Jack Welch on Business Strategy

Nokia’s Supply Chain Management Practices

 

Nokia, based in Finland has been very successful with its supply chain management practices. In 2009, AMR Research ranked Nokia sixth among the top 25 companies in global supply chain management. Nokia’s supply chain is successful because:

  • It has an integrated supply chain
  • Long-term partnerships with its suppliers. Nokia also helped them improve their processes
  • Low costs with efficient manufacturing systems (like hybrid hybrid manufacturing system and Smart manufacturing techniques) and processes.
  • Wide distribution network to effectively reach the even rural customers

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Sep 15, 2009

Customer-focused Fashion Retailers

 
The customer is King. That certainly is the case as many retailers are focusing more on the market and the consumer needs rather than being brand and product focused. High, medium and low-end fashion retailers are presenting customers with collections/assormtments which are more and more curated, interesting designer collaborations and mixture of high- and low-end designs. Retailers are findig newer ways for consumers to experience their products.The idea is to bring customers to the stores and provide them with a unique shopping experience. The unique shopping experience involves more entertainment to the customer for having a good time rather than being just a status/lifestyle symbol. The fashion retailers are also educating the customer by providing more information about products. Customers can even know how the products are made and why they cost what they do. A few retailers have displays/signage with product explanations.

Retailers and their initiatives to be more customer-focused

Bloomingdale – “Lights, Camera, Fashion,” campaign that will offer short films in stores, free movie tickets, cinematic window displays and tie-ins with movie studios.

Gucci – series of pop-up sneaker stores with designs by DJ Mark Ronson

H&M – Jimmy Choo designer Tamara Mellon’s shoes and clothing
H&M’s Supply Chain Management Practices Case Study(PDF File)

Japanese fast-fashion giant Uniqlo – Jil Sander’s first collection

Macy’s– started My Macy’s initiative to tailor merchandise to individual stores

 

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Jan 7, 2009

Uniqlo’s unique strategy to Fast Retailing

 

The Uniqlo chain of casual wear stores (operated by Fast Retailing Co.) has its own unique way of doing business. While other department stores, supermarket chains and retailers are struggling with the slumping economy, the chain sees it as an opportunity to differentiate itself from its rivals. While an increasing number of companies are cutting their non regular contract workforce, another unique strategy the company is following is making workers with limited-term contracts into full-time employees.

The secret to good sales at Uniqlo stores is a combination of lower prices and the time it spent in developing products keeping in mind future trends. The company strongly believes that during a recession, only goods that have a good price-quality balance have good sales. The retailer has set a goal of 1 trillion yen sales for the business year ending in August 2010.

Related Case Studies (PDF files):

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Dec 13, 2008

McDonald’s vs. Starbucks – Comparative campaigns, Attack Ads, Coffee Wars

 
Brand Valuation leaders believe that even in difficult times, brands have to keep investing in marketing/advertising to maintain their market shares. Cutting spend in these areas during a slowdown can boost profits but only in the short-term and at the expense of losing long-term brand awareness for not having been seen for a long time.

My coffee is better than your coffee

McDonald’s certainly has many marketing dollars and is taking on Starbucks with an aggressive ad campaign to capture a larger share of the coffee market. Billboards saying “four buck is dumb” have been erected close to the headquarters of Starbucks and some of them near Starbucks cafes. The campaign is far more aggressive than launched by another coffee retailer, Dunkin’ Donuts which claimed that its coffee had won a blind tasting test over Starbucks by 54.2 points to 39.3. McDonald’s had also started unsnobbycoffee.com to promote the launch of espresso drinks in the Seattle market.

 

Starbucks and Advertising

Quote
We see ourselves as trying to enter a new category and steal as much of the breakfast and coffee share as we can garner.” – Kelly Hoyman, Northwest region marketing director for McDonald’s.

UnQuote
I think the way we deal with that is not to respond to something that’s that frivolous, Are you going to say to your friend, ‘Let’s go meet at Dunkin’ Donuts?’ Are you going to say that?” – Starbucks Chief Executive, Howard Schultz

Starbucks though is no mood to retaliate with an attacking campaign and believes that its’ customer base is different. Earlier in the year, Starbucks had shelved its plans for new U.S. shops due to falling consumer demand. The company will also shrink its global workforce by 7 per cent.

Starbucks is more about tradition and experience. It has relied on building its brand on word of mouth for about two decades now. Only recently has it hired advertising agency BBDO New York and is also relying on cheaper modes of advertising via YouTube, Facebook and Twitter. The advertising spots are also being chosen carefully with emphasis on promoting social responsibility.

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Sep 30, 2008

HP’s Strategy in India

 

HP in India

Hewlett Packard was founded in 1938 by William Hewlett and David Packard and went public in 1957. HP has come a long way since then from being an electronic instruments company to a major player in the computer industry.

HP established its presence in India in 1988. Today, the Indian site is one of the largest sites outside the U.S. HP has more than 30 thousand employees in 42 locations. HP has a presence in over 350 cities in India. The HP and Compaq merger in 2002 resulted in the creation of the largest PC company in India with revenues of Rs. 35 billion and a combined 17 per cent market share (more than a third of the organised market) in India. The merged entity’s market share was was more than double of the nearest competitor New Delhi-based HCL Infosystems (eight percent).

HP has developed a three-pronged strategy to attract, capture and retain Indian customers. Salient features of HP’s Strategy are:

  • Consumer focus: Indian youth and women
  • Product Focus: Technology loaded and stylish products with connectivity and mobility not ignoring price sensitivity of Indian market.
  • Market Focus: Targeting Tier 2 and Tier 3 cities in India
  • Segment focus: Large product portfolio catering to SOHO, SMB, government and enterprise segments.
  • Dual-Brand Marketing Strategy: Mass market brand like Compaq Presario and at the same time ultimate digital experience brand HP pavilion.
  • Significant investment in R&D
  • Glocalization: Adopting a global framework and adapting locally
  • Following the principle that PC’s are very personal

HP’s ‘Trade in Trade Out’ program

In September 2009, HP India launched the second edition of its ‘Trade in Trade Out’ program aimed at all corporates and customers in India. Season one of the ‘Trade in Trade Out’ program received a tremendous response from HP customers. Under the program, any corporate or customer can exchange/upgrade their existing high-end large format printers in order to help their business obtain more value from IT investments. The products taken back are recycled to reduce the environmental impact of technology products.

In March 2009, HP launched the ‘HP Software University’ (HPSU) in partnership with Indian Institute of Hardware Technology (IIHT). The university was launched to address the growing demand for software testing professionals in India.

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Aug 7, 2008

Cafe Coffee Day (CCD) wants to be a Global Brand

 
CAFE Coffee Day (CCD) wants to become a global brand after its success in India. By 2012-13, CCD plans to be a big global chain both with organic growth and acquisitions. By the end of this year it will have 900 cafes and 2,500 by 2012-13. CCD already has its cafes in Austria and Pakistan and wants to set up cafes in Poland, Russia, Hungary, Dubai, Kuwait, China and Saudi Arabia. The company has received investment from Darby Templeton and Deutsche Bank to the tune of $100 million for expanding its network. In August 2008, CCD announced that leading international brand consultant Landor will help it to reinvigorate its brand and take it to the next level. Only the brand name and logo saying ‘A lot can happen over coffee’ will remain the same. CCD will now focus more on projecting a feeling of togetherness (friendship, romance or office meeting in an informal environment) and celebration which are critical core values. Accordingly the cafe ambience, the look and feel inside will be changed.
Download pdf file of case study on Cafe Coffee Day’s Brand Strategy in India

 
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Jun 17, 2008

Nokia India – The Most Trusted Brand

 

Nokia, India’s leading mobile handset marketer was voted as India’s Most Trusted Brand in Brand Equity’s annual Most Trusted Brands survey. Olli-Pekka Kallasvuo, president & CEO, Nokia Corp responded positively to this brand recognition and said that, “Becoming the No 1 trusted brand in India is a very prestigious achievement for us. Our team in India has worked very hard to achieve this, … together with investments in marketing and distribution that have helped differentiate the brand from the competition”.

The survey was conducted across 12 Indian cities and had over 8,000 respondents. Nokia was placed No 71 in 2005, No 44 in 2006 and No 4 in 2007. Nokia replaced Colgate as the No 1 this year. India is a critical market and this achievement certainly augurs well for Nokia which recently launched the Nokia N78 in the Indian market. Nokia has been investing in India since 1996 and the Indian mobile market has become the No 2 market, up from No 3 in 2006 and No 4 in 2005. Nokia India has a factory in Chennai, a design studio in Bangalore and managed a turnover of Euro 36 billion last year.

Download case study on Nokia in India (pdf file)

 

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Apr 2, 2008

Unilever Business Strategy 2008

 

Unilever identifies personal care for future sales growth and profitability

Unilever, the Anglo-Dutch company recently has identified its personal care segment as its fastest-growing business and a key to achieving sustainable profitable growth. Unilever is one of the world’s leading suppliers of fast moving consumer goods across Foods and Home & Personal Care categories. However, for many years, rivals like Procter & Gamble Co. (P&G), which have been more creative in introducing new products, have outperformed Unilever. Last year, Unilever reported an increase in personal care sales by only 1.4 per cent to €11.30bn while overall turnover rose 1.4 per cent to €40.2bn. The personal care segment will be a priority area in 2008 to Unilever for creation of future sales growth and sustaining profits from increasing raw material costs.

External Pressures and Organizational Restructuring

Key concern areas like high material costs, adverse exchange rates and macroeconomic worries could hamper Unilever’s performance. Unilever has already announced steps to improve its performance in 2008. These include reducing 20,000 jobs across its divisions and combining its Home & Personal Care and Foods into a single category structure. In February 2000, Unilever had announced a five-year growth strategy called ‘Path to Growth’, directed towards bringing a significant improvement in its performance. In 2001, the Path to Growth Strategy had led to organizational restructuring in the form of two global divisions being formed – one for Foods and one for Home and Personal Care.

Restructuring at Unilever

In February 2008, Unilever’s CEO Patrick Cescau had announced that it was streamlining its management structure in keeping with its strategy of focusing on developing markets and promoting executives with experience in those territories. It’s Central and Eastern Europe division would be included in an enlarged Asia, Africa and Central and Eastern Europe unit , thus centralizing management of emerging economies that shared similar consumer traits and potential for growth. Unilever also combined its home and personal-care and foods units into a single division as a part of the company’s continuing effort to raise its profitability by becoming leaner and more agile.

Related Reading:
Management Case Study on Restructuring at Unilever – Path to Growth Strategy(PDF file)

 

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Jan 15, 2008

Jack Welch, GE and Succession Planning

 

A succession plan always helps. Top companies hold people accountable for leadership development. McDonald’s had to name a successor within just an hour of the sudden death of its 60-year-old chairman, Jim Cantalupo. The decision was possible only due to years of succession planning.

Jack Welch and his Leadership Style

In 1994, years before he retired from GE, Jack Welch had started the succession planning process. He developed a list of qualities, skills and characteristics a CEO should essentially have. So, GE was ready for its next CEO, years before it finally had to make the decision in 1999. GE had three candidates – Jeff Immelt, W James McNerney and Robert L Nardelli. All three were ideal candidates and aspirants for the top job. All three exceeded every expectation required. Finally, the youngest of the three, Immelt was chosen. In November 2000, GE announced that Jeff Immelt would succeed Jack Welch as the chairman and CEO of the company. W James McNerney and Robert L Nardelli, moved on as the CEOs of 3M and Home Depot, respectively. All leaders and companies can take inspiration and should devise succession plans, the Jack Welch style.

Related Reading: Download case study on Warren Buffet

 

Dec 11, 2007

Toyota’s new cost-saving strategy CCC21

 

Toyota and Construction of Cost Competitiveness in the 21st Century

Toyota Motor Corp expects to save more than $2.7 billion annually as it’s cost-cutting efforts are gaining momentum. Dubbed CCC21 (Construction of Cost Competitiveness in the 21st Century) shaved $9 billion off costs over five years. Toyota has been working on a new cost-saving strategy called “VI” for Value Innovation since 2005. This strategy aims to combine its thousands of components in a car into modules and systems. Toyota’s long-term strategy involves developing both global and regional car models in order to compete worldwide with a full line of products.

Other Facts:

In 2002, Toyota had released its ‘Global Vision 2010’, in which it highlighted, among others, its concern for environmental protection.

In 2004, Toyota had replaced Ford as the second largest automobile manufacturer in the world. By the end of 2006, it was reported that Ford Motor Company would lose its position as the second largest automaker in the US to Toyota Motor Corporation.

Toyota Motor Corporation officially forecast that it would sell 9.34 million cars in 2007 – which could make it the world’s largest automaker.

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