rate to poor and small growers.
• Coffee Drinking Trends – The National Coffee Association’s 2009 study of drinking trends revealed that a majority, more than 80% of coffee drinkers get their coffee at home and only 18% drink at work. Just 5% of respondents drink their coffee at restaurants and 10% take a cup with them during their commute.
• Great business turnarounds – In the final three months of 2009, Starbucks posted a 4% growth in total sales and a 200% rise in profits, to $353m. In what is being seen as the one of the great turnarounds of the decade, earnings of Starbucks have jumped to 241.5 million US dollars (£149 million) in the quarter – more than three times the 64.3 million dollars (£39.7 million) seen a year earlier. In 2008, Schultz’s decision to resume the roles of CEO and President, has certainly helped the turnaround. Schultz had relinqu­ished the position in 2005.

Related Articles:

• Starbucks – Storm in an instant coffee cup
• Too many Starbucks stores for U.S. coffee Drinkers?
• Starbucks for a dollar, Storm in a coffee cup?

1. Introduction to Unilever's Restructuring Initiatives
2. History of Unilever
3. The 1880s – Lever & Co and Sunlight Soap – A revolutionary product
4. Lever Brothers – Growth with acquisitions and new product introductions
5. 1930 – Unilever is born
6. Unilever – Rapid Growth with diversification
7. Unilever N.V. and Unilever PLC
8. Unilever's Path to Growth Strategy
9. Key focus areas of the Path to Growth Strategy
10. Organizational Restructuring
11. Foods and Home and Personal Care as two separate Global Units
12. Unilever's Brand Restructuring
13. Brand focus strategy ‘nourishing the core’
14. Major components of Brand Strategy under PGS
15. Brand Acquisitions and Consolidation Strategy
16. Brand Disposal Strategy at Unilever
17. Marketing and Distribution
18. Advertising
19. Simplifying Business Processes
20. Supply Chain Restructuring
21. Questions For Discussion
22. Exhibit 1: Unilever – Turnover and profit for the last 12 years
23. Exhibit 2: Sales Growth of Unilever
24. Exhibit 3: Comparative Data on Unilever’s close competitors
25. Exhibit 4: List of Unilever’s Major Brands

Case Study Abstract

The case study highlights Unilever’s business strategy focusing mainly on its restructuring initiatives. The case analyzes in detail the key elements of Unilever’s restructuring plan ‘Path to Growth Strategy’ initiated in early 2000.

Case Study Keywords: Unilever, organizational restructuring, FMCG, fast moving consumer goods, Path to Growth Strategy, organizational structure, branding strategies, supply chain management, corporate restructuring, brand portfolio management, Lever Brothers, Foods and Home and Personal Care categories, Patrick Cescau, Anglo-Dutch consumer product company, Dove soap, Lipton tea and Ben & Jerry’s ice cream, William Hesketh Lever, Sunlight soap, Margarine Unie, P&G, Tide, Brooke Bond and Faberge/Elizabeth Arden, Simplifying business processes, Keki Dadiseth, Snuggle, Vaseline, Close-up, Ponds, Dove, Persil, Bird’s Eye, Knorr, Sunsilk, Calvin Klein, Lipton, Magnum and Omo, Brand focus strategy nourishing the core, • Expanding brands into new markets, Brand Acquisitions and Consolidation Strategy, Slim-Fast Foods Co, Bestfoods acquisition, Brand Disposal Strategy, Supply Chain Restructuring, Management Case Study

1. Introduction
2. CSR Approach and Initiatives
3. Tesco’s ‘Computers for Schools’ initiative
4. CSR KPIs with Tesco’s Steering Wheel framework
5. ‘Every Little Helps’ Approach and CSR Recognitions
6. Tesco and the Environment
7. Carbon calorie counter and carbon footprint labeling measure
8. Reducing carbon emissions from transporting goods
9. Exhibit: List of CSR Initiatives by Tesco
10. Regeneration partnerships
11. Benefits of regeneration partnership



12. Tesco’s Ethical trading policy
13. Tesco – Company Background
14. Tesco – History
15. Tesco – Company Timeline
16. Store Formats
17. Tesco: Quick Facts
18. Financial Highlights – Five Year Summary
19. Exhibit: Tesco Corporate Responsibility Review 2007 – Corporate Responsibility Key Performance Indicators (KPIs)
20. Related Reading
21. Questions for Discussion

Case Study Abstract

The focus of this case study is the Corporate Social Repsonsibility (CSR) initiatives of Tesco, UK’s biggest retailer.

1. Introduction

“Corporate Social Responsibility makes sound business sense. The key to our approach is our integrated business system, where environmental and social performance is managed alongside financial performance. This means we have a year-on-year program of focused action to drive improvement.” – Terry Leahy, Group Chief Executive, Tesco in “Tesco CSR Review,” 2001-02

Corporate Social Responsibility (CSR) at Tesco (UK’s largest retailer and one of the top supermarket operators in the world) is an important part of its corporate structure. Tesco’s CSR initiatives across several internal and external activities include local regeneration projects, being environmentally conscious, and community issues. A special focus is given to recycling, use of organics, use of energy and water, as well as its charity and community initiatives. These efforts reflect in its day to day activities.

Every year Tesco publishes its ‘Corporate Social Responsibility Review’ outlining its approach, implementation and policies in the coming year and the accomplishments in the past year. (Refer Tesco Corporate Responsibility Review 2007 – CSR KPIs on page 12) Tesco’s CSR strategy is basically “to earn the trust of our customers by acting responsibly in the communities where we operate, by maximizing the benefits we bring and working to minimize any negative impacts.” Tesco’s board members discuss the CSR strategy with performance reviews every quarter. The board and the executives receive quarterly updates on CSR performance, using which future risks and opportunities are evaluated…

2. CSR Approach and Initiatives

Tesco can influence society at large owing to its size and scale of operations and it does so by encouraging its employees and customers to become more socially responsible. Tesco is of the view that it has a major role to play in promoting health food among its customers and strives to make health food available at affordable prices. The company has adopted several initiatives over the years to fulfill its responsibility to society. These include charity, fund raising for a cause and promoting education. These efforts are not limited to the UK but extend to other countries in which Tesco operates…

Case Study Keywords: Tesco, Retailing, CSR, Corporate Social Responsibility, corporate responsibility index, FTSE4 Good Index, Sport for Schools and Clubs Tesco, Carbon calorie counter and carbon footprint labeling measure, Kids Carbon Calculator, Regeneration Partnerships, Ethical Trading Policy, Steering Wheel Framework, Terry Leahy, Computers for schools, Environment, Every Little Helps approach, Business Ethics Case Study, Management Case Studies

Related Case Studies on TESCO

• Tesco takes on US Wal-Mart

Case Study Snippets/Updates

• Tesco, Europe’s biggest retailer is nicknamed the Big Brother of the shopping world.

Ryanair was the first budget airline in Europe, modelled after the successful U.S. low cost carrier, Southwest Airlines. Ryanair is one of the oldest and most successful low-cost airlines of Europe. This case study on Ryanair highlights its low fares business model, its business strategies and operations. The case further incorporates the history and business description of Ryanair, its’ operations and challenges as a budget airline. Features and benefits of the low cost business model are also discussed.

Table of Contents

Introduction

• RyanAir: The ‘Southwest’ of European Airlines in 2007
• A year earlier…Ryanair, hedged fuel and a performance to envy
• Exhibit 1: Summary Table of Results and Key Statistics
• Exhibit 2: Ryanair Passenger Growth in Millions


History of Ryanair


• Ryanair’s initial efforts as a low-cost carrier
• 1990 – Restructuring at Ryanair
• The growth of Ryanair


Analyzing the Low-cost Business Model


• Ryanair Low Fares Strategy and Standardized Operational Model
• Advantages of using secondary or airports located outside city
• Lower Wage bills
• Ryanair.com and Online booking of tickets
• Paid-for extras – Sources of additional revenue
• The easyJet challenge
• Ryanair – Failed merger bid and other Controversies
• Ryanair / Aer Lingus merger failure
• Ryanair and EU
• Some low-fare carriers around the World
• Exhibit 3: List of Approved and prohibited mergers by the EU in the airline industry
• Exhibit 4: Features and Benefits of the Low Fares business model
• Exhibit 5: Comparative performance data of some major European LFA
• Exhibit 6: Oil Prices Comparison, 1994 – 2007
• Exhibit 7: Map of the European Union




• Questions for discussion

Introduction – RyanAir: The ‘Southwest’ of European Airlines in 2007

Ryanair, Europe’s biggest low-fares airline (LFA ) reported its third quarter results for 2007 with net profits dropping 27 percent compared to a net profit of 48 million a year earlier. Ryanair cited poor market conditions, fuel costs (oil prices at $90 a barrel) and concerns on recession in the UK and many other European economies for its current performance and not so strong future profit expectations. With average winter fares dropping almost 5 percent its’ underlying net profit in the three months to end December fell to 35 million euros ($52 million). Other factors that contributed included doubling of airport charges combined with reduction of winter capacity at Stansted , significant cost increases at Dublin Airport combined with longer sector lengths and staff costs which increased by 18 pct to 67 million euros. Ryanair’s net profit figure excluded a one-off gain of 12.1 million euros ($17.99 million) arising from the disposal of 5 Boeing 737-800 aircraft…

History of Ryanair

Ryanair was set up in 1985 and is one of the oldest and most successful low-cost airlines of Europe. In fact, Ryanair was one of the first independent airlines in Ireland. In 2001, many believed that Ryanair was like the Wal-Mart and Southwest Airlines of Europe. Ryanair transformed the Irish air services market where other airlines like Avair failed to compete with the more powerful national carrier Aer Lingus.

Ryanair’s initial efforts as a low-cost carrier

Ryanair began by offering low-cost no-frills services between Ireland and London. Ryan brothers – Catlan, Declan and Shane Ryan were the founding shareholders of Ryanair. Ryanair was set up with a share capital of just £1, and a staff of 25. Tony Ryan, their father and the chairman of Guinness Peat Aviation (GPA), an aircraft leasing company lent Ryanair its first airplane, a fifteen-seater turbo prop commuter plane. Ryanair’s first cabin crew recruits had to be less than 5ft. 2ins. tall so as to be able to operate in the tiny cabin of the aircraft. …Download full-text of this case study to read more.

Case Updates/Snippets

• Ryanair operates on more than 1,000 routes across Europe. Ryanair was founded in 1985 offering small flights from Ireland to England.
• Low-cost model in US – Ryanair’s entry in the US market – In 2008, Ryanair announced plans to operate in the United States. The plan includes forming a sister company that would begin servicing within three years. However, the start date has been delayed. Low-cost airline model attempts in the U.S. include Skybus in 2007 (which shut down within 10 months of operation) and Spirit Airlines (which shifted to the low-cost model in 2007).
• In recent years, fares have declined in the U.S. with budget carriers like Southwest Airlines and JetBlue Airways operating. However, the US airline industry has been struggling to match Europe where the cost of flying is very less.

The focus of this case study is the supply chain of the world’s largest retailer, Wal-Mart. Wal-Mart in recent years has struggled with its supply chain. The big question is: Will Wal-Mart be able to revive the competitive advantage it had in the past with its efficient supply chain? This case discusses the supply chain management practices of Wal-Mart over the years. A brief of Wal-Mart’s past distribution, logistics and inventory management processes is covered. The use of innovative Information Technology (IT) practices to enable the supply chain is discussed and highlighted. The benefits or competitive advantage Wal-Mart derived over the years from its supply chain management practices is also covered.

Table of Contents

1. Introduction – Can Wal-Mart sustain its Supply Chain Advantage?
2. Wal-Mart in US Retail Market
3. Wal-Mart – Company Background
4. Wal-Mart – Timeline



5. Wal-Mart: Quick Facts (Revenues, Total Employees and Stores, Competitors, Major Brands/Labels, Business/Growth Strategy)
6. MANAGING THE SUPPLY CHAIN – THE WAL-MART WAY
7. Pricing and Procurement Strategy
8. Supply Chain Integration through Product/Process Knowledge Sharing
9. Supply Chain Partnerships
10. Distribution Strategy
11. Logistics Management
12. Cross Docking
13. Inventory Management
14. Store Formats
15. Wal-Mart – International operating formats
16. Related Reading
17. Questions for discussion
18. View sample pages of this case study

Case Study Keywords: Wal-Mart, Supply Chain Management, Retailing Strategy Case Study, Logistics and Distribution, IT enabled supply chain, Information Technology, Supply Chain Partnerships, supply chain integration, information sharing, inventory management, retail store formats, cross docking, pricing and procurement, Sam Walton, discount stores, walmart.com.

Case Questions for Discussion

1. Wal-Mart’s focus on supply chain management is responsible for its leadership in the retail industry. Discuss the distribution and logistics practices adopted by Wal-Mart. How far has Wal-Mart’s supply chain contributed to its competitive advantage? Explain.
2. Companies that have significant buyer power and are very focused on exerting price pressure on their suppliers rather than seeking increased profitability through business process innovations. Support this statement with examples/best practices from your own field.
3. Wal-Mart has always used innovative information technology tools to supplement its supply chain. In a few words, explain how use of IT tools/enabled processes have benefited Wal-Mart. How has IT impacted you/your department?
4. What steps can Wal-Mart take in order to revive/sustain its supply chain advantage?
5. Wal-Mart invited its major suppliers to develop profitable supply chain partnerships. Discuss how good/bad is sharing knowledge/critical information with vendors/suppliers or even customers?
6. “It’s not a sale; it’s a great price you can count on every day to make your dollar go further at Wal-Mart.”, as quoted in the article, “Pricing Philosophy,” posted on www.walmart.com. Comment.

Other Case Studies on Wal-Mart

• Organization Culture at Wal-Mart
• Wal-Mart in Japan
• Tesco takes on US Wal-Mart

Case Updates/Snippets

• Wal-Mart’s new slogan – In September 2007, Wal-mart changed its slogan to “Save Money. Live Better.” Wal-Mart's earlier slogan for 19 years was “Always Low Prices.”
• Benefits of shopping at Wal-Mart – According to a study by research firm Global Insight, Wal-Mart saves American families $2,500 each year. This figure rose from $2,329 in 2004 by 7.3 percent.

This case study focuses on Tesco’s expansion plan and its entry strategy in the U.S. which places it directly against competitor and retail giant Wal-Mart.

Tesco in US Retail Market

UK’s largest retailer Tesco and one of the top supermarket operators in the world, plans to open a thousand-strong chain of discount stores in the US. Tesco plans to invest more than $250m (£120m) [$2.5 billion over the next five years] in its US business launch. This expansion plan and entry strategy places it directly against competitor retail giant Wal-Mart. Many UK retailers have found it difficult to survive or compete in the US retail market. The US retail market is most competitive in the world, a fact well-known to British retailers Sainsbury’s and Marks & Spencer which failed to attract US customers.

Case Study Contents

1. Introduction – Tesco in US Retail Market
2. Tesco – Company Background and Timeline
3. TESCO at a Glance
4. Localization Strategy – Tesco in South Korea
5. Tesco’s Business Strategy in the US – Healthy food, No waiting
6. Store Formats
7. Financial Highlights
8. Related Reading
9. View sample pages of this case study

This case study covers the following issues:

• Assess Tesco’s globalization strategies
• Examine and analyze the entry and expansion strategies of Tesco in US
• Study how Tesco localized its retail practices in US
• Understand Tesco’s efforts to integrate its global best practices with local strategies in US

Case Study Keywords: Tesco, Globalization Strategy, Localization Strategy, International Business, International Expansion and Entry Strategies, Retail Store Formats, supermarkets

Case Snippets/Updates:

• The world’s third-largest retailer: Tesco is the world’s third-biggest retailer by sales behind U.S. retail chain Wal-Mart Stores Inc. and French retail chain Carrefour SA.
• Tesco has 4,331 stores worldwide. In 14 countries, Tesco employs 470,000 people. (Jan 2010 figures)
• Top five supermarket groups in the U.K. – Tesco, Asda, Sainsbury, Morrisons and Co-op/Somerfield. These five groups have around 85% of grocery retail in the U.K. market.
• Tesco’s market share in U.K. – Tesco has approx 30% market share of British grocery retail
• By September 2009, Tesco had around 126 stores open in the U.S.
• Tesco’s U.S. operations (Fresh & Easy) reported a GBP85 million trading loss in the first half of the year (six months to August 31, 2009).
• A report on European Retail Forecast by RetailNet Group (RNG) indicates that, by 2014 the top 15 European retailers would capture 66% of retail sales growth (from 43% in 2009). The report covers more than 200 major retailers, 880 store banners (more than 2,12,000 stores) from more than 41 countries and includes major retailers Wal-Mart, Tesco, Aldi and Carrefour. These retailers account for over 47% of all retail sales across Europe.

Additional Reading: Related Cases on Tesco

• CSR initiatives at Tesco

The focus of this case study is the business strategy adopted by Nokia in the Indian Mobile devices market. This case study summarizes Nokia’s business strategies in India. Nokia has proven itself as one of the most recognized brands      Pic: A Nokia Dealer Store in India
in India in the past decade or so. This case also discusses in brief some of the marketing strategies of Nokia in India and examines how the Nokia brand has emerged.

This case study covers the following issues:

• Assess Nokia’s globalization strategies
• Examine and analyze the entry and expansion strategies of Nokia in India
• Analyze Nokia’s efforts to localize its practices in India market.

Nokia – Company Overview

Nokia Corporation (Nokia) is a global manufacturer of mobile devices headquartered in Espoo, Finland. Nokia operates through four business groups: Mobile Phones, Multimedia, Enterprise Solutions and Networks. In Q3 2007, Nokia sold over 111.7 million units worldwide, marking a 26 per cent, year-on-year growth. Nokia India had revenues of more than $3.5 billion in 2006…

Case Study Contents

1. Nokia – Company Overview
2. Company History
3. Nokia Timeline
4. Nokia in India
5. Locations and Subsidiaries
6. Mobile Devices Industry in India – Business Description
7. Restructuring
8. Distribution challenges – Getting to the Rural Market
9. Understanding the versatile Indian market
10. Nokia – Branding Strategy
11. SRK in Nokia ad campaign
12. Nokia India Recognitions and Awards
13. Related Reading
14. View sample pages of this case study

Case Study Keywords: Nokia in India, Mobile devices industry, Handsets, Cellular phones, Expansion and Entry Strategy, Business Strategy Case Study.

Additional Reading: Articles on Nokia

• Nokia to exit expensive Germany, move production to low cost countries
• Nokia’s Acquisition Strategy and Restructuring
• Nokia and its Growth Strategy in China
• Sony Ericsson Mobile Music Strategy not working
• Nokia India – Tapping the Rural Market
• Nokia’s Strategy in the Emerging Markets
• Nokia – A struggling market leader

Case Snippets/Updates:

Essence of Nokia India’s business strategy according to Nokia India’s Managing Director, Mr D Shivakumar (As quoted in “Nokia’s biz strategy to increase India market share” in 2009)

1. Do not underestimate competition
2. Do not rest on laurels
3. Be modest, flexible and open to change

5

Nokia and the Indian Market

• Nokia’s Entry in India: Nokia entered India in 1995.
• Third Largest Telecommunication Market: India ranks third globally after China and U.S. in terms of the largest telecommunication market.
• 500 million mobile subscribers in India: The Indian market is adding about 10 million users a month. Nokia sees the Indian market as a growth opportunity particularly in the country’s rural areas. Rural penetration in India is still very low at 13%. By 2010, Nokia estimates that there will be around 500 million mobile phone users in India as compared to 427 million. According to Standard Chartered Bank’s annual forecast, India will have signed up its 500 millionth mobile subscriber sometime in December 2009 or January 2010. So, it took India 12 years (from 1997 when the mobile revolution began) to grow from zero to 500 million subscribers. However, analysts estimate it will take only five years to add the next 500 million.
• Nokia’s market share in India: Nokia has more than half the share of India’s mobile handset market.
• Nokia’s manufacturing facilities in India: Nokia’s manufacturing facility in Chennai, Tamil Nadu (South India) exports half its production to more than 59 countries. Nokia has invested $250 million since its launch in 2006.
• Mobile Microfinance – In 2009, Nokia piloted a scheme in two Indian states where it sold handsets on a weekly installment of 100 rupees ($2) over 25 weeks. Nokia planned to rollout the microfinance offer in 12 Indian states.
• India not a low-end market segment – 81 percent of the India’s mobile users are in urban areas. Nokia anticipates such customers would drive demand for high-end phones.
• Increasing Competition from new mobile handset manufacturers’ entry into India: In one quarter of 2009 alone, twenty-seven new mobile handset manufacturers entered the Indian market to introduce entry-level models (and other models with features such as dual SIM cards and full QWERTY keyboard) for the price sensitive Indian consumer.
• Mobile handset sales in India: By year ended June 30, 2009, mobile handset sales in India was 100.9 million compared to 94.6 million, a year ago.
• Nokia’s strong distribution in India: In India, Nokia has 2 lakh retail outlets and 700 support centers across 400 cities and towns.
• Nokia’s competitors in India: Motorola, Sony Ericsson, Spice, MacroMaxx, Karbonn, Lava, Lemon, Oscar
• Nokia’s ‘Made for India’ phones: In 2000, Nokia introduced the Nokia 3210 with a Hindi menu. In 2003, Nokia launched the Nokia 1100, a first Made for India phone.
• India’s Most Trusted Brand: Nokia ranked as India’s topmost trusted brand in the The Economic Times-Brand Equity’s annual ‘Most Trusted Brands’ survey for 2010. In 2004, Nokia ranked 71 and moved to 44 in 2006 as India’s most trusted brand. In 2007, it ranked in the top ten at number 4. Nokia has since held the number one slot for three years consecutively.

The focus of this case study is the hurdles faced by retailing giant Wal-Mart in the Japanese market. WalMart’s best practices in retailing like Every Day Low Prices (EDLP) and Rollback to the Japanese market through its joint venture with Seiyu…In December 2005, Wal-Mart acquired a controlling 50.9 percent stake in Seiyu. However, Wal-Mart has since found it difficult to save the company even after investing more than one billion dollars. The company is revamping stores in hopes of drawing new customers. After exiting from Germany and South Korea last year (because it could not adapt to local tastes), Wal-Mart wants to maintain its presence in Japan. Success in Japan is important to Wal-Mart because a strong presence in the world’s No. 2 retail market is a key driver to future business growth.

Introduction – Wal-Mart in US Retail Market

Wal-Mart is the world’s largest retailer with $345 billion in sales for the fiscal year ending Jan. 31, 2007. Wal-Mart Stores, Inc. includes Wal-Mart Supercenters, discount stores, Neighborhood Markets and SAM’S Club warehouses. Wal-Mart employs 1.9 million associates worldwide ….

Case Study Contents

• Introduction – Wal-Mart in US Retail Market
• Wal-Mart – Company Background
• Wal-Mart – Timeline
• Wal-Mart: Quick Facts
• Wal-Mart's turnaround quest: Will Wal-Mart's mass-market formula work in Japan?
• Wal-Mart increases stake in Japan's Seiyu to 95%
• Localization Strategy – WalMart's failure in Germany and South Korea
• Cost-Leadership Strategy- WalMart's core philosophy – EDLP
• Cheap stuff at cheap prices – Japanese consumer mindset
• Is Wal-Mart the only one struggling in Japan?
• Will Seiyu get to U.S.-style EDLP in Japan?
• Store Formats
• Related Reading
• View sample pages of this case study

Case Study Keywords: Walmart, Wal-Mart Stores Inc., Japanese Retail Industry, Every Day Low Prices EDLP, Carrefour, Daeiei, Aeon Co., Sam’s Clubs, Consumer Behavior, Low cost strategies, Localization Strategies, Pricing Strategy, IT systems, Supply Chain and Logistics, supermarkets

1. Introduction
2. Dell – Company Overview
3. Dell Products and Services
4. Dell – Key Facts – Key Employees, Top Competitors, Revenues, Manufacturing Facilities
5. Dell Timeline
6. Dell – Business Segment Information
7. Dell’s Evolving Supply Chain Strategy
8. Typical Working of Dell’s Supply Chain
9. Five key strategies in Dell’s successful Direct Model
10. A supply chain with old technology is of little value
11. Restructuring at Dell
12. New Distribution Channels – Direct Model and Retail Strategy
13. Integrating the Supply Chain
14. Related Reading
15. View sample pages of this case study

Case Study Abstract

The focus of this case study is the supply chain management practices of Dell. Dell has been following its unique ‘direct build-to-order’ sales model for more than 20 years. Customers can plan their own configuration and place orders directly with the company via the phone or its Web site. Over the years, Dell’s supply chain efficiencies and direct sales gave it a competitive advantage.

Can Dell regain its market leader position from HP?

In 2006 however, Dell faced several problems. Many customers complained about long delays in supplies. Recall of Sony battery cells in its laptops brought undesirable media hype to the company. Increasing discontent of customers led to a slowdown in sales. Consequently, Dell lost its market leadership to Hewlett-Packard Co. (HP). Industry analysts felt that, with Dell’s competitors also improving their supply chains and matching Dell’s direct model, the company had been losing its competitive edge. Dell will have to bear additional costs with its foray into retail distribution thereby minimizing its cost advantage. Besides, profit margins of Dell will drop further since it will have to offer incentives to compete with HP in retail stores. Though Dell spruced up its product design and range but Apple is clearly far ahead of it. Many experts feel that such new initiatives will only distract Dell from its supply chain operations.

This case study covers the following issues:

• Examine and analyze Dell’s Direct model, its basic working, success and future challenges
• Typical Working of Dell’s Supply Chain and future supply chain challenges
• Highlights Dell’s evolving Supply Chain practices and strategy and steps being taken by it to recapture its lost market leader position

Case Study Keywords: Dell, Direct model, Supply Chain Management, Supply Chain Strategies, Build-to-order model, Inventory optimization, PC Manufacturing, Retail Distribution Channel, HP, Notebook computers, Desktop personal computers, Competitive Business Strategies, Sustaining competitive advantage, Michael Dell, Distribution Strategy, Supply Chain Case Study

Case Snippets/Update

Dell’s market share in U.S. and Worldwide (in Q1 2009) compared to other top PC makers

• In year 2010, PC sales are expected to rise 12.6 percent, according to research firm Gartner.

McDonald’s began operations in India in 1996. The fast-food chain started making profits after it broke even in 2008. Reports suggest that McDonald’s two subsidiaries in India, Connought Plaza Restaurants based in New Delhi and Hard Castle Restaurants in based in Mumbai posted accumulated losses of Rs 189.19 crore and Rs 119 crore in fiscal 2008. A total of Rs 211.41 crore of accumulated losses for fiscal 2008 for the company. India and China continue to be high-growth markets for McDonald’s. The top management felt that McDonald’s had achieved tremendous brand success in India and there was nothing extraordinary about accumulating losses and that McDonald’s India was not a unique case as the company was making losses similarly in many other markets.

Download management case study (PDF file) on McDonald’s Business Strategy in India

What McDonald’s is doing to increase the footfalls and increase the store utilisation?

McDonald’s menu is recognized world over for its affordability. A McDonald’s store gets an average of 3,000 walk-ins every day in each of its 165 restaurants in India. Typically, a customer visits a McDonald’s store twice. The key is to make that customer visit the McDonald’s store a third time so that the existing store space and rent can be leveraged further. Earlier attempts by McDonald’s to do so included adding breakfast to its menu, longer hours of service, setting up of kiosks etc. Eventhough breakfast was on its menu globally, it was on launched on a trial basis in India.

However, McDonald’s had a ‘snack joint’ tag in India. To overcome this McDonald’s added a lunch and dinner menu.

McDonald’s Pricing Strategy in India

In September 2009, McDonald’s announced reduction in prices by almost 25% for its lunch and dinner menus. Prices for its extra-value meals like McVeggie and McChicken were reduced to Rs. 85 and 95 respectively from Rs. 110 and 120 respectively. Typically a meal consists of burger, French fries and soft drinks. This strategy was surprising as it came at a time when food prices were increasing by the day. Cutting prices in such times did not make sense. But the management in India was convinced that tweaking the prices of it combo meal offering would help customers prefer McDonald’s as a lunch and dining destination as well.

“If I get on a plane next week and it goes down, there will be somebody in this seat the next morning,” – A.G. Lafley, P&G’s CEO as quoted in Fortune magazine.

Lafley took over Procter & Gamble (P&G) as CEO in 2000 and since then has been very successful in increasing sales by 110% and tripling profits. Does he have a succession plan? If he does he has not disclosed it yet and is certainly not overly concerned judging by his above statement. What is the reason? Does P&G have a strong leadership development program

P&G’s Leadership Program and Proctoids

P&G’s leadership program is called “Build From Within”. The program helps track the performance of each manager in a very detailed manner. The program ensures a manager is ready for the next level. According to CEO Lafley, “Each of the top 50 jobs already has three replacement candidates lined up.” Lafley himself oversees the development of the top 150 employees.

At P&G, a business school graduate is recruited at an entry level position. This position offers him/her a major window of opportunity for becoming what’s known in the company as a Proctoid (less than 5% of hires come from the outside at a later stage). Proctoids discuss their business goals, their ideal next job, and what they’ve done to train others during monthly and annual talent review sessions. The recruits select a career track depending on his/her goals and P&G’s needs. They are then trained to work in different countries and businesses. This helps build deep bench strength. So when a position is open, P&G has a pool of employees who are ready to move in to the new position in a particular country or region. According to Lafley, “We can fill a spot in an hour, that’s the beauty of the system.“

Training and Internal Reputation

P&G has a training center near to the CEO Lafley’s office where all executives teach and hold weeklong “colleges” for employees entering new levels. An executive’s willingness to train others ultimately determines who advances. Moheet Nagrath, head of human resources at P&G believes, “If your direct reports aren’t ready, neither are you. A manager who isn’t good at developing others doesn’t attract the best talent [to be on his team]. Internal reputation is crucial.”

Advantages and Success Factors for the program

• Loyalty
• P&G rarely hires from outside, promoting talent from the inside
• At P&G, less than 5% of hires come from the outside at a later stage
• P&G maintains a comprehensive database of its 138,000 employees. An employees’ performance (stars) are tracked carefully through monthly and annual talent reviews.

Disadvantages

• Promoting from within can build well oiled teams that act quickly but at the same time builds an insular culture where most people think in similar ways. This can hinder innovation.

Related Case Study:
Download Business Strategy Case Study on Restructuring at Unilever – Path to Growth Strategy (PDF)

McDonald’s in India

McDonald’s was launched in 1996 in India and has established itself as the family’s favorite quick-service restaurant. According to estimates, McDonald’s stores have an average of 2,750 walk-ins in each of the 155 stores. India counts itself amongst the top 10 per cent of the busiest markets for McDonald’s anywhere in the world. In India, McDonald’s had decided not to launch its beef-based core product – the hamburger – so that it didn’t hurt religious sentiments of the Hindus.

The Strategy – Building awareness among citizens

The strategy is simple. Delhi has approximately 40 lakh electors between the age group of 18-29. McDonald’s is popular among the younsters and catchy slogans and messages will encourage them. McDonald’s India wants to support the task of building awareness amongst citizens and remind them of exercising their right to vote.

Related Reading:
Download management case study (PDF file) on McDonald’s Business Strategy in India

• A $1.1 billion savings plan in its electronics division
• Cutting 16,000 jobs
• Pulling out of businesses and limiting investment for savings of almost 100 billion a year

Analysts believe the company needs more and bigger restructuring measures to improve its slowing sales and inventory pile-ups. Another challenge Sony has been facing are cultural clashes between its Japanese, US, and European operations. Restructuring moves would imply changing many of its long-established business practices (the Japanese business culture which is so deeply connected to its social culture). The restructuring plans include shutting down of some of its major divisions in its Japanese domestic operations. How Sony would go about facing these challenges and are more restructuring moves imminent amidst the financial crisis and lower consumer demand? Sony’s first non-Japanese CEO, Sir Howard Stringer sure has his task cut out.

In October 2008, Nokia, the world’s largest mobile phone maker launched a brand new campaign with the tagline ‘It’s not just a phone, it’s who we are’.

Nokia selected Priyanka Chopra, former Miss World and current Bollywood actor, as the Brand Ambassador. The company believes the young actor’s brand association will create a deeper connection with its young and style-savvy consumers and the new ad capmpaign featuring her will represent style, modernity and individuality. The TV campaign would be integrated with other consumer touch points like print, outdoor, radio, online and digital media.

Nokia’s other brand ambassadors include Bollywood’s leading actor – Shahrukh Khan. The company has already planned to bundle exclusive content featuring the actor for handsets sold in India. His movie ‘Om Shanti Om’ movie was recently bundled in Nokia N96.

New Indian factory

In October 2008, Nokia Siemens Networks, the second-largest network gear provider in India after Ericsson, announced that over three years it will invest $70 million in a new Indian factory in Chennai (south of India). The unit will make and distribute mobile communication equipment. Nokia Siemens already has a manufacturing facility in Kolkata in eastern India, where it makes fixed network equipment.

Also, in October 2008, Nokia’s handset manufacturing unit in Tamil Nadu (with over 8,000 workers) reached production volume of 200 million handsets within just three years of starting operations. Around 50 per cent of the production is sold domestically and the rest is exported. Nokia has two manufacturing units in China.

Nokia has a 62.5% market share in India while Samsung, the second major player with Aamir Khan (lead Bollywood actor) as the brand ambassador, has a 8% share.

Download PDF file on Nokia’s Business Strategy in India
Article on Nokia’s Strategy in the Emerging Markets

Michael Dell’s return and turnaround plans were paying off as the world’s No. 2 personal computer maker, posted higher-than-expected quarterly profit aided by strong demand from consumers and foreign markets and cost cuts. Last year, Dell had lost its spot as top PC maker to Hewlett-Packard (HP) and was struggling to regain momentum. In January 2007, Michael Dell had returned to the chief executive post. In May 2008, Michael Dell selected Brian T. Gladden (working with General Electric, GE), to take over as chief financial officer (CFO) at the troubled PC maker. Dell aims to shave $3 billion of its operational costs. Dell also announced plans to cut 8,900 jobs to reduce costs, but Asia would see more job growth as it formed a large part of it’s supply chain. Meanwhile, Dell’s supply chain ranked third in the fifth-annual “Supply Chain Top 25″ list released by AMR Research in May 2008 behind Apple and Nokia. Dell’s supply chain was acknowledged for its outstanding inventory turns and high marks from peers.

Dell’s strong International Growth

Dell believes that in around five years time its sales outside the U.S. could account for two-thirds of total revenues. Its sales in international regions topped U.S. revenues as corporate customers in the United States were uncertain about buying given the current and future economic outlook. Brazil, Russia, India and China (BRIC) led the way with 73 percent shipment growth in the quarter ended May 2008. Americas revenue rose 1 percent in the quarter.

Related Reading
Download Pdf file of management case study on Dell’s Supply Chain Management Practices

However, Home Depot is not the only one scaling back expansion plans or shutting down stores. Other major retail chains like Starbucks, Foot Locker, Pacific Sunwear, Charming Shoppes, J. C. Penney, Kohl’s, Wal-Mart and Ann Taylor have announced plans to slow their expansion or delay store openings. Trade group, The International Council of Shopping Centers, predicts 5,770 store closings in 2008 – an increase of 25 percent from last year.

This has prompted analysts to comment that these retails chains made overly ambitious expansion plans when consumer spending was unusually robust and that America is over-stored.

Retail Chain – Number of stores for close/delay
Ann Taylor – 117
Charming Shoppes – 150 stores
Foot Locker – 140 stores
J. C. Penney will open 36 stores instead of 50 planned
Kohl’s will open 75 instead of 100 planned in 2008
Starbucks – 100
Wilsons – 158
Zales – 100

On March 19, 2008, Sony Ericsson warned of a sharp decline in profit expectations. The No.4 player in the cell phone industry cut its current-quarter profit forecast ($276 million) to less than half the year-ago level ($571 million). Reasons given were a slowdown in consumer spending on its mid-priced and high-end phones. The growth in the mobile phone industry is expected to be at 15% in 2008, about half when compared to a high of 31% in 2004. Sony Ericsson expects to ship about 22 million phones in the first quarter. It shipped 30 million units in the fourth quarter and 21.8 million in the first quarter of 2007.

Sony Ericsson’s announcement was expected when Texas Instruments cited fewer mobile phone chip orders for its lower guidance. Its key customer Nokia possibly has a inventory pileup. Sony Ericsson also said that certain component shortages for popular midprice phones had also contributed to modest unit-sales growth in the first quarter.

A low profit expectation is common in the first quarter – the slowest time of year for phone sales after the Christmas shopping season. However, the concern is the magnitude of Sony Ericsson’s shortfall. The same can be expected from Nokia and Motorola might even lose its third place position as a mobile phone maker.

The Sony Ericsson joint venture

In 2001, Sony Ericsson was formed as a joint venture between Telefonaktiebolaget LM Ericsson of Sweden, and Sony Corporation of Japan. Both partners had 50% ownership in the company.

Ericsson was established in 1876 and was a major player in the telecommunications equipment and related services to mobile and fixed network operators worldwide with presence in 140 countries. Sony on the other hand was established by Masaru Ibuka and Akio Morita in 1946 in Japan. At the time Sony was the world’s second largest consumer electronics company and famous for its innovative products like the Walkman, Playstation, and Aibo, the robot dog.

In the last quarter of 2000 and the first quarter of 2001, Ericsson made a loss of US$ 1 billion and US$ 558 million respectively. Shareholders of Ericsson wanted a sell-off. Sony was also making losses in its mobile phone business. Ericsson’s board decided to form a joint venture with Sony instead of exiting the business. In 2001, this decision was rated as the fifth best management decision by Sunday Business.

Walkman phones are no longer popular?

In February 2005, at the 3GSM World Congress in France, Sony Ericsson had announced its mobile music strategy. It looked to integrate of high quality digital music players into stylish mobile phones under Sony’s world famous Walkman brand. The strategy was to target a specific product portfolio and not look at providing various types of mobile phones across various price points.

In the third quarter of 2005, the Walkman phones were launched. The impact was visible in the subsequent quarter itself in terms of increased volumes, sales, and net income for the company. Similar to its success with its camera phones in 2004, Sony Ericsson reported a 36.4 per cent increase over its third quarter figures and 47.1 per cent higher than the figures for the same period in 2004. It even revived Sony’s Walkman music player which had lost market share drastically after the launch of iPod by Apple in 2001.

However, mobile phone users are known to be quite finicky and generally choose the most popular or the next cool mobile phone in the market. Earlier, users replaced handsets every three years, but with the economy slowing down this is no longer the trend. And with the popularity of Apple’s iPhone growing, Sony Ericsson may have reached the end of its good run with the popular Walkman phones. The general higher price of its phones than its rivals’ devices does not help either.

Quote
Be Number 1 or Number 2. “When you’re number four or five in a market, when number one sneezes, you get pneumonia. When you’re number one, you control your destiny.“ – Jack Welch

Unquote
“Sony Ericsson will continue to try to reduce its dependence for growth on the European high-end sector and develop its presence in new markets. This strategy will continue, and our objective remains to become a top-three player globally by 2011″ – Sony Ericsson President Dick Komiyama

Related Reading:
Case Study on Nokia in India [Pdf file]
Nokia and its growth strategy in China
Nokia increases market share, Motorola Struggles
Nokia to exit expensive Germany, move production to low cost countries

Dimon was born in New York to second-generation Greek immigrants. He has a degree in biology and economics from Tufts, and a MBA from Harvard. At Harvard he met Sandy Weill. Both went on to create the banking major Citigroup and emerged as a powerful force on Wall Street. In 1998, both separated after having worked together for 16 years. Rumor mills suggested that Dimon was fired by Weill for not promoting his daughter in the company.

After leaving Citigroup, Dimon became the chief executive of Bank One. In 2001, Dimon played a key role in the turnaround of Bank One. In January 2004, he negotiated the acquisition of Bank One by JP Morgan Chase & Company. After the merger, Dimon was appointed President and Chief Operating Officer of JP Morgan Chase. The merger was the third largest acquisition (at the time) in the US history at US$ 58 billion.

Dimon, since then has been aggressively involved with JPMorgan and aims to turn it into the biggest and best banking group in the US. So far, he has been successful in his endeavor and is emerging as one of the most successful navigators of the credit crunch. Over the last few years, he has focused strongly on cutting costs, improving technology and integrating JPMorgan’s disparate operations. But he also has been resolute about preparing the company for an economic downturn. While other investment banks are struggling, Dimon managed several accomplishments one after the other. He co-chaired the summit of world and business leaders in Davos, Switzerland. He even persuaded former Prime Minister Tony Blair to sign on as an adviser and ambassador for JPMorgan. And in what is being regarded as his biggest coup, he has plans to prop up Bear Stearns to avoid a full-blown banking crisis. This draws similar reference to John Pierpoint Morgan (JPMorgan’s founder). JP Morgan financed the US government and other large corporations during the Great Depression and the two world wars. In 1907 during the panic, his organization and personal funding for rescuing of the banking system was representative of the end of a long recession.

Similarly Dimon has played a key role in JPMorgan and the Federal Reserve guaranteeing the huge trading obligations of the troubled firm Bear Stearns. JPMorgan agreed to pay only about $270 million in stock for Bear’s big losses on investments linked to mortgages. Dimon negotiated the deal with Bear and government officials, sleeping only for a few hours over the weekend. Though Dimon had his doubts about the deal and has not been an aggressive acquirer since his joining the company, the quick decision making to buy Bear is outstanding.

Related Reading:

Backsourcing at JPMorgan

Tesco Group is UK’s biggest retailer and operates more than 2,500 stores in the UK and 12 other countries in Europe and Asia. For years, Tesco had plans to enter the U.S. retail market. It was believed that Tesco even looked into possibly acquiring key parts of the Albertson’s grocery chain. But finally, Tesco announced that it would enter the US by 2007 and that its new stores would be based on its “Tesco Express” convenience store model. Tesco operates four different retail formats – Tesco Express, Tesco Metro, Tesco Supercenters and Tesco Extra. Tesco Express is a smaller store format of up to 3,000 sq. feet.

At the time many analysts predicted that the coming of Tesco – even though a new player was a quite accomplished retail entity – had the ability to impact the U.S. market over the long term. To the conventional supermarket channel and even Wal-Mart, Kroger, and Safeway it could only be viewed as a negative. For the traditional supermarket chains who were already struggling to compete with Wal-Mart and the growing popularity of organic food stores like Whole Foods (and other premium food chains), the competition was only going to get worse.

Taking on Wal-Mart

Tesco was serious about expanding into the U.S. as indicated by its initial plans to spend $400 million a year to build its U.S. stores. This investment could pay for 100 to 150 stores. It aims to build 1,000 stores in the US eventually. Tesco chose to enter U.S. through the West Coast first because that region of the country is not yet dominated by Wal-Mart. Like Wal-Mart, Tesco is nonunionised. Wal-Mart is planning to test similarly sized new grocery stores under the “Marketside” banner in the Phoenix area later this year.

Success of Tesco’s launch in the US?

There was growing speculation that the initial performance of Tesco’s new Fresh & Easy discount grocery stores concept was not up to the mark and that internal sales targets were not being met. Some reports in the US suggested that the small neighbourhood groceries, similar in concept to an Aldi hard-discount store, have been failing to attract customers at the rate needed. (The hard discount store, pioneered by Aldi, is a small outlet with only 700 to 1,000 lines of stock compared with 100,000 in a big Wal-Mart. The shelves are mostly filled with own-brand goods.)

Even competitors like Stater Brothers, a supermarket chain in south California (and where the first 20 Tesco stores opened) felt almost no impact from Tesco. The Fresh & Easy concept was being questioned. Fresh & Easy had claimed to be up to 25 per cent cheaper than its main supermarket competition and had expectations of average sales to reach $200,000 per store per week.

Will Tesco succeed in the U.S?

A spokesman from Tesco however maintained that its failure claims were “a bit ridiculous, given that we only opened four months ago”. Tesco is continuing to push ahead with its ambitious US store plans, with another 150 stores expected to open over the coming year in its initial markets. The group has committed £1.25bn ($2.48bn) over five years to its US expansion plans. It is signing leases on additional store sites in northern California, where it is also planning to open a second large distribution centre outside Stockton.

In the past, retailers from the UK like Marks & Spencer, Next, Dixons, and Sainsbury’s have all tried to expand in the US and failed. Tesco has already made the first change to its executive management team at Fresh & Easy. Jeff Adams is heading back to US. He was the chief executive of Tesco’s Lotus business in Thailand. He will be second-in-command to Tim Mason, Fresh & Easy’s chief executive. Meanwhile, Tesco has other things to worry about in its home UK market after it was accused of setting up an elaborate offshore tax avoidance scheme.

Related Reading

Tesco takes on US Wal-Mart [Pdf File]
Wal-Mart’s supply chain management practices [Pdf file]
Wal-Mart’s Marketside or Tesco’s Fresh and Easy stores in US
Corporate Social Responsibility at Tesco [Pdf file]
Of Wal-Mart price cuts, Struggling Retailers and Weak 2008 Retail Sales Forecast

Adidas and Reebok – Two mega brands, with great strengths

In August 2005, German adidas-Salomon AG announced plans to acquire Reebok at an estimated value of € 3.1 billion ($3.78 billion). At the time, Adidas had a market capitalization of about $8.4 billion, and reported net income of $423 million a year earlier on sales of $8.1 billion. Reebok reported net income of $209 million on sales of about $4 billion. While analysts opined that the merger made sense, the purpose of the merger was very clear. Both companies competed for No. 2 and No. 3 positions following Nike (NKE).

Competition with Nike and Puma

Nike was the leader in U.S. and had made giant strides in Europe even surpassing Adidas in the soccer shoe segment for the first time. According to 2004 figures by the Sporting Goods Manufacturers Association International, Nike had about 36%, Adidas 8.9% and Reebok 12.2% market share in the athletic-footwear market in the U.S. Adidas was the No. 2 sporting goods manufacturer globally, but it struggled in the U.S. – the world’s biggest athletic-shoe market with half the $33 billion spent globally each year on athletic shoes. Adidas was perceived to have good quality products that offered comfort whereas Reebok was seen as a stylish or hip brand. Nike had both and was a favorite brand because of its fashion status, colors, and combinations. Adidas focused on sport and Reebok on lifestyle. Clearly the chances of competing against Nike were far better together than separately. Besides Adidas was facing stiff competition from Puma, the No. 4 sporting-goods brand. Puma had then recently disclosed expansion plans through acquisitions and entry into new sportswear categories. For a successful merger, the challenge was to integrate Adidas’s German culture of control, engineering, and production and Reebok’s U.S. marketing- driven culture.

The ADDYY and RBK Merger – Impossible is Nothing

On January 31, 2006, adidas closed its acquisition of Reebok International Ltd. The combination provided the new adidas Group with a footprint of around €9.5 billion ($11.8 billion) in the global athletic footwear, apparel and hardware markets.

Adidas-Salomon AG Chairman and CEO Herbert Hainer said, “We are delighted with the closing of the Reebok transaction, which marks a new chapter in the history of our Group. By combining two of the most respected and well-known brands in the worldwide sporting goods industry, the new Group will benefit from a more competitive worldwide platform, well-defined and complementary brand identities, a wider range of products, and a stronger presence across teams, athletes, events and leagues.”

Hainer also said, “The brands will be kept separate because each brand has a lot of value and it would be stupid to bring them together. The companies would continue selling products under respective brand names and labels.”

Related Reading on Adidas Reebok merger case study: Is the Adidas Reebok merger working?

Download PDF file (25 pages) – Management Case Study on adidas and Reebok Merger

In 2005, Sears Holdings was formed with the merger of Kmart and Sears. When the merger took place, a centralized managed structure was essential to control costs and focus on integrating the two companies. But recent profit declines and its struggle to win customers from its competitors have prompted retailer Sears Holdings Corp (Sears) to go for a new decentralized structure in order to turn around its business. Sears had earlier announced lower quarter profit expectations compared to last year. Even its holiday sales and sales of home goods such as appliances and tools slowed with the crumbling U.S. housing market and competition. A new structure was necessary for a turnaround.

The new structure – Five business units

The new structure separates its business units into:

• Operating businesses – current product lines like appliances, apparel and electronics
• Support – marketing, store operations and customer strategy
• Brands
• Online and
• Real estate

The real estate and onine units will focus on increasing the “sales productivity” of real and virtual holdings. Each business unit will have a leader and an advisory group including senior Sears Holdings executives who will oversee performance. With these five business units, Sears (controlled by hedge fund manager Edward Lampert) can simplify the way they are managed, besides giving each unit greater power to focus on consumers and operating more efficiently.

In 1994, China had 1.5 million subscribers across the country. Also in 1994, China transitioned from an analogue network towards a digital Global System for Mobile communications (GSM, originally Group Special Mobile) system. In 1998, Motorola, Nokia and Ericsson had 83% market share. Also in this year, Kejian introduced its (first local mobile brand) GSM mobile phone.

Keywords: Nokia in China, Domestic and foreign cell phone players in China, Nokia entry strategy in China, Chinese mobile phone market

Download Case Study: Nokia’s Business Strategy in India

Case Contents

1. Introduction – Tesco in US Retail Market
2. Tesco – Company Background and Timeline
3. TESCO at a Glance
4. Localization Strategy – Tesco in South Korea
5. Tesco’s Business Strategy in the US – Healthy food, No waiting
6. Store Formats
7. Financial Highlights
8. Related Reading

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Case Abstracts

UK’s largest retailer Tesco and one of the top supermarket operators in the world plans to open a thousand-strong chain of discount stores in the US. Tesco plans to invest more than $250m (£120m) [$2.5 billion over the next five years] in its US business launch. This expansion plan and strategy places it directly against competitor retail giant Wal-Mart. Many UK retailers have found it difficult to survive or compete in the US retail market. The US retail market is most competitive in the world, a fact well-known to British retailers Sainsbury’s and Marks & Spencer which failed to attract US customers.

Tesco’s Business Strategy in the US – Healthy food, No waiting

Fresh & Easy stores

Tesco started operations in the US by opening 15 of its Fresh & Easy stores in Las Vegas, Los Angeles, San Diego and Phoenix. By 2009, Tesco plans to open 200 more outlets to expand the retail network. Tesco’s basic US stores will be similar to European discounters Aldi and Lidl though Tesco stores will be 75% smaller than most American supermarkets. Fresh & Easy stores about 10,000 square feet are one-third the size of a typical supermarket, but four times that of a convenience store. Tesco is adopting a hard-discount model in the US. Tesco’s convenience stores modeled on the Tesco Express blueprint target US grocers such as 7-Eleven and locally-run stores.

This case study covers the following issues:
1. Assess Tesco’s globalization strategies
2. Examine and analyze the entry and expansion strategies of Tesco in US
3. Study how Tesco localized its retail practices in US
4. Understand Tesco’s efforts to integrate its global best practices with local strategies in US

Case Study Keywords:
Tesco, Samsung, Globalization Strategy, Localization Strategy, International Business, International Expansion and Entry Strategies, Retail Store Formats, supermarkets

In early 2007, Daimler sold 80 percent of Chrysler to private equity firm Cerberus Capital Management LLC for $7.4 billion. This strategic move ended a nine-year merger. Daimler can now concentrate on its luxury Mercedes brand and its truck business.

Daimler Chrysler Merger – Marriage made in heaven?

In 1998, Daimler and Chyrsler merged to form the Daimler-Benz and Chrysler Corp. in a $36 billion deal. At that time, then-CEO Juergen Schrempp described the merger as a marriage made in heaven. Since then, up-and-down earnings and repeated cost-cutting soured many investors on the effort to create a global auto giant.

The failure of the merger between two leading competitors in the global computer industry, Hewlett-Packard Company (HP) and Compaq Computer Corporation (Compaq) failed as the synergies identified prior to the merger did not materialize.

HP bought Compaq for US$ 24 billion in stock. This was the largest ever deal in the history of the computer industry. The deal meant combined operations in more than 160 countries and more than 145,000 employees. HP-Compaq would offer the most complete set of products and services in the computer industry.
The motivation behind a HP-Compaq merger (whether it made economic sense) and the problems encountered in merging operations is an interesting discussion as the stock prices of both HP and Compaq fell within two days of the merger announcement. An estimated 13 billion dollars was lost (in terms of market capitalization) in this time frame.

Shares fell further as industry analysts failed to understand the benefits HP would derive by acquiring Compaq. HP was a market leader in the high margin printer’s business and Compaq, a low-margin personal computer (PC) manufacturer. Moreover, established players like direct marketer, Dell and leading IT service consulting company like IBM would give fierce competition even if economies of scale were to be achieved.

With the stock price of HP’s shares stabilising at a level much below than before the merger and the PC & other hardware businesses not making much profits, the merger was ruled a failure. Industry experts felt that HP’s printer business should be spun off into a separate entity.
Merger Challenges:

Product line integration: This requires discontinuing some products (some loss in revenue) thereby rationalizing the product line.

Reorganization: In the computer industry this has always been a failure.

Cultural change challenges: HP’s culture is largely based on engineering and compromise, while Compaq had a hard-charging sales culture.

Some Facts:
HP was founded by Stanford engineers Bill Hewlett and David Packard

HP was started in California in 1938 as an electronic instruments company.

According to 2003 figures, HP revenues from imaging and printing systems accounted for 31% which was more than seventy percent of total operating profits.

Keywords: Post merger integration, merger and cultural challenges, HP, Compaq, Carly Fiorna, computer industry, printers, merger & consolidation, merger and acquisitions, change management

The problem faced by Time Warner after its merger with AOL is an issue which merits discussion. The AOL-Time Warner merger in 2001 resulted in the largest media company in the world. AOL joined hands with Time Warner (TW) to create synergy between its online businesses and Warner’s media business.

Two significant factors affected the post merger company. One, the dot com bust meant adverse effect on AOL’s advertising revenues. And two, dial-up subscribers decreased thereby affecting revenues and overall profitability of AOL. Richard Parsons, the CEO and Chairman of Time Warner and Joe Miller, the CEO of AOL took steps to turnaround AOL. A key element of their turnaround strategy was to offer free content on its portal. This strategy benefited AOL in attracting more online users and advertising revenues.

When AOL began operations it soon became the leading company for-pay online subscriber service, bringing easy-to-use Internet service to more than 30 million users. AOL was mainly based on around its dial up business. With customers shifting to broadband, AOL was losing subscribers rapidly. In 2004, AOL had 20 million subscribers. The dial-up segment though profitable, was declining in revenues having lost 2.6 million subscribers in a period of one year. The share price of AOL Time Warner fell by 60% after the merger. The merger was heavily criticized from all quarters.

Growth in advertising business came with AOL establishing itself as a support service rather than an internet access provider. Seeing AOL’s success Google entered into a global advertising partnership with the AOL. Google acquired a 5% equity stake in AOL for US$ 1 billion.

To be continued…

The focus of this case study is the hurdles faced by retailing giant Wal-Mart in the Japanese market. In the early 90′s, Wal-Mart’s decision to globalize is a major focus area.

Issues covered in the case study include: Download Case Study (in PDF format)

• Wal-Mart’s entry strategy in Japan
• WalMart’s best practices in retailing like Every Day Low Prices (EDLP) and Rollback to the Japanese market through its joint venture with Seiyu.
• Wal-Mart’s problems faced in Japan because of the differences between the operational and cultural environment in its home market and the Japanese market.
• Walmarts future prospects and business strategies in Japanese Market.

Other management issues covered include:

• The Japanese retailing industry: It’s nature and structure and its market size, market scope, and market characteristics.
• How to frame an entry strategy for a global and culturally diverse market.

Business Case study terms:

Wal-Mart Stores Inc., Green Field Operations, Costco Wholesale, Metro, Tesco, Japanese Retail Industry, Ito Yokado , Large Store Law, Every Day Low Prices, Carrefour, Daeiei, America Online Inc., Sam’s Clubs

Related Case Study Reading:

1. Can Wal-Mart Woo Japan?, Business Week Online
2. Japan Isn’t Buying The Wal-Mart Idea, Business Week Online
3. How Wal-Mart Is Reshaping Packaging?
4. A New Era in Japan’s Retailing Market
5. Tesco Enters The Japanese Market
6. Japanese Retail Market Overview
7. Japan Market Research
8. Japan Retail Sector Overview: companies Walmart

Will Wal-Mart be able to sustain its supply chain advantage : Download Case Study on Wal-Mart’s Supply Chain Practices in PDF format.

A Plain English handbook by the US Securities and Exchange Commission in the late 90’s to help companies draft clear SEC disclosure documents emphasize the need for writing clear informative text. As Warren Buffett mentions in the preface, it is quite difficult to understand what the companies are actually saying.

Writing clear, informative text is vital for a case study. Those who master the technique can boost their case studies value with readers. Clear writing is becoming more and more important.
Readers of a case study will have very different backgrounds and knowledge levels. Some students may be from finance backgrounds who understand balance sheets. A majority will not.

Case studies should be written in a manner that students and educators can assess their level. There needs to be sufficient introductory level subject matter for those with relatively less financial or business knowledge, and more advanced information for those who do. It’s easy to do that on the web with hyperlinks but difficult to do in a hard copy case study.

Case Study – A student’s perspective

With management and business case studies, Yamini, a MBA student with Maharishi Institute of Management Education likes to see a summary at the beginning. She opines that having key facts up front will be very useful.

Case study writers who use acronyms and do not define them develop an incomplete case study. It is absolutely wrong to assume that a case study reader knows what acronyms mean. Most readers are particularly interested in hard facts. Most students read the case study from the back. As Ishleen says, “I am not interested in the fancy stuff in a business or management case study.”

Good-quality writing does get case studies credit. One case study writer with a business management education provider says, “We get feedback from the students and case study corporate trainers. These people are the actual users of the case studies so they know if they have understood the case study or case studies correctly, but we sometimes have to modify the case studies for the students or corporate trainers. The language in our case studies tends to be straight to the point and simple. We try not to make it too formal and complicated with management or business jargon. In cases where we write about management subjects like business ethics and corporate governance, the text in the case study needs to be more formal. It depends on which management or business area we write.”

The skill lies in not just writing correctly, but in being able to interpret and explain potentially complex business situations in clear-cut ways.