SBenegaL

Category: Case ಸಂಗತಿ

  • Changing Environment – changing response

    In the last blog, we concluded the implications of history to a practicing manager. Now, before we continue with the next set of blogs on organization development, and their process of growth. Let us look at a small case, though a bit old it would be give us a good starting point for the discussion over the next few blogs.
    TV is a semi-autonomous division of a medium sized equipment manufacturing firm which is part of a large, highly diversified conglomerate. TV manufactures a line of heavy duty pumps and some components for fluid movement systems. The company does most of its own castings, makes many of its own parts and maintains a complete stock of replacement parts. TV also does special-order foundry work for other firms as its production schedule allows. 
    Until recently, TV had defined its business as providing quality products and services to a limited set of reliable customers. TV’s GM, a first-rate engineer who had spent most of his time in the machine shop and foundry, personified the company’s image of quality and cost efficiency. In the mid-90’s corporate management became concerned about both the speed and direction of TV’s growth. The management and staff at corporate headquarters began considering two new product and market opportunities, both in the energy field. Fluid movement systems required for nuclear power generation provided one of these opportunities, and the development of novel techniques for petroleum exploration, well recovery and fluid delivery provided the second. TV had in the past done some large for these markets, but the opportunity now clearly indicated growth opportunities. 
    TV initially moved towards exploiting these opportunities tentatively, the GM realized that the contract sales involved extensive planning, field-contact work, and careful negotiation. These didn’t suit the GM’s primary strength or his area of interest. The Parent organization moved the present GM to another position at the headquarters and in his place got a new manager with extensive background both in sales and engineering and who was adept at large-scale contract negotiations.
    Within a year of this changeover, TV landed several lucrative contracts, and more appeared to be in the offing. The new business created by these contracts, however, placed heavy coordination demands on company management, and while the organization’s technology (production and distribution system) has not been drastically revised over the past 2 years, workflow processes and the operational responsibilities of several mangers have changed markedly. Materials control and scheduling, routine tasks in the past are now complex activities, and managers of these operations meet regularly with the executive planning committee. Moreover, a rudimentary matrix structure has emerged in which various line manages undertake specific project responsibilities in addition to their regular duties. Key personnel addition have been made to the marketing department and more are planned, with particular emphasis on individuals who are capable of performing field planning and supervising and who can quickly bring new fluid systems to full operation. Budget of some of the older departments are being cut back, and these funds are being diverted to the new areas of activity.

  • Strategy – 20

    In the last blog we were talking about the concept of productivity and attempting defining it. In today’s blog, we will try understanding this with an example. We would take simple situations of daily life and extend it to the context of an industry to really understand the concept of productivity.

    We all generally have one resource at our disposal – time. If we look at the various things we could do investing the time we have, it becomes clear that we generally love to do the most “productive” utilization of time. We could probably use the time to teach a few kids something they have difficulty with, or use the time to read something or on one of or hobbies. We continue or decide to discontinue a particular investment (or spend) of the time at we have depending on the satisfaction we derive by using it in the particular activity.

    Now, let’s get to the corporate context, more so to the Bangalore phenomenon of cabs (interchangeably car). One of my conversations with a cab driver gave me an insight that way this business works. There are the travels or tour cos or city taxi agencies which offer this service to the companies. Many a times the cabs offered by these agencies are not really owned by them. They are a property (or resource) of an individual who has given it to the agencies.

    If we look at it from the investor’s (the car owner’s – he is looking at earning quite a bit from it!) perspective he could probably have used it himself or given it to a school to be used at peak hours or like in this case give it off to an agency (there could have been a lot more scenarios but we shall just freeze this to these). His returns on just owning a car, and using it for his personal use wouldn’t make the car as productive, so he would like to rent it out. The second option of giving it to the school as a school car would give him some returns, but would be relatively less since the school might not use the car as frequently and pay a higher rent. In the third scenario, he would give it off to an agency; he could expect a higher return. The agency would use this car as a resource rent it off to offices in morning and evening, while by the day use it as a city taxi for a general passenger.

    In the illustrations above, we clearly see the usage of the definition of performance as – “The comparative value an organization is willing to create using its productive assets with the value that owners of these assets expect to obtain“.

    Read in Kannada:

  • Strategy – 4

    In the earlier blog on Business Strategy, we had seen how Honda made successful attempt at leading the Motorcycle market in US. While this is the success side of the story; strategy gets effectively communicated when we also see why companies haven’t been successful in their pursuit.
    We take the case of another automobile company – Yugo to illustrate this point. Yugo entered the US automobile market in the mid 1980s. It had decided to position itself as the leader by under pricing all of its competition. It believed it could dominate the low-price automobile segment with this approach. One point that Yugo overlooked in its approach was that the US consumer’s valued their safety even while seeking to purchase an inexpensive automobiles. Although Yugo’s price was lower than any other new car in the US maker, its performance and safety were widely perceived to be unacceptable; when its cars actually hit the market, the price really didn’t cost less than many used cars in the US market – those having higher level of safety and performance. There needs to second guess that Yugo no longer sells its cars in the US.
    The two caselets mentioned here – that of Honda and Yugo; illustrate the fact that it’s not that your initial plan of approach that matters but the agility with which the company adapts to the different environment.
    Read in Kannada

  • ಯುಕ್ತಿ – ೩

    ಯುಕ್ತಿಗಳ ಬಗ್ಗೆ ಮುಂದುವರಿಸುತ್ತಾ ಇಂದು ನಾವು ಹೋಂಡ ಕಂಪನಿಯ ಬಗ್ಗೆ ನೋಡೋಣ.

    ಹೋಂಡ ಕಂಪನಿಯು ಮೊದಲ ಬಾರಿಗೆ ಅಮೇರಿಕದ ಮಾರುಕಟ್ಟೆಯನ್ನು ೧೯೬೦ ರ ಸಮಯದಲ್ಲಿ ಪ್ರವೇಶಿಸುವಾಗ ಅದು ಆ ಮೊದಲೇ ಮಾರುಕಟ್ಟೆಯಲ್ಲಿ ಮಜಬೂತಾದ ಸ್ಥಾನದಲ್ಲಿದ್ದ ಹಾರ್ಲೆ – ಡೇವಿಡ್ಸನ್, ಟ್ರೈಮ್ಪ್ ಇತ್ಯಾದಿ ಕಂಪನಿಗಳೊಂದಿಗೆ ಸ್ಪರ್ಧಿಸಬೇಕಾಗಿತ್ತು. ಹೋಂಡ ಅಮೇರಿಕಾದಲ್ಲಿ ಉತ್ತಮ ಶಕ್ತಿಶಾಲಿ ಮೋಟಾರ್ ಗಾಡಿ ಯನ್ನು ಮಾರಾಟ ಮಾಡಿ ಯಶಸ್ವಿಯಾಗ ಬಯಸಿತ್ತು. ಆದರೆ ಅಮೇರಿಕಾದ ಗ್ರಾಹಕರು ದೊಡ್ಡ ಗಾತ್ರದ ಮೋಟಾರ್ ಗಾಡಿಗಳನ್ನು ಹೋಂಡ ಕಂಪನಿಯಿಂದ ಕೊಳ್ಳಲು ಬಯಸದೆ ಮೊದಲೇ ಇದ್ದ ಕಂಪನಿಗಳಿಂದ ಕೊಳ್ಳುವುದನ್ನು ಮುಂದುವರಿಸುತ್ತಿದರು. ಅಮೇರಿಕಾದ ಜನರು ಹೋಂಡ ಕಂಪನಿಯಿಂದ ಸಣ್ಣ ಗಾತ್ರದ ಮೋಟಾರ್ ಸ್ಕೂಟರ್ ಗಳನ್ನು ಕೊಳ್ಳ ಬಯಸುತ್ತಿದ್ದರು.

    ಒಮ್ಮೆ ಹೋಂಡ ಕಂಪನಿ ಇದನ್ನು ಗ್ರಹಿಸಿದ ಮೇಲೆ ಕಂಪನಿಯಯುಕ್ತಿಯನ್ನು ಬದಲಾಯಿಸಿ ಮೋಟಾರ್ ಸ್ಕೂಟರ್ ಗಳನ್ನೂ ಮಾರಲು ಶುರು ಮಾಡಿತು. ಮೊದಲು ಸಣ್ಣ ಗಾತ್ರದ ಮೋಟಾರ್ ಸ್ಕೂಟರ್ ಗಳನ್ನು ಮಾರಿ ಮಾರುಕಟ್ಟೆಯನ್ನು ವಶ ಪಡಿಸಿಕೊಂಡು ಹೋಂಡ ನಂತರದಲ್ಲಿ ತನ್ನ ದೊಡ್ಡ ಗಾತ್ರದ ಮೋಟರ್ ಸೈಕಲ್ ಗಳನ್ನೂ ಮಾರುಕಟ್ಟೆಗೆ ಯಶಸ್ವಿಯಾಗಿ ತಂದಿತು. ಈ ಯುಕ್ತಿಯ ಮೂಲಕ ಹೋಂಡ ಕಂಪನಿ ಜಪಾನಿ ಕಂಪನಿಗಳ ಒಟ್ಟಿಗೆ ಸೇರಿಕೊಂಡು ಭಾಗಶಃ ಇತರ ಮೋಟರ್ ಸೈಕಲ್ ಕಂಪನಿಗಳನ್ನು ಹಿಮ್ಮೆಟ್ಟಿಸಿತು. ಹಾರ್ಲೆ – ಡೇವಿಡ್ಸನ್ ಒಂದೇ ಕಂಪನಿ ೧೯೬೦ ರಿಂದ ಸ್ಪರ್ಧೆಯನ್ನು ಇನ್ನು ಮುಂದುವರಿಸಿದೆ.

    ಈ ಒಂದು ಸಣ್ಣ ಇತಿಹಾಸದ ಮುಖ್ಯಾಂಶವೆಂದರೆ- ಕೆಲವೊಮ್ಮೆ ಮಾರುಕಟ್ಟೆಯ ಮತ್ತು ಉದ್ಯಮಗಳ ಸೂಕ್ಷ್ಮ ಆರ್ಥಿಕ ಗತಿಗಳು ಮತ್ತು ಅವುಗಳನ್ನು ದುರುಪಯೋಗ ಪಡಿಸಿಕೊಂಡು ತಮ್ಮ ಏಳ್ಗೆ ಸಾಧಿಸುವುದು ದೊಡ್ಡ ತಪ್ಪಾಗುವುದು. ಯಶಸ್ಸು ಅನ್ನುವುದು ಎಷ್ಟು ಶೀಘ್ರದಲ್ಲಿ ಬದಲಾವಣೆಗಳನ್ನು ಅರಿತು ಅಳವಡಿಸಿಕೊಳ್ಳುವೆವು ಅನ್ನುವುದರಲ್ಲಿ ನಿಂತಿದೆ.

  • Strategy – 3

    Continuing our discussion on strategy, we begin with a small case on Honda.
    When Honda Motorcycle Company decided to enter into the U.S. market in the early 1960s – it wanted to compete with the established firms like Harley Davidson, Triumph etc. Honda wanted to be successful in the US market by selling the large and powerful motorcycles. However, the US consumers did not want to purchase large motorcycles from Honda – they already had established players for it. The U.S consumers were really looking at buying the Honda’s smaller motor scooters.
    Once Honda discovered what customers in the US wanted, the strategy was changed and Honda began selling motor scooter. With the niche in smaller motor scooters established, Honda was able to introduce larger and more powerful motorcycles. This strategy was so successful that Honda along with other Japanese motorcycle firms virtually destroyed all the other motorcycle-manufacturing firms in the US. Today, Harley-Davidson is the only competing company from the 1960s to continue competing in the market.
    This small caselet highlights an important aspect that – Sometimes, a firm’s understanding of the critical economic process in an industry or market and how it can exploit those processes for its own advantage are simply wrong. The success if defined by how quickly the company learns and adapts.
    Read in Kannada: