Strategy During Crisis Times? Pedagogical Objectives However, Instead of Doing Well, by 2007 Indian Lccs Were Bleeding

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

1 www.ibscdc.org turbulent times – Wars, recessions and US and excitement through Revlon’s core Financial Crisis (2008). The current products, nail colours and lipsticks. Despite financial crisis has had crippling effects on the intense competition posed by players luxury industry. The connotation of luxury like L’Oreal, Estee Lauder and Procter & Low-Cost Airlines in India: Took is used in a very generic sense in this case Gamble, Revlon emerged as a strong off with Pride, Landed in Troubles study, symbolising all the ultra-premium contender, becoming a multi-million dollar and super premium goods. It also enables company in a short span of 6 years. The primary objective of the case study is an interesting discussion on whether the However, trouble started brewing when the to analyse the sustainability of Low-Cost industry succumbed to the troubled times’ reigns of the company were passed on to Carrier (LCC) model in Indian aviation business pressures or did it use those troubled Michel Bergerac, Charles’ handpicked industry. This case would enable a discussion times to come out with business and market successor, in 1975. With the company’s on the factors that are critical for the innovations. This case study particularly focus shifting from its core beauty business successful functioning of LCCs; the factors looks at what happened to fashion brands towards diversified areas like healthcare, that have led the Indian LCCs into trouble; as a result of US Financial Crisis. This case Revlon started succumbing to its and the sustainability of LCCs in the long tries to resolve the following questions. competitors. Post acquisition in 1985, the run. Since 2003, when Air Deccan entered Firstly, is luxury industry a recession-proof company witnessed a series of efforts to with its LCC model, Indian aviation was urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies or a recession-prone industry? What made restore its lost glory. But burdened under a revolutionised. While with the increase in the luxury brands to hold back their debt-load of $2.9billion, and with the demand, opportunities increased, so did the expansion plans, lay off employees and miserable failure of Vital Radiance, its latest threats with the increase in competition. set their minds on improvement of sales? product launch for women above 50, the In a span of 2 years, the industry witnessed How can luxury brands uphold their growth dilemmas surrounding Revlon have 25% annual growth and the entry of four during turbulent times? Who can be their increased greatly. new players. It was estimated that by 2010, target customer and how should be their air passengers would increase to 50 million. positioning strategy during crisis times? Pedagogical Objectives However, instead of doing well, by 2007 Indian LCCs were bleeding. In 2007, Air Pedagogical Objectives • To understand cosmetics industry’s

estructuring T estructuring T Deccan merged with Kingfisher Airlines estructuring T estructuring T estructuring T dynamics – critical success factors, RR RR R while, GoAir moved out of the LCC model, • To analyse and understand the nature industry attractiveness, competitors’ adding business class in its aircraft. With and business dynamics of luxury industry analysis, etc. SpiceJet and IndiGo remaining as the only and to debate on whether luxury industry LCCs in India, the case delves into the is recession-proof or recession-prone • To analyse the reasons for Revlon losing reasons behind the failure of LCCs in India its market share inspite of being an old and enables an interesting discussion on • To examine the performance of luxury player with formidable brands what needs to be done to make the LCC sector in the light of US Financial Crisis (2008) • To discuss and debate the challenges model successful, given the potential facing the new CEO, David Kennedy and demand. • To analyse the ways in which luxury to explore all the possible ways and brands can sustain their growth when means for reviving Revlon. Pedagogical Objectives industry is engulfed by economic and financial crisis. Industry Cosmetics • To understand the critical success factors Reference No. RTS0187 for a LCC player globally and in India in Industry Luxury Goods Year of Pub. 2009 particular Reference No. RTS0188 Teaching Note Available Year of Pub. 2009 Struc.Assig. Available • To analyse the performance of LCCs in Teaching Note Available India and the reasons behind the failure Struc.Assig. Available Keywords of LCCs in the country Keywords Brands, Brandings, Positioning, Cosmetics, • To explore and evaluate various options Consumer behaviour, Revlon, P&G, to make Indian LCCs operations Luxury Industry, US Financial Crisis, L'Oreal , Advertising, Marketing economically viable. Luxury Brands, Premium Brands, Brand Loyalty, Recession, Purchasing Power, Industry Aviation/Airlines Disposable Income, Brand conscious Reference No. RTS0189 Starbucks in US: Too Much customers, Conspicuous Consumption Year of Pub. 2009 Coffee Spilling All Over? Teaching Note Available Struc.Assig. Available What helps retailers decide ‘how much of Revlon's Revolving Fortunes: a good thing is too much’? This is the Keywords Resolving the 'Core' Brand dilemma that Starbucks, the leading retailer, roaster and brand of specialty Industry analysis, Low Cost Carriers, Low Challenges coffee is facing. Starbucks, with over Cost Carriers in India, Air Deccan, 14,000 stores and $9.4 billion in sales Aviation, Business Model, Positioning, This case study, while providing a landscape worldwide, exemplifies how a commodity CSFs, GoAir, Indigo, SpiceJet, Jet Airways, of the cosmetics industry, offers scope to can be successfully converted into a Kingfisher Airlines discuss the factors that enabled Revlon in becoming a global brand and why in spite premium brand. In about two decades, the of being such a renowned and popular brand, company has grown from 17 to more than it lost out in the global cosmetics industry. 10,000 stores in the US – its largest Luxury Industry in Turbulent Times It also enables to discuss the measures that market. However, now it is feeling the the new CEO, David Kennedy, should take strains of rapid expansion with the same This case was primarily written to debate to rejuvenate Revlon. “In the factory we store sales in the US and the share price of on how to manage troubled times for one make cosmetics; in the drugstore we sell the company declining. The situation has of the highly recession-prone industries – hope”, said Charles Revson, founder of led to the reinstated CEO Howard Schultz Luxury Industry. It captures the Revlon. Guided by this principle, Charles ruing that in its efforts to grow; Starbucks performance of luxury industry during had strived to promote glamour, fantasy has commoditised its brand. In the first 2 www.ibscdc.org

move at damage control, the company has For one it was leadership in denial. Not industry was searching for ways and means

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S announced that it would be closing 600 willing to break the set precedents was to deal with recession, Burger King had the I – Y G E T A R T S underperforming stores in the US. Will that another. The case also helps in debating additional burden of dealing with its internal be sufficient? What else should Schultz do how far was appointing Nardelli correct, problems. Meanwhile, the company to ensure that the Starbucks brand stands given his background and precarious witnessed a change in its leadership for the steady? conditions of the company and the 17th time in 52 years as John Chidsey took industry. Can he do a Lee Iacocca? over as the CEO of Burger King in April This case study talks about how Starbucks 2006. What strategies should John Chidsey converted the world’s second most traded Chrysler enjoyed iconic status at Detroit implement to help the company survive commodity into a much sought-after for a long time, but surrendered meekly to in these difficult times? What impact would luxury. The company’s expansion strategy the European and Japanese automobile US recession have on the fast food industry? is dealt with in detail emphasising, how manufacturers. Guided by a ‘prudent’ logic, Will Burger King be able to survive in the and why the company grew at the rate the company teamed up with Daimler- industry? that it did. The data in the case study enables Benz but the relation ended on a sour note. students to debate Starbucks’ position vis- The private-equity firm, Cerberus Capital à-vis its competitors. The changes that Management in a management buyout, Pedagogical Objectives Starbucks made along the growth track are took over Chrysler in 2007 for $7.4 billion. • To understand the dynamics of the fast also mentioned along with how each change The underlying confidence stunned food industry affected the company. Through the case markets, automobile industry experts and students identify the brand dilemmas that analysts. Cerberus appointed Bob Nardelli • To identify the factors that led to the Starbucks is facing and suggest alternatives to clear up the impending mess. Bob growth of the US fast food industry for improvement. Nardelli, with his GE-background and • To understand the impact of recession turnaround experience at Home Depot, has in the US economy on the performance This case is best suited to understand how chalked out a master plan to turnaround differentiation can increase consumer of the industry in general and Burger Chrysler. Lee Iacocca, for sure would be King in specific willingness to pay premium prices for a watching him over his shoulders. Any commodity item and how over-exposure advice for Bob Nardelli? • To comprehend the challenges faced by can soon erode that same willingness, Burger King in staying profitable in this resulting in commoditisation of the brand. Pedagogical Objectives industry and analyse the possible course of action for John Chidsey. Pedagogical Objectives • To understand and analyse the critical success factors and strategic inflection Industry Fast Food Industry • To understand the dynamics of the points of the auto industry Reference No. RTS0184 coffee industry especially the specialty Year of Pub. 2008 coffee segment in the US • To debate on the factors responsible for Teaching Note Available Chrysler's continuous failures • To understand how a premium brand can Struc.Assig. Available be created around a commodity item • What should Bob Nardelli do to revive Keywords the fortunes of one of the Detroit’s Big • To understand Starbucks’ growth strategy Three? Burger; Burger King; Turnaround Strategies and debate whether growth and over Case Studies; McDonald's; Fast Food; Fast expansion have led to the • To debate whether Bob Nardelli is the Food Retailing; Obesity;Franchisee; commoditisation of the niche brand right person to lead Chrysler to its Business Model; Leadership; Brands; (un)known future. • To debate whether premium brands can Branding; Brand image grow big and ubiquitous without hurting Industry Automobile their brand image Reference No. RTS0185 Year of Pub. 2009 Xerox Corporation: A New • To understand Starbucks’ position vis- Teaching Note Available à-vis its competitors and the brand Corporate Identity? Struc.Assig. Available dilemmas it faces. Xerox, synonymous with photocopying, Keywords Industry Food and Beverages evolved as a generic brand. Apart from Reference No. RTS0186 Chrysler, Lee Iacocca, Robert Nardelli, US providing document management systems, Year of Pub. 2009 Automobile Industry, Daimler-Chrysler, services, and supplies; it progressed into Teaching Note Available Cerberus Capital Management, Big Three, consulting and outsourcing services over Struc.Assig. Available Strategic Inflection Points, Total product the years. Feeling that the existing brand Concept, Leadership, Detroit image was not portraying a wholesome Keywords picture of its businesses, the company decided to rebrand. In January 2008, it Starbucks, Howard Schultz, Business Model, changed its logo, emphasising the Differentiation, Expansion, Positioning, Burger King's Troubled Times: customer-centric approach of the Founder/Outsider CEO, Branding, Business The CEO's Turnaround Plans company with a stress on innovation. With Environment, Competition, Industry the brand supposed to reflect its present Dynamics, Succession problems, The fast food industry, which stature and future prospects, it remained International Business, Growth Strategies phenomenally grew into a multibillion dollar to be seen whether Xerox’s rebranding of Starbucks industry, was being threatened by multiple efforts will succeed. factors like the US recession since 2006, obesity concerns, looming food prices, Pedagogical Objectives Bob Nardelli at Chrysler: Can he embargo on commodity exports, etc. This case study elucidates the growth of Burger do a Lee Iacocca? • To analyse how Xerox Corporation King, world’s No. 2 fast food chain, and (Xerox) had become a leader in its This case study helps in analysing the the impact that recession might have had Document management Enterprise factors that led to the downfall of Chrysler. on the company. While the US fast food 3 www.ibscdc.org • To analyse the various portfolios of Keywords GAP's Turnaround Strategies: products and services offered by Xerox Winning Back its Customers? Corporation eBay; John Donahoe; Revitalisation; E- Commerce Business; Meg Whitman; Fraud Gap Inc., leading retailer in the US, had • To analyse the need for the Rebranding sciences; Restructuring - Turnaround ruled the apparel market since the 1960s. of Xerox Corporation Strategies Case Studies; Revenue model; Gap offered garments for men, women and Revenue per unique Visitor; eBay business • To analyse the implications of children, and by the end of 1990s, the Rebranding on Xerox company was operating in 42 countries around the globe. In the early 2000s, due • To analyse whether the rebranding will Lowe's Companies, Inc: Will its to the changing fashion trends, Gap started be successful. EPM Strategies Payoff in loosing customers. Gap’s customers moved away to other youth-oriented retailers. This Industry Document Management Canada? posed a threat to Gap’s market position. Enterprise Lowe’s Co., Inc. was a US-based chain of To gain its customers back and to sustain Reference No. RTS0183C retail home improvement and appliance its market position, Gap started planning Year of Pub. 2008 stores with 1,252 superstores across 49 a turnaround under Paul S. Pressler that Teaching Note Available urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies states in the US. It decided to implement included brand differentiation, revamping Struc.Assig. Available Enterprise Portfolio Management (EPM) of stores, promotions, and expansions. As Keywords in 2001 for better monitoring of its assets. a result, Gap’s sales increased by 7% in EPM enabled Lowe’s to reevaluate new 2004. However, from 2006 onwards, Gap’s Xerox corporation; New Corporate priorities against its current investment same-store sales started declining. Analysts identity; Xerox global Services; methods. It helped to enhance Lowe’s felt that this was because Gap was unable Rebranding; Document Management business from $ 22,111 million in 2001 to to bring back its customers. To win back Enterprise; Restructuring / Turnaround $ 43,243 million in 2005. When EPM was customers, Gap planned to incorporate Strategies Case Studies; Generic brand; introduced in Lowe’s, the company was store-expansion strategy as a part if its Photocopying; Anne Mulcahy; Quality and operating only in the US. When the turnaround efforts. However analysts innovation estructuring T estructuring T estructuring T estructuring T estructuring T company intended to enter Canada in opined that it would take time for Gap to RR RR R 2006, it expected to implement the EPM gain its customers back. strategies that it had employed in the US. Revitalisation of eBay under Banking heavily on its US experience, Pedagogical Objectives John Donahoe: Will it Work? Lowe’s was confident that it would succeed in Canada, but analysts felt that success in • To understand the changing fashion Internet auctioneer eBay Inc.had Canada would not be easy. They thought trends of the US Apparel industry announced that John Donahoe would take that Home Depot and RONA, the existing • To analyse the turnaround styrategies over as eBay Chief Executive on March players in the Canadian home of an apparel retailer 31, 2008 from Meg Whitman who had improvement market, would not make been at the helm of affairs for 10 years Lowe’s entry into Canada an easy one. They • To analyse the importance of customer since March 1998. John Donahoe said that also felt that an expansion decision solely satisfaction parameter in a business his priority is to reinvigorate eBay. backed by duplication of efforts might be turnaround. Although it still remains the dominant like playing with fire. online auction site, it faces increased Industry Apparels and Accessories Reference No. RTS0180B competition from other Internet retailers Pedagogical Objectives such as Amazon.com. The new CEO Year of Pub. 2008 announced a series of measures to revive • To understand Lowe’s expansion in Teaching Note Available the company including changing the fee Canada Struc.Assig. Available structure, which was at the core of eBay’s • To understand Enterprise Portfolio Keywords business model. He also proposed to Management (EPM) improve trust and safety in its Restructuring / Turnaround Strategies Case transactions. The case allows for • To understand the competition in Study; US Apparel Industry; Consumer discussion on whether the revitalisation Canada Preferences; Growth of Apparel Industry; process under John Donahoe would bring Competition; Performance; Turnaround in the desired results • To analyse whether Lowe’s will be Strategy; Store Sales; Millard Drexler; Paul successful in Canada. S. Pressler; Customer satisfaction parameter; price comparison; brand Pedagogical Objectives Industry Home Improvement Retailing differenttiation; Brand personality; Reference No. RTS0181B • To analyse the revenue model of eBay Revamping stores Year of Pub. 2008 • To analyse the impacts of the initiatives Teaching Note Available on eBay under Meg Whitman Struc.Assig. Available Yum! Brand's Turnaround • To analyse the revitalisation of eBay Keywords Strategy under John Donahoe Lowe's; Enterprise Portfolio Management; Yum! Brands, Inc. (Yum!), one of the • To analyse the future of eBay. US Home Improvement Industry; world’s largest restaurant companies based Canadian Home Improvement Industry; in Louisville, Kentucky, operated in more Industry Online Auctioneering Expansion; Home Depot; Robert Niblock; than 34,000 restaurants across 100 Reference No. RTS0182C Steve Stone; Resource Planning Program; countries. In 2006, Yum! generated more Year of Pub. 2008 Growth Strategy; Home Centers; RONA; than $9.5 billion in total revenues which Teaching Note Available Hardware Stores; Restructuring - included sales and franchise fees. But in Struc.Assig. Available Turnaround Strategies Case Study; IT and 2007, disappointing performance in its US non-IT decisions; Planning division, forced Yum! to re-look at its business. Changing consumers’ tastes with 4 www.ibscdc.org

increasing awareness towards health and ‘Incredible India’ in 2002 – a campaign • To analyse whether Fiat can restore the

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S obesity problems affected Yum!’s aimed at building brand image of India in past glory by introducing Fiat 500 amidst I – Y G E T A R T S performance in the US. To turnaround its global tourism industry and to increase competition from the existing players US business, it decided to follow foreign exchange earnings. The tourism like Toyota, Volkswagen, etc and adapt McDonald’s business model. It decided to industry witnessed positive results of this to the changing trends in the automobile introduce new products like beverages and campaign and now enjoying the fruits of industry. breakfast meals; and expanded value menus ‘Incredible India’ campaign. to offer healthier products in KFC, Taco Industry Automobile Industry Reference No. RTS0177P Bell and Pizza Hut in the US. But, by Pedagogical Objectives following its competitor’s business model Year of Pub. 2008 would it be able to turnaround its US business • Growth of Indian Tourism Industry Teaching Note Available Struc.Assig. Available division, needs to be seen. • The dynamics of tourism industry in India Keywords Pedagogical Objectives • To analyse the branding and positioning Fiat 500; Heritage Brand; Branding; Fiat’s • To understand the dynamics of the US strategies by the Indian government Decline; Fiat’s Turnaround; Brand Quick Service Restaurant industry Nostalgia; Brand Revival; Automobile • To understand the reasons behind the Industry; Sergio Marchionne; • Changing consumer tastes and success of ‘Incredible India’ campaign. Restructuring - Turnaround Strategies Case preferences and its impact on the fast Study; New Product Launch food business Industry Tourism Industry Reference No. RTS0178A • Implications of changing business model Year of Pub. 2008 for Yum! Brands Teaching Note Available Sanofi-Aventis: CEO Gerard Le • To evaluate the importance of value Struc.Assig. Available Fur's Formula for Change proposition in fast food industry. Keywords Sanofi-Aventis, the world’s third biggest Industry Quick Service Restaurants Indian Tourism Industry; India Tourism pharmaceutical company, focuses mainly Reference No. RTS0179A Development Board; Tourism Industry; on prescription drugs and human vaccines. Year of Pub. 2008 Tourism Promotion Policy; Inbound Ever since the company’s establishment Teaching Note Available Tourism; The Ministry of Tourism; Tourist in 1973, the company had been following Struc.Assig. Available arrivals in India; The ‘Incredible India' the inorganic growth strategy to mark its presence worldwide. Until recently, Sanofi Keywords Campaign; Rural Tourism and Adventure Tourism; Print and TV Campaign; remained reserved and never disclosed the Turnaround Strategies Case Study; Fast food Restructuring - Turnaround Strategies Case details of the group’s portfolio of industry; US Quick service restaurant Study; The Medium Term Strategy; Five experimental drugs, thereby raising industry; Obesity; McDonald’s Changing Year Plan; Foreign Turists to India shareholders’ concerns. In addition, the consumer taste; Value proposition in food company is uptight with growing industry; Value menus; Healthier products; competition from generic drug-makers. In January 2007, Sanofi had a major Full-service restaurants Independent New Fiat 500: Revival of a restaurants; Breakfast menus; Premium management reshuffle wherein, the coffee Healthy foods; Trans-fats Heritage Brand company’s longest serving chairman and CEO Jean-Francois Dehecq, relinquished Fiat Auto, a leading player in the automobile his CEO position to Gerard Le Fur while industry, has lost market share and retaining chairmanship. Amid this Indian Tourism Turnaround: The sustained losses between 1999 till 2003. situation, it remains to be seen whether Le Its new strategy enabled Fiat to turnaround Success Story of 'Incredible Fur can sail the company through these its auto business and return to profitability India' Campaign troubled times. in the fourth quarter of 2006. But the India, one of the Asia’s most popular company feared a reversal of fortunes. Pedagogical Objectives tourism destinations lured foreign tourists Keeping in mind the changing market through its hills, rivers, plateaus, plains, trends and consumer behavior, Fiat decided The case is structured to help the students beaches, deltas and deserts, many luxurious to broaden its product portfolio. It decided understand: hotels and resorts, picturesque nature sites, to relaunch its heritage brand ‘Fiat 500’. and the architectural wealth. India In addition to increasing its market share, • Critical success factors in the delivered novelty in various categories of the relaunch was also expected to secure pharmaceutical industry tourism like history tourism, adventure its turnaround. • Value chain of the pharma industry tourism, medical tourism like Ayurveda and other forms of Indian medications, spiritual Pedagogical Objectives • Trends and challenges facing global tourism, business travels, holiday seekers, pharmaceutical industry beach tourism, etc. The liberalisation of • To analyse and discuss heritage branding • Sanofi-Aventis’ new CEO Gerard Le Fur’s Indian economy in the 1990s attracted • To discuss Fiat’s decline and its return to initiatives investment in the tourism sector and profitability in auto industry infrastructure development fostered the • Promoting a company insider vs international tourist flow to India. But, • To discuss the challenges faced by Fiat appointing an outsider. between 2001 and 2002, the Indian tourism in the process of reviving its Fiat 500 sector witnessed fall in foreign tourist brand Industry Pharmaceutical Industry arrivals due to the 9/11 incident in the US, Reference No. RTS0176 • To understand the role of promotion Afghanistan war, and India-Pak border Year of Pub. 2008 and advertising while relaunching an tension. To boost the tourists’ flow, Teaching Note Available erstwhile brand Ministry of Tourism (MoT), launched Struc.Assig. Available

5 www.ibscdc.org Keywords Hybrid Digital Radio, an Upgrade and promotion, organising training and cutting costs. Despite this, Circuit City was Global Pharmaceutical Industry; Critical to Struggling Terrestrial Radio: Will it Bring Back the Listeners? unable to gain back its position. To combat Success Factors; Value Chain of the Best Buy and to regain its top position in Pharma industry, Acquisitions and Joint In 2004, the iBiquity Communications the US consumer electronics market, Ventures, Trends and Challenges in the Corporation developed a new digital Circuit City followed Best Buy's strategy Pharma Industry; Product Lifecycle format for the terrestrial radio operators, of self-service store format and recruited a Management; Jean-François Dehecq; which was called HD Radio with a view to non-commissioned sales force. In 2005, Organisational Transformational bring back listeners to the radio. The HD though Circuit City witnessed initial sales Strategies; Restructuring - Turnaround radio alliance was created to market and growth, analysts were sceptical of long- Strategies Case Study; Leading attract listeners from the satellite and term growth. Some of the industry observers Transformation; Pfizer; Glaxosmithline; Internet radio and devices like iPods. opined that Circuit City lost productive Novartis; Clinical Research Outsourcing Inspite of the massive marketing efforts sales men during this exercise where as (CRO); Blockbuster Drugs; Successor’s the technology which needed radio receiver some others felt that Circuit City was right Dilemma; Generic Drugmakers; FDA for its broadcast did not pick up among the in doing so and felt that Circuit City should Regulations consumers even 3 years after its launch. also adopt Best Buy's strategy of store- urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies The Alliance members announced a new segmentation. By the end of 2006 the marketing campaign of $250 million in company opened 59 stores in the different Private Equity Companies: The 2007 and were optimistic about reviving locations of the US and also planned to Strategic Shift this new technology. But industry critics open 20 stores by 2007. But the question and analysts doubted if HD Radio was what remained - Would imitating Best Buy help Kohlberg Kravis Roberts & Co. (KKR) the consumers really wanted and whether Circuit City in its turnaround effort and to and Texas Pacific Group, one of the it had the potential to make the terrestrial gain back its position? leading private equity (PE) firms radio's days greener. announced a $45 billion acquisition of Pedagogical Objectives Texan Energy Utility (TXU), an energy Pedagogical Objectives estructuring T estructuring T estructuring T estructuring T estructuring T generation company in February 2007. • To analyse the competitive strategies RR RR R In the past PE firms followed a strategy • To understand the reasons for the decline of the US consumer electronics market to buy loss-making businesses and sell in popularity of terrestrial Radio • To analyse the turnaround strategies them after exercising management and • To understand the new forms of digital adopted by Circuit City financial restructuring. The music media announcement made by KKR to produce • To analyse how replication of a energy without damaging the • To understand the consumer preferences competitor's business strategy can be used environment signaled a strategic shift in in the music industry as a tool for growth. how private equity businesses operated. The case discusses the challenges raised • To analyse the reasons for lack of Industry Consumer Electronics and by the environmental groups and the acceptance of HD Radio by consumers Appliances Retail Reference No. RTS0173B dynamics of private equity business as a • To analyse whether HD Radio is a whole. It also attempts to trace private Year of Pub. 2008 strategically correct product to entice Teaching Note Available equity companies' strategic shift in customers. acquiring businesses. Struc.Assig. Available Industry Radio Broadcasting and Keywords Pedagogical Objectives Programming Reference No. RTS0174B Circuit City; Restructuring - Turnaround • To understand dynamics of private Year of Pub. 2008 Strategies Case Study; Best Buy; self-service equity business Teaching Note Available store format; non-commissioned sales Struc.Assig. Available people; advertising; training; Wal-Mart; • To evaluate the growth strategy of KKR consumer behavior; hourly wage; business Keywords • To understand shift in strategy of private strategy; dynamics of consumer electronics equity companies and it impact. HD Radio; Terrestrial Radio; Satellite market; Circuit City vs Best Buy; Radio; Internet Radio; MP3 players; iPod; competitive differentiation Industry Private Equity Marketing Myopia; Strategic Inflection Reference No. RTS0175A Points; Industry Change; Changing Year of Pub. 2008 Consumer habits and preferences; Digital Teaching Note Available European Railways Revamping media; Music; Restructuring - Turnaround Struc.Assig. Available Model to Combat Low-Cost Strategies Case Study; On-demand forces; Airlines: Will it Succeed? Keywords iBiquity Since 1990s, European Railways were Private Equity; Mergers and Acquisitions; facing stiff competition from discount Leveraged buy-outs; Kohlberg Kravis airlines. While the Low-cost airlines Roberts & Co. (KKR); Texan energy utility Circuit City's Turnaround achieved strong growth in all areas of (TXU); Blackstone Group; Carlyle Group; Strategies: Can the ex Numero Europe, the European Railways' market Newbridge Group; Restructuring - Uno Bounce Back? share declined from 8% in 2003 to 7.5% Turnaround Strategies Case Study; Private in 2004. In order to compete with Budget Equity Industry Guidelines Group; Securities In the 1980s, Circuit City was the leading Airlines, European Railways reduced fares. and Exchange Commission; Barbarians at retailer in the US consumer electronics However, low-cost carriers with a market the Gate; Dynamics of Private Equity market. But by the mid 1990s Circuit City share of 16.3% in 2006 still maintained a Business had lost its market position to Best Buy. To regain its position the company started lead. To beat the competition, European its turnaround plan that included upgrading Railways decided to form a new model of merchandising, improving its advertising partnership - including seven European 6 www.ibscdc.org

Rail companies and their subsidiaries - Industry Aviation Ford's New Turnaround Strategy:

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S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S named 'Railteam'. The Rail team initially Reference No. RTS0171 Will it Work? planned to cover more than 100 cities and Year of Pub. 2007 grow to 400 destinations covering 15000 Teaching Note Available In 2000s, Ford Motor Company’s (Ford) km by 2020. The alliance aimed to reach Struc.Assig. Available US market share has been steadily declining. 50% share of the travel market by 2020. Since 2002, it has unsuccessfully launched However analysts were skeptical about the Keywords two restructuring plans to reverse the success of European Railways' new model LCC in the Indian market; Aircraft declining trend. In September 2006, in the over Low-cost airlines in Europe. manufacturers; Airbus and ATR; Integration supervision of Fords new CEO, Alan of two different identities; Restructuring / Mulally, the third restructuring plan has Pedagogical Objectives Turnaround Strategies Case Study; Revival been introduced. The case outlines the Strategies; Rebranding Strategies; dynamics of the US automobile industry, • To understand the operating structure Competition; Operational efficiencies; its players, Fords early growth strategy and of European Railways Consolidation; Low Cost Model; Business the reason behind its decline. It also analyses the third restructuring plan of the • To understand the stiff competition Design company. faced by European Railways to discount airlines Pedagogical Objectives • To understand the competitive strategy Maruti-Suzuki's Zen: Will the adopted by European railways. Legacy Last? • To analyse dynamics of US Automobile Industry Industry Transport Maruti Udyog Ltd (Maruti) is one of India's Reference No. RTS0172B leading automobile manufacturers in the • To analyse causes for decline of Ford in Year of Pub. 2007 car segment, with a market share of over Automobile Industry 60% in the car industry in the country. Teaching Note Available • To analyse the third restructuring plan The term ‘Maruti’, in popular Indian Struc.Assig. Available of the Ford Company. culture, is associated with the Maruti 800 Keywords model. Maruti’s product portfolio range Industry Automobile European Railways; Low-cost Airlines; from Zen, Alto, Wagon R, Gypsy, Esteem/ Reference No. RTS0169P operating cost structure; Restructuring / Swift, Versa and the Baleno, all backed by Year of Pub. 2007 Turnaround Strategies Case Study; the inherent value proposition of high Teaching Note Not Available Operating cost analysis; Railwaysvs budget quality, fuel efficiency, and compared with Struc.Assig. Not Available the competition, low cost. Maruti Suzuki airlines; yield management system; Keywords Railteam; airline-style alliance; rail rank highest in customer satisfaction in network; budget airlines; Eurostar; Yield India for a Seventh Consecutive Year, and Turnaround strategy; Automobile industry; Management system ingradients; also ranked at 91 in the Forbes' list of the Alan Mulally; restructuring plan; US marketing; business model; Reformation World's Most Respected Companies. automobile; growth strategy; Sport Utility Zen was the second largest selling model of Vehicles; fuel efficiency; Restructuring / Maruti. Despite being the leader in B2 Turnaround Strategies Case Study; segment, Zen was losing market share in consumer preferences; competing GM; Air Deccan C: The Captain vs Toyota; productivity; competitive costs The Baron India due to increasing competition. Even after its re-launch, Zen sales continued to Third in the 'Air Deccan series', this case decline. To reverse the declining sales trend study explores Kingfisher Airlines' in the competitive market, the company British Broadcasting Corporation: capabilities - in terms of financial clout decided to phase out Zen and launch a new Grim Future Ahead? and operational efficiencies - to revive Air version. The case talks about initiative Deccan. It highlights the possibilities of taken by Maruti to reverse its declining sale. The British Broadcasting Corporation, synergising two divergent airlines - one that once the pioneer in the broadcasting is positioned as a premium value carrier Pedagogical Objectives industry took a step-down in the wake of and the other that relies on significantly intense competition and technological low fares and no-frills. Given the power • The automobile industry in India and its change. BBC’s licencing practice was and business experience of the UB group, local players subject to fierce debate among the public as well as among politicians. Deregulation participants can assess whether Air Deccan • Product life cycle of Maruti Suzukis Zen will exist as itself or will UB group's boss, of the broadcasting industry opened the Vijay Mallya integrate the ailing airline into • Exit of Maruti Suzukis Zen gates to a number of competitors which his own. The case plays out a few 'emotive' shook BBC’s position as the No: 1 and 'economic' issues in giving a new • Reincarnation of Maruti Suzuki Zen. broadcaster in the world. The technology identity to Air Deccan - from Air Deccan's Industry Automobile shift from analog to digital also threw up perspective as well as Kingfisher's. Reference No. RTS0170P new challenges to BBC. Decreasing Year of Pub. 2007 viewership along with its outdated business Pedagogical Objectives Teaching Note Not Available model drew blood from BBC bottom line. Struc.Assig. Not Available This case discusses the problems that BBC • To discuss Kingfisher Airlines' business faced in the 21st century and also the decisions about Air Deccan's revival Keywords initiatives taken by BBC to fight back the competition. • To analyse the exclusive benefits of Air Car industry; B2 segment; Sales; Hyundai; Deccan's equity dilution, for it as well as Re-launch; New design; Speed; Estillo; for Kingfisher Airlines Tarun Tahiliani; Restructuring / Pedagogical Objectives Turnaround Strategies Case Study; Anti • To assess whether Air Deccan should • To discuss the reasons behind BBC’s braking system; Attractive look; Wagon- downfall. continue operations in its own name or R; Alto; New model; competition merge with Kingfisher Airlines. 7 www.ibscdc.org • To discuss the technological changes that Business Model; US Airways; Restructuring market, the second largest in the world, happened in the UK broadcast industry. / Turnaround Strategies Case Study; Gerald accounts for ¥130 trillion. It is Grinstein; LCCs characterised by a unique consumer Industry Broadcasting Industry behaviour, distribution system and increased Reference No. RTS0168B retailer density. These challenges hamper Year of Pub. 2007 Boeing: Back on the Track? the success of global retailers who tried to Teaching Note Available transplant the business model from their Struc.Assig. Available The year 2006 had been a record-breaking parent country into the Japanese market. Keywords year for Boeing Company which was also Analysts attribute that lack of localisation a year to remember as this accomplishment and adoption of the ‘cookie-cutter’ BBC; Royal charter; Technology; CNN; came after several setbacks since 2003 approach in foreign markets as the main Restructuring / Turnaround Strategies Case which resulted in Boeing losing its leadership reason for their failure. Wal-Mart, the Study; CableTV; Licence fee to Airbus. The company received a record world’s largest retailer has been daunted by number of airplane orders, which surpassed the five consecutive years of losses since that of its rival – Airbus. Industry observers its entry into Japan in 2002.It entered Delta Air Lines: Flying out of felt that several factors led to Boeing’s Japan by acquiring Seiyu, a struggling urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies Bankruptcy? success. One of the reasons cited was the Japanese retail chain. Despite management strife and other problems at implementing many strategies, Wal-Mart Delta Air Lines Inc., one of the leading Airbus. Other reasons that contributed to was not able to successfully execute its US carriers in the US, filed for Chapter 11 Boeing’s increase in orders included model in Japan. By mid-2007, Wal-Mart bankruptcy protection on September 14th Boeing’s product strategy and increasing had invested $1 billion in Japan and had 2005. Delta’s bankruptcy was ascribed to a fuel prices which made Boeing’s fuel- made Seiyu its wholly owned subsidiary, by variety of factors ranging from September efficient airplanes desirable. With a acquiring a 53% stake. The year 2007 was 11th 2001 terrorist attack on the US to triumphant 2006, it remains to be seen if relatively better. The net loss for the first soaring fuel prices. Delta, which had Boeing would regain its lost leadership and quarter of 2007 had declined to ¥4.4 billion survived an initial takeover bid by US sustain the same. compared to the net loss of ¥52.8 billion estructuring T estructuring T estructuring T estructuring T estructuring T Airways earlier in November 2006, was in the first quarter of the previous year. In RR RR R optimistic about its future as an independent Pedagogical Objectives spite of this positive trend, analysts suggest airline. On January 31st 2007, US Airways that Wal-Mart should sell Seiyu and give withdrew its subsequent $10.2 billion bid • The case deals with the growth strategies up its Japanese operations. Wal-Mart to take over Delta Airlines, after it failed of Boeing company however is committed to Japan. to convince Delta’s creditors. US Airways’ • The case analyses the challenges and offer for Delta had been viewed by analysts problems encountered by Boeing Pedagogical Objectives as a deal that would set the tone for airline industry consolidation in the US. What are • The case examines the competitive • To analyse the retail industry scenario the implications of Delta’s bankruptcy on stand-off between Boeing and Airbus in Japan the US airline industry? What does the • The case analyses the different • To analyse Wal-Mart’s successful US future hold for Delta Airlines? Will the retail model restructuring efforts of Delta be successful? restructuring strategies of Boeing to Will Delta emerge out of bankruptcy and combat its challenges • To compare and contrast the retail retain its independence? • The case deals with the product strategy market characteristics in developed of Boeing economies, viz. Japan and the US Pedagogical Objectives • It analyses the various factors behind • To analyse the strategies to be adopted • To understand the contribution of US Boeing’s success by Wal-Mart for survival and growth in airline industry to the overall economic Japan. performance of the country • It analyses whether the events of the year 2006 would help Boeing lead the Industry Retailing • To provide an overview of the US airline market. Reference No. RTS0165C industry and the competitive scenario Year of Pub. 2007 Industry Aircraft Manufacturing Teaching Note Available • To discuss about various factors that Reference No. RTS0166B Struc.Assig. Available contributed to Delta Airlines’ bankruptcy Year of Pub. 2007 Teaching Note Available Keywords • To discuss how Delta is trying to emerge Struc.Assig. Available out of bankruptcy and it’s restructuring Wal-Mart; Japan; Retail; Retail Market plans Keywords Scenario in Japan; Keiretsu; Seiyu; Consumer Behaviour; Restructuring / • To analyse the scope and limitations of Boeing;Airbus; Dreamliner; B-787; Turnaround Strategies Case Study; Japanese consolidation in the US airline industry. Commercial Aircraft; Miltray Aircraft; Distribution System; Developed Economy; Restructuring / Turnaround Strategies Case Business Environment; Survival Strategies; Industry Airline Industry Study; US Air Force; McDonnell Douglas; Localisation Strategies; Revenue Models; Reference No. RTS0167B Defense; Lockheed Martin; Pentagon; Strategy; Economics Year of Pub. 2007 Plastic Composites; Air Freight; Tankers; Teaching Note Available FAA Struc.Assig. Available Heineken's Amstel Light Struggles Keywords to Recoup its No. 1 Position in the Delta Air Lines; Airline Industry; Legacy Wal-Mart in Japan: Survival and US: Would its Strategy Work? Carriers; Network Carriers; Bankruptcy; Future of its Japanese Business Turnaround Strategies; Chapter 11; In the 1980s, with the increasing Localisation is the buzz word for a Operating Cost; CASM; Deregulation; consumption of light beer in the US successful global business. Japan’s retail alcoholic beverage market, Heineken N.V., 8 www.ibscdc.org

one of the world’s largest breweries in of Lamborghini. Under the leadership of Pedagogical Objectives

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S Amsterdam, introduced Amstel Light in the Audi, Lamborghini oversaw increased I – Y G E T A R T S US. Amstel Light was the first imported profits with the highest sales record in the • The business model of Tupperware light beer in the US beer industry. By the history of the company in 2006. In 2007, • How changing trends in the purchasing mid 1990s, Amstel Light contributed 75% Lamborghini is all set to outshine its habits of customers affect a company’s of the total growth of Heineken’s import immediate rival Ferrari, which had wider growth segment in the US and became the No.1 presence worldwide and made better sales importer in the US beer market. The than Lamborghini. The company is • Tupperware’s strategy to meet the Hispanic community grew and they formulating various strategies to make its increasing competion and to regain its demanded ‘high quality beer’ for which they presence felt in different corners of the lost market. were willing to pay, ‘high prices’ encouraged globe other than the US, which remains its Industry Food & Beverage Mexican beer (Corona Light and Corona most important market. However, the Reference No. RTS0162P Extra Light) to enter and subsequently analysts believe that Lamborghini needs Year of Pub. 2007 capture the US light beer market. By 2005, to balance higher sales with brand Teaching Note Available Corona Extra led the market whereas exclusivity. Struc.Assig. Not Available Heineken’s Amstel Light had slipped to the No. 7 position in the US market for Pedagogical Objectives Keywords imported beer. To reclaim its No.1 position, the company launched a new light beer • The case discusses Lamborghini’s Direct selling; Premium Food storage called ‘Heineken Premium Light Lager.’ evolution over the years under changing products; Competition; Life time In addition to this, the company also tried owners Guarantee products; Research and development techniques; Brownie Wise; to promote its Amstel Light through • The case comprehends Lamborghini’s intensive promotional strategies. Restructuring / Turnaround Strategies Case initiatives to widen and strengthen its Study; Party Plan; Advertisements; Retail brand awareness channel; Premium segment; Online selling; Pedagogical Objectives • It analyses Lamborghini’s strategies to Kiosks; Target marketing; Incentive to • The case deals with the different outrival Ferrari sales force; Changing business model; dimensions of the beer industry. Celebrity Advertising; Extending product • It analyses whether Lamborghini would line • It analyses the competitive strategies retain its luxury brand image in its race of US beer category to increase sales.

• It deals with the importance of Industry Luxury Cars Redefining Saks advertising and promotional strategy in Reference No. RTS0163B Saks Inc was a $6.4 billion company and a alcoholic beverage industry. Year of Pub. 2007 leading player in the luxury retailing Teaching Note Available • The case also analyses the concept of business with 359 department stores across Struc.Assig. Available brand extension in beer industry. 38 states in the United States. It operated through two business segments - Saks Industry Beverage Industry Keywords Department Store Group (SDSG) and Saks Reference No. RTS0164B Automobili Lamborghini; Luxury Fifth Avenue Enterprises (SFAE). SDSG Year of Pub. 2007 Passenger Cars; Brand Exclusivity; operated branded stores like Younkers, Teaching Note Available Bankruptcy; Volkswagan's Audi; Versace; Parisian, Herberger’s, Carson Pirie Scott Struc.Assig. Available Asus; Merchandising; Prestige Cars; Ferrari; (Carson’s), Bergner’s and Boston Store, and Keywords Restructuring / Turnaround Strategies Case Club Libby Lu mall-based specialty stores. Study; Barnd awareness; Higher Sales; SFAE consisted of ‘Saks Fifth Avenue Heineken's Premium Light; US Beverage China; India; Lamborghini (SFA)’ luxury department stores and ‘Off Industry; Heineken's Foray in the US; The 5th’, a discount designer clothing store. growth of Light beers; Amstel Light; Since 2000, Saks sales stagnated and its Restructuring / Turnaround Strategies Case Tupperware Re-igniting Growth Study; Hispanic Community; Competition operating margins fell from 4% in 2004 to scenario in the US beer market; Corona In 2005, the $1.2 billion Tupperware 2% in 2005. The company tried to beers; Corona Light; Corona Extra Light; Corporation (Tupperware) is one of the consolidate its position and reinvent itself. Promotional Campaign; Advertising world's leading direct sellers, supplying This case study discusses the strategies strategy; Brand Extension; Cannibalization premium food storage, preparation and adopted by Saks to transform itself. serving items to consumers in more than 100 countries. Its products also include Pedagogical Objectives Automobili Lamborghini: Growth kitchen gadgets, children’s educational toys, microwave products, gift items, beauty • The case discusses strategies adopted by after Bankruptcy and skin care products. Competitors like Saks to make over its losses and market position Though Lamborghini began outstandingly Gladeware and Rubbermaid were well in 1964, the leading player in market introducing low priced products and • The case evaluates Saks marketing for sports cars, witnessed numerous ups and capturing market. To meet the market strategies, merchandising strategy and downs over the years. From the early 1970s challenges, Tupperware is introducing new advertising campaigns to maintain its until 1998 the company’s products, advertising through celebrities brand value underperformance resulted in change of and launching several initiatives to ownership six times in a span of 16 years. rejuvenate its bottomline. The case • The case also explores the challenges And the company went bankrupt for four discusses how Tupperware changes its faced by Saks to improve its image and years between 1978 and 1981. Following business model to meet threats in the maintain its reputation for high quality the bankruptcy, in 1998, Audi AG, a market. in the competitive market. subsidiary of Volkswagen became the owner

9 www.ibscdc.org Industry Retail of The Wall Street Journal (Journal), its • To analyse Motorola’s decline Reference No. RTS0161P flagship brand, which is dependent upon • To analyse effectiveness of Motorola’s Year of Pub. 2007 business-to-business advertising. The revival strategy Teaching Note Not Available circulation and advertising revenue of The Struc.Assig. Not Available Journal has been steadily falling with the • To understand the importance of new advent of internet. In 2007, it is being Keywords product development in Cellular / Mobile revamped and its business model is being phone industry. Saks Inc.; Saks Department Store group; overhauled to suit the changing market Saks Fifth Avenue; Restructuring / scenario. It will be the first major American Industry Telecommunication Industry Turnaround Strategies Case Study; Off 5th paper to push significant portions of Reference No. RTS0158P Stores; British American Tobacco traditional newspaper functions onto the Year of Pub. 2007 Company; Investcorp International Inc.; Web site, leaving the paper itself to focus Teaching Note Not Available Gap; JC Penny; Abercrombie & Fitch; more on news analysis. The case discusses Struc.Assig. Not Available Bloomingdale; Profitt; Versace; Helmutt the dynamics of the newsprint industry, Keywords Lang; Neiman Marcus; Nordstrom The Journal’s competition and the changes in its strategy over the years. Motorola; US mobile phone industry; Ed urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies Zander-new CEO; Razr; Krzr; Siv; Pebl; Pedagogical Objectives Rok; Motoslim; Restructuring / Turnaround Kodak's Turnaround Strategies Strategies Case Study; MOPtoMing; • To discuss the dynamics of the newsprint Kodak was a $8 billion company and a Motorola Q; Zander's new revival strategy industry leading player in the imaging industry. It for company; Step Revival Plan had four main businesses -- commercial • To analyse Wall Street Journal’s digital imaging, film and photofinishing, competition and the changes in its health care and graphic communications. strategy over the years. Fiat's Turnaround Strategies Its digital business offered digital cameras, software for organising and manipulating Industry Publishing Industry Fiat Auto, a leading player in the automobile estructuring T estructuring T estructuring T estructuring T estructuring T pictures, printer docks, and the Web-based Reference No. RTS0159P industry, has been losing market share and RR RR R EasyShare Gallery for buying and storing Year of Pub. 2007 sustaining losses since 1999. The case photos online. Since the 1990s Kodak’s Teaching Note Not Available outlines the dynamics of the global auto film-based business was a major revenue Struc.Assig. Not Available industry, Fiat’s initial growth strategy, its problems, its early initiatives to stem the generator for Kodak. However, with the Keywords advent of digital photography, its based decline and its turnaround strategy. The business suffered losses. This case study Dow Jones; Restructuring / Turnaround turnaround strategy focuses on cost cutting, discusses Kodak’s transition strategy from Strategies Case Study; Business Model; new product launches and revision of the analog to digital technology and its Brand Revamp; Restructuring exercise; company’s advertising and marketing attempts to regain market share. target audience; Business strategy; internet strategy. news Pedagogical Objectives Pedagogical Objectives • The case outlines Kodak’s rise and its • To analyse the dynamics of the global Motorola's Revival Strategy product portfolio in imaging industry auto industry • The case discusses Kodak’s new product The case study is about the revival strategy • To understand the factors which led to launches and comparative performance launched by the C.E.O. Ed Zander (Zander) decline of Fiat Auto of Motorola in 2006. The company of these products against the film based • To discuss the turnaround strategy of products designed manufactured and marketed cellular /mobile phones and was a leading Fiat which focuses on cutting cost, • It discusses the changeover strategy from US mobile player. In 2006, the company launching new products and revising the analog to digital technology and its was experiencing growth in number of company’s advertising and marketing attempts to recapture the market share. units sold and revenues as compared to the strategy. previous year but there was a decline in the Industry Auto Industry Industry Imaging profits of the company. Reference No. RTS0160P Reference No. RTS0157P Year of Pub. 2007 To address drop in the profitability of the Year of Pub. 2007 Teaching Note Not Available company, Zander was launching various Teaching Note Not Available Struc.Assig. Not Available initiatives. Zander unveiled a three-step Struc.Assig. Not Available revival plan which included rationalization Keywords Keywords of workforce - eliminating about 3500 jobs Kodak; EasyShare; Brownie camera; Fuji mostly in the middle management, thereby Fiat; Decline; revival; Sergio Marchionne; Photo Film CO.; Olympus; Nikon; Canon; reducing costs by $400 million by the end Turnaround Strategies; Automobile Polaroid; Restructuring / Turnaround of 2007. The second step required indistry; Restructuring / Turnaround Strategies Case Study; Snapfish.com; Motorola to become more selective about Strategies Case Study Maytag; Hewlett-Packard; Xerox Corp; the markets in which the company planned Cingular Wireless; Seiko Epson; NexPress enhancement in its market share. The third and final step involved new product Sony Electronics: The Turnaround development focused on consumer preferences and current market trends. Strategy The Wall Street Journal: Sony’s electronics division which Changing with the Times Pedagogical Objectives accounted for the major share of Sony’s Dow Jones’s overall performance is largely overall revenue was making losses during • An overview on changing trends in the last three years (from 2004). This was dependent on the operating performance Cellular / Mobile phone industry 10 www.ibscdc.org

due to a decrease in revenues in the audio, will be able to survive the increased • To debate on its decision to exit from

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S video and the semiconductor products of competition and tough market conditions. both the countries. I – Y G E T A R T S the company. Sony faced challenges from Industry Retail companies across different product Pedagogical Objectives categories like Apple’s iPod and also from Reference No. RTS0154K Sharp and Samsung in the LCD TV segment. • To understand the automobile market Year of Pub. 2006 Moreover, in August 2006, Dell announced in Malaysia Teaching Note Not Available Struc.Assig. Not Available a massive recall of Sony’s batteries fitted • To analyse Proton’s competitive in its laptop computers. In a turnaround positioning Keywords strategy, Sir Howard Stringer, the CEO of the company, closed the money-losing • To discuss the causes for its poor Wal-Mart; Carrefour; Tesco; Aldi; Metro divisions and undertook diversification performance AG; South Korean retail industry; German strategies through technological retail industry; Discount store; • To analyse the strategies adopted by innovations. The case gives an insight into Hypermarket; Departmental stores; Proton to overcome the challenges. Sony’s history and the challenges that it Restructuring / Turnaround Strategies Case faced from its major competitors. It also Industry Automobile Study; Supermarket; Conventional stores; discusses the strategic initiatives taken by Reference No. RTS0155K Convenience stores; E-Mart; Global retail Sir Howard Stringer in order to turn the Year of Pub. 2006 industry company around. Teaching Note Not Available Struc.Assig. Not Available Pedagogical Objectives Marvel Comics: Forward Keywords • To get a brief idea of Sony’s inception Integration into Movie-making and growth Car; Automobile; Malaysia; ASEAN (Association of Southeast Asian Nations); In April 2006, with a market-share of 43.93 • To discuss the challenges faced by Sony Restructuring / Turnaround Strategies Case percent, Marvel Comics was the leading from its competitors Study; AFTA (ASEAN Free Trade Area); publisher of comics, graphic novels and Trade; Market leader; Mitsubishi; HICOM magazines in the US. Yet, it was not the • To analyse the strategic initiatives taken (Heavy Industries Corporation of contributions from its publication sector by its CEO, Sir Howard Stringer to bring Malaysia); Assembly; Perodua; Inokom; that had helped Marvel Entertainment the company back to its growth Competition; Technology; Quality Inc., to quadruple its profits over three trajectory years to $103 million by the end of 2005. It was the licensing of its comic characters • To debate whether Sony would be able for movies that had helped the company to turnaround or not. Wal-Mart's Exit from South Korea which was on the brink of bankruptcy in Industry Consumer Electronics and Germany: What Went Wrong 1997, to achieve such a success. Reference No. RTS0156K The world’s largest retailer, Wal-Mart was Avi Arad, Chief Executive of Marvel Year of Pub. 2006 growing at a rapid pace with more than Entertainment’s Marvel Studio unit, was Teaching Note Not Available 6100 stores world wide, with net sales to a great extent, responsible for the revival Struc.Assig. Not Available reached to more than 6100 stores globally, of Marvel’s fortunes. It was under his Keywords with the net sales reached to more than leadership that the company licensed its US$ 312.4 bn for the year ended Jan 31, characters to make movies. Till 2005, the Sony; Microsoft; Apple; Samsung; Sharp; 2006. Since 1990, the retailer was pursuing company only licensed the characters to Nokia; Walkman; LCD (liquid crystal aggressive international expansion strategy film studios like Fox and Sony who made display) TV; Plasma TV; Battery recall; across the globe, but the company failed the movies and cornered most of the Restructuring / Turnaround Strategies Case miserably in Germany and Korea. Wal- profit. However, in 2006 the company Study; Dell; Trinitron; Turnaround Mart exited from the both the two country decided to foray into movie making and strategy; Playstation; Sir Howard Stringer by selling it’s under performing business was planning to set up its own independent divisions to other retail companies. film studio. Though Marvel was positive, Analysts perceived that the company analysts were skeptical of the company’s Proton: Way to Survive failed to adapt its business model to both move in this direction. the countries, failed to understand the Proton, the Malaysian national car customers of the respective country and The question is: will it succeed in its new company, had been the market leader in struggled hard to grab a significant market venture? the Malaysian automobile market since its share in competitive German and South- inception in 1983. During 2004, it Korean Retail market. This case deals in Pedagogical Objectives witnessed a rapid slip of its market share detail with why Wal-Mart failed to replicate • To understand the business model of from 74% in 1993 to 41% in 2005. its successful business model in Germany Marvel Comics Moreover, with the abolition of tariff and South Korea and its decision to exit barrier against foreign cars, Proton was from the two country was strategically • Marvel Comics business strategy of exposed to stiff competition. In 1993, the correct or not. licensing of its comic characters to members of Association of Southeast Asian movies Nations (ASEAN) agreed to cut tariffs on Pedagogical Objectives imported cars to 5% but Malaysia was the • Revival strategies of Marvel Comics exception and was allowed to cut tariff rate • To understand the retail market both in through Marvel Studio unit. Germany and South Korea to 20% in 2005 and to 0-5% in 2007. In Industry Entertainment Industry 2005, The ASEAN Free Trade Agreement • To discuss about Wal-Mart’s strategic Reference No. RTS0153B (AFTA) was promulgated, making Proton initiatives Year of Pub. 2006 vulnerable to foreign competition. This Teaching Note Not Available case deals with the challenges facing Proton • To analyse Wal-Mart’s failure in both Struc.Assig. Not Available and tries to investigate whether Proton the countries 11 www.ibscdc.org Keywords its image get tarnished? Could they turn Pedagogical Objectives around and run their stores as an on going Marvel Entertainment Inc.; Comics; Avi concern after emerging from its bankrupt • To understand Volkswagen’s entry into Arad; movies; The Hulk; Spider-Man; state? China and its subsequent growth in the bankruptcy; DC Comics; Perelman; market characters; licensing; production; Restructuring / Turnaround Strategies Case Pedagogical Objectives • To study the competition in the Chinese market Study; distribution; marketing; Blade • To understand the law that operates for retail bankruptcies in the US • To analyse Volkswagen’s restructuring measures and its strategy to face the • To understand how competition and competition Winn-Dixie Stores, Inc: Will it be complacency could lead to a bankruptcy able to Turnaround? • To analyse whether Volkswagen would • To analyse how to overcome the vagaries succeed in regaining its position in China. Commercial bankruptcies could have a big of retail bankruptcy and devastating impact on an economy as Industry Automobile • To comprehend financial, personnel, a lot of money is at stake. In recent years, Reference No. RTS0151B planning and strategies required during urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies several high-profile corporations like Year of Pub. 2007 bankruptcy. Enron, WorldCom and the like have filed Teaching Note Not Available for bankruptcy. Businesses accounted for Industry Retail-Grocery Struc.Assig. Not Available about 2% of all bankruptcy filings in the Reference No. RTS0152B Keywords US in 2005.In the retail industry 10 Year of Pub. 2007 companies in the US filed for bankruptcy Teaching Note Available China Automobile Industry; SW in 2005, the same year that Winn-Dixie a Struc.Assig. Available performance; Restructuring / Turnaround grocery store chain filed for bankruptcy. Strategies Case Study; FAW-VW Kmart another grocery store in 2002 filed Keywords Performance; Marketing programme; for bankruptcy. What is of significance of USA; Retail; Grocery; Bankruptcy; Strategy of Expansion; Training of local estructuring T estructuring T estructuring T estructuring T estructuring T Kmart’s bankruptcy was that firstly they Restructuring / Turnaround Strategies Case partners; cost-reduction; Stiff competition RR RR R were able to turn around successfully and Study; Chapter11; Plan of Reorganisation; in the Chinese Automobile Industry; GM; secondly it was believed that the liquidity; Disclosure Statement; Toyota; Hyundai; Honda; Olympic bankruptcy was the biggest ever in the retail restructuring; Business Ethics; Legal; Program industry. Winn-Dixie Winn-Dixie a public limited company listed on the stock exchange was a Jacksonville- The Changing Face of MTV based grocery store chain with 920 stores Volkswagen: Turnaround in in eight southeastern states of the US and In the early 21st century, MTV (Music China? the Bahamas. On February 21st 2005, the Television), a popular cable channel, faced company filed for Bankruptcy under In the 1980s, the open door policy of the threats from new entertainment options chapter 11 in the U.S. Winn-Dixie was Chinese government and the large market like online videos, podcasting and do-it- driven to file for bankruptcy as it fell back potential for the passenger car business in yourself music mixes. These new forms of on its payments, which kept mounting and China encouraged the international entertainment easily lured away young the company reached a stage when they automakers to invest in the Chinese audience of MTV. After witnessing the loss just could not afford to take it forward automobile industry. Volkswagen was the of viewers, MTV realised the need to hold financially. The company filed to help first company which entered the Chinese its audience. To make use of the growing reorganize itself, improve its finances, market and dominated the market by using popularity of digital entertainment and to reduce expenses and decide on how to use its most advanced manufacturing increase its audience, MTV decided to its assets to make its stores more techniques, product technologies and high transform itself to the needs of the digital productive. Under US bankruptcy laws, the quality product lineup. In 2001, China’s age. company was allowed to function as it entry into the World Trade Organization As a major step in digitalizing the process, normally would, with a specified time limit (WTO), opened a gateway for a huge influx it collaborated with Microsoft in creating to file what was called a ‘Plan of re- of new car imports and led to a greater MTV Urge, to cater to the on-line music organization’. If the plan was not filed competition in the Chinese car market. In download market. It also launched MTV within the time stipulated, Chapter 11 order to compete with the new wave of Flux which allowed viewers to choose the would be converted to Chapter 7 which competitive price imports, local programmes that they wanted to watch. meant that the company was deemed manufacturers reduced the price of their This helped MTV to integrate the insolvent. vehicles. Price cuts by competitors and an traditional TV channel with the internet. The events of the case happened in 2005/ increasing number of available models in For wider distribution of its content, MTV the market posed a challenge for the 06, when competition in the supermarket also forged alliances with mobile phone market leader, Volkswagen, in China. In grocery retail industry was at its peak. companies like Vodafone, Orange, and Every retailer was being wiped out with 2005, the market share of Volkswagen in DoCoMo. It remained to be seen whether the omnipresent Wal-Mart. China declined to less than 15% (13.6% MTV’s attempts to would raise the market share in China in 2005). To combat popularity and acceptance among the new The bankruptcy process was lengthy and competition and to regain its leading age viewers. sometimes uncertain. How did Winn-Dixie market position in China, Volkswagen cope with this difficult crisis? group adopted a strategy in 2005, to Pedagogical Objectives restructure its Chinese market. This Chapter 11 gave Winn-Dixie some strategy was named “Olympic Program”, • To understand the emerging breathing space but what strategies need as it would get over in 2007, the same year entertainment options the company deploy to successfully emerge that the Chinese were to host the from its bankrupt state? What would be Olympics. Would Volkswagen succeed? • To study MTV’s growth over the years the perceptions of its customers? Would and its strategies to capture new markets 12 www.ibscdc.org

• To analyse the competitive threat posed Kodak: Rewriting Its Film Destiny? at attractive prices. More importantly, in

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S by the new age digital entertainment recent years, various ‘fast-fashion’ brands I – Y G E T A R T S options to MTV Kodak was slowly burning its bridge and were making strong inroads into the UK was mutating from analog to digital business and French markets. Shoppers wanted to • To examine the strategies of MTV to since 2000. Kodak was no longer the wear what the ‘stars’ wore, and some fast- adapt to the changing environment. market leader in film and cameras and the fashion brands like ‘Zara’ and ‘Hennes & entry of digital cameras made most of Industry Entertainment-Music Mauritz’ (H&M), churned out fashionable Kodak’s traditional products obsolete. Reference No. RTS0150B and trendy, cut-price copies of catwalk Kodak was losing millions and selling off Year of Pub. 2007 pieces at lightning speed – in less than two assets to repay its debts and to fund its Teaching Note Not Available to four weeks after conception (hence called digital business. Will Kodak regain its lost Struc.Assig. Not Available ‘fast-fashion’ brands). Also, with the glory in the photography industry? Or will complete phasing out of the Multi-fiber Keywords Kodak be just another page in the book of Agreement from January 1, 2005, corporate history? This case details the MTV; MTV Urge; MTV Flux; MySpace; premium brands like those of Gap, became circumstances that led to Kodak’s forced more vulnerable to low cost imports from MTVN; MTV Overdrive; VH1; Viacom; transition to digital business, the problems Restructuring / Turnaround Strategies Case developing countries. In this context, some Kodak was facing and its strategies to get analysts opined that Gap should revise its Study; Atom Entertainment; Microsoft; back to the perch where it once was. Neopets; Vodafone; Nickelodeon; MTV production, distribution and strategies so digitalization process; Judy McGrath as to come up with trendier and cost Pedagogical Objectives effective styles at a very fast pace. At the same time, others pointed out that Gap • To discuss about the US camera market could break free of low-cost competition Snags in Wendy's • To understand the market performance by coming up with well-differentiated ‘pinch-hitting styles’ along with good In 2005, the fast food industry in the US of Kodak, its competitive strategy and quality and pricing, so as to establish its witnessed 5% increase over that of the various threats to it brand reputation. This case highlights Gap’s previous year. However, due to ineffective • To assess the future of Kodak. evolution, its sales decline during 2005- ads and stiff competition, Wendy’s incurred 2006 - mainly in Europe, the company’s a loss of $29.1 million. Wendy’s was the Industry Photography/Digital Camera response, the further threats that it was third largest burger chain in the world after Reference No. RTS0148B faced with and analysts’ views and opinions McDonald’s and Burger King. Since 2002, Year of Pub. 2006 regarding the same. due to the price war between McDonald’s Teaching Note Not Available and Burger King and the death of Dave Struc.Assig. Not Available Thomas, the founder of Wendy’s, it Pedagogical Objectives Keywords witnessed a decline in its market share. • To analyse the competition in the After reviewing the market condition, the Turnaround; Diversification; Kodak; digital Apparel industry worldwide and in company came out with a turnaround plan. camera segment; Eastman Kodak; Europe Wendy’s decided to reinvigorate its core Restructuring / Turnaround Strategies Case products and to improve its service. It also Study; US Camera Market; Film Sales; Fuji; • To discuss about various factor planned to cut overhead costs by $100 Camera Phones; CMOS; Cannibalization; contributed to decline of Gap Inc and its million. With McDonald’s introducing new Competitive Strategy; Sony; Marketing; production, distribution and strategies. products, analysts were skeptical about OLED; PhotoCD; Antonio Perez Industry Apparel Wendy’s revamping plan. Would Wendy’s Reference No. RTS0147B succeed in its endevors? Year of Pub. 2006 Gap Inc.’s Declining Apparel Teaching Note Not Available Pedagogical Objectives Sales in Europe: Style or Struc.Assig. Not Available • To understand the fast food industry in Substance? Keywords US Gap Inc., the US-based global clothing Gap; Fashion Industry; Fast-fashion Brands; • To understand Wendy’s growth in US retailer, had faced dwindling sales over the Restructuring / Turnaround Strategies Case period 1999-2002. While closing Study; Inditex Zara; Multi-fiber Agreement; • To understand the challenges of the fast underperforming stores, reducing excess food industry in US Clothing and Accessories; Apparels; inventory, etc., led to a temporary Readymade Garments; Retailer Brands; • To analyse whether Wendy’s turn around turnaround in 2003, sales declined once Competition; Positioning; Fashion and plan work. gain during the subsequent years. During Styles the fiscal year ending January 2006, Gap’s Industry Fast Food Industry global sales fell by 1.5%, while the plunge Reference No. RTS0149B was even sharper at 6.1% in its two Year of Pub. 2006 European markets, Britain and France. The Dell Inc: Time to Discard its Direct Teaching Note Not Available company identified that having an Selling Model? Struc.Assig. Not Available ‘American look’ was the foremost reason Dell Inc., the world’s largest computer behind the Europeans’ disinterest in its Keywords manufacturer achieved revenue of $55.9 apparel. Hence, Gap Inc. aimed to add some billion (by January 2006) and it set the Origin of Wendy; System wide sales of local flavor to its European business, by target of $80 billion revenue world-wide Wendy's; Advertising awareness; Market establishing a design house in London. by 2010.Michael Dell’s innovative low- share of Wendy's; Quality score of leading However, analysts judged it as an inadequate cost, direct-sales strategy had been burger chain; Restructuring / Turnaround solution to the company’s problems. Gap successful in allowing his company to sell Strategies Case Study; Wendy's sales (2000- was facing enormous competition from computers at lesser cost than its rivals. 2005); Challenges; Competitors; Next supermarket chains like Wal-Mart and Dell held a leading 18.2% (in FY 2005-06) Chapter of Wendy's; Wendy's turnaround Tesco, which offered good quality clothing share of the world PC (personal computer) plan; Moving ahead 13 www.ibscdc.org market and grew much faster than intensity performance culture, and social operations with its key customer segment, competitors. obligations were contributing to their and it ends with a debate whether Yahoo’s dismal financial performance. restructuring strategy would work in its However, according to the industry sources, favor? it was the fourth time (Q4 of FY2005-06) The case highlights the trials and Dell said the company could not achieve tribulations of MAS and efforts of Jala to quarterly earnings or sales forecast since improve efficiency and capabilities and Pedagogical Objectives the beginning of financial year 2005.Its turnaround the airline to profitability. • To analyse the significance of corporate stock price decreased by nearly 10% to restructuring strategy and performance $19.91, the lowest in five years (FY 2001 Pedagogical Objectives of an SBU - FY2006) which pushed down the stock prices of other computer companies • To discuss the role of government in • To examine the role of leadership role bringing down NASDAQ to a 14-month Malaysian Airlines System in the change management. low. In many fast-developing markets, • To understand the importance of Industry Internet Services including India and China, Dell’s market management efficiency in the Reference No. RTS0144A share had increased marginally over the performance of a company Year of Pub. 2006 past years (Up to 2005). In desktop and urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies Teaching Note Available • To discuss and understand the turnaround notebook PCs segment, which contributed Struc.Assig. Not Available 80% of sales world over, PC sales for Dell strategies. had slowed down. Keywords Industry Aviation Repeated missing of targets, declining sales Reference No. RTS0145A Corporate restructuring; Reorganization; and decreasing share prices led industry Year of Pub. 2006 Audience group; Advertisers & Publisher analysts to raise questions about the business Teaching Note Not Available group; Technology Group; Strategy; Google model followed by Dell Inc. Was the direct- Struc.Assig. Not Available Inc.; Restructuring / Turnaround Strategies sales model struggling for survival? Stock Case Study; Share Price; YouTube; exchange of U.S.A. Keywords MySpace; Social Networking Websites; estructuring T estructuring T estructuring T estructuring T estructuring T Malaysia Airline System (MAS); Business Search Engine industry; Web Portals RR RR R Pedagogical Objectives Turnaround Plan (BTP); Idris Jala; Management Restructuring; Cost • To understand how Dell had achieved Reduction; Strategy Overhaul; growth through its unique business model Alan Mullaly, veteran from Restructuring / Turnaround Strategies Case Boeing: Can he turn Ford Study; Schedule Optimization and Airline • To understand the supply chain process around? in Dell Revenue System (SOARS); Mutual Separation Scheme (MSS); Financial One of the ‘Big Three’ auto-makers in US, • To understand the challenges to the Process Exchange System (FPX); Ford Motor Company, manufactured and direct-selling model Competitive Scenario; Government distributed automobiles in 200 markets • To analyse the future of the model. Policy; AirAsia; Low Cost Carriers; across six continents. In August 2006, the Penerbangan Malaysia Berhad (PMB); sales in Ford’s home market, witnessed Industry Personal Computer Industry Kaula Lampur International Airport further fall compared to the previous year Reference No. RTS0146B (KLIA); Turnaround strategy; Fuel prices and the losses were $1.3 billion (£680 Year of Pub. 2006 million) in the first half of 2006. The US Teaching Note Available sales decreased by 12% in August 2006 due Struc.Assig. Available Corportate Restructuirng at to sharp rise in petrol prices in the US. Ford announced its second restructuring Keywords Yahoo! Inc. plan in January 2006, entitled "The Way Dell; Direct sales model; Restructuring / Yahoo! Inc., a leading global internet Forward". Turnaround Strategies Case Study; business service provider, offered online products Bill Ford, the great grand son of Henry model; Michael Dell; Supply chain; and services besides offering a full range of Ford stepped down as the CEO in September Challenges; Customer Centric tools and marketing solutions for 2006, and announced Alan Mullaly, a businesses to connect with internet users veteran from aircraft manufacturing around the world. Its total revenue was industry as the CEO. Since the time Bill $6.256 billion and it had around 11000 of Malaysian Airlines: A Turnaround Ford took up his job as CEO at Ford Motor total workforce in 2006. Strategy Company (FMC) in 2001, he was trying Google was a proven leader in search engine to get successful auto industry veterans like Malaysian Airlines System (MAS), industry by 2006. With emergence of the Renault-Nissan CEO Carlos Ghosn and incorporated in 1937, was one among the social networking media such as MySpace DaimlerChrysler Chairman Dieter Zetsche only four to be awarded 5–star rating by and YouTube, Yahoo! was facing a to take up his position as he felt he was Skytrax. MAS was characterized by tremendous pressure in its growth not the right person. Unable to get either government intervention and control. Due initiatives. Yahoo! was suffering from an of them, Bill Ford looked outside the to this, fares charged in Malaysia were the identity crisis as a result of no clear focus industry to choose right leader for his ailing lowest in the region. Foreign airlines were or strategy. Amidst the crisis and after family business. The decision raised a unable to compete at such a low fare which witnessing a decrease in quarterly profits question in the industry - Can a ‘non-car’ adversely affected the overall industry and by 38% to $158 million (£84.4 million) guy fix FMC? also the profits of MAS. Moreover, rising and share price decrease of 2.1%, to The case aims at discussing the challenges fuel prices and poor management led to $26.86. Yahoo decided to undertake the that lie ahead for Alan Mullaly to do his losses being incurred by the airline. Idris corporate restructuring initiative. Jala was appointed as MD and CEO to job at Ford and discuss the pros and corns overhaul the MAS operations. Poor Case details Yahoo’s reorganization of its of this decision taken by FMC. pricing, rising cost structure, mismatch structure and management to align its fleet, weak operational performance, low- 14 www.ibscdc.org

Pedagogical Objectives Keywords Business; Brand; Revival; Non-core

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S Brands; Competitive Advantage; Global I – Y G E T A R T S • To discuss the Ford Motors Company as Kraft Foods Inc.; Packaged food industry; advantaged markets; Restructuring / one of the ‘big three’ auto giants in US Altria Group of Companies; Spin-off; Turnaround Strategies Case Study; Global Turnaround plan; Irene Rosenfeld; Roger Confectionery Industry; Global Beverage • To understand the strategies used by Ford Deromedi; Rrestructuring; Restructuring / Motors for restructuring during crisis Industry; US Beverages Industry; Coca Turnaround Strategies Case Study; Cola; Pepsi; Nestle; Chocolate; Candy; • To understand importance of new Competitive strategies; managing brand Gum Markets; Carbonated Soft Drinks leadership in a family-owned company portfolio; cost reduction; acquisitions; focused portfolio; declining financial • To study the role of leadership in a performance turnaround of a company. AOL: The Strategic Shift, Will it

Industry Automobile Payoff Reference No. RTS0143A Corporate Restructuring at US based online service provider, AOL, had Year of Pub. 2006 Cadbury Schweppes: Splitting US been the biggest service provider of the Teaching Note Not Available Beverages and Confectionery world. Struc.Assig. Not Available In March, 2007 Cadbury Schweppes, the Traditionally, providing internet access to Keywords largest confectionary business in the world the paid subscribers had been the core Ford Motor Company; Bill Ford; Henry announced its decision to split its US business of AOL. However, over the time, Ford; Restructuring / Turnaround Strategies beverages business, which owned famous due to drastic shift towards broadband from Case Study; Alan Mullaly; Aircraft Veteran; brands such as Dr Pepper and Canada Dry, dial-up system and competition from free Non-car guy; Leadership; Strategic from the rest of the Cadbury Schweppes. service providers AOL had been invariably management, turnaround; 2006 Crisis; The company had been under increasing losing its paying subscribers. pressure to split its business. The move, Boeing; Challenges; Way Forward; To arrest its declining core business, on many analysts believed had come under a Restructuring; Big Three; Leader 2nd August, 2006, AOL, announced to strong push from the Nelson Peltz, a US reorganize its subscription-based business activist investor, who in March 2007 model and change it to one supported by acquired almost 3% of the company’s advertisements. AOL repackaged itself, Kraft Foods Spin-Off: Will it help its share. Further the company acknowledging apart from the core business, as a free, Turnaround? the strong portfolio of brands for its advertising supported web destination. confectionary business intended to revert On June 26 2006, Kraft Foods Inc., (Kraft) Nevertheless, to execute this strategic to its origins as a core confectionary the world’s second-largest consumer shift, AOL had to take restructuring route company in the global market. packaged-foods Company after Nestle and lay-off around quarter of its employees announced the appointment of Irene Although the strategic rationale was still around the world. But then AOL chief Rosenfeld, as the new chief executive officer misty, the split certainly would make the Jonathan Miller who brought the strategic replacing Roger Deromedi. Irene de-merged independent Cadbury shift was replaced by NBC veteran Randy previously was the chairman and chief Schweppes US beverages, an approximate Falco just three months after the executive officer at Frito-Lay, a division £7.0 billion division, the third largest introduction of new strategy. The case of PepsiCo. contender in the US soft drinks market discusses the strategic shift and challenges after Coca-Cola and PepsiCo. The twin- ahead for AOL. On January 31 2007, Kraft’s parent and track approach had a strong reaction from 88% stake owner Altria Group Inc., one of the credit rating agencies as it apparently the world’s famous tobacco corporations, Pedagogical Objectives expressed its intentions to downgrade announced the long awaited spin-off of its Cadbury Schweppes ratings. The case ends • To understand the concept and subsidiary Kraft, which would be completed on a debate whether the decision to split challenges of strategic shift by March 30 2007. It was an initial step of beverage business would prove a right one on-going restructuring exercise for creating • To analyse corporate restructuring at for Cadbury. shareholder value. On February 20 AOL 2007,Kraft announced a new phase of its Pedagogical Objectives • To understand the rule of leadership in turnaround plan to revitalize its falling strategic shift and corporate sales. • Understanding Corporate Restructuring restructuring. The case details about how Kraft will utilize Strategies Industry Internet Services its spin-off and various opportunities and • Discuss the Splitting off as a way of Reference No. RTS0140A challenges for a successful turnaround. restructuring. Year of Pub. 2007 Teaching Note Not Available Industry Confectionery & Beverages Pedagogical Objectives Struc.Assig. Not Available Reference No. RTS0141A • To understand the corporate spin-offs Year of Pub. 2007 Keywords and its impacts Teaching Note Available Struc.Assig. Available AOL; Internet Service Provider (ISP); • To study the challenges for a turnaround Business Model; Strategic Shift; with new leadership Keywords Restructuring; Lay-offs; Restructuring / Turnaround Strategies Case Study; • To understand the corporate Cadbury Schweppes; Corporate Leadership Change; Jonathan Miller; Randy restructuring. Restructuring; Business Portfolio Falco; Quantum Computer Services (QCS); Management; Strategic Business Units; Industry Packaged-Food Time Warner; Repositioning; Change in Business Acquisitions and Disposals; Reference No. RTS0142A Business Model; Challenges of Strategic Business Strategy; Inorganic Growth; Year of Pub. 2007 Shift; Competition Organic Growth; Spin-off Strategy; Core Teaching Note Not Available Struc.Assig. Not Available 15 www.ibscdc.org Carrefour S.A. - Jose Luis Duran's Pedagogical Objectives radience; Charlie perfume; Mitchum; Turnaround Strategies Almay; L'oreal; Cosmaceuticals; To understand Colourstay; Cover girl Carrefour S.A. is the world's leading retail • The concepts associated with business supermarket chain. The company spans a organisation of financial services wide network of hypermarkets, companies supermarkets, hard discounters, Volkswagens Turnaround convenience stores and Cash & Cary outlets • The issues related to the leadership styles Strategies of the CEOs across 30 nations. France gives Carrefour Volkswagen (VW), an automobile nearly 50% of its revenues. But after it • The issues related to legal and manufacturer based in Wolfsburg, Germany merged with Promodes in 1999, Carrefour's governance problems faced by a is a part of VW Group, one of the world’s sales started stumbling. Its domestic market, company four largest car producers. The group France, became its biggest source of trouble consisted of well known brands like Audi, as competitors ate into its market share. • The concepts associated with employee Seat, Skoda, Lamborghini, Bentley and Till 2005, its sales went through a series of morale and motivation. Bugatti. ups and downs. Carrefour's directors woke • The concepts associated with urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies up to this sales chaos. And, in their plans to Since 2001, the company suffered losses reorder the management, they promoted decentralisation of authority and in the North American market. In 2005, Jose Luis Duran as the new CEO. decision making VW’s sales fell sharply leading to a loss of • he pros and cons of revival initiatives roughly $1 billion for its operations in the Pedagogical Objectives launched by Morgan Stanley’s new CEO (United States) US and Canada. Its sales John Mack fell from 356.000 units to 224.195 units. • To analyse the factors responsible for By 2005, its models were at the bottom of the declining fortunes of Carrefour Industry Financial Services Industry Consumer Reports and J.D. Power Reference No. RTS0138P reliability rankings. This case study • To understand the strategies undertaken Year of Pub. 2006 discusses the reasons behind VW’s losses by the new CEO, to turn the fortunes of estructuring T estructuring T

estructuring T Teaching Note Available estructuring T estructuring T and its attempts for a turnaround. Carrefour around RR RR R Struc.Assig. Not Available • To discuss whether Carrefour would be Keywords Pedagogical Objectives able to regain its lost market share, by beating its competitors. John Mack; Dean witter; Philip Puurcell; • To understand the automobile industry Restructuring / Turnaround Strategies Case scenario in the US Industry Retail Industry Study; investment banking; equity Reference No. RTS0139 • To discuss Volkswagen’s strategy to make underwriting; retail brokage; asset Year of Pub. 2006 a turnaround. management Teaching Note Not Available Industry Auto Industry Struc.Assig. Not Available Reference No. RTS0136P Keywords Year of Pub. 2006 Turning Around Revlon Teaching Note Not Available Hypermarkets; Restructuring / Turnaround Revlon is a leading manufacturer of Struc.Assig. Not Available Strategies Case Study; Supermarkets; cosmetics, skin care, fragrance and personal Keywords Convenience stores; Cash & Carry; Wal- care products based in the US. It is the Mart; Tesco; Brands; Auchan; Casino; E. third largest cosmetic company in the Audi; Seat; Skoda; Jetta; Restructuring / Leclerc; Declining sales of Carrefour; world, and owns global cosmetic brands like Turnaround Strategies Case Study; Passat; Pricing strategy in retail industry Revlon, Flex Almay, Ultima, Vital Phaeton; Golf; project M; JD power survey Radiance, Charlie and Mitchum. Since 1998, Revlon had been struggling to post a The Turnaround of Morgan profit. It was unable to hold its ground in Ahold: The Road to Recovery Stanley the face of intense competition and faced major setbacks in its core North American Royal Ahold NV, the fourth-largest grocery In 2005, the $52 billion – Morgan Stanley market. This case study discusses the retailer in the world, faced challenges since was among the largest financial services reasons behind Revlon’s losses, rising 2003, due to an accounting scandal that companies in the world. It was also the competition in the cosmetic market and almost made the company bankrupt. In 30th largest U.S. corporation with 53,760 its attempts to make a comeback. late 2003, Anders Moberg, the chief employees across the globe. Morgan executive officer of the company, Stanley was popularly called the ‘white Pedagogical Objectives undertook a three-year finance and shoe’ investment bank due to its strategy plan, termed ‘road to recovery’, association with major corporations and • To understand the global cosmetic to restore its financial strength. In wealthy individuals. industry scenario accordance with the plan, Ahold was able Since 2005, Morgan Stanley, once the • To discuss Revlon’s turnaround strategy. to cut costs and became financially solvent leader in investment banking and public by the end of 2005. stock offering underwritings was losing its Industry Cosmetic Industry Reference No. RTS0137P The case study highlights the strategies leadership position to other US financial adopted by Ahold as a part of its revival services firms. CEO Philip Purcell (Purcell) Year of Pub. 2006 Teaching Note Not Available plan, to recuperate from its financial had been asked to leave Morgan Stanley downturn. under a cloud of corporate mis-governance. Struc.Assig. Not Available John Mack was appointed as the new CEO Keywords Pedagogical Objectives in June 2005.The case talks about various initiatives launched by Mack to turnaround Fiex Almay; Ultima; Restructuring / • To discuss the turnaround strategies of the company and improve its image. Turnaround Strategies Case Study; Vital Ahold 16 www.ibscdc.org

• To analyse financial position of Ahold • To understand the concept of strategic • To discuss the company’s decision to

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S before and after the accounting scandal concentration and divestment with enter into consumer electronics segment, I – Y G E T A R T S reference to D&B. strategy adopted by the company and • To understand the accounting norms apprehension among the analysts accepted in the industry Industry Credit Reporting & Industry Information • To discuss whether the company’s • To discuss the control mechanisms Reference No. RTS0134K decision to enter into the consumer required to maintain an optimum balance Year of Pub. 2006 electronics market will help the in the company Teaching Note Not Available company to turnaround or not. • To understand strategic concentration Struc.Assig. Not Available Industry Personal Computers and divestment of resources to maximise Keywords Reference No. RTS0133K revenue. Year of Pub. 2006 D&B; A.Z.Loren; Credit reporting; EPS; Teaching Note Not Available Industry Grocery, Retail Turnaround; Reengineering. Reference No. RTS0135K Struc.Assig. Not Available Year of Pub. 2006 Keywords Teaching Note Not Available Struc.Assign. Not Available Dell’s Turnaround Strategy Dell; Turnaround Strategy; Direct to order; JIT; Apple Computers. Keywords During the late 1980s, Michael Dell and his company, Dell Inc., revolutionised the Ahold; Road to recovery; Liquidity crisis; global PC market by the latter’s ‘Dell Bankruptcy. Direct Business Model’, where it Viacom – Restructuring For eliminated all kinds of middlemen and Growth directly supplied customised PCs to the D&B: The Turnaround Strategies customers. For the last two decades, the Since early 2004, Viacom Inc., the third company continued to be the market leader largest media company in the world, Dun & Bradstreet (D&B), the $1.4 billion in the small household PC segment. exhibited a massive drop in share prices, company by 2005, dealt with global business However, after enjoying the supremacy for with growth investors being discouraged by data and provided business information, tools, two decades since 2005, it started facing presence of slow-growth businesses like and insights about various companies. competition. The company's revenue and broadcast TV and radio, and value Customers bought D&B products, such as profit failed to match the expectations. investors being put-off by high risk business information reports and business to Besides, it had to write off US$450 million business of cable networks. In order to business marketing lists, to improve cash (mn) for the installation of defective restore growth in the company, Sumner flows, mitigate risks and increase revenue. capacitors in its computers and opt for M. Redstone, the chairman and CEO of But, during the 1980s and 1990s, a series of workforce alignment. The analysts were Viacom decided to unlock value and split acquisitions and divestitures diminished the thus,, sceptical about the future of the the company into a high-growth, high-risk performance and brand value of the company organisation. The company was termed as division and a slow-growth division. and by the late 1990s, it could no longer less innovative than its competitors as it The case, while highlighting on the focus on its core performance areas. In 1999, failed to launch innovative products in the different divisions of Viacom, also focuses D&B failed to meet its revenue and earning market. To be on the growth trajectory on the restructuring of Viacom into two expectations, as a result of which, again, it planned to enter into the consumer separate publicly traded companies. shareholders were furious, leading to the electronics segment. But the analysts were resignation of the CEO, Volney Taylor. The doubtful about the success of Dell’s ‘Direct Pedagogical Objectives company had become an under-performer Business Model’ in the consumer with under-leveraged assets. In May 2000, electronics segment. The case deals with • To understand the dynamics of business Allan Z. Loren joined D&B as the CEO. Dell’s business model and its success in the restructuring process Under Loren’s leadership, D&B devised a consumer electronics segment. It provides strategy to determine ways in which it could a scope for discussing whether the • To critically analyse the business model reclaim its position in the market place. Soon turnaround strategy of Dell would be of Viacom and its sustainability in the the company adopted a business model successful and about the scenario of global long-run designed to increase its investments in its PC industry and global consumer • To understand how revenue core competence areas. Further, it also sought electronics market. maximisation is achieved by unlocking to re-position itself for enhanced growth. value Savings from re-structuring were re-invested, Pedagogical Objectives in order to expand the business and raise its • To understand the optimum mix of Earnings Per Share (EPS). D&B also created • To discuss the idea of ‘Direct Business business portfolio. a new culture of leadership, which Loren Model’ which revolutionised the global regarded as crucial, for sustaining any business. PC market by eliminating all kinds of Industry Television cable pay and The Case discussed D&B’s crisis and its middleman and by supplying customised Broadcast Network turnaround while raising a question of its PCs to customers Reference No. RTS0132K sustainability. Year of Pub. 2005 • To discuss in details about trends and Teaching Note Not Available patterns of US and global PC industry Struc.Assign. Not Available Pedagogical Objectives • To discuss the strategy adopted by Dell Keywords • To understand the concept of revenue to become the market leader in driver household PC segment Viacom; Restructuring; Media Industry; CBS. • To analyse the business model with • To discuss how the company’s market specific reference to D&B share was eroded and the company • To understand and discuss turnaround started to face the heat due to aggressive strategies marketing strategy of its competitors 17 www.ibscdc.org Ford: Restructuring US Operations Pedagogical Objectives Teaching Note Not Available Struc.Assig. Not Available The North American operations of Ford • To discuss the challenges faced by Intel Motor Company (Ford), the leading Keywords • To discuss the restructuring process automobile manufacturer in the world, A V Birla Group; Corporate Restructuring; exhibited a sharp decline in profitability in • To understand the chip industry Birla Group; Turnaround Strategy. 2005 with a decrease in production and factory usage rate. The total number of • To analyse the strategic initiatives taken Ford models sold in the US till November by Intel. 2005, was 2.7 million only, compared to 4 Industry Microprocessor & DSP Should Halliburton Drop its KBR million in 1995. Ford models were losing Reference No. RTS0130K Unit? market share while competing with its Year of Pub. 2006 Japanese counterparts, like Honda, Nissan KBR, the engineering and construction unit Teaching Note Not Available of Halliburton was formed as a series of and Toyota. Its profit margins were further Struc.Assig. Not Available depleted by the huge burden of legacy costs mergers between companies like Dresser and pension obligations, due to its contract Keywords industries, Brown & Root, and MW with the United Auto Workers Union. Kellogg. KBR enjoyed leadership status in urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies Intel; Micro processor; Semiconductor; many areas of its operations. But the The case highlights the restructuring Pentium; AMD. lackluster financial performance of KBR initiatives undertaken by Ford, particularly along with different controversies resulted the various cost-cutting measures, as a part in Halliburton share trading much below of its revival plan to recuperate from its A.V Birla Group: Corporate expectations. The case analysed lost position in the automobile industry. Restructuring and Growth operational as well as financial synergies among the different units of Halliburton Pedagogical Objectives In October 1995, Kumar Mangalam Birla as well as the trade off between the positives took charge of the INR 7, 200 crore AV and negatives of KBR. The case concluded • To understand the dynamics of the US Birla Group, after the death of his father with an open ended question; on whether estructuring T estructuring T estructuring T estructuring T estructuring T automobile industry Aditya Birla. Birla Junior inherited India's Halliburton should divest KBR or function RR RR R • To discuss the revival strategies of Ford third-largest Indian business group, with a as a single entity? to improve its profitability in the US dominant presence in diverse businesses. He was just 27 at the time. Analysts were Pedagogical objectives • To understand the impact of legacy costs sceptical about the future of the group as in the business the 27 year old Kumar Birla had little • To understand the concept of strategic experience. But the performance of the alternatives with reference to Halliburton • To discuss the transformation of a group has proved everyone wrong. After and KBR traditional company like Ford and the his takeover, the group turnover has grown subsequent change in the product • To discuss the tricks to analyse political fourfold. Kumar Birla has revamped the portfolio in accordance to the changing environment and use the best of business portfolio and started looking market demands in the US. companies benefit. seriously at sunrise businesses like telecom, Industry Auto Manufacturing branded apparel, software, ITES (IT Industry Commercial and heavy Reference No. RTS0131K Enabled Services) and insurance through construction Year of Pub. 2006 joint ventures and acquisitions. The group Reference No. RTS0128K Teaching Note Not Available has also consolidated its competitive Year of Pub. 2006 Struc.Assign. Not Available position in traditional businesses such as Teaching Note Not Available cement, aluminium, copper, VSF (Viscose Struc.Assig. Not Available Keywords Stable Fibre) and carbon black. Will the Keywords Ford; Employee separation plan; junior Birla be able to manage and Restructuring; Cost-Cutting; US automobile consolidate the old businesses, and at the Halliburton; KBR; Cheney; Iraq problem; market. same time transform the new economy Petrobus. businesses from question marks into stars?

Pedagogical Objectives Intel Chipped to Restructure Reinventing Hewlett-Packard • To discuss corporate restructuring as a with Mark Hurd In the beginning of 2006, Intel, the world's growth strategy largest chip maker, had started facing Hewlett-Packard’s new CEO and president, problems due to its declining market share. • To discuss how companies perform the Mark Hurd took charge in April 2005, During this period, the sale of its restructuring exercises replacing the ousted Carleton Fiorina. microprocessors, chipsets, motherboard With Hurd HP was looking for a solid, staid • To discuss when companies plan to do and flash memory had declined in all the personality who would take the company the corporate restructuring exercises major geographic segments. Moreover, the forward by bringing back lost market share company faced stiff competition from • To discuss how corporate restructuring in products and services, and drive the AMD. Hence, Intel planned to restructure, helps a company to grow and achieve various business units to realise their high resize and repurpose itself. The case gives success potential. The mandate given to Hurd by an insight into Intel’s history and the the board was to steer the sprawling competition that it faced from its major • To discuss the problems associated with computer and printer company into a more competitor AMD. It discusses the corporate restructuring programme. profitable and high-growth road. Industry challenges faced by Intel and the strategic Industry Conglomerate watchers wondered if Hurd’s strategies could initiatives taken by it to mitigate those Reference No. RTS0129K overcome the fallout of the $24 billion problems. Year of Pub. 2006 Compaq merger and help restructure HP to substantially improve bottom lines.

18 www.ibscdc.org

The case details HP under Fiorina, impact of Marketing – the 4Ps and application of building, financing, airframe and hangar

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S of the disastrous Compaq deal, the advent Porter’s Five Forces Model. maintenance etc., is considered as a tool I – Y G E T A R T S of Mark Hurd, and the restructuring that for growth and dominance. was put in place. It discusses the changes Pedagogical Objectives introduced by Hurd, the reorganisation of Pedagogical Objectives different units and the effect on the • To discuss Porter’s Five Forces Model company’s financial performance. through the case • The low-cost airlines industry in India in the backdrop of global LCAs • To discuss the 4Ps of the Marketing Mix Pedagogical Objectives through the case. • Challenges faced by the low-cost airlines in India • SWOT Analysis to understand HP’s Industry Traditional Toys and Games position in the business world when new Market • Survival strategies employed by them, CEO Mark Hurd took over Reference No. RTS0126C specifically on cost-cutting Year of Pub. 2006 • Evaluate Mark Hurd’s Strategy Plan for • Growth strategies adopted by them with Teaching Note Available the future. an emphasis on participating in growing Struc.Assign. Not Available ancillary trades Industry IT Keywords Reference No. RTS0127C • Analysing the future of the low-cost Year of Pub. 2006 Traditional toys and games; Mattel; airlines in India. Teaching Note Not Available Hasbro; Barbie; Video games; Bratz; Struc.Assign. Not Available Hotwheels; Fisher Price; American Girl; Kids Industry Low-cost Airlines in India Reference No. RTS0124C Keywords Getting Older Younger; Brand building; Radica Games; Kids marketing; Tickle Me Year of Pub. 2006 Hewlett-Packard; Mark Hurd; Carly Elmo; Web page design. Teaching Note Available Fiorina; Compaq; Market leadership; Struc.Assign. Not Available Printing & Imaging; IT Services; Dell; Keywords Management Strategy; UNIX; IBM; Low-Cost Airlines in India – Merger; Personal Systems Group; Low-cost Airlines; Load Factor: Cost Offshoring; Decentralise. Emerging Trends and Survival Efficiency in Low-cost Airlines; Airport Strategies Modernisation in India; Rise in ATF Cost; Rising personnel cost for Airlines; Air India’s low-cost airlines are transforming Deccan; Kingfisher Airlines; GoAir the way public have been traveling. The Mattel’s Digital Makeover Survival; Strategies of Low-cost Airlines; boom is associated with sustained economic Indigo Aircraft Leasing and Renting; E- Mattel, the largest traditional toys and growth, growth in disposable income and ticketing Inflight advertising Ancillary games manufacturer in the US was a liberalisation of Indian government’s Revenue for Low-cost Airliness. Fortune 416 company as of 2006. It had aviation policies. to its credit some of the renowned brands in the traditional toys and games markets But, as in the case of low-cost airlines world like the Barbie, Hot Wheels, Matchbox over, there are continued loss making. To Boeing – Lockheed Martin JV: and Fisher-Price to name a few. During the compensate the growth in flying seat Together to Survive new millennium the fate of Mattel, whose capacity, the low cost airlines are cutting main target customers were children, fares and have started offering lakhs of In June 2003, Lockheed Martin sued became questionable due to the change in seats at INR 1 and INR 100/-. As Boeing’s Boeing alleging that the company had their attitude toward traditional toys and Keskar had observed, offering this low fares resorted to industrial espionage in 1998 to games. Children were becoming more would benefit no one and would stop after win the EELV contract. It accused Boeing mature even at an early age due to their few eliminations and consolidations. of possessing 25,000 of its classified increased exposure to technology which documents. In July 2003, Boeing was The challenges in Indian scene are many: made them skip traditional toys and games penalised, with the Pentagon canceling $1 rising ATF cost, internal competition, in favour of CDs, iPod, videogames and billion worth of rocket launch contracts rivalry with Indian railways in short haul the not so childish products like makeup, only to award them to Lockheed. Boeing markets, shortage of trained and skilled jewellery, and body spray. To overcome was also barred from bidding for rocket manpower, increasing labour costs, this changing trend, Mattel adopted a contracts for a 20-month period which infrastructural hurdles and deficiency of number of strategies like diversifying into expired in March 2005. By May 2005, airports, airstrips etc. related and unrelated fields, introducing new both competitors in spite of pending legal technologies into its toys and launching To survive the situation resulting from these disputes between them announced the joint the kids’ version of popular consumer challenges would be to minimise the venture. In early September 2005, it was electronics. Mattel also ventured into the operating cost, hedge the fuel pricing, reported that Boeing was negotiating a World Wide Web and used the internet as a improve load factor and absorb losses for a settlement with the US. Department of channel for brand building. In spite of its period of three years. To grow and expand Justice in which it would pay up to $500 efforts the annual domestic revenues of the low-cost airlines are expected to tap million to cover the espionage issue and Mattel fluctuated and did not result in potential markets by enlarging the size of the Darleen Druyun scandal. significant top line growth. Added to these, air traveling segment by aggressive On May 2nd 2005 Boeing and Lockheed Mattel also faced challenges from the marketing, improving the ancillary Martin announced a 50:50 joint venture traditional toys and games business. revenues by in-flight marketing, selling called the United Launch Alliance (ULA) advertising spaces on board and on flight The case details the history of Mattel, the by merging the operations and production body, selling packages with tours and hotels traditional toy and game market, Mattel’s of both their government space launch along with tickets. Being part of a growing strategies during the new millennium and services. Boeing Integrated Defense technology trade related to aviation also briefs the challenges facing Mattel. Systems’ Delta IV and Lockheed Martin industry like IT service providing, The case facilitates learning of the basics Space Systems’ Atlas V were both rocket manpower hiring and training, spare 19 www.ibscdc.org launchers developed for the Evolved improve all aspects of customer base, it did not result in more profits. Net Expendable Launch Vehicle (EELV) experience. According to this plan, profits were down by 98%. It remained to programme intended to provide the United McDonald’s had revamped its menu, be seen whether McDonald’s under Eikoh States government with competitively advertising and promotions. Now Harada, President and Chief Executive priced private spaceflight and assured access McDonald’s wanted to refurbish its stores Officer, would increase sales and sustain to space. In September 2006, the Pentagon to enhance customer experience. adequate growth. renewed its support for the ULA and the McDonald’s felt that customer tastes and Federal Trade Commission (FTC) gave its preferences had changed over the years The case allows discussion on how a anti-trust clearance on October 3rd 2006. and in order to cater to their needs, the company made a turnaround successfully Operations of the new company officially store should upgrade its facilities and from loss to recovery. It also analyses the began on December 1st 2006. The case present a more trendy and modern look. strategies adopted by McDonald’s in Japan attempts to highlight the complex nature to increase revenue turnover. of the US Defense and Space launch McDonald’s was however facing problems missions and the highly competitive in implementing this plan. The franchisees Pedagogical Objectives were reluctant to invest in the makeover. market of international space launches. • To introduce to the students McDonald’s The background of the partners, the US There was also the fear of the brand losing its nostalgia. The case facilitates discussion operations in Japan urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies government, the competitors for these launch vehicles like Northrop Grumman on issues related to brand management. It • To throw light on the strategies followed and Space and situation analysis on the also provides scope for discussion on chain by McDonald’s to introduce Western fast joint venture is also presented. store and franchisee management. food culture in Japan

Pedagogical Objectives • To give an idea about the fast food Pedagogical Objectives industry in Japan • To understand the space launch market • Is the redesigning of McDonald’s stores a right strategy? • To list the various challenges faced by in US McDonald’s in Japan • To discuss Boeing’s and Lockheed • How would McDonald’s convince the estructuring T estructuring T estructuring T

estructuring T estructuring T • To detail the strategy used by Martin’s stature in space launch vehicle franchisees to adopt the store revamp? RR RR R McDonald’s to face the challenges. manufacturing • Will the new design of stores affect the McDonald’s brand. Industry Fast-food retail chain • To discuss US defence contract awarding Reference No. RTS0121C mechanism Industry Fast Food Retail Chain Year of Pub. 2006 • To understand growing competition in Reference No. RTS0122C Teaching Note Available global space launch business Year of Pub. 2006 Struc.Assign. Not Available Teaching Note Available • To understand various technologies in Struc.Assign. Not Available Keywords Boeing and Lockheed Martin’s space Keywords McDonald’s; Retailing in Japan; Retail vehicles and Chain; Fast food stores; Franchise; • To discuss the future of US space launch McDonald’s; Redesign; Retail Chain; Fast Branding; Makeover; Brand attributes Low vehicle’s market and players. food stores Plan to Win; Repositioning; price Strategy; Store Revamping; Brand Franchise; Branding Makeover; Brand Equity Target customer; Retailing. Industry Aerospace Industry in US attributes; Target customer Retailing; Brand Reference No. RTS0123C Equity; Store Revamping; Strategy. Year of Pub. 2006 Teaching Note Not Available Philips’ Strategy Shift – The Turnaround and After Struc.Assign. Not Available McDonald’s in Japan: From loss Keywords to Recovery Royal Philips Electronics of the Netherlands, one of the world’s biggest Boeing Lockheed Martin Atlas V Delta IV McDonald’s hamburgers had been part of electronics companies, and the largest in Evolution of Expendable Launch Vehicle the Japanese food cycle for 35 years. They Europe, had over the years established itself Integrated Defense systems accounted for about 65% of the domestic as a leading player in the consumer NorthropGrumman’s satellites launches hamburger market and boasted the highest electronics industry. The company Space X and Falcon rockets DoD and NASA sales in the entire restaurant industry. witnessed a slump in the late 1990s. Gerard space launch contracts FTC pproval for McDonald’s, after experiencing a bad phase Kleisterlee (Kleisterlee) who was appointed Joint venture Heavy Payload lift rockets in 2005, witnessed a robust growth in Japan the president and CEO, Royal Philips Commercial Space launch market during the second quarter of 2006. Annual Electronics in 2002 was able to turnaround Pentagon’s Role in Space joint venture sales had grown by 8.5% to US$2.8 billion, the company from its previous losses by Shavit;GSLV; H-2A; Ariane rockets DARPA the same-store sales by 10.2% and per- introducing a number of strategic changes. funding for rocket development. customer spending by 8%. Despite considerable success, Kleisterlee In 2002, McDonald’s experienced its first admitted that the company had not yet loss in 29 years, mainly due to strategic been fully transformed. Drafting plans for McDonald’s Redesigning of mistakes on the part of the management. the future, Kleisterlee wondered if the Outlets – Change for the Better? Fear of the outbreak of mad cow disease in changes he had introduced would continue Asia and deflation in Japan were some of to yield greater returns and what other McDonald’s, the world’s largest hamburger the reasons for the poor performance of strategic moves he should take, to make chain, was redesigning its stores worldwide. the company. McDonald’s had to close the company more profitable. It was the first time in 30 years that down stores which were not making profits. McDonald’s had undertaken a major This case offers scope for discussion on In 2005 it introduced the strategy of the management strategy and various revamp of its store. This initiative was in low-priced menu in order to attract continuation of the “Plan to Win” innovative management initiatives that customers and increase sales. Even though companies adopt to achieve growth. strategy, which it undertook in 2003, to this strategy yielded an increased customer 20 www.ibscdc.org

Pedagogical Objectives Profitability; Business Strategies; Sony’s Return to Glory?

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S Operational strategies; HR Strategies Rebel I – Y G E T A R T S • To discuss management strategies for attacks on Sri Lanka; Tsunami impact on Once an unassailable brand, Sony has fallen growth airline industry; Peter Hill; Low cost behind in critical product segments, such as flat-screen TVs, DVD players, and • To discuss turnaround strategies and carriers; Sri Lankan political environment; portable digital music players. Faced with measures to be taken to sustain the same. Tourism Industry. falling electronics’ prices, tough Industry Electronics sector competition from other manufacturers, Reference No. RTS0120C and increased restructuring costs, Sony is Year of Pub. 2006 SUN in 2006: Changing Business also heading for its first ever loss in a Teaching Note Not Available Model decade. In March 2005, Sony has appointed its first non Japanese CEO, Howard Struc.Assign. Not Available Sun Microsystems (Sun), a US-based Stringer, to turn the ailing company leading computer company followed a Keywords around. vertically integrated business model wherein Philips; Strategy; ‘One Philips’; Design; it provided the entire range of hardware The case outlines Sony’s rise, its decline Innovation; Turnaround strategies; and software requirements including and Stringer’s turnaround strategy. Stringer Partnership with competitors; Consumer computer chips, computers, operating mercilessly cuts costs while unifying the Electronics; Medical Equipment; Lighting; system and programming language. Sun also rank-and-file, and curbing the internal Joint Ventures; Corporate Culture; put a strong emphasis on Research and rivalry among engineers that had led to a Competition; Chinese Medical Exports; Development (R&D). The business model confusing line-up of products, and the Partnerships. had enabled Sun to maintain its lead in diminution of the once wanted brand. He innovation and deliver many technological believes that high-definition products are breakthroughs over the years. the key to Sony’s future success. He also launches a makeover of the SonyStyle.com Sri Lankan Airlines – The But since 2002, Sun had recorded losses web site and bets on electronic iPod like Turnaround Story and After for four consecutive years. To turn the books for future success. Sri Lankan Airlines, the national carrier of company around, Scott McNealy (McNealy), CEO of Sun, had launched Sri Lanka, made a record profit of Sri Pedagogical Objectives Lankan Rupees 5.6 billion in 2004 several initiatives, but the situation becoming the most profitable public sector continued to worsen. In 2005, Sun’s losses • The case traces Sony’s growth strategy organisation during the year. However, the amounted to $10.7 million on revenues of • It highlights the reasons behind its airline was in deep trouble since inception. $11 billion. stagnation Inspite of being known for its courteous The case discusses the relevance of Sun’s customer service and fairly good in-flight business model in changing face of the • It outlines Sony’s rise, its decline and facilities, the company faced many computer industry in the US. Stringer’s turnaround strategy. problems such as old fleet, high fuel costs, Industry Consumer Goods labor problems and delayed flights. Sri Pedagogical Objectives Lankan Airlines was in great need of new Reference No. RTS0117P investments to solve its problems. • To discuss the present/existing business Year of Pub. 2006 model of Sun Teaching Note Not Available Sri Lankan government decided to invite Struc.Assig. Not Available Dubai based Emirates Airlines to acquire • To compare the business models of the 30% stake in 1999. The stake was other leading US computer companies keywords increased to 43% in 2001. Emirates Airline with that of Sun Sony Corporation; Howard Stringer; was cash rich to make investments and • To discuss the relevance of Sun’s business Consumer electronics market; Turning used its expertise to bring the turnaround around Sony; Nintendo; Problems at Sony; of the Sri Lankan Airlines. The case model in the changing face of the computer industry in the US sonystyle.com; Sony Reader; Network discusses the challenges faced by Sri Lankan Walkman; Mora; iTunes; iPod. airlines and the strategies adopted by • To discuss the pros and cons of the Emirates management to make the airlines initiatives adopted by Sun to bring about profitable. The ongoing and future a change in its business model problems that might impact the airline’s Burger King: Will it regain market profitability are also discussed. Industry Software (IT) industry Share? Reference No. RTS0118P $11 billion-Burger King (BK) was also the Pedagogical Objectives Year of Pub. 2006 Teaching Note Not Available second-largest burger chain in the world • To discuss how Sri Lankan Airlines made Struc.Assig. Not Available with 11,220 outlets in 61 countries. A profits amidst lot of challenges privately-owned company, In addition to keywords its popular ‘Whopper’ sandwich, the chain • To discuss ongoing future problems that offered a variety of burgers, chicken Sun Microsystems; Software(IT) industry; may affect airline’s profitability. sandwiches, salads, and breakfast items. In Vertical business model; Strong R&D 2004, the chain enjoyed 14.2% share of Industry Automobiles emphasis; competitors namely Dell; IBM; the fast food market in the world. Reference No. RTS0119C Intel; Microsoft; Competitors’ strategies Year of Pub. 2006 and business models; Sun’s earlier strategies; BK had changed hands five times since its Teaching Note Not Available Sun’s decline; Razor and Blades (R&B) inception. The frequent change in Struc.Assign. Not Available revival strategy launched by Sun CEO Scot management and their respective strategies McNealy; Effects of R&B strategy; CEO had taken a toll on the company. BK’s Keywords change at Sun in 2006. revenue had been declining steadily since Sri Lankan Airlines; Turnaround strategies; 1999. The company had lost nine CEOs Emirates Airlines; Asian Airline industry; since 1999. In August 2004, Greg

21 www.ibscdc.org Brenneman (Greg) was appointed as the Work Culture; Streamlining Product Line; Pedagogical Objectives 10th CEO. The case discuss about Greg Time to Market; Product Development strategies to turn around the ailing Strategy; Empowering Design Department; • To discuss about how theme parks were company. Most Powerful Brand. performing in the US • To understand the background of Six Pedagogical Objectives Flags and its turnaround plan.

• To discuss the dynamics of the fast food Reinventing Samsung Industry Entertainment industry Samsung wants to become the most Reference No. RTS0113B Year of Pub. 2006 • To understand the factors leading to the powerful consumer brand in the world. The Teaching Note Available downfall of Burger King case outlines Samsung’s R&D initiatives, global marketing strategy and holistic Struc.Assig. Not Available • To discuss the attempts made by Greg to brand campaign to reinvent brand Samsung. keywords make a turnaround. Samsung has changed the processes and procedures in its design department and Amusement; Theme Park; Struggle; Industry Restaurant given its designers more power to influence Turnaround; US Amusement Park Industry; Reference No. RTS0116P urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies not just how products look but also the Marketing Strategy; Cross Promotions; Year of Pub. 2006 products’ functionality and application. Acquisition; Discounts; Credit Card Teaching Note Not Available The case traces brand Samsung’s emergence Programmes; Competition; Debt. Struc.Assig. Not Available as the world’s most powerful brand. keywords Pedagogical Objectives Whooper; Drive Thru; Take outs; Levi Strauss in the US (Part B): The Changing Management; Strategies; Greg • The case outlines Samsung’s R&D Great Turnaround Plan Benneman; Broiler; competitors; Market initiatives, global marketing strategy and Levi Strauss, the original blue jeans Share; Have it your way; Enormous holistic brand campaign to reinvent manufacturer, has been steadily losing estructuring T estructuring T estructuring T estructuring T estructuring T omelets; Morale Boosting; Service-quality brand Samsung. Samsung has changed the market share in the US. since 1996. When RR RR R good; Liquidity & IPO; Investors. processes and procedures in its design the industry trend was to move department and given its designers more manufacturing facilities to developing power to influence not just how products economies in order to save on labor costs, Rejuvenating Samsung look but also the products’ functionality Levi dragged its feet. It was also said to and application have been sloppy in terms of keeping up In 2001, Samsung is not content with being • The case traces brand Samsung’s with the latest trends in fashion and hence one of Korea’s most successful companies, lost its market leader position to Tommy or even with outsmarting its Japanese rivals. emergence as the world’s most powerful brand. Hilfiger, VF, Gap… and a whole lot of new It wants to become Korea’s first great global entrants in the industry. Part A of the case company. CEO Jong-Yong Yun (Yun) is Industry Consumer Electronics talks about this phase of Levi, from its trying to put in place international systems Reference No. RTS0114P birth. The issue here is: “How will Levi and practices to transform Samsung into a Year of Pub. 2006 stem the decline in its sales and catch up global company. Yun realises that Samsung Teaching Note Not Available with the industry trends?” can no longer succeed by gaining market Struc.Assig. Not Available share at the expense of profits. He departs In the 21st century the company has from the company’s traditional Japanese keywords initiated a series of comeback efforts aimed at recapturing its lost glory. Levi’s president business philosophy of life-time Global Branding Strategy; Global and CEO, Phil Marineau, who joined the employment and respect for seniority. Marketing; Product Design; Innovation; company in 1999, has engineered “The Samsung’s turnaround strategy is based on R&D; Restructuring; Advertising Strategy; Great LS & Co. Turnaround Plan”, to providing leading-edge, stylish products Work Culture; Streamlining Product Line; revive the company. Part B of the case that can be sold for a premium. To make Time to Market; Product Development details these efforts by Levi and tries to itself look and operate more like a Strategy; Empowering Design Department; answer the questions raised in Part A. Western-style multinational, Samsung Most Powerful Brand. opens its operations to foreigners. Yun Levi expected 2003, its 150th anniversary realises that profits in the Digital Age were year, to be a significant year in the Plan. directly linked to being first to market. But due to the declining market, deflating The case outlines Samsung’s initiatives to Six Flags: The Turnaround prices and tax return errors, the company become a global brand. Management suffered a setback in its efforts. Since then Six Flags headquartered at New York, it looks like the company is plodding on Pedagogical Objective owned and operated a chain of amusement determinedly on its comeback trail. • The case outlines Samsung’s initiatives and theme parks in the US. Since 2001, to become a global brand. the company had posted annual losses and Pedagogical Objective around $2.6 billion was lost during the Industry Consumer electronics years. It was cited that heavy expansion • To understand the importance of keeping Reference No. RTS0115P and improper marketing insight were the in pace with the changing trends in Year of Pub. 2006 causes for the losses. So in order to revive business. Teaching Note Not Available back its position, the new management Industry Apparel Industry Struc.Assig. Not Available took several initiatives to turnaround Six Reference No. RTS0112B keywords Flags. There was a mixed reaction in the Year of Pub. 2006 industry and analysts opined that Teaching Note Not Available Global Branding Strategy; Global restructuring would be a costly affair. The Struc.Assig. Not Available Marketing; Product Design; Innovation; case focuses on the management turnaround R&D; Restructuring; Advertising Strategy; at Six Flags. 22 www.ibscdc.org

keywords took over as a CEO in 1998, gave equal Teaching Note Not Available

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S emphasis to both chemical and life science Struc.Assig. Not Available I – Y G E T A R T S Branded Apparel Industry; Levi Jeans; businesses unlike other players in the Dockers; Levi Strauss Signature; Phil industry like Monsanto, Novartis etc. keywords Marineau; Tommy Hilfiger; VF DuPont has emerged as a vertically Wal-Mart; Germany; Retail Industry of Corporation; The Great Turnaround Plan; integrated LSC after divesting its interests The LS & Co. Way; Red Wire DLX Jeans; Germany; The Act against Restraints of in energy, pharmaceuticals and textiles and Competition; The Commercial Asct; Euro; iPod; Levi’s Red Tab; Outsourcing; forming strategic alliances with Bunge Leadership; Global Sourcing Guidelines. Singles' Shopping; German Management; Limited and Tate and Lyle. Analysts were Private lables; Smart Price; Hard discout wondering how the new gamble would take stores; Aldi; Price cuts; Government off. regulations; Wertkauf; Interspar. Levi Strauss in the US (Part A): Fading Denim? Pedagogical Objectives Levi Strauss, the original blue jeans • Reinvention initiatives of Chad Holliday Wal-Mart in Germany (Decline): manufacturer and largest apparel Part (A) • Operational details of a life science manufacturer till the 1990s, has been conglomerate like DuPont steadily losing market share in the US since In 2005, Wal-Mart was the leading retailer of consumer goods and groceries worldwide. 1996. Levi was also said to have been • Vertical and horizontal integration using It entered Germany in 1997 by the sloppy in terms of keeping up with the joint ventures and alliances latest trends in fashion and hence was taken acquisition of two local hypermarket over by competitors such as Tommy • Impact of long-term strategies on a chains, Wertkauf and Interspar. Ever since Hilfiger, VF, Gap art A of the case talks company’s finance. its entry, Wal-Mart made losses in Germany and its business declined steadily due to a about this phase of Levi, from its birth. Industry Life science The case highlights the period in Levi’s host of reasons. The case discusses on the Reference No. RTS0110B reasons behind its failure. The revamp history from the 1980s since when Robert Year of Pub. 2005 Haas, great-great-grand nephew of the strategies of Wal-mart in Germany has been Teaching Note Not Available highlighted in Part (B) of this case. founder has been at the helm of affairs. It Struc.Assig. Not Available is his Utopian management style which experts have pointed out as the reason for keywords Pedagogical Objectives the fading of the brand. Will Levi be able Life science industry; Conglomerates; • Retailing in Germany to stem the decline in its sales and catch up DuPont; Chad Holiday Business Strategy; with the industry trends? • Entry of Wal-Mart in Germany Sustainable growth strategy; Reinvention strategy; Renewable energy; Bio-based • Decline of Wal-Mart in Germany Pedagogical Objectives products; Polymers; Joint ventures; Acquisitions and divestitures; Marketing • Reasons for decline of Wal-Mart in • To understand how Levi had become the Germany largest apparel manufacturer and distribution strategies; Vertical and Horizontal integration; Product • Government regulations in German retail • To understand the effectiveness of diversification. industry. Utopian management style on business. Industry Retailing Industry Apparel Reference No. RTS0108B Reference No. RTS0111B Wal-Mart in Germany (Revamp Year of Pub. 2005 Year of Pub. 2006 Strategies) – Part (B) Teaching Note Not Available Teaching Note Available Struc.Assig. Not Available Struc.Assig. Not Available In 2005, Wal-Mart, the leading retailer of consumer goods and groceries worldwide keywords keywords reported a steady decline ever since its entry to Germany, way back in 1997. (The Branded Apparel Industry; Levi Jeans; Branded Apparel Industry; Levi Jeans; Dockers;Levi Strauss Signature; Phil Dockers; Slates; Levi’s 501 jeans; Lee; reasons behind the decline has been discussed in detail in Part (A) of this case.) Marineau; Tommy Hilfiger; VF Wrangler; Levi Strauss; Roberts Haas; Corporation; The Great Turnaround Plan; LBO; Benevolent management style; jeans Wal-Mart tried to revamp itself by the introduction of a series of initiatives, The LS & Co. Way; Red Wire DLX Jeans; market; Supply Chain Initiative; iPod; Levi’s Red Tab; Outsourcing; Leadership; Global Sourcing Guidelines. backing on which it planned to break-even in Germany by 2005. However, it was Leadership; Global Sourcing Guidelines. highly sceptical whether they would finally emerge as winners in Germany. Reinventing DuPont Sony Corporation: Turning DuPont, the leading US-based Life Science Pedagogical Objectives Around the Television Business Conglomerate (LSC) was founded in 1802. • Government regulations in German retail Since 1968, Sony Corporation (Sony) had After nearly 100 years in the explosives industry dominated the television industry with its business, the company realigned its focus Trinitron Technology. Television, which on chemicals, banking on its polymer • Reasons for decline of Wal-Mart in is part of the electronics segment, innovations. But with decline in Germany contributed 18%-20% to the group’s profitability in the chemical business, • Revamp strategies of Wal-Mart in revenue. However, the company faltered DuPont’s focus shifted to a sustainable Germany. during the transition from the analog to growth strategy aimed at increasing the digital technology. While competitors such use of renewable energy and raw materials, Industry Retailing as Sharp, Samsung, Philips and LG invested and moving away from depletable resources Reference No. RTS0109B heavily in the commercialization of Flat like petrochemicals. Chad Holliday, who Year of Pub. 2005 Panel Display (FPD) televisions, Sony 23 www.ibscdc.org continued investing in the Cathode Ray Year of Pub. 2006 keywords Tube (CRT) technology. With the demand Teaching Note Not Available Avon; Direct selling; cosmetics; Anew; for FPD TV displacing CRT TV and average Struc.Assig. Not Available selling price of tube TV declining rapidly, Restructuring; Makeover; Mark; Andrea the company’s operating margins declined keywords Jung; De-layering; Organisation structure; from around 10% in 1991 to a meagre Make-up; solutions; color; L’Oreal; Procter RadioShack; US; Electronic retailer; 2006; & Gamble. 1.5% in 2004. In a bid to consolidate its Turaround strategy; business model; position, the company, in December 2004, Solution strategy; business;store announced its exit from the Plasma rationalisation; turaround plan; resume Display Panel TV market paying more scandal; Best Buy; slow moving inventory; Transnet, The State-owned South attention to the LCD and rear projection Circuit City; Tandy Radio. African Transport and Logistics TV business. Group: Maria Ramos’ Turnaround Strategies Pedagogical Objectives Avon gives itself a Makeover Transnet is a transport and logistics • To discuss about the missteps taken by Avon Products, Inc. (Avon) is a leading company controlled by the South African urnaround Strategies urnaround Strategies

urnaround Strategies the management at Sony over the years urnaround Strategies urnaround Strategies global beauty company, with over $8 billion government. Started in the late 1850s as a which led to the company losing its in annual revenue in 2005. As the world’s railway system, it got the company status market leadership position in the largest direct seller, Avon marketed to in 1990. Being a government organisation, television segment women in 143 countries through five it suffered from inefficiency, bureaucracy • To highlight the corrective measures million independent Avon Sales and over staffing. In January 2004, Maria taken by the company to improve its Representatives. Avon product lines Ramos took over as the chief executive of product mix in a bid to increase revenues included popular brand names such as Avon the Transnet group. She implemented a and profitability. Color, Anew, Skin-So-Soft, Mark, Avon four-point turnaround strategy for the Industry Consumer Electronics Solutions and also an extensive line of revival of Transnet. She is overhauling Reference No. RTS0107B fashion jewelry and apparels. Although South Africa’s largest transport company, estructuring T estructuring T estructuring T estructuring T estructuring T Year of Pub. 2005 revenues increased in 2003, 2004 and which controls the country’s rail and port RR RR R Teaching Note Not Available 2005, its net income was $848 million in operations, divesting non-core assets, Struc.Assig. Not Available 2005. There was stiff competition in the including South African Airways, US market from other cosmetic embarking on a major capital expenditure keywords companies. To hold its feet in the US and program and improving customer service. Profits were up 57%, to $1.3 billion, for Sony; Trinitron; WEGA; Sony TV; Digital also to focus in other countries, especially the fiscal year that ended March 31st 2006, Transmission; LCD TV; Television market; China, the company announced changes on a revenue of $4.1 billion. CRT TV; Sharp; Samsung; Television to its global operating structure to bring business; HD TV; Sony Style Stores. senior management closer to its key business geographies, strengthen global Pedagogical Objectives integration, speed information flow and position the company for sustainable • To understand the problems affecting RadioShack’s Revival Plan: Way growth. Avon expected to incur costs to the financial health of Transnet to Success? implement these initiatives over the next • To analyse the strategies implemented several years, with a significant portion of RadioShack was one of the leading by Maria Ramos to turn Transnet around the total costs to be incurred during 2006. consumer electronics retailers in the world The company expected that benefits from • To debate whether disinvestments and which had more than 7,460 outlets in and restructuring would help to fund a laying off employees are always the most around the US. In the early 2000, the significant increase in consumer useful tools to revive a company company witnessed decline in its sales due investment as well as improve the to unsuccessful products and new ventures. • To understand and analyse how a competitiveness of its direct selling In 2005, in order to revive the struggling government-controlled company, if opportunity. Avon expected to increase company, its CEO, Edmondson formulated enthused and imbued with professional investment in advertising, marketing a revitalisation plan. Before the company management, can be turned around into intelligence, consumer research and started working on its revival plan, a profitable venture. product innovation. These actions were Edmondson had to resign and this resulted expected to improve growth prospects Industry Logistics and Transport in uncertainty in the entire organisation. beginning in 2007. It remains to be seen Reference No. RTS0104 Though the new CEO, Claire Babrowski whether Avon would be successful in its Year of Pub. 2006 started working on the turnaround plans, makeover plans. Teaching Note Not Available analysts were sceptical about the Struc.Assig. Not Available company’s ability to rejuvenate itself amidst its challenges. Pedagogical Objectives keywords • To elucidate about the US cosmetic Public sector enterprise; South African Pedagogical Objectives market Railways; South African Railways and • To understand about the consumer • To understand how Avon was Harbour (SAR&H); Metrorail; Overstaffing; electronic market in the US restructuring to maintain its position in Spoornet; National Ports Authority; the global cosmetic market. Restructuring; Spin offs; The Blue Train; • To discuss about the need for innovation Revival strategies; Worker opposition. to survive in business Industry Cosmetics Reference No. RTS0105B • To understand how Radio Shack achieved Year of Pub. 2006 growth and what led to its turnaround. Teaching Note Not Available Tyco International Ltd. in 2006 Industry Electronics Struc.Assig. Not Available In 2006, Tyco International Limited Reference No. RTS0106B (Tyco) was a US$40 billion diversified 24 www.ibscdc.org

manufacturing and services company which material costs by $6 billion and revive its Pedagogical Objectives

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S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S operated in four business segments: Fire money-losing North America auto I – Y G E T A R T S and security, Electronics, Healthcare and operations to profitability by 2008. Ford • To investigate the challenges faced by Engineered products and services. Tyco also planned to make significant changes Sanyo shifted its operations to Bermuda while in its global operations and product • To debate whether ‘Sanyo evolution operated from New Jersey with its engineering that would make new product project’ and other structural reforms administrative and executive functions development more efficient and would help in Sanyo’s turnaround were conducted from New York and New economical. Would Ford be able to make Hampshire. Tyco had operations in more its presence felt in the market as before? • To discuss the restructuring strategies of than 100 countries and employed 260,000 Sanyo. people worldwide in 2006. Pedagogical Objectives Industry Consumer Electronics Dennis Kozlowski (Dennis) became CEO • To discuss the restructuring efforts of Reference No. RTS0101A in 1992 and left the company in 2002 as Ford to tackle problems like Year of Pub. 2006 was charged of unethical accounting unimpressive revenue growth, mounting Teaching Note Not Available practices, governance issues and fraud losses and damaged brands Struc.Assig. Not Available against company’s shareholders. In August keywords 2002, Edward Breen (Breen) became the • To discuss the turnaround strategies CEO and brought about major changes at followed by Ford. Sanyo; Japan; Consumer Electronics; Tyco. He rescued the company from Semiconductor plant; Sanyo evolution Industry Automobile Industry project; Think GAIA; structural reforms; liquidity crisis and reduced the debt to US$ Reference No. RTS0102A management reforms; workforce 10 billion in Jan, 2006 from US$28 billion Year of Pub. 2006 in 2002. He brought the turnaround of Teaching Note Not Available reduction; scaling operations; core company by improving efficiency of Struc.Assig. Not Available businesses; changing focus; turnaround. operations through Six Sigma and closed the unproductive units. The case discusses keywords why a conglomerate restructured itself Restructuring at Merck through spin off strategy to focus on its Ford Motors; Automobile Industry; North America; Bill Ford; Mark Fields; US; United core business and increase its stock price In 2005, Merck was the world’s sixth- Auto Workers (UAW); Employee pricing by gaining the investors’ confidence. The largest global pharmaceutical company. In for everyone; Crossover; Special Utility case highlights whether a three way split November 2005, Merck announced a global Vehicle (SUV); minivans; Big Three; was the solution for the Tyco’s operational cost-cutting campaign. Several factors General Motors; Strategy; Restructure; problems and will it make job easier for prompted this move, including uncertainty Product Design; Marketing; Brand; the company. The leadership of Breen and in its discovery pipeline and the loss of Management. strategies adopted by him would help to sales revenue from the pain-reliever Vioxx, overcome the financial crisis. The which was recalled in September 2004. Tens emphasis of company had changed to have of billions of dollars in potential liability more focus to achieve core competence. Restructuring at Sanyo arose from the recall of Vioxx. Moreover, the company’s top-selling product, Zocor, In 2005, Japan’s third-largest consumer Pedagogical Objectives would lose patent rights in mid-2006. When electronics maker, Sanyo Electronic Co., the flow of new medicines from Merck’s • To discuss on the appropriateness of the Ltd., (Sanyo) faced a crisis. The company research and development pipeline dried restructuring efforts undertaken by Tyco was making losses in its home appliance up, analysts criticised the company for business and faced sluggish growth in its • To debate on the success of the split concentrating too much effort on a limited digital camera and mobile phone business. range of cures. • To discuss the mergers and acquisitions To add to its woes, in October 2004, an strategies followed by Tyco. earthquake measuring 6.8 on the Richter The case discusses the restructuring plan scale caused extensive damage to its of a pharmaceutical company which is Industry Diversified Services semiconductor manufacturing facility in facing problems like unimpressive growth Reference No. RTS0103A Nigata. For the year ended March 31st in R&D, blockbuster product recall, loss Year of Pub. 2006 2005, Sanyo reported its biggest ever loss on patent rights on its top selling drugs. Teaching Note Not Available of US$1.1 billion and the company Struc.Assig. Not Available expected yet another loss of US$1.24 Pedagogical Objectives billion for the year ending March 31st 2006 keywords • To discuss the restructuring plan of a In September 2005, it announced the Tyco International; Manufacturing and pharmaceutical company which is facing ‘Sanyo evolution project’ under which the Services Company; Fire and security; problems like unimpressive growth in company planned to initiate company wide Electronics; Healthcare; Engineered R&D, blockbuster product recall, loss on structural reforms. It included a massive products and services; Bermuda based patent rights on its top selling drugs reduction in workforce, closing down some conglomerate; unethical accounting manufacturing facilities, scaling down the • To understand the structure of practices; Governance issues and fraud; unprofitable businesses and other Pharmaceutical industry. Liquidity. significant measures over a period of time. Industry Pharmaceutical Industry The top management at Sanyo aimed at Reference No. RTS0100A shifting the focus of Sanyo from a general Year of Pub. 2006 Ford Restructuring in 2006 consumer electronics manufacturer towards Teaching Note Not Available one focused on cutting edge environment Struc.Assig. Not Available In January 2006, Ford Motor Co. (Ford), and energy products and services. Would one of the Big Three in automobile these reforms help in turning around keywords industry worldwide, announced to close 14 Sanyo? factories and trim as many as 30,000 jobs Merck; Pharmaceutical Industry; North by 2012. The company planned to cut America; Restructuring; cost-cutting; 25 www.ibscdc.org Vioxx; Zocor; Gardasil; Rotateq; Zostavax; had been its major market and it had incurred losses to the tune of $543 million Patent; Rofecoxib; FDA; Research and invested heavily to increase production in financial year 2005-2006 in its digital Development; Downsizing; Drug expecting an open market across Europe. camera division. Development; Pre-clinical test; Product Due to rising debts, despite divesting many Recall; Prescribed Drug; Generic Drug. of its businesses, Chiquita filed for Pedagogical Objectives bankruptcy in 2001. In March 2002, Cyrus Freidheim was appointed as the CEO and • To understand the reasons that prompted Konica Minolta to close down its global EMC Corp.: The Turnaround under his leadership, the company underwent a restructuring to reduce its debts camera and colour film business Started in 1979 as an agency to sell office and increase its revenues. However, • To discuss the restructuring strategies furniture, EMC Corp. had been the leading Chiquita still faces the challenge of the adopted by the company to turn its producer of disc storage devices in the new banana import regulations in Europe, fortunes around 1990s. However, the company was hit hard which has been implemented since January by technology bubble burst in 2000 and for 2006. • To debate whether Konica Minolta would the first time in its history it incurred losses be able to reinvent itself from a highly in 2001. The same year, Joseph Tucci took Pedagogical Objectives regarded camera manufacturer to a urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies over as the CEO and president of EMC provider of multifunction products. and to revive the company he acquired • To highlight the factors that enabled Industry Printing & Imaging Equipment many small and start-up software firms, Chiquita to become one of the largest Reference No. RTS0097 which would help the company to diversify food companies in the world Year of Pub. 2006 into the software business. By diversifying • To analyse the reasons that forced the Teaching Note Not Available its business portfolio, EMC returned to company to file for bankruptcy in 2001 Struc.Assig. Not Available profitability in 2003 and in July 2006, with revenues of $9.6 billion, it was ranked No. • To discuss the various strategies keywords 249 in the Fortune magazine’s list of implemented by Cyrus Freidheim that America’s largest industrial corporations. revived Chiquita Konica Minolta; Sony; Digital camera estructuring T estructuring T estructuring T estructuring T estructuring T market; Commoditisation; Digital Single-

RR RR • To debate on the future challenges of R Lens Reflex (SLR) cameras; Growth of Pedagogical Objectives Chiquita and whether the transformation camera phones; Prosumer cameras; • To understand the factors that enabled plan would enable the company to Minilabs; Revamp of management EMC to become the biggest overcome them. structure; Restructuring strategies; Digital multi-function products. manufacturer of disc storage devices in Industry Fresh Fruit & Vegetable the world Production • To analyse the reasons for EMC’s losses Reference No. RTS0098 after the technology bubble burst in Year of Pub. 2006 Sony: Sir Howard Stringer’s 2000 Teaching Note Not Available Strategic Choices Struc.Assig. Not Available • To discuss how the acquisitions of many Since the late 1990s, Sony Corporation, small software firms enabled EMC to keywords known for its pioneering products like the come out of spiralling losses Banana fruit company; Environment Walkman, the compact disc and the PlayStation, had been witnessing fierce • To analyse how EMC’s transformation pollution; Rain Forest Alliance; EU Regulations; Quota Restrictins; Corporate competition from companies like Apple from being a hardware manufacturer to Computer, Matsushita Electric, Sharp and a complete solution provider in Social responsibility; Core Values; Code of Conduct; SA8000 Labour Standards; Social Samsung. Further, due to several unrelated information management and security diversifications, Sony’s shares lost two- helped it to revive its fortunes. Accountability International; United Fruit Company; Banana exports. thirds of their value since 2000. Despite Industry Magnetic Disk Storage several cost-cutting measures initiated by Reference No. RTS0099 the former chairman, Nobuku Idei, Sony Year of Pub. 2006 failed to contain declining sales and Konica Minolta: The Teaching Note Not Available operating losses. In June 2005, Sir Howard Struc.Assig. Not Available Restructuring Strategies Stringer, the then chairman of Sony

th America, was appointed as the new keywords On January 19 2006, Konica Minolta chairman of Sony Corporation (the first announced that it would withdraw from the ever non-Japanese to be Sony’s CEO) and Magnetic Storage Devices; Joe Tucci; global camera and colour film business. It was handed over the mantle to steer the Mergers and Acquisitions; Technology also decided to divest a plant, intellectual company out of the financial crisis. Companies; Diversification; Symmetrix; property rights and customer service Add-on memory; Technology Bubble Burst; operations of its cameras and other assets Information Lifecycle Management; of digital SLR cameras to Sony for an Pedagogical Objectives Fortune 500 Companies; Revival of EMC. undisclosed amount and discontinue • To analyse the reasons behind the decline production of its compact cameras by of Sony from a global consumer March 2006. Konica Minolta decided to electronics behemoth to trail behind Chiquita Brands International: focus on areas that did not directly cater other competitors like Samsung, LG and Turnaround Strategies to individual consumers but to offices and Apple other organisations, such as digital Chiquita Brands International is one of the Multifunction Products (MFPs), laser • To discuss the cost-cutting and largest producers and distributor of bananas printers, colour office copiers, liquid restructuring strategies at Sony and why in the world. In the 1990s, the EU crystal display materials, medical they failed to turn Sony around regulations restricting banana imports into equipment and optical devices. These • To debate on the strategies announced Europe hit the company hard as Europe decisions were taken after the company by Sir Howard Stringer and whether they

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would enable Sony to regain its leadership • To debate whether the new restructuring adopted the ‘Hunter strategy’ to expand

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S in the global market. strategies of Brenda Barnes would be able beyond its domestic market. Based on I – Y G E T A R T S to turn Sara Lee’s fortunes around. McKinsey’s recommendations, Swissair Industry Consumer Electronics expanded its operations by acquiring stakes Reference No. RTS0096 Industry Food and Beverages in different airlines. However, the strategy Year of Pub. 2006 Reference No. RTS0095 failed with mounting debt and continuous Teaching Note Not Available Year of Pub. 2006 losses resulting in liquidity crunch. Liquidity Struc.Assig. Not Available Teaching Note Not Available crisis finally led to the grounding of the Struc.Assig. Not Available keywords Swissair fleet on October 2nd 2001. Based keywords on the events on the last days of the airline, Consumer electronics; Walkman; Compact a movie named ‘Grounding: Last days of disc; Mobile communication; Global TV Steven McMillan; John Bryan; Sara Lee’s Swissair’ was made in Switzerland. The market; Digital camera; Cost restructuring; restructuring strategies; Divestiture; Jimmy movie, which has brought alive the national Supply chain management; Internet ready Dean; De-verticalisation; New vision; Bill disaster, not only raises the question about devices; Silo organisational structure; Mar; Senseo; Acquisition of Earthgrain; whose was responsible for the grounding Product interoperability; Structural re- Listeorisis controversy; Sara Lee Bakery of Swissair but has once again brought into organisation; Group convergence strategy; Group (SLBG); Consolidated Food the forefront the issue of corporate Middleware; Profit structure. Corporation. governance.

Pedagogical Objectives Sara Lee: CEO Brenda Barnes’ Burger King’s Turnaround: • To discuss Swissair’s ‘Hunter strategy’ Restructuring Strategies Courtesy the Private-equity Firms and its failure which resulted in the By the turn of the 21st century, Sara Lee The world’s second-largest fast food grounding of Swissair Corp., which started as a food products restaurant has been facing declining profits • To discuss Swissair’s restructuring efforts manufacturing company in the US in 1939, and market share since the late 1990s. In to revive its operations had transformed into a $20 billion 2002 three private-equity firms bought conglomerate of diversified businesses Burger King and turned the company’s • To discuss the corporate lessons to be ranging from Jimmy Dean sausages, Kiwi operations around. In 2006 the private- learnt from the movie ‘Grounding: Last shoe polish, Hanes undergarments to Ambi equity firms announced their exit through days of Swissair’. pure air freshener and Sara Lee bakery. an IPO. These events have brought to the However, a series of expensive but fore the concerns whether the company Industry Aviation unyielding acquisitions, lack of investment has been actually turned around, and Reference No. RTS0093 in new product innovation, negligible whether IPO is the appropriate exit Year of Pub. 2006 expenditure on advertising and the declining strategy. Teaching Note Available returns from its unrelated businesses started Struc.Assig. Not Available affecting the bottom line of Sara Lee. The Pedagogical Objectives keywords problem was further compounded by rising commodity prices, sluggish European and • To discuss Burger King’s turnaround Switzerland; Deregulation; Aviation; US economies, increasing bargaining Hunter strategy; Qualiflyer alliance; • To understand the various exit strategies Grounding: Last days of Swissair; Mario powers of mega discount stores like Wal- available to the private-equity firms Mart, fluctuating exchange rates and the Corti; Brand image; Corporate governance; company itself was mired a series of • To analyse whether IPO is the right exit Crisis management; Business ethics; controversies. Although the company strategy for the owners of Burger King. Bankruptcy; Growth strategy; endeavoured to address the situation Restructuring. through several restructuring measures Industry Fast Food under different CEOs, it failed to overcome Reference No. RTS0094 its challenges. In February 2005, Brenda Year of Pub. 2006 Teaching Note Not Available Japan Airlines’ Losses Mount: The Barnes took over as the CEO of Sara Lee Restructuring Strategies and embarked upon one of the biggest Struc.Assig. Not Available restructuring tasks in the US corporate keywords Japan Airlines Corporation (JAL), founded history to revive the fortunes of the in 1952, was the oldest airline company of company. Private-equity firms; Initial Public Offer Japan. JAL had been running its business as (IPO); Customisation; Customer a monopoly in an environment highly Pedagogical Objectives Relationship Management (CRM); regulated by the Japanese government. Franchisee relationship management; Exit However, with the subsequent deregulation • To comprehend how Sara Lee had grown strategy for private equity firms; Troubled of the Japanese Aviation industry in 1985, as a market leader in the US by focusing times; Positioning strategy; Marketing; it had to face competition from other on coherent business expansions Culture; Customer centric approach; airlines. A series of highly publicised safety Restaurant design. • To discuss the factors that prompted Sara gaffes forced its customers to switch to Lee to foray into several un-related competitors’ services, endangering JAL’s businesses in the mid-1990s and the survival. An internal power struggle, which challenges that are faced by companies Swissair’s ‘Hunter’ Strategy and had been brewing for some time, coupled with diversified business portfolios the “Grounding”: The Lessons with harsh media-led criticism eventually led to a change of leadership in the • To analyse the reasons behind the failure With Switzerland rejecting the membership company. Though the new leadership of various restructuring initiatives to European Economic Area, Swissair formulated a restructuring package, undertaken by different CEOs to boost encountered restriction to operate in other scepticism run high about the success of the sagging financial health of the European countries. Swissair, known for the restructuring process. company its quality, reliability and innovations,

27 www.ibscdc.org Pedagogical Objectives • To debate whether Volkswagen would be Industry Retail able to continue its success in the future Reference No. RTS0090 • To discuss the effects that change in also. Year of Pub. 2006 environment has on a corporation’s Teaching Note Available Industry Automobile Manufacturing fortunes Struc.Assig. Not Available Reference No. RTS0091 • To discuss the management problems Year of Pub. 2006 keywords that government-owned companies face Teaching Note Not Available post privatisation Ahold; Anders Moberg; Re-engineering; Struc.Assig. Not Available Value chain; Financial crisis; Corporate • To discuss the evolution of the Japanese keywords governance; Turnaround strategies; Supply Aviation industry and the competitive chain and logistics; Road to recovery environment that ensued subsequent to Restructuring strategies; Dr. Bernd programme; Divestments; Business model; deregulation of the industry Pischetsrieder; Cost cutting; Platform Cost-cutting measures; Crisis management; sharing; Cannibalisation; US automobile Accounting scandal. • To discuss problems that JAL was facing market; Legacy costs; Volkswagen; and their causes Ferdinand Piech; Formotion programme; urnaround Strategies urnaround Strategies

urnaround Strategies Comparative labour costs. urnaround Strategies urnaround Strategies • To discuss JAL’s restructuring strategy and its potential success. Motorola’s Turnaround: Ed Zander’s “Culture Strategy” Industry Aviation Industry Reference No. RTS0092 Anders Moberg at Ahold: Initially founded as the Galvin Year of Pub. 2006 Turnaround Strategy with Manufacturing Corporation in 1928, Teaching Note Not Available Re-engineering the Value Chain Motorola was known for being the first to Struc.Assig. Available manufacture the hand-held radio and pager. In February 2003, Ahold, the largest retailer It was the leading manufacturer of cellular keywords in the Netherlands, was charged with handsets and semiconductor chips. But the significant accounting irregularities. The early 1990s brought in a number of estructuring T estructuring T estructuring T estructuring T estructuring T Japan Airlines; Civil aviation industry in company was accused of overstating its challenges for the company. The company RR RR R Japan; Civil Aeronautics Law; International revenues and certain illegal transactions. carrier; 45-47 framework; Deregulation; did not envision the surge in demand for The company also went through liquidity digital products. Although the then CEO Freedom rights; Aggregate cost formula; crisis and was on the verge of bankruptcy. Zonal airfare system; Flag carrier; Japan Christopher Galvin made attempts to revive To turn Ahold’s fortunes around, Anders the company, the results were not visible. Airlines Corporation’s (JAL’s) safety Moberg (Moberg), the ex-IKEA executive, record; Restructuring strategies; Edward Zander (Zander) was appointed as was appointed as the CEO in May 2003. the CEO in 2003 to bring a new perspective Bureaucratic culture; Power struggles; Cost To stabilise the company, Moberg cutting measures. into the company. Zander reorganised the introduced a three-year ‘Road to recovery’ various units and increased the focus on the programme. This involved a major development of new products. His strategies restructuring process at Ahold through 2003 worked and the company climbed to the Volkswagen: The (Proactive?) to 2005. The programme brought stability number two spot in the cellular handset Restructuring Strategies to the company, and for 2006 Moberg market with the introduction of the ‘Razr’ planned to improve the company’s V3 handset. However, questions remain Volkswagen, the leading German carmaker, profitability through effective re- about the company’s turnaround and the produced better financial results for 2005 engineering of the value chain. However, tough obstacles that Zander could face in compared to the year before. The company there are many challenges ahead and unless the future. attributed this success to its restructuring they are addressed quickly and effectively, programme, “Formotion” which was started Ahold could become a soft target for Pedagogical Objectives in 2004 and continued through 2005, for takeover. the reduction of costs in the manufacturing • To highlight how a market leader, if it processes. Despite the good results, the Pedagogical Objectives reads the market wrong, can be forced company planned to continue with its to be a follower restructuring plans, as the company officials • To understand the crisis at Ahold due to felt that in the long run its cost structure a major accounting scandal • To understand Motorola’s strategic was still not justifiable. Being the largest missteps if any • To understand the ‘Road to recovery’ carmaker in Europe, Volkswagen was also programme introduced by Moberg to • To discuss the need for the turnaround targeting the North American market where bring in stability to the company at Motorola it has been facing severe competition from major carmakers like GM, Ford and Toyota. • To discuss the relevance of Moberg’s • To underscore the importance of turnaround strategy, which included re- leadership in managing troubled times engineering the value chain, to improve Pedagogical Objectives • To discuss the effectiveness of Edward the company’s profitabilty • To understand the “Formotion” Zander’s strategies to turn the company programme initiated at Volkswagen to • To discuss how divestments, logistics and around supply chain savings, efficient business reduce the costs associated with the • To debate on further steps to be taken model, cost-cutting measures and private company’s manufacturing process to defend and enhance Motorola’s labelling of brands can become effective market position. • To discuss the reasons behind strategies Volkswagen’s continuation of its Industry Telecommunication restructuring process • To debate whether Moberg’s strategies Reference No. RTS0089 would be able to save the company from Year of Pub. 2006 • To discuss the strategies being becoming a takeover target. contemplated by Volkswagen for its US Teaching Note Available operations Struc.Assig. Available

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keywords Daimler-Chrysler to SABMiller’s Miller Brand in USA:

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S Motorola; Edward Zander; Razr V3; DaimlerChrysler: Dieter Zetsche’s The Turnaround (The New CEO) Restructuring Cellular handsets; Iridium; Pebl; Slvr; South African Breweries (SAB), a beer and Culture; Strategy; Semiconductor business; Strategies other cold beverages manufacturer, has a Seamless mobility; Apple iTunes. Daimler-Benz and Chrysler Corporation near total monopoly in its domestic merged to form DaimlerChrysler in May market. SAB commenced its global 1998. The merger was considered an expansion only in the mid-1990s after the The Fiat Group: Rebuilding its Car historical merger of mass with class. installation of a democratic government Business However, soon after the merger, the in South Africa. While making efforts to Chrysler division of the company began gain a foothold in the US, the world's most Fiat Auto, the auto division of the Italian to incur losses and this in turn had an profitable beer market, SAB acquired the conglomerate Fiat Group, had gained huge adverse effect on the Mercedes division, country’s second-largest beer maker, success during the 1980s and 1990s. But which meanwhile had begun to witness Miller, in 2002. Miller was a declining US with increasing competition the company’s quality problems. DaimlerChrysler’s other brand having continuously lost market as well as the group’s fortune started initiatives of acquiring a stake in Japanese share to its competitor and market leader declining and for three years – 2001, 2002 automaker Mitsubishi and the two car units Anheuser-Busch throughout the 1990s. and 2003, the group reported negative Smart and Maybach, failed to deliver The new company SABMiller, brought in profits. To turn the fortunes around, Sergio profits. This led to increasing Norman Adami, a veteran SAB executive Marchionne (Marchionne) was appointed discontentment towards the leadership of from South Africa to revive the Miller the CEO in 2004. Marchionne brought Jurgen Schrempp, the former CEO and the brand. changes in the management structure and prime architect of the merger. On January introduced new car models. In August 2005, 1st 2006, Dieter Zetsche, the former CEO Pedagogical Objective he introduced a new three-year industrial of the Chrysler Division, who had • To discuss the turnaround strategies of plan to re-launch the entire Fiat Group successfully turned Chrysler’s American SABMiller under Norman Adami. and bring recovery to the auto division of operation around, replaced Schrempp as the group. The success of the plan was the new CEO of the company. Zetsche Industry Beverages seen at the end of 2005, when the financial announced a restructuring plan on January Reference No. RTS0086 results of the group showed profits. But th 24 2006 that mainly focuses on Year of Pub. 2006 critics were doubtful whether this success integrating the Mercedes and Chrysler Teaching Note Not Available would continue in the coming years in the divisions to increase the profitability of Struc.Assig. Not Available face of competition from other car DaimlerChrysler. manufacturers. keywords Pedagogical Objectives Turnaround strategies; Norman Adami; Pedagogical Objectives Anheuser-Busch; Brand image; Brand • To highlight the reasons behind the building; Organisation culture; Marketing • To understand the problems being faced merger of Daimler-Benz and Chrysler by Fiat Group, especially its auto division strategies; Philip Morris Altria Group; • To focus on the reasons behind the poor South African Breweries (SAB); Miller Lite; • To discuss the underlying reasons behind performance of DaimlerChrysler after Bud Light Budweiser; Beer market in the such problems the merger US; Promotion and distribution strategies. • To discuss the appropriateness or • To provide a scope to discuss the otherwise of CEO Sergio Marchionne’s restructuring plan of Zetsche and strategies to turn the fortunes of the whether it would be able to turn Lear: The US Automobile Parts auto division and the group around DaimlerChrysler around Maker’s Restructuring Strategies • To debate what is the likely future of • To debate whether the new CEO can Southfield (Michigan)-based Lear the group, especially the auto division integrate two opposing cultures. Corporation, one of the world’s largest • To debate what are those practices that suppliers of automotive interior Industry Automobiles components and systems, provides must be institutionalised independent of Reference No. RTS0087 the CEO. complete seating systems, interior trim Year of Pub. 2006 products and electrical & electronics Industry Auto manufacturing Teaching Note Available systems. Since 2000, the company has been Reference No. RTS0088 Struc.Assig. Not Available witnessing flat sales and increased raw Year of Pub. 2006 keywords material costs. Further, it has also been hit Teaching Note Not Available by declining business from its major Struc.Assig. Not Available Mergers in global automobile industry; Cross customers like GM and Ford that have cultural mergers; Mercedes-Benz; reduced production in the face of stiff keywords Chrysler’s financial downturn; Restructuring competition from Asian carmakers. To Fiat Group; Fiat Auto; Business strategies; Leadership issues at minimise its losses, Lear has announced a diversification; Sergio Marchionne; DaimlerChrysler; Culture change at global restructuring plan in June 2005, General Motors; Put-out option; Industrial DaimlerChrysler; Turning around Chrysler; which includes factory closures in North plan; Customer preferences; Joint ventures; New management model at America and Western Europe apart from Foreign competition; Government DaimlerChrysler; Synergies of mergers in transferring some of its manufacturing protection schemes; Restructuring the automobile industry. facilities to low-cost regions like Eastern programme; Organisational change; Europe and Asia. Capacity utilisation. Pedagogical Objective • To discuss the restructuring strategies of Lear while highlighting the perils of over 29 www.ibscdc.org dependency of any supplier on a handful has transformed into a large chain of 420 Pedagogical Objectives of major customers. stores worldwide by the early 21st century. However, the low-carbohydrate craze in • To analyse the reasons behind Industry Auto Parts Manufacturing the US coupled with the company’s Goodyear’s slack market performance Reference No. RTS0085 overdependence on doughnuts led to its • To discuss the restructuring strategies Year of Pub. 2006 first quarterly loss in May 2004 and its Teaching Note Available adopted by Robert Keegan and the shares declined by 29.2% to $22.51. probability of a successful turnaround. Struc.Assig. Not Available Further, many of its franchisees went keywords bankrupt and the company was forced to Industry Rubber and Plastic Product re-acquire them. However, the Manufacturing Lear Corporation; Automobile parts shareholders alleged that the company had Reference No. RTS0082 manufacturing market; Automobile interior misreported its profits and had also failed Year of Pub. 2006 manufacturers; Auto industry; Cost cutting; to issue a profit warning when it knew that Teaching Note Not Available Expansion strategies; Localisation; its prediction for the quarter earnings would Struc.Assig. Not Available Restructuring strategies; Delphi; Visteon; fall short. This was followed by a Securities keywords Acquisitions and partnerships; and Exchange Commission (SEC) enquiry urnaround Strategies urnaround Strategies

urnaround Strategies Competition; Market share; Oil prices; urnaround Strategies urnaround Strategies in July 2004. Under such circumstances, Restructuring strategies; Turnaround Challenges for Lear. the chief executive officer, Scott strategies; Management change; Dealer Livengood, stepped down in January 2005 relationships; New product developments; and Stephen Cooper, a renowned Tyre industry; Acquisition strategy; Merrill Lynch: Reviving its Asian turnaround specialist, was appointed to turn Management restructuring; Organisational Business the company around and refurbish its change; Assurance tyre line. declining image. Merrill Lynch & Co. was the first US brokerage firm to start its operations in Pedagogical Objectives GM's Growing Troubles: Rick Japan. Since the late 1960s, Merrill Lynch Wagoner’s Restructuring estructuring T estructuring T estructuring T estructuring T estructuring T played a significant role in the development • To highlight the troubled times at Krispy RR RR R of the capital markets in the Asia-Pacific Kreme and the turnaround strategies Strategies and the Challenges initiated by Scott Livengood region. It also became the first US financial General Motors (GM) incurred losses to management and advisory company to • To discuss whether Stephen Cooper along the tune of $1.6 billion in the third quarter open an office in China. However, after with Scott Livengood revive the sagging of 2005 mainly arising from its North the dotcom burst in the late 1990s followed fortunes of the American doughnut icon. American operations. Rick Wagoner, Chief th by the September 11 2001 terrorist Executive Officer (CEO) of GM, attacks in the US, Merrill Lynch was forced Industry Specialty Eateries announced that the company would to streamline its international operations Reference No. RTS0083 eliminate 30,000 jobs and close down four significantly in the Asia-Pacific region. Year of Pub. 2006 of its 20 assembly plants in North America Since 2004-2005, it has again started Teaching Note Not Available by the end of 2006. The management cited looking out for more business partnerships Struc.Assig. Not Available rising health care and labour costs as major to revive its fortunes in Asia. keywords reasons for the losses. But the United Auto Workers (UAW) felt that the vehicle Pedagogical Objectives Turnaround strategies; Reasons for business design, product development and foreign failure; Stephen Cooper; Scott Livengood; competition were the major reasons for • To highlight the growth as well as the Troubled times at Krispy Kreme; Carver the company’s poor performance. The subsequent decline of Merrill Lynch in Rudolph; Low carbohydrate craze in US; opposing stands taken by the management Asia Accounting controversies; Securities and and the labour union had stalled • To discuss the revival strategies of Exchange Commission enquiry in Krispy negotiations concerning reduction of Merrill Lynch for its Asian business. Kreme; Warehouse management; health care costs, job cuts, outsourcing and Acquisitions and partnerships; Restaurants sub-contracting. Finally on October 17th Industry Retail Brokerages and cafes business in US; Restructuring 2005, GM announced its deal with the Reference No. RTS0084 strategies; Cost-cutting strategies; UAW, which agreed to reduce its health Year of Pub. 2006 Expansion through franchisee. care costs for retirees by $15 billion and Teaching Note Not Available its annual employee health care expenses Struc.Assig. Not Available by $3 billion a year. Other than reducing keywords Goodyear’s Troubles: CEO costs, GM has also planned to increase its Robert Keegan’s Restructuring revenues by refocusing on sales, marketing Merrill Lynch; Goldman sachs; Growth and development of new models. It even Strategies strategies; Competition; Morgan Stanley; planned to sell a majority of its stake in Lehman Brothers; Charles Schwab; Revival In the 1990s, Goodyear, the iconic US tyre the profit-making General Motors strategies; Financial market in Asia; On- manufacturer witnessed a decline in its Acceptance Corporation. Despite this, in line trading; Acquisitions and partnerships; profits. Its debts increased as Goodyear December 2005, S&P (Standard & Poor’s) Brokerage scandals; Investors; Restructuring faced successive years of recession, rising slashed GM]s credit rating to ‘junk’, from strategies; Challenges for Merrill Lynch. raw material costs and overcapacity in the BB to B, and expressed concern about the market. After several unsuccessful attempts turnaround efforts. It also said that to turn the company around, Robert bankruptcy was a distinct possibility in the Krispy Kreme Doughnuts Inc.: Keegan, a former Kodak executive, was near future. Turning the Turnaround appointed as the chief executive officer Strategies Around? and chairman of the company. Robert Pedagogical Objectives Keegan launched a detailed restructuring Since its inception in 1933 as a small plan to turn the financially troubled • To provide an insight on the historical doughnuts store in the US, Krispy Kreme company around. perspective about the legacy costs at GM 30 www.ibscdc.org

• To discuss whether Rick Wagoner could Turnaround strategies of Acer. enough of a measure to regain Teltra's

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S turn around the company by bringing lost glory in the light of competitive I – Y G E T A R T S down the legacy costs while highlighting pressures in the Australian the possible effects of bankruptcy on its Siemens AG’s Troubles: Klaus telecommunications industry. suppliers, customers, creditors andinvestors. Kleinfeld’s (The New CEO) Industry Telecommunication Restructuring Strategies Reference No. RTS0078 Industry Automobile Year of Pub. 2005 Reference No. RTS0081 In January 2005, Klaus Kleinfeld Teaching Note Not Available Year of Pub. 2006 (Kleinfeld) succeeded Heinrich von Pierer Struc.Assig. Not Available th Teaching Note Not Available as the 11 CEO of Siemens AG. Although, keywords Struc.Assig. Not Available under the tenure of Heinrich von Pierer, Siemens had achieved significant sales and Telstra Corporation; Sol Trujillo; Australian keywords profits, the operating profit margin of the telecommunications industry; company was only 5% as compared to 11% General Motors; Rick Wagoner; US car Privatisation; ‘Transformational’ strategic achieved by its competitor, General industry; Toyota; Competition; Labour; plan; Integrated company; Cost structure; Electric. Further, the increasing Health care costs; Suppliers; Customers; Retrenchments; 3G Networks; Internet unemployment and labour cost in Germany Creditors; UAW (United Automobile services; Cost-effective services; coupled with several loss-making units in Workers); Contracts; Negotiations; Alfred Government regulations. Siemens were also among the major P Sloan Jr; Delphi. problems being faced by the company. Kleinfeld, known for his successful turnaround of the ailing Siemens unit in The Power of Spin-offs:The Case Acer Co. Ltd.: The Corporate the US, is expected to restructure Siemens of Motorola’s Freescale Turnaround AG. However, analysts were sceptical about Kleinfeld’s US style of management. There are varied reasons as to why In 2005, Acer had become the world’s companies opt for spinning-off their fourth-largest branded personal computer business divisions or subsidiaries. Sometimes Pedagogical Objectives vendor, with a market share of 4.4% taking spin-offs unlock hidden shareholder value it to the same league as Dell, HP and • To highlight the problems faced by or they are merely a means to separate a Lenovo. In 1999, Acer had withdrawn from Siemens troubled unit from the parent company. In the US computer market in the wake of a competitive landscape, for a spun-off huge losses and in turn underwent • To discuss the strategies adopted by company to succeed as an independent restructuring, spinning off several different Kleinfeld in reviving Siemens AG. entity, the timing of the spin-off and the business divisions. Acer succeeded in all the Industry Not Applicable status of the spin-off's relationship with major markets of the world by embracing Reference No. RTS0079 its former parent company are important traditional marketing channels – in an age Year of Pub. 2005 factors. Corporate history is replete with when its competitors were following direct Teaching Note Not Available examples of spin-offs that have selling methods. Restructuring had paid off Struc.Assig. Not Available spectacularly failed to achieve their touted and the PC (Personal Computer) division potentials. At the same time, there are retained the brand name Acer and is keywords those that have performed far beyond currently challenging the bigwigs of the market expectations. Siemens; Klaus Kleinfeld; BenQ; General business. Acer’s achievement is rated to be Electric; Leadership style; Restructuring a remarkable turnaround, considering its strategy; Germany; Europe; US; Pedagogical Objective miserable performance at the turn of the Turnaround; Management style. 21st century. Acer has set a goal of • To highlight the reasons as to why becoming the third-largest company, and companies opt for spinning-off their aims to surpass Lenovo by 2008. If the business divisions or subsidiaries. company achieves its goal, it would be a Telstra, the Australian Industry Semiconductors fitting culmination to the turnaround Telecommunications Company: Reference No. RTS0077 efforts. CEO Sol Trujillo’s Year of Pub. 2005 ‘Transformational’ Strategic Plan Teaching Note Not Available Pedagogical Objective Struc.Assig. Not Available After holding a major share in the local • To discuss whether the turnaround telecommunications market in Australia, keywords strategies of Acer would enable the Telstra started facing competition from Spin-offs, Equity carve-outs, Tracking company to surpass Lenovo to become other mobile phone operators. To counter stock; Restructuring through spin-offs; the third-largest PC vendor by 2008. competition the government decided to General Motors, Ford, Delphi, Visteon; privatise Telstra. Solomon Trujillo was Industry Computer Hardware AT&T, General Electric, Genpact; appointed as the new chief executive officer Reference No. RTS0080 Strategic Rationale; Operational and Year of Pub. 2006 of the company in July 2005 to formulate a strategy, which could enable Telstra to financial transparency; Accountability and Teaching Note Not Available incentives; Shareholder value; regain its market position. But the strategic Struc.Assig. Not Available Semiconductor Products Sector (SPS); plan announced by Trujillo was met with Asset light strategy; Branding strategy; keywords scepticism from analysts and politicians. Product development strategy; Michel Analysts were doubtful whether Telstra could Global PC (Personal Computer) Mayer; Merck, Medco, McDonald’s; accomplish the targets it set for itself. manufacturers; PC manufacturers from Cendant, Viacomm. Taiwan; Cost control at Acer; Acer’s acquisitions; Acer’s international Pedagogical Objective operations; Original equipment • To discuss whether the plan of action manufacturers; Asian financial crisis; announced by Solomon Trujillo is 31 www.ibscdc.org John Swainson’s Turnaround of Pedagogical Objectives turnaround would bring profits for the fashion house. Computer Associates • To highlight the rationale behind the International Inc.: Setting IBM spin-off of Novelis from Alcan Industry Fashion Retail Standards? Reference No. RTS0074 • To discuss the competitive strategies of Year of Pub. 2005 In 2000-2001, Computer Associates, the Novelis in the global rolled products Teaching Note Not Available third-largest independent software business. Struc.Assig. Not Available company in the world, was involved in a $2.2 billion accounting scandal, which led Industry Aluminium Production keywords to the resignation of its Chief Executive Reference No. RTS0075 Officer (CEO). John Swainson, an IBM Year of Pub. 2006 PPR (Pinault-Printemps-Redoute); Gucci; veteran, was appointed as the CEO of Teaching Note Not Available Balenciaga; Fashion retail industry; Tom Computer Associates in November 2004. Struc.Assig. Not Available Ford; Domenico De Sole; Nicolas Ghesquiere; Competition; Acquisitions; Following a change in the name of the keywords company to CA, with an improvement in Expansion strategies; LVMH (Louis customer relations and enhanced focus on Alcan; Novelis; Spin-off; Competitive Vuitton Moet Hennessy). urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies research and development, the company strategy; Flat-rolled aluminium market; witnessed an increase of 9% in its revenue Aluminium production; US; GM (General for the quarter ending September 2005. Motors); Mercedes; Jaguar Cars Limited; International Paper: John Metal price ceiling; Canada. Faraci’s Restructuring Strategies Pedagogical Objectives New York-based International Paper is the • To discuss the reasons behind the slack PPR’s Balenciaga Brand: The world's largest paper, and forest products performance of the company and discus company and is the world’s second-largest the accounting scandal Turnaround private landowner. However, since the early 21st century, it has been witnessing weaker • To discuss various strategies Pinault-Printemps-Redoute (PPR), a estructuring T estructuring T estructuring T estructuring T estructuring T demand, falling prices and its debts have implemented by John Swainson to turn multinational holding company is a major RR RR R increased. Despite many revival initiatives, Computer Associates around and player in the French luxury goods industry. in 2004, it incurred a loss of $35 million. overhaul its tainted image. With a unique combination of various businesses, PPR emerged as a global player In July 2005, John Faraci, the Chief Industry Storage and Systems in the business segment. The company Executive Officer (CEO) of International Management Software includes retail companies such as Paper announced a broad restructuring plan Reference No. RTS0076 Printemps, Redcats, Fnac, Conforama and to boost profits and reduce debts by Year of Pub. 2006 10 luxury brands under the Gucci Group: focusing on core businesses. Teaching Note Not Available (1) Gucci; (2) Yves Saint Laurent; (3) YSL Struc.Assig. Not Available Beaute; (4) Balenciaga; (5) Sergio Rossi; Pedagogical Objective (6) Boucheron; (7) Bottega Veneta; (8) keywords Bedat & Co.; (9) Alexander McQueen; and • To discuss the restructuring strategies adopted by John Faraci to revive the CA (Computer Associates); Computer (10) Stella McCartney. It acquired Gucci in loss making international paper. software market; Acquisitions and licensing 1999, after a legal battle with Gucci's agreement; Accounting scandal; Sanjay competitor LVMH (Louis Vuitton Moet Industry Paper and Paper Product Kumar; John Swainson; Turnaround Hennessy). In 2001, Gucci acquired the Manufacturing strategies; US Securities and Exchange Balenciaga Fashion House, which was in Reference No. RTS0073 Commission; Employee compensation losses then. The company was in crisis Year of Pub. 2005 plan; Accounting practices; Customer when its Creative Director Tom Ford and Teaching Note Not Available relations; Global distribution and service Chief Executive Officer (CEO) Domenico Struc.Assig. Not Available networks; Licensing of software products; De Sole quit the company after the parent Corporate governance; Bureaucracy. group PPR refused to grant them keywords managerial autonomy. In 2004, the International Paper; European and US company appointed Robert Polet as Gucci's economy; US dollar decline; Consumer new CEO. Polet formulated a three-year demand; Restructuring plan; Troubled Novelis, Alcan’s Spin-off: Staying strategic plan to revive the company’s loss- Competitive? times; Competition; Competitive making brands such as Balenciaga, Yves advantage; High material cost; In January 2005, Alcan, the Canadian Saint Laurent and Alexander McQueen. Diversification; Mergers and acquisitions; aluminium company, spun-off its rolled The company appointed Nicolas Fluctuated income; Product innovations; products business into an independent Ghesquiere as Balenciaga’s Creative Future of International Paper; John Faraci. company, Novelis. The spin-off was Director. The Spring/Summer 2006 required for Alcan to receive an antitrust collections of Ghesquiere, were appreciated by the media as well as the fashion world. approval from the European Union after Canon: Fujio Mitarai’s its acquisition of a French company, The company is expected to undergo a Pechinery. Novelis supplies rolled products turnaround with profit generation and Restructuring Strategies revival by 2007. for use in food and beverage, can From the early 1990s Canon, a leading production, food packaging foils as well as manufacturer of copying machinesand automotive parts. In 2004, with customers Pedagogical Objectives cameras, witnessed a decline in its fortunes. like Jaguar, Ford, Mercedes, Reaxam and • To highlight the problems of PPR, the The profitability of the company declined Kodak Polychrome Graphics, Novelis crisis in Gucci and the efforts of with several of its divisions reporting losses. generated sales of $7.8 billion. However, Balenciaga to revive its fashion house To turn the fortunes of the company it is mired with problems like a debt of around, Fujio Mitarai (Mitarai) was $2.95 billion, rising energy costs and metal • To discuss Balenciaga’s sustained efforts appointed as Canon's president in 1995 price ceilings in some of its sales contracts. to gain recognition and whether this and then as its CEO in 1997. Mitarai 32 www.ibscdc.org

undertook restructuring strategies, which business model; Turnaround strategies; Pedagogical Objectives

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S led to Canon turning its fortunes around. Restructuring; Competitive strategies; I – Y G E T A R T S Peer-to-Peer (P-to-P). • To comprehend the reasons behind GM’s declining fortunes Pedagogical Objectives • To discuss whether the turnaround • To discuss the evolution of Canon over ITC’s Acquisition of WIMCO: The strategies devised by Wagoner ensure the the years, the decline in the company’s company’s survival. fortunes and the restructuring strategies Turnaround Challenges adopted by Mitarai to turn Canon’s Industry Automobile Indian Tobacco Company, popularly fortunes around known as ITC, is the market leader in the Reference No. RTS0069 Year of Pub. 2005 • To discuss whether Canon under Mitarai tobacco industry in India. Ever since its Teaching Note Not Available would be able to face future challenges inception, it focused on diversifying into Struc.Assig. Not Available successfully. other unrelated businesses that further intensified in the mid-1990s as a result of keywords Industry Printing and Imaging growing awareness among consumers about Equipment the harmful effect of tobacco and General Motors (GM); Turnaround Reference No. RTS0072 cigarettes. As a part of its diversification strategies; Rick Wagoner; Legacy costs; Year of Pub. 2004 strategy, ITC also made its entry into the Sports utility vehicle (SUV); Cash flow Teaching Note Not Available matchstick industry in 2002; and acquired negative; Non-investment negative; Struc.Assig. Not Available the West Indian Match Company United Automobile, Aerospace and Agricultural Implement Workers of keywords (WIMCO), the Indian subsidiary of Swedish Match AB, which was the largest America (UAW); Product differentiation; Cannon Inc.; Fujio Mitarai; Restructuring mechanised manufacturer of match boxes Brand image; Value pricing. strategies; Economic environment; in India with a market share of 13%. But Consolidated accounting system; during the time of acquisition, WIMCO Conveyor belt system of manufacturing; was in losses. This helped ITC in acquiring Charles Schwab: Schwab’s Excellent global corporation plan; Cash WIMCO at a lower price than the industry Turnaround Strategies flow management; Cell production system; expectations. However, after the Profit maximisation; Cost reduction; acquisition, ITC is confronted with the issue Brokerage firm Charles Schwab witnessed Prototype-less design; Stereolithography. of turning around WIMCO. a decline in its fortune since 2000 as a result of the company’s dependence on the Pedagogical Objectives brokerage business for its revenues. To find Warner Music Group: Edgar new sources of revenue, the company • To focus on the business diversification diversified into new businesses under its Bronfman Jr’s Turnaround strategies of ITC and its entry into the then Chief Executive Officer (CEO) David Strategies match stick industry Pottruck. But it continued to struggle and For the year 2003, Warner Music Group • To discuss the challenges faced by ITC founder Charles Schwab was recalled to lead (WMG) reported a loss of $239 million, in turning around WIMCO. the company. After taking over as the CEO, which the management attributed to the Schwab undertook major restructuring changed dynamics of the music industry Industry Matchstick Industry steps to improve profitability. and the resultant competition and large- Reference No. RTS0070 scale piracy. In March 2004, Seagram scion Year of Pub. 2005 Pedagogical Objectives Edgar Bronfman Jr. bought WMG from Teaching Note Not Available • To discuss the strategies of Schwab in Time Warner for $2.6 billion. After taking Struc.Assig. Not Available turning around the company over the company, Edgar who was known keywords for his business acumen and strategies, • To highlight the challenges faced by the turned around the company in a period of Indian matchstick industry; Indian Tobacco company for sustaining its successful just 10 months and WMG recorded a profit Company’s (ITC) acquisition of West turnaround. of $36 million for the first quarter of 2005. Indian Match Company (WIMCO); Turnaround challenges; ITC’s Industry Capital Market Reference No. RTS0068 Pedagogical Objectives diversification; Synergies of acquisition. Year of Pub. 2005 • To understand the challenges faced by Teaching Note Not Available WMG in the highly competitive music Struc.Assig. Available GM’s Turnaround Strategies: Will industry they Ensure its Survival? keywords • To discuss the turnaround strategies of Charles Schwab; David Pottruck; Discount Edgar Bronfman Jr. and whether these Continued losses at its core North brokerage; Mutual funds; Restructuring; strategies would enable WMG to show American operations had called into Turnaround strategies; Growth strategies; outstanding performances in the future. question the very survival of General Motors (GM). The giant automobile Institutional investing; Diversification; Industry Music Industry manufacturer was rapidly losing ground in Leadership; Competition; Cyclical Reference No. RTS0071 the North American market to its nimble revenues. Year of Pub. 2005 competitors and its brands were losing their Teaching Note Not Available popularity. The company also had huge Struc.Assig. Not Available legacy costs. But the company’s ABB: Fred Kindle’s Restructuring management, led by chairman Rick keywords Strategies Wagoner, was confident that their Warner Music Group (WMG); Edgar turnaround strategies would be successful From being on the brink of failure, Asea Bronfman Junior; Music piracy; Music in ensuring the survival of GM. Brown Boveri Limited (ABB) was slowly industry; On-line digital music; On-line turning around its fortunes. Industry experts 33 www.ibscdc.org were of the opinion that it was the Teaching Note Not Available Millard Drexler: Turning Around company’s chief executive officer, Fred Struc.Assig. Not Available J. Crew Inc. Kindle’s (Kindle) restructuring strategies that were responsible for this turnaround. keywords Millard Drexler took over as the chief They were confident that ABB had left its Viacom Inc. (Viacom); Media movies and executive officer of J. Crew Inc. in 2003, troubled times behind and was on the path broadcasting services; Largest media amidst a declining market share and quality to healthy growth. Nevertheless, some conglomerate; Split-up and reversal of of merchandise at the stores. After he took experts believed that the company may merger; Combined entity market power over, Drexler withdrew all non-J.Crew face many troubles ahead and it was too synergies; Tom Freston and Leslie merchandise from the stores and focused early to conclude Kindle’s success. Moonves; Columbia Broadcasting System on repositioning the brand, targeting 25- (CBS); CBS Corporation and Viacom 45 year olds, instead of teenagers. A Pedagogical Objectives merger; MTV networks and Nickelodeon; premium pricing strategy was employed, Acquisitions takeovers and mergers; which was considered a bold move in the • To highlight the turning around of ABB Comcast, NBS Corporation, Time Warner; midst of the gloomy situation. For the Ltd. from failure Sumner Redstone; Media industry fourth quarter of 2004, the store sales of J. Crew increased by 17% and operating • To discuss whether Kindle would sustain deconsolidation; Opportunities and urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies income rose to $20 million from $1 million its successful turnaround in the future. challenges; Enhanced value for investors. in the last quarter of 2003. Industry Engineering Reference No. RTS0067 Pedagogical Objectives Year of Pub. 2005 PEMEX: The Mexican Oil Giant’s Teaching Note Not Available Restructuring Strategies • To discuss the reasons for the decline in sales of J. Crew Struc.Assig. Not Available Petroleos Mexicanos (PEMEX) is the keywords national oil company of Mexico, and • To discuss the turnaround strategies seventh-largest oil producer and tenth adopted by Millard Drexler to revive the Asia Brown Boveri Ltd. (ABB); Fred Kindle; largest gas producer in the world. PEMEX store sales. estructuring T estructuring T estructuring T estructuring T estructuring T ABB’s restructuring; Fred Kindle’s accounts for one-third of the Mexican RR RR R Industry Apparel Retailing strategies; ABB and the asbestos lawsuit; government’s revenues and 7% of its Reference No. RTS0064 ABB’s problems; ABB in China – India and export earnings. But due to rampant Year of Pub. 2005 other Asian countries; ABB’s corporate corruption, lack of investment and political Teaching Note Not Available culture; ABB in US; Former chief executive exploitation, PEMEX started losing its Struc.Assig. Not Available officers of ABB, Percy Barnevik, Lindahl, financial stability since 2000, despite the Centermann, Dormann; ABB’s record-high energy prices and increasing keywords acquisitions; ABB’s turnaround; ABB in world appetite for oil. To revive its 2005. fortunes, in mid-2003, PEMEX J Crew Inc.; Millard Drexler; Premium implemented several restructuring pricing strategy; Conservative inventory strategies. But the company’s future is still management; Speciality retailing; GAP Inc.; Turnaround strategies. The Viacom Inc. Split-up: uncertain due to its falling output, Opportunities and Challenges increasing debt and costs.

Viacom Inc., one of the world’s largest Pedagogical Objectives Italy’s Electricity Giant, Enel: media conglomerates, was built over the Paolo Scaroni’s Turnaround • To provide insights into the troubles years through several acquisitions. One of Strategies the biggest acquisitions in the company's faced by PEMEX and the restructuring history was the acquisition of Columbia strategies undertaken to overcome them Enel, Italy’s state-owned power utility, was Broadcasting System (CBS) by Viacom in • To discuss the efficacy of PEMEX’s the world’s second largest electric company 1999. However, in mid-2005, the company restructuring strategies and its future. in terms of installed capacity and number decided to split up into two separate entities of consumers. It monopolised the Italian owing to the stagnating stock price that Industry Oil and Gas electricity markets until the deregulation has been affecting the company since May Reference No. RTS0065 of Italy’s power sector in the 1990s. Franco 2000. Though the split-up of the Year of Pub. 2005 Tato, the then Chief Executive Officer conglomerate is offering potential benefits Teaching Note Not Available (CEO) of Enel, envisaged a multi-utility like enhanced value of the new entities, Struc.Assig. Not Available company with diversified interests. With ability to acquire high growth assets and this vision, he acquired businesses in gas, better investment opportunities for keywords water, real estate, waste treatment and investors, it is also posing challenges like Petroleos Mexicanos (PEMEX); telecom sectors, none of which were related loss of market power and synergies achieved Restructuring strategies; Corruption, to Enel’s core business of power generation as a combined entity. privatisation, liberalisation; Investment, and distribution. Franco Tato failed to joint venture, partnership; Reserve extract synergies from the company’s Pedagogical Objectives Replacement Ratio (RRR); Loss-making varied businesses. The results were falling debts and costs; Crude oil production share prices, and declining profit margins • To highlight the growth and the split-up refining transport; Natural gas, oil and gas for Enel, and rising cost of electricity for of Viacom reserves; Political posturing; Incompetent consumers in Italy. Paolo Scaroni, architect • To discuss the viability of split-up as an managers and poor decisions; Financial of the turnaround at loss making British option for growth for conglomerates. stability, lack of investment; Troubled times glassmaker, Pilkington PLC., was declining revenues; Mexico’s natural oil appointed the CEO of Enel in 2002. Under Industry Media Movies and company; Taxation and economic reforms; Scaroni’s leadership, Enel executed an Broadcasting Mexican debt crisis, Pemexgate. about-turn from Tato’s multi-utility Reference No. RTS0066 strategy, divesting all non-core activities, Year of Pub. 2005 and concentrating on electricity and gas. 34 www.ibscdc.org

Pedagogical Objectives consumers; Restructuring plans and • To provide an insight into the reasons

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S strategies; Acoustic lenses; Focused product behind the downfall of the Japanese video I – Y G E T A R T S • To discuss the diversification strategies design and marketing; Overcrowded game publishers employed by Enel under Franco Tato competition; Revolutionary products with and their effects simple functionality; The Archimedes • To discuss the turnaround strategies being under taken by the Japanese video game • To discuss the turnaround strategies Project; B1 exclusive B&O franchisees; Technology sharing partnership; Dismal publishers and whether they would be employed by Paolo Scaroni for the able to regain their leadership. company’s profitability and to redefine financial performance; Ineffective its strategic focus. distribution channels; National custom Industry Video Games design programme; Outreach Customers & Reference No. RTS0060 Industry Electricity and Power Services Partners Programme. Year of Pub. 2005 Reference No. RTS0063 Teaching Note Not Available Year of Pub. 2005 Struc.Assig. Not Available Teaching Note Not Available Struc.Assig. Not Available Piaggio: The Italian Scooter keywords Manufacturer’s Turnaround keywords Strategies Japanese video game publishers; Nintendo; Electronic Arts Inc.; Leading video game Ente Nazionale per l’Energia Ellettrica After a spate of losses since 2000, Piaggio publishers; Turnaround strategies; Falling (Enel); Electricity generation and recorded its first net profit in 2004. Under fortunes; Video game industry; Loss of distribution; Monopoly and state owned Roberto Colaninno, who took over as the market share; Video game console; Sony company; Turnaround strategies; Chairman in October 2003, Piaggio PlayStation; Arcade games; Console games; Restructuring plan; Franco Tato and Fulvio implemented radical cost-cutting measures, Profile of average gamers; Mergers and Conti; Unrelated diversifications and and along with the introduction of new acquisitions; Video games for mobile expansions; Paolo Scaroni; Electricity, products, the company was able to mark a phones. water, gas, telecommunications; Lost recovery in almost all its markets across business focus and poor decisions; Troubled the globe. times and leadership change; Mergers and acquisitions; Liberalisation and Electronic Data Systems Corp. Pedagogical Objective deregulation; Turnaround specialist; (EDS): Turnaround Strategies Divestments and spin-offs. • To highlight the strategies adopted by Electronic Data Systems Corporation Piaggio to recuperate from its financial (EDS), was the second-largest global downturn and claim its lost business in provider of information technology and the global two wheelers market. Bang & Olufsen: The Danish High- Business Process Outsourcing (BPO) end Audio Maker’s Restructuring Industry Motorcycle and Other Small services in diverse fields such as financial Strategies Engine Vehicle Manufacturing services, manufacturing, healthcare, Reference No. RTS0061 communications, energy, transportation, Bang & Olufsen (B&O) is a Denmark-based Year of Pub. 2005 consumer and retail industries. However, high-end audio-video equipment maker. Teaching Note Not Available since 2001 the company has been From a humble beginning in 1925, B&O Struc.Assig. Not Available experiencing fall in profits due to loss- has grown into an international company making mega contracts, increased known for its high quality and innovative keywords competition, reduced number of new products. But during the 1980s, rising contracts and a Securities and Exchange competition coupled with inefficient Piaggio; Vespa; Roberto Colaninno; Turnaround; Recession; Morgan Grenfell Commission investigation. To turnaround management and economic crisis resulted the company, the new Chief Executive in severe loss in the revenues and market Private Equity; Immsi; Debt-for-equity; Chongqing Zongshen Motorcycle Group; Officer (CEO), Michael Jordan, initiated share of the company. A restructuring plan several strategies. implemented in the early 1990s did not Piaggio Vehicles; Aprilia; Rocco Sabelli. achieve the desired results. In 2001, the Pedagogical Objectives new Chief Executive Officer, Sorensen, initiated another restructuring plan based Falling Fortunes of Japanese • To provide insights into the reasons on global expansion, focused product Video Game Publishers: The behind EDS’ troubles and highlight the design and aggressive marketing strategy. Turnaround Strategies efforts of the new CEO in turning around the company Pedagogical Objectives Ever since Nintendo launched its family computer for the US market in 1985, the • To discuss the efficiency of the strategies • To highlight the rise and fall of B&O Japanese video game publishers had and the potential threats faced by the over the decades dominated the global video game industry. company. But since the late 1990s, they had been • To discuss the restructuring strategies of Industry Information Technology losing market share to their western B&O and whether these strategies would Services counterparts, especially in the crucial US ensure a successful future for B&O. Reference No. RTS0059 market. To turn around their fortunes, the Year of Pub. 2005 Industry Audio Video Electronics Japanese publishers have initiated several Teaching Note Not Available Reference No. RTS0062 steps since 2003. Struc.Assig. Not Available Year of Pub. 2005 Teaching Note Not Available Pedagogical Objectives keywords Struc.Assig. Not Available • To understand the profile of the video Electronic Data Systems Corp. (EDS); keywords game industry and the evolution of the Information technology services; Business Japanese video game industry process outsourcing services; Turnaround Bang & Olufsen (B&O); High-end audio- strategies; Restructuring plan; Michael video equipment maker; Fashion conscious Jordan and Richard Brown; EDS Agility 35 www.ibscdc.org Alliance; AT Kearney and Tower Perrin; (Chief Executive Officer) Brenda Barnes Airlines (4) the leadership of Herb Loss-making mega contracts; Incompetent announced a major restructuring strategy. Kelleher (5) and the employee managers and poor decisions; General empowerment of Southwest Airlines in Motors; Structural problems and cultural Pedagogical Objectives achieving success in the highly clashes; Computer services and software; competitive Airlines industry Turnaround specialist divestments and spin- • To highlight the diversification offs. strategies of Sara Lee, by shifting • To discuss the changing cost structure consumer preference towards low price and corporate culture of Southwest and low-calorie foods, and increasing the Airlines. trend of private label brands Siemens: The Challenges of Industry Airlines Leadership Change • To understand the reasons for the failure Reference No. RTS0056 of Sara Lee’s previous restructurings and Year of Pub. 2005 After 12 years at the helm of affairs of its future challenges. Teaching Note Available Siemens AG, Heinrich von Pierer, who was Struc.Assig. Available considered one of Germany’s top managers Industry Food and Apparel keywords and was credited with transforming the Reference No. RTS0057 urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies 157-year-old electronics and electrical Year of Pub. 2005 Southwest Airlines; Leading low-cost engineering conglomerate into a powerful Teaching Note Not Available airline; FORTUNE’s most admired global player, stepped down from the chief Struc.Assig. Not Available companies; ‘Triple Crown’ award; Herb executive position in January 2005. In keywords Kelleher; Strategic advantages; Business place of Heinrich von Pierer, Klaus model; Hub-and-spoke system; Point-to- Kleinfeld, CEO (Chief Executive Officer) Sara Lee Corporation; Restructuring point airline network; Corporate culture; of Siemens’ US unit, was appointed as the strategies; Diversification strategies; The Southwest Airlines way; Competitive new CEO of the company. Though the Brenda C Barnes; Branding strategies; advantage; Lowest cost structure; LUV company was in a good financial state, Brand portfolio; Brand extension; Apparel airline; Changing employee attitude. some of its prominent business units like industry; Food and beverage industry; Loss estructuring T estructuring T estructuring T estructuring T estructuring T the mobile handset unit and Siemens of focus on key brands; Huge portfolio of RR RR R Transportation Systems were incurring brands; Consumer behaviour; Global heavy losses. conglomerate; High-quality branded NVIDIA: The Graphic products; Continuous restructuring Chipmaker’s Turnaround Pedagogical Objectives programmes. Strategy • To understand the leadership styles of NVIDIA Corporation (NVIDIA), a global Heinrich von Pierer and Klaus Kleinfeld leader in manufacturing graphic Southwest Airlines: The Changing processors, failed to deliver its most • To discuss as to which approach would Cost Structure and Corporate ambitious graphic processing unit, ‘NV30’, be adopted by Kleinfeld, the ‘American’ Culture to the market as per schedule in 2002. approach or the consensus-driven Besides, NVIDIA’s tussle with Microsoft German management style in turning Southwest Airlines, the largest domestic and an accusation against NVIDIA’s around Siemens AG. passenger airline with the highest market employees of insider trading added to the capitalisation in the US airline industry, company’s woes. From $11 billion in Industry Not Applicable has been the only airline in American January 2002, NVIDIA’s market value fell Reference No. RTS0058 history to have recorded profits for 32 to $1 billion by October 2002. However, Year of Pub. 2005 consecutive years since its inception in having learnt from its mistakes and with a Teaching Note Not Available 1971. Southwest relied on a unique business focused turnaround plan, NVIDIA was back Struc.Assig. Not Available model of ‘low cost – no frills – high into its leadership status by early 2005. keywords customer service’ and leveraged its human resources effectively to achieve Pedagogical Objective Siemens; Klaus Kleinfeld; Heinrich von extraordinary success. Southwest had been Pierer; ‘Top’ or ‘time-optimised in the top ten list of FORTUNE’s Most • To highlight NVDIA’s turnaround processes’; 10-point Programme; Siemens Admired Companies every year since 1998. strategy to emerge as a leader in the under Heinrich von Pierer; Operation Southwest had sustained the success and its global chip market. 2003; Siemens Management System; US- position even when the whole airline management style; Siemens Transportation industry plunged into losses after the 9/11 Industry Graphics, Video Chips and Systems; Telecommunications unit; terrorist attacks and also withstood the Boards Medical solutions; Leadership change; competition from a horde of airlines, which Reference No. RTS0055 American leadership style; Challenges of tried to replicate its strategies and business Year of Pub. 2005 leadership change. model. But since 2002, Southwest also had Teaching Note Not Available been caught up with the general troubles Struc.Assig. Not Available associated with the other airlines – higher keywords Sara Lee Corporation: Brenda C cost structure, changing consumer attitude, NVIDIA; NVIDIA’s GPU (Graphic Barnes’ Restructuring Strategies infrastructure bottlenecks, and changing corporate culture. Processing Unit); NVIDIA’s product cycle; Sara Lee is a global manufacturer and Worldwide graphic chip market; marketer of high-quality, high-profile Pedagogical Objectives Microsoft’s Xbox; NVIDIA’s price dispute branded consumer products. But the with Microsoft; NVIDIA’s challenges; company had been recording flat growth • To understand (1) the evolution of NVIDIA’s turnaround plan; Jen-Hsun since the early 1990s. Continuous Southwest as successful airline in Huang; NVIDIA’s competitors; NVIDIA’s restructuring to revive its fortunes had America (2) The business model of market share; Insider trading. failed. In February 2005, its new CEO Southwest Airlines (3) the strategic and competitive advantages of Southwest 36 www.ibscdc.org

Nestle: The Organizational Pedagogical Objectives has come a long way in shaping up

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S Transformation Thailand's industrial sector. The company • To discuss the restructuring activities was on an expansion bid when the Asian In nearly 140 years of existence, Nestle adopted by Deromedi to make Kraft financial crisis hit the region in 1997. had grown from a small baby food competitive Thailand, being one of the worst hit manufacturing house in Vevey, Switzerland, • To discuss the opportunities and countries, saw the devaluation of the baht, to the world’s largest food company, challenges faced by Kraft in the changing the Thai currency, and thereby the collapse operating in 86 countries and with more food market. of the economy. To survive the blow, than 500 factories spread across the globe. Chumpol NaLamlieng, the President of Nestle owns some of the world's best selling Industry Food Siam Cement, formulated restructuring brands in instant coffee (Nescafe), baby Reference No. RTS0053 strategies. Their implementation helped food (Cerelac), bottled water (Perrier) and Year of Pub. 2006 the company survive and gradually move pet care (Friskies). The company's growth Teaching Note Not Available towards profits. By 2004, with a stable strategy through acquisitions resulted in an Struc.Assig. Not Available external economy and growing internal ‘unwieldy empire’, lower profit margins keywords profits, the company was moving ahead and a negative response from stock towards achieving Chumpol's vision of markets. To accelerate profits without a Kraft Foods Inc.; Private label brands; turning the company into a regional leader slow down in growth, chief executive Roger K Deromedi; Low price; Low calorie and the ASEAN (Association of South East officer, Peter Brabeck, initiated a foods; Philip Morris Companies (Altria Asian Nations) region into a leading transformation of the organisation, which Group); Restructuring; Nabisco Holdings; industrialised area. analysts felt was akin to moving a Food and beverages business; Competitive mountain. advantage; Product innovations; Pedagogical Objectives Diversification; Oscar Mayer meat brand; Pedagogical Objectives Marketing and promotion strategy; • To understand (1) the evolution of SCG Sustainable growth plan. (2) the impact of the Asian financial • To understand the business model of crisis on Thai industries Nestle and the conditions in which its organisational transformation took • To discuss the competitive strategies place Deutsche Bank: Ackermann’s adopted by Chumpol NaLamlieng, and Restructuring Formula his vision for the future of the company, • To discuss as to how and whether Nestle Thailand and the ASEAN region. could be transformed. Josef Ackermann, the chief executive of Deutsche Bank, had set a high target of a Industry Cement, Paper and Industry Food and Beverages 25% return on equity in 2005 in order to Petrochemicals Reference No. RTS0054 transform his institution into one of the Reference No. RTS0051 Year of Pub. 2005 best banks in the world. Despite the bank’s Year of Pub. 2005 Teaching Note Not Available failed mergers with Citigroup, Germany’s Teaching Note Not Available Struc.Assig. Not Available Postbank and Credit Suisse First Boston Struc.Assig. Not Available keywords and its stock plunging by 6.9% in 2004, Ackermann was confident that the bank keywords Nestle; Largest food company; Nescafe; would be able to deliver its set targets. Siam Cement Group (SCG); The Asian Cerelac; Decentralised operational model; financial crisis; Thailand; Industrial Organisational transformation; Business Pedagogical Objective conglomerate; Restructuring strategies; model; Nestle empire; Mergers and Association of South East Asian Nations acquisitions; Peter Brabeck; Henri Nestle; • To discuss the restructuring of the (ASEAN); Divestment of non-core business; Misguided diversification; Food industry Deutsche Bank under the leadership of Thailand’s ‘industrial powerhouse’; King consolidation; Centralised management Ackermann. Rama VI; A white elephant in a hexagon; model; Global Business Excellence Industry Money Centre Banks Kingdom of Siam; Crown Property Bureau; Resource Planning System (GLOBE) Reference No. RTS0052 Asian market leader; Chumpol NaLamlieng; Year of Pub. 2005 Devaluation of baht. Teaching Note Not Available Kraft Foods in Crisis: Roger K Struc.Assig. Not Available Deromedi’s Restructuring keywords Parker Hannifin Corporation: Strategies Donald Washkewicz’s Deutsche Bank; Josef Ackermann; German Turnaround Strategies Kraft Foods Inc. is a leading confectionery, banking industry; Restructuring strategies; food and beverage company. Since 2001, it Money machine; Investment banking; Parker Hannifin Corporation is one of the has been losing out to cheaper store brands, Universal bank; European banks; Euro world's leading motion and control private label brands and competitors, due to effect; Single market programme. technologies and systems manufacturers. consumer preference towards low-priced and It provides precision-engineered solutions low calorie foods. A lack of new products, to commercial, mobile, industrial and the exit of top executives and a failure to aerospace markets. When the industrial supply what retailers wanted were also Thailand’s Siam Cement Group: recession set in during 2001, the company troubling the company. The parent The Conglomerate’s Resurgence was faced with huge amounts of excess company, Philip Morris, began pressurising from the Asian Crisis capacity and high costs. The company’s Kraft Foods for a possible spin-off. In chief executive officer, Donald January 2004, chief executive officer Roger Siam Cement Group (SCG), Thailand’s Washkewicz, introduced lean K Deromedi announced a restructuring plan largest industrial conglomerate, is the Asian manufacturing throughout the company. aimed at trimming non-core brands, focusing market leader in many diversified This helped it change its operational only on blockbuster brands and re-fashioning businesses. Siam Cement was established structure, resulting in decreased overheads, the product line up. by King Rama VI in 1913 and since then it 37 www.ibscdc.org reduced inventory and shorter lead times, Neckermann and Quelle brands; stock market crash and corpus erosion in thereby ensuring enhanced teamwork and Reorganisation; Europe’s largest mail order its fund management business. The increased profits. groups; Restructuring strategies; Discount changing circumstances and increasing chains; Family-run business; Diversification competition required aggressive fund Pedagogical Objective strategy; Pricing strategy; The management and innovative investment ‘Intercontinental Department Store banking which further required expertise • To discuss as to how parker Hannifin Group’; Mismanagement; Competitive and funds. Failing to generate enough Corporation converted adversities into strategies; Turnaround. revenue to attract fresh talent and structure advantages under the leadership of new products, Cazenove started looking Donald Washkewicz. for alliances which could provide the required competence while preserving its Industry Motion and Control Systems Dell in China: The Strategic independence. After some deliberations Reference No. RTS0050 Rethinking Cazenove formed a joint venture with JP Year of Pub. 2005 Teaching Note Not Available Dell, the world’s largest computer seller, Morgan, which was providing it with both Struc.Assig. Not Available started focusing on China in 1998. Its independence and competence. But the market share in China rose from less than deal generated apprehension among its urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies keywords 1% in 1998 to 7.4% in 2004. Dell has clients and some of them were focused on low-end PC’s and aggressively contemplating severing long-standing Parker Hannifin Corporation; Largest relationships with Cazenove. motion and control systems company; targeted state-owned large enterprises and Fluid system components; US economic individual consumers, where profit margins recession; Airconditioning systems; Donald are typically lower, while other players Pedagogical Objectives Washkewicz; Lean manufacturing system; focused on high-end PC’s and targeted corporates and business consumers. But due • To highlight the journey of Cazenove Turnaround strategies; Win strategy; in restructuring its operations Industrial recession; Pricing strategy; to heavy competition from the local PC Strategic procurement goal; Cellular vendors, Dell decided to change its strategy • To discuss whether the strategy had manufacturing; Competitive strategies; by shifting its focus from low-end consumer adopted to overcome its problems was a estructuring T estructuring T estructuring T estructuring T estructuring T PC’s to high-end products like servers and rational decision or a mistake committed

RR RR Precision-engineered solutions. R storage systems for corporates and in haste. businesses. Industry Financial Services KARSTADTQUELLE: The German Pedagogical Objectives Reference No. RTS0047 Retail Giant’s Restructuring Year of Pub. 2005 Strategies • To discuss the expansion strategies of Teaching Note Not Available Dell in Chinal Struc.Assig. Not Available KarstadtQuelle, one of Europe’s largest department store and mail order groups, • To discuss the strategies it adopted while keywords represented 50% of the German market facing competition from the local players. Cazenove Group Plc.; David Mayhew; share in this business. In 2000, the Financial advisory; Investment banking; company shifted away from general Industry PC and Software Vendor Corporate broking; JP Morgan; Lehman retailing towards more specialised sectors Reference No. RTS0048 Bros; Restructuring strategies; Failed Initial such as fashion apparel and sports to attract Year of Pub. 2005 Public Offer (IPO); Mergers and additional foreign customers. It further Teaching Note Not Available acquisitions; Investment research; Foreign diversified into new businesses such as Struc.Assig. Not Available financial institutions; Britain’s blue-chip financial services, tourism and mail order. companies; Joint venture; Structured But mismanagement and weak consumer keywords finance market. demand in Germany began hurting the Dell Inc.; Michael Dell; China; World’s company’s core activities, resulting in largest computer vendor; PC market share; severe structural problems and a collapse Growth strategy; Chinese PC vendors; On- in earnings. To revive its fortunes, McDonald’s “Plan To Win” line sales; High-end PC market; Low-end KarstadtQuelle began restructuring its Strategy: The Payoffs PC market; Market share; Pricing strategy; operations. Target consumers; Competitive strategies; McDonald’s had been recording declining Brand management. profits since 2001. Although turnover was Pedagogical Objectives increasing, there was a continuous decrease • To discuss the reasons for the problems in its operating profit and net profit faced by KarstadtQuelle and the Cazenove Group Plc.: British margins. To turnaround its fortune, the company adopted the “Plan To Win” restructuring strategies it adopted to Financial Firm's Restructuring turnaround strategy in 2003. The main purpose of the Strategies strategy was to bring about improvement • To discuss the challenges ahead for the Cazenove Group Plc., the oldest and largest in the company’s performance by building retailing giant. British financial services firm, serves a it around five key drivers of customer experience – People, Product, Price, Place Industry Retailing client base comprising of top UK-based and Promotion; and by identifying Reference No. RTS0049 companies. Since its inception in 1823, it opportunities on the basis of the four basic Year of Pub. 2005 had operated independently and discreetly, aspects of its mission statement – Quality, Teaching Note Available much to the approval of its clientele, Service, Cleanliness and Value. The strategy Struc.Assig. Not Available dealing with fund management and investment banking, besides providing was also based on what McDonald’s keywords corporate finance advisory, securities considered as three essential components distribution and research services. The firm of success – Operational Excellence, KarstadtQuelle; German retail market; Leadership Marketing and Innovation. Europe’s largest department store chains; ran into rough weather in 2003 due to the

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Pedagogical Objectives World Trade Centre was a severe blow to keywords

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S the entire airline industry, pushing many I – Y G E T A R T S • To discuss the efficacy of the “Plan to companies to the verge of bankruptcy. Interstate Bakeries Corporation; Alvarez Win” strategy Delta was one such company which was & Marsal; A&M’s turnaround formula; severely affected, incurring losses for three Tony Alvarez; Wonder Bread; Low carb • To discuss the solutions for challenges food products; Atkins; Extended shelf life; plaguing the fortunes of the firm. subsequent years – 2001, 2002 and 2003. The company was on the verge of filing Interstate Bakeries filing for bankruptcy; Industry Fast Food Retailing for Chapter 11 bankruptcy protection in Home Pride carb action; Hostess twinkies. Reference No. RTS0046 2004. To save the struggling airline, the Year of Pub. 2005 company’s new CEO, Gerald Grinstein Teaching Note Available formulated ‘Delta solution’. But the Televisa: The Turnaround Struc.Assig. Not Available implementation of the solution depends Strategies of Emilio Azcarraga keywords on the cost concessions to be offered by Jean the Pilot Association and a host of other McDonald’s Corporation; Plan to Win; factors. When Emilio Azcarraga Jean took over Operational excellence; Innovation; the reins of Mexico-based Grupo Televisa, Leadership marketing; People Vision; Pedagogical Objective the world’s largest Spanish-language media People Promise; Mission statement; Fast conglomerate, in 1997, investors raised food; Obesity; Jim Cantalupo; Charlie Bell; • To discuss the restructuring strategies doubts as to whether the then 29-year-old ‘I’m lovin’ it’ ad campaign; Best Quick formulated by the CEO to save the scion would be able to carry on the daunting Service Restaurant; McCafe. company and its future that is dangling task of turning around the media between bankruptcy and transformation. conglomerate. At that time, the company's revenues were stagnant, it was characterised Industry Airlines by a bloated management structure and Hynix: The South Korean Reference No. RTS0044 intense competition. However, Jean Year of Pub. 2004 Chipmaker’s Restructuring proved his critics wrong. By focusing on Teaching Note Not Available Strategies lowering costs, improving production and Struc.Assig. Not Available South Korean chipmaker, Hynix, was changing the work culture, Jean, in a span severely hit by the downturn in the keywords of six years returned the company to country’s semiconductor market with a profitability with revenues of $2.3 billion Delta Air Lines; Gerald Grinstein; CE and profits to the tune of $350. debt of six billion won in 2002. However, Woolman; 9/11 attack on New York's World Hynix managed to extricate itself from its Trade Centre; Restructuring strategies; Delta Pedagogical Objectives financial troubles and restated profits in solution; Pilot concessions; Delta - ACES; the third quarter of 2003. Despite profits, Transformation plan; Chapter 11 • To discuss the initiatives taken up by Hynix was accused of various allegations bankruptcy protection; Profit Emilio Azcarraga Jean to bring back the by competitors as they considered the bank Improvement Initiatives (PII); Airline lost glory of Televisa bailouts being provided to the company as industry; Strategic cornerstones; Hub and an unfair government subsidy. spoke system; The Airlines Pilot Association • To discuss the future plans of Jean for the further growth of the company Pedagogical Objective • To discuss TTSL’s ambitions to become • To discuss the restructuring strategies A&M’s Turnaround Formula for a popular brand by focussing on the adopted by the company and the InterstateBakeries Corporation: company’s initiatives towards offering challenges being faced by it in the The Testing Times its subscribers more value and less costs. competitive market for semiconductors. The largest bakery company in the US, Industry Media Industry Memory Chips and Modules Interstate Bakeries Corporation (IBC) had Reference No. RTS0042 Reference No. RTS0045 been operating successfully with popular Year of Pub. 2004 Year of Pub. 2004 brands like Wonder Bread and Hostess Teaching Note Not Available Teaching Note Not Available cakes, since the late 1920s. However, IBC Struc.Assig. Not Available Struc.Assig. Not Available had been reporting stagnated sales and its keywords keywords net income had been falling since 1999 owing to competition from manufacturers Televisa; Emilio Azcarraga Jean; Televisa Hynix; Hyundai Electronics Industries; of low-carb food products like Atkins, and 2000; Univision Communications; Emilio South Korea DRAM (Dynamic Random increased operational costs. In 2004, the Azcarraga Milmo; El Tigre; TV Azteca; Access Memory) market; Hynix bailout company filed for bankruptcy reporting a Grupo Televicentro; Clear Channel packages; LG Semicon; Hynix restructuring debt of $1.320 billion. Communications; Institutional plan; Export duties on Hynix DRAM; Revolutionary Party; The tequila effect; World DRAM market; Hynix blue chip Pedagogical Objectives Telemundo Communications Group Inc; US technology. Hispanic TV market; Telesistema • To discuss the factors leading to IBC’s Mexicana; Sky Entertainment Services. tryst with bankruptcy Delta Air Lines Inc.: Restructuring • To discuss the challenges faced by A&M Strategies in turning around IBC. Volkswagen: Bernd Pischetsrieder’s Turnaround Industry Bakery Products Delta Air Lines, one of the largest airlines Efforts in the world, with a vast domestic and Reference No. RTS0043 international network is known for its safe Year of Pub. 2004 Volkswagen has been Europe’s leading and reliable transportation. The September Teaching Note Not Available carmaker with many successful models. 11th 2001 terrorist attack on New York’s Struc.Assig. Available However, the company seemed to be losing

39 www.ibscdc.org ground since 2002, witnessing stagnant Competition; Rural marketing; Personal keywords sales and declining profits. The company care business; Business strategy; Malvinder is besieged with problems on many fronts: Singh Banga; CK Prahalad; New business Business segments of Tyco; Market (1) labour problems; (2) ageing models; (3) initiatives. capitalisation of Tyco; Accusations against brand cannibalisation due to overlapping Tyco; Losses of Tyco; Revival of Tyco; models; and (4) increased competition. Timeline of Tyco International; Tyco’s growth through acquisitions; Divisional Bernd Pischetsrieder, who succeeded US Airways: The Tryst with Ferdinand Piech as chairman, initiated structure of Tyco International; Segment efforts to turnaround the company. Bankruptcy wise revenues of Tyco; Debts of Tyco. In 2004, following unsuccessful Pedagogical Objectives negotiations with labour unions on wage concessions, US Airways, America’s Matsushita Electric Industrial • To discuss the reasons for the decline in seventh largest airline, filed for bankruptcy Company: The Restructuring the company’s performance for the second time since 2002. This time, Strategies • To discuss the turnaround efforts of the airline aims to repeat the success of By the end of the 1990s, Matsushita Electric Bernd Pischetsrieder. the 2002 restructuring and emerging as a urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies low-cost airline. Industrial Company was hit by rapid Industry Automobile changes in the domestic as well as the global electronics market. In 2003, it had a loss Reference No. RTS0041 Pedagogical Objectives Year of Pub. 2004 of ¥19.5 billion. However, by 2004, the Teaching Note Available • To discuss the reasons for the bankruptcy company had an operating profit of ¥195.5 Struc.Assig. Available of US Airways billion. keywords • To discuss the restructuring strategies it Pedagogical Objective adopted, to recover from its poor Volkswagen; Bernd Pischetsrieder; Brand financial health. • To discuss the restructuring strategies cannibalisation; Overlapping models; estructuring T estructuring T estructuring T

estructuring T estructuring T adopted by Matsushita that paved the Ferdinand Piech; Labour problems; Ageing Industry Airlines RR RR R way for the future growth of the models; Turnaround. Reference No. RTS0039 company. Year of Pub. 2004 Teaching Note Not Available Industry Consumer Electronics Hindustan Lever Limited: The Struc.Assig. Not Available Reference No. RTS0037 Year of Pub. 2004 Organizational Restructuring keywords Teaching Note Not Available Hindustan Lever Limited (HLL), the The US Civil Aviation industry; Low-cost Struc.Assig. Not Available largest FMCG (Fast Moving Consumer carriers in the US; The weak American keywords Goods) company in India, was struggling economy after September 11th 2004; US to increase its business by the late 1990s. Airways’ bankruptcies; Labour unions of Global electronics manufacturers; Progress To kick-start growth, HLL trimmed its US Airways; Negotiations with the labour 2000 plan; Value creation 21; Corporate brand portfolio of 110 brands to 30, unions of US airways; Key components of Panasonic marketing division; Profile of initiated new business ventures and the transformation plan of US Airways; the world electronic industry; China- relaunched all its brands. But being caught Airlines that have filed for bankruptcy post Matsushita’s low-cost manufacturing up in price wars with its arch rival Procter 1978; Star Alliance network; US airways’ destination; Mergers and alliances of & Gamble negated the gains it achieved. In successful recovery from the first Matsushita; Brands of Matsushita; Sales of March 2004, HLL announced a major top bankruptcy. Matsushita products by category; management reshuffle and reorganised its Deconstruction and creation; New business business portfolio under two divisions. The segments of Matsushita; New consumer company officials maintained that the Tyco International Ltd.: The sales structure of Matsushita in Japan; strategy was to provide a sharper focus on Revival Strategies Matsushita’s concept of groupwide business key brands and categories and to simplify and organisational restructuring; New the organisational structure. Tyco International Limited (Tyco), one management structure of Matsushita. of the 20 most valuable companies in the Pedagogical Objective US, was accused of corporate fraud in 2002. Its top management was accused of Humana Inc.: Turnaround of a • To discuss the organisational misusing the company’s loan system and Health Insurer restructuring at HLL and whether HLL misrepresenting the company’s financial would eventually pull itself out of the status. In the same year, the company’s Louisville-based health management growth rut. stock lost a total of $90 billion. company, Humana Inc., ran into difficult Industry Personal Care Products circumstances in the late-1990s due to the Reference No. RTS0040 Pedagogical Objective rising health care costs of its employees in Year of Pub. 2004 the US. The troubles were further Teaching Note Available • To discuss the revival strategies adopted aggravated as various class action lawsuits Struc.Assig. Available by Tyco to improve its operational were filed against it on the grounds that efficiency and reclaim its leadership the company had misrepresented its health keywords position in the US market. care plans to its customers. The arrival of Hindustan Lever Limited (HLL); Unilever; Industry Electronics, Security, Plastics the new CEO, Michael P. McCallister, FMCG (Fast Moving Consumer Goods); Reference No. RTS0038 marked a turnaround for Humana and Organisational restructuring; Year of Pub. 2004 earnings increased significantly in 2003. Organisational structure; Project Teaching Note Not Available Humana chose a consumer-centric millennium; e-Tailing; Power brands; Struc.Assig. Not Available approach and a strong IT infrastructure as

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the two growth drivers to ensure its success appliances industry; Mergers and Pedagogical Objectives

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S in commercial and government business acquisitions; Eureka; Michael Treschow; I – Y G E T A R T S segments. Research and development; Marketing • To understand the reasons for the failure strategy; Hans Straberg; White goods of the two companies in realising the expected synergies of the merger Pedagogical Objective producers; Market segmentation. • To discuss the restructuring initiatives • To discuss the different strategies adopted of John F. Miller to revive the company’s by Humana to become the leading health fortunes. services company in the competitive US BP: Organisational Restructuring market. and Evolution of a New Industry Media and Telecommunications Corporate Identity Services Industry Health Care Insurance Reference No. RTS0033 Reference No. RTS0036 By 2004, BP (British Petroleum) had Year of Pub. 2004 Year of Pub. 2004 transformed itself from a typically old- Teaching Note Not Available Teaching Note Not Available fashioned British company to an aggressive Struc.Assig. Not Available Struc.Assig. Not Available corporate entity to become the second largest company in the world, with keywords keywords operations in more than 70 countries. BP’s America Online, Time Warner; Humana; Health Maintenance transformation into a successful energy company in the 21st century can be traced Restructuring strategies; US Securities and Organisations (HMO) in the US; Rising Exchange Commission (SEC); Mergers and health costs in the US; SmartSuite; Personal back to its restructuring in the 1990s under the stewardship of its CEO, Lord David acquisitions; Inorganic growth; Media and nurse; TRICARE; HumanaCoverage-First telecommunications services; Internet PPO; Health care plans; Medicare Browne. Radical changes in BP’s organisational culture, the knowledge service providers; Growth strategies; advantage; Smart Assurance; A competitive Premium narrowband, broadband service; landscape of the US HMO market; sharing initiatives and its focus on being an environmentally conscious energy Jonathan Miller; Robert Pittman; Market Potential of health insurance business in capitalisation; Competitive strategy. the US; Difference between nursing homes provider, have all contributed to the and hospitals; Growth of the HMO industry corporate transformation. in the US; Lawsuit allegation against Humana. Pedagogical Objective AirTran Airways: The Turnaround • To discuss BP’s restructuring initiatives AirTran, which was started in Orlando in to bring about a change in its corporate 1994, started reeling under losses after the Electrolux: Reinventing identity. Atlanta-based low cost airways ‘ValuJet’, Operations in North America acquired it in 1997. In 1998, it incurred Industry Energy and Utilities losses of $41 million and failed to compete In 1968, Electrolux AB had sold its US Reference No. RTS0034 with traditional carriers like Delta and US manufacturing facilities and the rights to Year of Pub. 2004 Airways. By January 1999, the airline had use the brand name in North America and Teaching Note Not Available only $10 million that could keep it afloat Canada to Consolidated Foods. Since then, Struc.Assig. Not Available for a few weeks. However, under new it had operated under a slew of other brand keywords management, AirTran saw significant names like Eureka, Frigidaire, White- growth and was named as the ‘best lowfare Westinghouse and Weed Eaters, while the BP (British Petroleum); Organisational airline’ in 2004 by the Entrepreneur well-known ‘Electrolux’ vacuum cleaners restructuring; Corporate culture; magazine. in the US were manufactured and marketed Organisation culture; Change in corporate by a company called Aerus. In 2000, under structure; Work culture; BP identity; BP Pedagogical Objective its global strategy to integrate all its brands transformation; Change in culture; under the brand name of ‘Electrolux’, Knowledge management; Green image. • To discuss the revival strategies of Electrolux AB bought back the rights to AirTran airways between 1999 and 2004 use its name in the US from Aerus, by under the leadership of its CEO, Joe paying $50 million. But, there was Leonard. confusion as to which were the real America Online: The Electrolux AB brands and which were the Restructuring Strategies Industry Airlines Reference No. RTS0032 ‘Electrolux’ brands from Aerus. st In the early 21 century, the technology Year of Pub. 2004 sector experienced a significant number of Teaching Note Not Available Pedagogical Objective mergers and acquisitions among the old and Struc.Assig. Not Available new economy companies. The merger of • To discuss the branding and positioning America Online (AOL), America’s largest keywords challenges faced by Electrolux AB as it Internet service provider with the media reinvented its operations in North AirTran; ValuJet; Low cost airlines in the giant Time Warner, in 2001, was considered America. US; Cost management at AirTran; Key as one of the largest mergers in the success factors of low-cost airlines; Industry Consumer Durables and technology sector. However, the merger Employee management at AirTran; Appliances failed to deliver the desired synergies. AOL, Advertising strategy of AirTran; Reference No. RTS0035 one of the subsidiaries of the merged entity, Marketing strategies of AirTran; Year of Pub. 2004 Time Warner, was the worst affected and Multitasking at AirTran; Differentiation Teaching Note Not Available it continued to experience a decline in the strategies of AirTran; Joe Leonard; Market Struc.Assig. Not Available customer base. Jonathan F. Miller, who share of major US airlines. took over as CEO in August 2002, the third keywords in a period of four months, implemented Electrolux AB; Global branding strategy; certain measures to revive the company. Branding strategy; Consumer durables and 41 www.ibscdc.org AirTran Airways: Leonard’s Future keywords labour unions leading to constant Growth Plan government intervention and a lack of any Japanese automobile manufacturers; research and development and innovation AirTran Airways was the second-largest Honda; Toyota; Nissan; Mazda’s sports car policy. low-cost, lowfare airline in the US (after heritage; Millennium plan of Mazda; Domestic sales of Mazda; New models from Southwest) and was one among the few Pedagogical Objectives that was profitable even after September Mazda; History of Mazda; Brand strategy 11. While the majors collectively lost $5 of Mazda; Mazda’s turnaround. • To discuss the reasons for the decline of billion in 2003, AirTran increased its profits the company and the turnaround from $10 million in 2002 to $100 million strategies that have been implemented in 2003. Unlike most other prominent Janus Capital Group: The since 1999 Low Cost Carriers (LCC) such as Southwest Revival of the American Mutual • To understand the various factors that and JetBlue, AirTran targeted business Fund Company have resulted in the failure of the travellers with business class seats, and turnaround strategies. operated via a hub and spoke system. With the revelation of the mutual fund scandal in the US in 2003, Janus Capital Industry Automobile urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies Pedagogical Objectives Group, a major player who had half of the Reference No. RTS0028 US total investments in growth funds, was Year of Pub. 2004 • To discuss the genesis of the airline, the hit hard with huge fund outflows. Teaching Note Available strategies employed for growth, and the Moreover, Janus was also charged with Struc.Assig. Available future amid increasing competitive unethical and illegal trade practices. pressures Although it spent $226 million to settle keywords • To discuss the following points: (1) the the charges, investors had lost their faith Agnelli family; Diversification of the Fiat unique model employed by AirTran for in the company. To rebuild its brand image, Group; Bankruptcy; Luca Di its growth and the difference between the leadership of the company was handed Montezemolo; Inflexible production lines; its model and that of the majors and the over to Steven L. Scheid and Gary Black, Dependence on single model; Government estructuring T estructuring T estructuring T estructuring T estructuring T LCC; (2) the product development two veterans from the financial services intervention; Turnaround efforts. RR RR R strategy used by AirTran to attract industry. business travellers; and (3) the challenges that might be faced by AirTran due to Pedagogical Objective Delta Air Lines: Grinstein’s its fast growth and the nature of • To discuss the strategies adopted by Janus Restructuring Challenge competition. Capital Group to win back investor During 2001-2003, Delta Air Lines (Delta) Industry Airlines confidence in the backdrop of the mutual had cumulatively lost $3.3 billion, in sync Reference No. RTS0031 fund scandal in the US. with industry losses of $21 billion. Delta Year of Pub. 2004 Industry Mutual Fund Management had laid off 16,000 employees and had cut Teaching Note Not Available Reference No. RTS0029 capacity by 16%. To improve revenues, Struc.Assig. Not Available Year of Pub. 2004 Delta had strengthened its alliances with keywords Teaching Note Not Available its regional Delta Connection partners and Struc.Assig. Not Available international partners through 'SkyTeam'. AirTran; US airline industry; ValuJet; The airline had also leveraged technology keywords Joseph Leonard; Low-cost carriers; Point- through its Delta Nervous System (DNS) to-point flights; Hub and spoke model; Mutual fund industry in the US; Mutual to cut costs and improve productivity. In Deep discount fares; A-Plus rewards fund scandal in the US; Janus Capital Group; addition, to compete with the Low Cost programmes; Product improvements. Market timing; Late trading; Canary Carriers (LCC), the company had launched Capital; Mutual Fund Reform Act; Stilwell Song, a low cost subsidiary in select markets. Financial; Morningstar ratings; Winning In spite of these initiatives, it posted losses Mazda’s Magical Turnaround investor confidence in mutual funds; No of $383 million in the first quarter of 2004 load funds; Growth of mutual funds in the due to high labour costs as its pilots were Mazda, Japan’s fifth-largest automaker, US; Investment Companies Act of the US. the highest paid in the airline industry. witnessed a consistent decline in its revenue Having failed to get the required in the 1990s. During 2000-2001, its loss concessions from the pilots, Leo Mullin, touched a record $1.2 billion due to an the CEO of Delta, resigned and Gerald oversized workforce, unsuccessful growth Fiat Auto: Turning Around the Grinstein took over in January 2004. After initiatives and a blurred brand image. Turnaround Strategies? taking over, Grinstein announced a Fiat Auto, the $24 billion flagship company complete strategic assessment of the Pedagogical Objective of Italy's largest industrial group Fabbrica airline. • To discuss the strategies that Mazda Italiana Automobili Torino (FIAT), has adopted to put itself on the path to accumulated $9.3 billion in net losses from Pedagogical Objectives 1999 to 2003, and the Fiat group is sustainable profitability and stage a • To discuss the various problems faced struggling to turnaround its auto business. remarkable comeback. by the company and the choices it needs Fiat was established in 1899 and the group’s to make a return to profitability Industry Automobile core business is automobile manufacturing. Reference No. RTS0030 Over the years, Fiat Auto has produced • To discuss the strategies adopted by Delta Year of Pub. 2004 some very popular passenger car models to lower its costs and the advantage it Teaching Note Not Available but the company’s profits have been on a derives from DNS Struc.Assig. Not Available decline since 1995. The company’s problems stem from inflexible production • To discuss the challenges Delta faces due lines producing only one model, huge to its high labour costs and increasing production overheads, and unyielding debt 42 www.ibscdc.org

• To discuss the challenges posed by the Reinventing the Buick Magic Dell PCs; Management innovation 2001;

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S rapid growth of LCC and the strategic Inter-company value chain; Procurement I – Y G E T A R T S importance of Song in the long run Buick, one of the oldest and premium brands innovation division; PC and peripherals; of GM (General Motors), has been Notebooks; Dynamic random access • To discuss the merits and demerits of witnessing a rapid decline in sales and memory. the regional and international alliances market share since the mid-1980s. Despite for Delta two reorganisation efforts in 1985 and 1992, GM failed to reduce Buick’s costs • To discuss the ways in which Delta and revive its sagging production lines. Daewoo Corporation: Corporate mainline can optimise and streamline Restructuring Success its operations Pedagogical Objective Daewoo, which in Korean stands for ‘great • To discuss the possible outcomes of the universe’, was Korea’s second-largest strategic assessment and the pros and • To discuss GM’s efforts since 2001 to conglomerate and one of the world’s cons associated with them. revitalise Buick to achieve sales of half a million cars per annum. leading automobile companies. Belying the Industry Airlines Korean belief, ‘the chaebols are too big to Reference No. RTS0027 Industry Automobile Manufacturing fail’, Daewoo was declared bankrupt by the Year of Pub. 2004 Reference No. RTS0025 government of Korea in 2000. Teaching Note Not Available Year of Pub. 2004 Struc.Assig. Not Available Teaching Note Not Available Pedagogical Objective Struc.Assig. Not Available keywords • To discuss the restructuring efforts of keywords the affiliate companies of the Daewoo Network carriers in the US; Business empire against the backdrop of Daewoo’s segments of Delta Airlines; History of Delta GM (General Motors); The history of the rise and fall. Airlines; Leo Mullin’s revival plan for Delta Buick brand; Buick city; GMs North Airlines; Employee involvement American Operations (NAO); The light Industry Not Applicable programme at Delta; Delta Airlines’ truck boom in the US; Buick’s sales Reference No. RTS0023 business alliances; Cost management at problems; Buick rendezvous; Buick ‘bengal Year of Pub. 2004 Delta Airlines; Productivity enhancements concept’ vehicle; Harvey Earl campaign; Teaching Note Not Available at Delta Airlines; Delta Nervous System Park Avenue Ultra; J.D. Power and Struc.Assig. Not Available (DNS); Song; Delta expansion initiative. Associates; Buick Velte concept; Changing Buick’s image; Attracting younger buyers keywords for Buick. Daewoo; Restructuring; Kim Woo Choong; Lucent Technologies: The Chaebol; Workout; General Motors; Debt Resurrection restructuring; South Korea; Asian financial Toshiba: Restructuring to Sustain crisis; Big deals; Turnaround; Electronics; By the turn of the 21st century, Lucent its Leadership Korean economy; Hyundai. Technologies, which was one of the leading providers of carrier network equipments By the end of the 1990s, Toshiba Corporation was finding it difficult to in the world in the 1990s, was on the brink Korea’s Kookmin Bank: of disaster. Due to heightened competition maintain its leadership position in the in an already saturated global telecom arena of PCs, laptops and dynamic random Restructuring Strategies access memory, due to fierce competition market, Lucent witnessed a sharp decline The Asian crisis of 1997 had a devastating from Dell, International Business Machines in its revenues and even its survival became effect on the economies of the southeast Corporation (IBM), Hewlett-Packard uncertain. Asian countries. The majority of the loans (HP), and scores of others. The ongoing extended by the countries’ financial recession in the Japanese economy and Pedagogical Objectives institutions to prime sectors including reduced consumer spending also added to manufacturing and real-estate sectors, went • To discuss the strategies that enabled its woes. Toshiba now looks set to regain bust. Kookmin, the largest commercial Lucent to bounce back from its near its lost advantage through its fine-tuned bank of South Korea was no exception. death experience restructuring strategies. Kookmin under the leadership of Jung Tae • To discuss Lucent’s plans for a long-term Kim, who was named the ‘best CEO’ in Pedagogical Objectives profitable future. 2001 by the Korean Stock Exchange, for • To discuss Toshiba’s restructuring his leadership and governance practices, Industry Wireless Telecom Equipments strategies adopted various restructuring strategies to Reference No. RTS0026 retain its profitability. Year of Pub. 2004 • To discuss whether the strategies adopted Teaching Note Not Available by Toshiba would help it to regain its Pedagogical Objectives Struc.Assig. Not Available lost advantage. • To discuss Kookmin Bank’s restructuring keywords Industry Computer Hardware strategies Reference No. RTS0024 Carrier network equipments manufacturers; Year of Pub. 2004 • To discuss the contributions of Kookmin Competition in the global telecom market; Teaching Note Not Available Bank’s CEO, Jung Tae Kim. Patricia Russo; AT&T; Bell Labs; Avaya Struc.Assig. Not Available Incorporated; Troubled times for Lucent Industry Banking and Financial Technologies; Strategies of revival of keywords Services Lucent; Lucent as a telecom service Reference No. RTS0022 provider; Top 10 telecom manufactures in Toshiba Corporation; In-house company Year of Pub. 2004 the world; Products from Lucent. system; Mid-term business plan; 2001 Teaching Note Not Available action plan; Restructuring strategy; iValue Struc.Assig. Not Available creation company; Toshiba value created; 43 www.ibscdc.org keywords manufacturers were plagued with similar keywords problems like huge debt and slumping sales. Korea’s Kookmin Bank; Restructuring While Renault’s turnaround man Carlos Sony; Restructuring; Cost Cutting; strategy; Asian financial crisis; Jung Tae Ghosn nicknamed ‘le cost killer’ proved Consumer Electronics. Kim; Kookmin Interbank Payment Service the sceptics wrong by successfully turning (KIPS); Customer Relationship around Nissan within a short period of time, Management (CRM); Risk management DaimlerChrysler’s Rolf Eckrodt’s attempt Philips: Restructuring to Make group; South Korean chaebol; Risk Adjusted to revive Mitsubishi did not yield desired Things Better Pricing System (RAPS); Basel II capital results. accord; Financial leverage; Housing and Since the mid-1980s, Philips, one of the Commercial Bank (H&CB); Private Pedagogical Objectives largest consumer electronics companies in commercial bank; South Korean financial the world had been witnessing losses in system; Chip-based mobile banking. • To discuss the situations that led to the many of its fourteen divisions, including troubled times at Nissan and Mitsubishi its core business – consumer electronics. Cheaper products from Japanese and • To discuss why Renault and Korean companies flooded Europe, which Tata Tele Services Ltd.: Setting up DaimlerChrysler picked up a stake in urnaround Strategies urnaround Strategies urnaround Strategies

urnaround Strategies urnaround Strategies was the niche market for Philips. The a New Connection the ailing Japanese auto manufacturers 1990s were no different for Philips and it Tata Tele Services Ltd. (TTSL) a part of • To discuss the turnaround efforts of continued to reel under losses and the Tata Group of companies, and one of Ghosn and Eckrodt stagnating growth. India's biggest business conglomerates, • To discuss why Nissan could be turned spearheads the group’s presence in the Pedagogical Objective telecom sector. TTSL was incorporated in around while Mitsubishi could not. 1996 and in spite of being an early entrant • To discuss how Philips, under CEO Industry Auto Manufacturing Gerard Kleisterlee with his ‘towards one in the Indian telecom market, it had Reference No. RTS0020 acquired the image of a laggard. The Philips’ philosophy, has been able to Year of Pub. 2004 recover itself and is preparing itself for estructuring T estructuring T estructuring T estructuring T estructuring T company however, is trying very hard to Teaching Note Not Available RR RR

R a profitable future. become a major player and has come up Struc.Assig. Not Available with a series of initiatives to improve its Industry Consumer Electronics market share. keywords Reference No. RTS0018 Nissan and Mitsubishi turnaround; Renault Year of Pub. 2004 Pedagogical Objectives and DaimlerChrysler; Carlos Ghosn; Rolf Teaching Note Not Available • To discuss the strategies taken up by Eckrodt; Cross functional teams; Nissan Struc.Assig. Not Available revival plan; Keiretsu; Common supplier management to turnaround the company keywords Mitsubishi Motors Corporation (MMC) • To discuss the factors that drive the operating system; Nissan’s 3-3-3 Philips; Restructuring; Towards one Indian telecom sector and how TTSL is programme; Cost-cutting at Nissan; Philips; Gerard Kleisterlee; Consumer trying to increase its customer base by Mitsubishi triple-zero scheme. electronics; Corporate strategy; Lets make offering better services thing better; DVD recorders; Compact disc; • To discuss TTSL’s ambitions to become Strategic conversations; Recovery plan of a popular brand by focusing on the Sony’s Cost-Cutting Strategies Philips; Change at Philips; Sony; company’s initiatives towards offering Semiconductors; Medical systems. its subscribers more value and less costs. Since its inception in 1946, Sony Corporation has been known for its Industry Telecom Industry innovation and product quality. However, Kellogg’s: Reclaiming its Lost Reference No. RTS0021 since the late 1990s, due to high Leadership Year of Pub. 2004 competition from domestic and Teaching Note Not Available international players, recession in the Kellogg’s, an American icon for breakfast Struc.Assig. Not Available Japanese economy and quality concerns cereals, had been facing stagnating growth of its gadgets, Sony has been facing keywords since the early 1990s. With its focus on stagnant growth and decreased profitability. selling high volumes, Kellogg’s offered high Tata Tele Services Limited; Tata Group; With its core business of consumer discounts to clear its stocks, which resulted Bharti Telecom; Reliance Infocomm; electronics witnessing stagnated growth, in the reduction of profitability. Further, Hutchinson Essar; GSM (global system for Sony under its CEO, Nobuyuki Idei, initiated in 1999, Kellogg’s lost its leadership mobiles); CDMA (Code Division Multiple a massive restructuring plan in 1999, which position in breakfast cereals in the US Access system); (GPRS) General Packet was primarily aimed at cutting costs and market to General Mills. Radio Switching; Data based services; Push- regaining the company’s competitive edge. to-talk; Distribution network. Pedagogical Objective Pedagogical Objectives • To discuss the restructuring strategies • To discuss the restructuring strategies of adopted by Kellogg’s under the leadership Nissan and Mitsubishi: A Tale of Sony of its new CEO, Carlos M Gutierrez, to Two Turnarounds • To discuss the company’s once again become the biggest breakfast In the late 1990s, when Renault and ‘transformation 60’ initiative . cereal maker in the US. DaimlerChrysler took up the challenge of Industry Pastas and Cereals Industry Consumer Electronics turning around ailing Japanese car Reference No. RTS0017 Reference No. RTS0019 manufacturers Nissan and Mitsubishi Year of Pub. 2004 Year of Pub. 2004 respectively, observers were sceptical of Teaching Note Not Available Teaching Note Not Available their chances. Both the Japanese car Struc.Assig. Not Available Struc.Assig. Not Available 44 www.ibscdc.org

keywords multinational brands and the presence of a investment fund; Global non-carbonated

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S huge unorganised sector that offered beverages market. I – Y G E T A R T S Breakfast cereal makers in USA; General cheaper imitations. Mills; Ready-to-eat cereals market in USA; Restructuring at Kellogg’s; Lender’s Bagels; Country Inn Specialities; Ernie; Tony the Pedagogical Objectives NOKIA: Restructuring Strategies tiger; Toucan Sam; Kellogg’s Special ‘K’ • To discuss the strategies taken up by the Since its entry into the new millennium, brand; Branding strategies of Kellogg’s; management to turnaround the company Nokia, the global leader in digital Kellogg’s sales by the turn of the century. • To discuss how VIP changed its retailing technologies and telecommunications, has structure to provide a better service to been witnessing stagnating revenues. With the consumers and its efforts to the saturation of the European mobile Cisco’s Turnaround: John T. reposition itself as a stylish and modern phone market (Nokia’s major market) Chambers’ Strategy brand coupled with strong competition from Asian manufacturers like Samsung, LG Cisco had outperformed the market’s • To discuss VIP’s ambitions to become a Electronics and TCL Holdings, Nokia’s expectations for 43 years consecutively popular global brand by focussing on the sales growth is below the global average. and had overlooked the increasing problem VIP’s international acquisitions and tie- Besides, with the consumer preference that the company was facing. It also ups. shifting towards higher end phones with underestimated the effects of a major colour screens and imaging capabilities, Industry Luggage Industry economic recession and was soon facing Nokia is failing to achieve the desired sales Reference No. RTS0015 financial crisis. At such trouble time the volume as it continues producing its utility Year of Pub. 2004 company found in John T. Chambers a handsets for the lower end mass markets. visionary leader that could turn the Teaching Note Not Available company around to a profitable future. Struc.Assig. Not Available Pedagogical Objective keywords Pedagogical Objectives • To discuss the recovery strategies VIP Industries; Dilip Piramal group; adopted by Nokia to sustain its global • To discuss that ‘nothing is certain in Samsonite Corporation; Carlton leadership in the mobile business’ and also that it requires an International; Nitol Motors PVT Limited; telecommunications market. effort of three gorges magnitude to save Cheaper Chinese imports; Unorganised oneself from 100 years flood (sudden sector; Delsey; Improved retailing Industry Wireless Telephone Handsets and steep recession) ambience; Advertising; Acquisitions and tie- Reference No. RTS0013 ups. Year of Pub. 2004 • To discuss Chamber’s leadership style Teaching Note Available • To discuss Cisco’s turnaround strategy. Struc.Assig. Available

Industry Computer Hardware Restructuring Efforts at Cadbury keywords Reference No. RTS0016 Schweppes Digital telecommunication business; Third Year of Pub. 2004 In 2003, Cadbury Schweppes, the global generation (3G) mobile phones; Global Teaching Note Not Available beverages and confectionery manufacturer System for Mobile Communications (GSM); Struc.Assig. Not Available and retailer, saw its profits slipping despite Nokia mobile phones; Nokia networks; keywords a rise in its overall sales. An increase in raw Nokia ventures; Digital subscriber line materials and employee costs increased its networking equipment; High capacity Cisco Systems turnaround; John T operating costs and reduced its pre-tax Internet security appliances; Samsung; LG Chamber’s strategy; Mergers and profits. Electronics; TCL Holdings; Ningbo Bird; acquisitions; Industry-wide network N-gage; Code division multiple access protocols; Enterprise resource planning (CDMA); Sony. (ERP); Mike Volpi, Lary Carter, Ed Kozel; Pedagogical Objective Eye of the Storm; Dotcom bust; • To discuss the ‘fuel for growth’ initiative Telecommunications; Virtual close; Vendor of Cadbury Schweppes through which the Gateway’s Restructuring financing model; E-customer; Internet company aims to cut down on its costs Strategies capabilities review; Networking equipment; and reorganise itself over a four-year American hardware industry. period. Gateway Inc., the computer manufacturer famous for its cow-spotted boxes grew Industry Beverages and Confectionery quickly to become a multi-billion dollar Manufacturing company. By the year 2000, the company VIP: The Indian LuggageCarrier’s Reference No. RTS0014 started losing its market share. Growing Turnaround Strategies Year of Pub. 2004 operating costs of the company coupled Teaching Note Not Available VIP Industries (VIP) is India’s largest with the fall in demand for computers in Struc.Assig. Not Available manufacturer of luggage carriers, and over 2001 drove the company into losses. the years, has become a generic name for keywords luggage for the Indian traveller. Set up in Pedagogical Objectives 1971, VIP emerged as a popular brand Global confectionery and beverage business; during the 1980s and the 1990s Adams; Global sugar confectionery brands; • To discuss the company’s growth as a predominantly due to innovative products Cadbury; Dr. Pepper; European brand until 2000 backed by successful brand building confectionery business; Fuel for growth; • To discuss the factors that not only initiatives. However, in the new millennium Restructuring activities at Cadbury impeded the growth of the company the company experienced decreasing sales Schweppes; Schweppes; Halls; Trident; post-2000 but also made it lose a huge and had to struggle with several challenges Dairy Milk brand of Cadbury; Global chunk of its domestic and international due to stiff competition from chocolate market; Berkshire Hathaway market resulting in huge losses 45 www.ibscdc.org • To discuss the restructuring steps taken banks were expected to play a social role and reorganised itself into four divisions, by the company to come out of the red by catering to the financing needs of the T-Mobile, T-Systems, T-Com and T- and how these measures were getting it corporate sector. The growing proximity Online. back on track. between the bank and the corporate sector resulted in ‘profit-motive’ taking a Pedagogical Objective Industry Computer Hardware backseat and throwing up drastic Reference No. RTS0012 consequences after the Nikkei-crash in • To discuss the various strategic initiatives Year of Pub. 2004 1990. The bank faced a rising proportion that were taken at Deutsche Telekom Teaching Note Not Available of bad loans in its lending portfolio due to to make a turnaround. Struc.Assig. Not Available its exposure in real estate. The Japanese Industry Telecommunications Services government introduced the Financial keywords Reference No. RTS0009 Rehabilitation Law in 1998 under which Year of Pub. 2004 Gateway Incorporated; The Rolls Royce LTCB was nationalised on October 23rd of laptops; Beyond the box products; Teaching Note Not Available 1998. After being sold to Ripplewood Struc.Assig. Not Available Consumer electronic products; Holding Inc., a US-based private equity Information Technology Association of investor group, in 2000, the bank was re- keywords urnaround Strategies urnaround Strategies

urnaround Strategies America; Non-PC products; Low urnaround Strategies urnaround Strategies christened as Shinsei Bank. The new entity operational costs; eMachines; Mergers and combined the best practices of the West Deutsche Telekom turnaround; acquisitions; Cost of Goods Sold (COGS); and the existent structure of its predecessor Liberalisation of the telecom industry; 6+6 Restructuring strategy; Low-cost to carve out one of the most spectacular point cost cutting programme; T-Systems; distribution model; Supply chain turnarounds. T-Com; T-Mobile; T-Online; Public management; Tedd Waitt; Cow-spotted switched telephone network; Kreditanstalt boxes. fur wiederaufbau; 3G mobile networks; T- Pedagogical Objectives Nova Deutsche Telekom • To understand the effect of ‘social role’ innovationsgesellschaft; Growth strategy; of banks in the Japanese banking system Deregulation of the telecom market; Turning Around Porsche European telecom industry; Regulatory estructuring T estructuring T estructuring T estructuring T estructuring T and how it resulted in disastrous

RR RR Authority for Telecommunications and R Failures teach better lessons than successes. consequences This was true with Porsche, one of the Posts. • To discuss how an effective restructuring finest carmakers in the world. Since the exercise can go a long way to revitalise 1960s, the Japanese carmakers, with their operations, promote synergies in unprecedented production acumen were profitability, technology and business Infineon: Signs of a Recovery becoming a real threat to Porsche. aspects, and achieve and sustain a Porsches’ decision to take on the Infineon Technologies AG was one of the competitive advantage. competition head on only with increased top 10 semiconductor companies in the production, proved fatal as it jeopardised Industry Banking and Financial world. In the late 1990s, the global its technical innovation, which Porsche Services semiconductor industry went into a had long been known for. The new CEO, Reference No. RTS0010 recession. Further, the downturn in the Wendelin Wiedeking, who took over the Year of Pub. 2004 global PC business in early 2000 led to a reins of the loss making Porsche in 1993, Teaching Note Not Available drastic fall in the Dynamic Random Access initiated the turnaround at Porsche. Struc.Assig. Not Available Memory (DRAM) prices. Infineon, one of the leading DRAM manufacturers, was keywords Pedagogical Objective compelled to sell its chips at prices below its manufacturing cost. This resulted in huge Shinsei Bank turnaround; Long Term Credit • To analyse the turnaround strategies of losses for the company. Ulrich Schumacher, Bank (LTCB); Ripplewood Holdings Porsche under the leadership of Wendelin the CEO, took certain measures to regain Incorporated; Nationalisation of Long Wiedeking. the profitability of the company. Term Credit Bank; Japanese banking Industry Auto Manufacturing system; Corporate restructuring; Effect of Pedagogical Objectives Reference No. RTS0011 Nikkei crash on Japanese banking; Law for Year of Pub. 2004 the emergency measure to revitalise • To discuss Infineon’s strategy of Teaching Note Not Available financial functions; Foreign investors in surviving the economic recession in an Struc.Assig. Not Available Japan; Restructuring; Masamoto Yashiro; ailing semiconductor industry FlexCube; PowerFlex account; Capital keywords adequacy ratio; Japanese economy. • To discuss the problems faced by the Porsche; Wendelin Wiedeking; Great DRAM industry and Schumacher’s role Depression; Volkswagen; 356 Roadster; in the revival of Infineon. Peugeot; Porsche 911; Formula 1 racing; Deustche Telekom: A Industry Semiconductor Lean production; Just-in-time Turnaround Reference No. RTS0008 manufacturing; Zero defect manufacturing; Year of Pub. 2004 st Porsche improvement process; Boxter; In the late 1990s and the early 21 century, Teaching Note Not Available Toyota; Sports Utility Vehicle. Deutsche Telekom, a German telecom Struc.Assig. Not Available major and one of the largest integrated telecommunications service providers in keywords the world, faced falling revenues in its core Shinsei Bank: A Turnaround Semiconductor industry; Infineon businesses. This was as an aftermath of the turnaround; IMPACT programme; ACT liberalisation of the telecom market in The Long Term Credit Bank (LTCB) was programme; Ulrich Schumacher; Agenda Europe and the company faced an one of the institutions that fuelled the 5-to-1 programme; Siemens unenviable task of being a regulated player post-World War Japanese economic semiconductor; Joint ventures and mergers; in an inflexible labour market. In 1999, revival. The bank’s core business area was Dynamic random access memory industry; Deutsche Telekom restructured its board in long-term debenture lending where the Entrepreneurship; Wafer technology; 46 www.ibscdc.org

Micron; Restructuring; Personal computer Pedagogical Objective LNM: Turning Around Sick Steel

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S industry. I – Y G E T A R T S • To discuss the events that led to the Plants sudden decline of EMC’s revenues and Laxmi Niwas Mittal (Mittal), who started some of the initiatives taken by its new with a rod mill in Indonesia in 1976, had Indian Bank’s Turnaround CEO Joseph Tucci to reverse the foreseen, as early as the 1980s, the changes Strategy company’s fortunes. that the global steel industry would undergo. Indian Bank is one of the oldest Industry Magnetic Disk Storage Starting from the late 1980s, Mittal nationalised banks of India. In 1992, the Reference No. RTS0006 acquired and turned around a host of steel prudential norms related to asset Year of Pub. 2003 plants in ten countries across the world. classification, income recognition and Teaching Note Not Available provisioning were introduced, which made Struc.Assig. Not Available Pedagogical Objective the bank’s Non-Performing Assets (NPAs) • To discuss how Mittal, by turning around clearly visible. These NPAs were gradually keywords sick steel plants worldwide, made his increasing because of the bank's methods EMC Corporation; Software storage group (LNM) the second-largest steel and systems. In 1999, a Management market; Storage vendors; Hardware storage; producer in the world in 2003. Advisory Group, appointed by the Reserve SAN, NAS and DAS; Joseph Tucci’s Bank of India, reported that Indian Bank initiatives; IBM mainframe storage; EMC Industry Steel was a weak bank, as its accumulated losses history and Robert Egan; EMC revival Reference No. RTS0004 exceeded its capital and reserves. In 2000, strategies; EMC culture and sales tactics; Year of Pub. 2003 Ranjana Kumar was appointed the EMC competitors; Data storage Teaching Note Not Available Chairperson and Managing Director and technology; Information life style Struc.Assig. Not Available she proposed a restructuring plan for a management; Storage architectures; EMC keywords three-year period from 2000 to 2003 to Symmetrix product line. turnaround the bank. LNM; Ispat International; Laxmi N Mittal; Turnaround strategies of Mittal; European Pedagogical Objectives Reinventing Chrysler: Dieter steel industry; Direct Reduced Iron; DRI; Acquisitions of Mittal; Ispat Mexicana and • To discuss the banking scenario in India Zetsche’s Strategy Ispat Karmet; LNM and global steel and various opportunities and threats industry; LNM and loss-making steel faced by Indian Bank There had been times in Chrysler’s history when the future of the company was in plants; Mittal’s management; Mittal’s cost • To discuss various strategies serious doubt. Leaders such as Lee Iacocca management; Mittal the turnaround implemented by Indian bank to come were successful in turning the company specialist; Largest steel companies in the out of its losses. around from deep troubles in the past. A world. similar situation arose in 2000 after the Industry Banking and Financial merger with Daimler-Benz. Dieter Zetsche, Services considered a turnaround specialist, came Turnaround Efforts at Ford Reference No. RTS0007 to the helm and made some strategic moves Year of Pub. 2004 to put Chrysler back on track. The most In 2003, when Bill Ford took over as CEO Teaching Note Available notable steps that he took were of the Ford Motor Company, he did not Struc.Assig. Not Available rationalisation of the work force and hiving inherit the most profitable company in keywords off redundant plants and operations. In the world. The unintended consequences terms of product development his of Ford’s ex-CEO, Jacques Nasser's Indian banking industry; Indian bank ‘disciplined pizzazz’ approach was the most initiatives continued to affect the turnaround; Ranjana Kumar; Non- notable. performance of the company. The Performing Assets (NPA); Restructuring company that posted a net income of $7.2 plan; Mitr shared service; Capital adequacy Pedagogical Objective billion in 1999 incurred a loss of $5.5 billion ratio; Vision 2010; Asset recovery (including a one time write off of $4.1 management; Provisioning; Asset • To discuss the strategies adopted by billion in restructuring costs) in 2001. Bill classification; Indbank merchant banking Dieter Zetsches to put Chrysler back on Ford, faced with the onerous task of putting services; Income recognition; Public and track. the company back on track, had initiated private sector banks; Credit management. some concrete measures amidst scepticism Industry Automobiles Industry about his abilities to turn the company Reference No. RTS0005 around. Year of Pub. 2003 EMC’s Restructuring Teaching Note Not Available Struc.Assig. Not Available Pedagogical Objective Founded in 1979, EMC Corporation (EMC) became the world’s leading provider keywords • To discuss the reasons for the financial of high-end enterprise data storage systems losses of the Ford Motor Company and in the early 1990s. EMC provided storage Dieter Zetsche; Turnaround; Daimler- the steps that Bill Ford has taken to solutions to the world’s largest banks, Benz; Chrysler; Cost cutting; Mercedes; overcome the same. airlines, Internet providers and Auto industry; Jurgen Schrempp; Supplier Industry Automotive and Transport government agencies. Between 1997 and cost reduction effort; General Motors; Reference No. RTS0003 2000, EMC’s sales doubled every year. Toyota; Ford; Quality gates; Disciplined Year of Pub. 2003 However, due to economic recession and pizzazz; Mergers and acquisitions. Teaching Note Not Available increased competition from established Struc.Assig. Not Available storage vendors like IBM and Hewlett- Packard, EMC’s revenues have begun to slide since 2001.

47 www.ibscdc.org keywords Industry Electrical Products Keywords Reference No. RTS0001 Turnaround; Bill Ford; Jacques Nasser; Motorola, Spin-off, Divestiture, Mobile Year of Pub. 2003 Restructuring; Ford Motor; Internal Teaching Note Not Available phone, Handset business, Brand, Branding, problems; Cost cutting; Layoffs at Ford; Struc.Assig. Not Available Brand Image, Moto Razr, Edward Zander, Management overhaul; Premier Auto Carl Icahn, Culture, Product development Group. keywords Alstom; Government bailout; Restructuring Alstom; Alstom’s financial troubles; EU Turnaround Efforts at Sun Commission; EU competition laws; France; Microsystems Layoffs; Patrick Kron; Turnaround; Alstom’s bailout; Turnaround specialist; Sun Microsystems is having a tough time French Government and Alstom; French Slumdog Millionaire (A): with increasing competition in the server engineering company; Alstom Power Accolades and Acrimonies market. It has become ‘defensive’, with Distribution. the likes of Dell, Microsoft and Intel This case study, the first in the three-part urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies urnaround Strategies encroaching the low-end and companies series, captures the various perspectives like IBM and HP-Compaq giving it a torrid towards Slumdog Millionaire. While the time in the high-end of its market. Despite movie has invited much criticism for its such obstacles, Scott McNealy, CEO of Sun, audacious representation of poverty in refused to make products that could work India, the popularity of the movie is clearly in tandem with other companies’ Motorola's Spin-off Decision: visible in terms of its search ranking technologies and stuck to his original What's the Spin? (84,100,000), which is just less than the strategy of making all the components in key search of the world’s most popular house, which included its own chips, the Lucent from AT&T, Delphi from GM, book – Bible (125,000,000). This case SPARC microprocessors, and its operating BenQ from Acer, Novelis from Alcan and study is primarily aimed at delving into estructuring T estructuring T estructuring T estructuring T estructuring T system, the Solaris. many others are examples of companies many other such perspectives on the Danny RR RR R spinning off a major part of their business Boyle-directed movie Slumdog Millionaire. Pedagogical Objectives into a new business. Spin-offs are While the movie has given oodles of hope increasingly being used by companies as a and optimism for a few to sustain even in • To understand the competitive scenario method of restructuring in order to increase the direst of situations, for others the in the global server market shareholder value and to improve focus on movie has been nothing else but a • To analyse Scott McNealy’s strategies their core business. In the wake of these reiteration of the age old perception of to turnaround Sun Microsystems and developments, Motorola, the third largest the West towards East. In the backdrop of whether the company needs to change mobile phone manufacturer announced the the new and emerging hybrid model of its course and partner with its spin-off of its handset business. This case Indian and Western cinema, the case study competitors. study sheds light on the role played by spin- explores issues such as – the collaborative offs in improving the performance of a journey of Indian cinema hand in glove Industry Computer Hardware company. It also focuses on circumstances with the Westerners, the factors that Reference No. RTS0002 which led Motorola to consider the spin- assisted in the corporatisation of the Indian Year of Pub. 2003 off decision. What are the possible reasons cinema in the 21st century, the emerging Teaching Note Not Available for the spin-off announcement? What trends in the global cinema industry and Struc.Assig. Not Available impact does it have on Motorola? Will finally the reactions of the various sections Motorola’s handset business be able to keywords of the society towards Slumdog Millionaire. survive without the Motorola brand name? Turnaround; Restructuring; Scott McNealy; Pedagogical Objectives Sun Microsystems; Price wars; Wintel; Pedagogical Objectives Competition; Network computing; • This case study aims at achieving the Technology; Server market; Solaris; • To analyse the reasons underlying a spin- following pedagogical objectives: To Revival plan; Linux; Java; Network 1. off decision, when does it make sense to analyse and examine perceptions of the spin-off one of the existing businesses, West towards East and how they what kind of business (a business doing influenced the Indian cinema industry well or a business doing badly) should be Restructuring Initiatives at Alstom spun-off, etc. • To assess the emerging hybrid model of cinema through partnerships and Alstom, the French multinational • To understand and debate on the alliances and the rationale behind engineering group that is considered a global implications of a spin-off for the parent Hollywood and UK film industry to forge icon of French technological prowess, is company’s bottom line and the tie-ups with Bollywood in deep trouble, burdened with huge debts. consequent structural changes warranted The French government bailed it out with • To debate upon Slumdog Millionaire’s a package of •3.4 billion. • To debate on the pros and cons of controversial success and the future Motorola’s decision to spin-off, what prospects of the evolving hybrid model. Pedagogical Objectives can it expect from this spin-off, who would be the beneficiaries, etc. Industry Entertainment • To discuss the reasons that contributed Reference No. SCJ0026 to the colossal downturn at Alstom Industry Telecommunication Industry Year of Pub. 2009 Reference No. SPN0001 Teaching Note Available • To discuss the efficacy of the French Year of Pub. 2009 Struc.Assig. Available government’s bailout of a public limited Teaching Note Available company. Struc.Assig. Available Keywords Slumdog Millionaire, Danny Boyle, A R Rehman; Hollywood, Bollywood, Oscars, 48 www.ibscdc.org

Golden Globes, Collaboration, Strategic Pedagogical Objectives Group's business operations and made the

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S Alliances, Mumbai, Dharavi, UK Film Group compete globally. Under Ratan I – Y G E T A R T S Industry, Poverty, Globalisation, Simon • To discuss the trends and changing Tata's chairmanship, Tata Consultancy Beaufoy competitive dynamics of the global Services went public and Tata Motors was consumer packaged goods industry – listed in the New York Stock Exchange. developed vs developing markets Starting from the late 1990s, Ratan • To understand the role and importance revamped the operations of Tata Steel and of supply chain management in a made it one of the lowest-cost steel consumer packaged goods company like producers in the world. However, as the P&G Tatas lacks an heir who can succeed Ratan, the group is at cross-roads to decide who P&G's Logistics Revolution Co- • To debate on the possibilities of supply will be the next chairman. After Ratan creating Value chain management becoming a Tata's retirement who would succeed him competitive advantage and contributing Proliferation of products, brands, and carry the vision of the Group is a to top-line growth as well as bottom- dilemma. companies and even distribution channels line performance and media, have necessitated consumer goods industry giants to shift their attention • To analyse and debate on the possible Pedagogical Objectives from brand marketing and positioning synergies between Delta Air Lines and • To understand the vision that has driven towards a cross-functional focus. While Northwest Airlines the Tata group till Ratan Tata joined manufacturers vied for significant shelf space, retailers competed for winning • In a consolidating and troubled industry, • To analyse the contribution made by customer attention and loyalty. However, which is the ideal company to be taken Ratan Tata to the Tata Group their inability in rightly assessing consumer over – a strong player or a weak player? • To analyse if conglomerates can be demand created market imbalance in the Industry Consumer Packaged Goods form of either excessive stocks or stock driven by leaders' vision and not Reference No. SCM0001 necessarily by a strategy outs. The need to produce and deliver goods Year of Pub. 2008 based on real demand made both Teaching Note Available • To analyse the leadership style of Ratan manufacturers and retailers rethink/review Struc.Assig. Available Tata their business relationships and co-create value for each other. This involved Keywords • To analyse the succession dilemma at the Tata Group integration of their operations across the Supply chain; Logistics; Customer-driven supply chain and delivery of the right goods supply chain; Demand-driven supply chain; • To analyse what kind of leadership is to the right place at the right time with Wal-Mart; Keith Harrison; Supply chain required for Tata Group after Ratan Tata the right operational costs. P&G was one integration; Manufacturer-retailer steps down. among the first consumer goods companies Collaboration; Consumer Packaged Goods; that realised the significance of shelf space Wal-Mart Retail Link; Inventory Industry Business Conglomerate and the need to lure customers at the point management; Balancing stock-outs and Reference No. VMG0015C of sale. It initiated customer-driven supply excess stocks; Top-line growth and bottom Year of Pub. 2008 chain management, wherein starting from line performance; Continuous Teaching Note Available customer decision at the store shelf, it replenishment process; Category Struc.Assig. Available worked backwards to production. This management Keywords required P&G to assess product demand based on customers’ purchase decisions and Tata Group; Succession Dilemma; Ratan buying behaviour and this in turn Naval Tata; Organisation Transformation; necessitated collaboration with retailers. Tata Business Excellence Model; Total In this context, P&G’s tie-up with Wal- Quality Management Services; Ratan Tata's Mart exemplified the success of Vision; HR Revamp; Vision, Mission and manufacturer-retailer relationships. They Tata Group's Strategy: Ratan Goals Case Study; Leadership Style; Future collaborated with each other to track Tata's Vision of Tata Group; Jehangir Ratanji Dadabhoy customer buying behaviour with the help Tata; Jamshedji Tata of a sophisticated technology and The Tata Group is one of India' largest accordingly assess the demand for their business conglomerates established by products. The case study highlights various Jamshedji Tata (Jamshedji) in the second aspects like the need for conducive half of the 19th century. Jamshedji's vision MindTree Consulting: Designing manufacturer-retailer relationships in co- for the Group was in line with nationalist and Delivering its Mission and creating value, viewing supply chain as a goals and ideals then, and envisaged to Vision profit centre rather than as a cost centre, make India self-reliant. After Jamshedji, MindTree Consulting is an international supply chain as a source of competitive Jehangir Ratanji Dadabhoy Tata (JRD) IT consulting company with revenues of advantage in ensuring top-line growth as became the Chairman of the Tata Group about $103 million in 2006, an increase of well as bottom-line performance, and played a significant role in continuing over 85% from the previous year’s revenue customer-driven supply chain - shift from the vision of the group. Tata's assets climbed of $55 million. Besides, MindTree had forecast-based to demand-based and better from INR 620 million in 1939 to INR 100 several laurels to its credit. It was the world’s inventory management by attaining billion in 1990. Tata Motors had increased youngest company to be assessed at Level balance between stock-outs and excess its sales to INR 1 million in the year 1991 5 in both CMMI and P-CMM. The inventory. However, sustainability and and it had rolled out 3 million vehicles in company was ranked among the top five extendibility of P&G’s collaboration the same year. In 1991, Ratan Naval Tata Great Places to Work in 2004 in a study across Wal-Mart's other stores as well as (Ratan Tata/Ratan) took over the conducted by Grow Talent Company and other retailers - in both developed and Chairmanship from JRD Tata. Although Businessworld and rated as one of the Best developing countries - remains to be he was initially criticized for his poor Employers in India in 2004 by Hewitt answered. performance, over the years, Ratan Tata disproved his critics. He restructured Tata Associates. 49 www.ibscdc.org When MindTree was established in 1999, health and wellness company. With this rates in both Premium Income and Profit, the founders had set a clear Mission and acquisition, Nestle moved from being a IAGL planned to achieve through both Visions keeping in mind a timeframe of minor player in healthcare nutrition organic as well as through acquisition. But 2005. The company had almost reached segment to world number two player in following Tort Law reforms, falling the Vision parameters. It went on to set the nutrition, health and wellness industry. premiums due to reducing claims costs, in bigger Vision targets for the future. Nestle aimed at becoming the leader of the addition to smash repairer disputes, However, there were questions raised industry with the combined strengths of competitive pressures IAGL’s organic whether a mid-sized IT firm like MindTree the two companies. growth rate was affected. can battle the big players like Wipro, Infosys, Satyam and TCS. At the same The case focuses on the strategic IAGL had set a clear aim to increase top time, it was also important how the transformation initiatives undertaken at and bottom line performance by an average company would keep its core values and Nestle. It analysis the acquisition and its 15% a year over the next 10 years. But culture which formed the foundation of impact and ends on the debate whether the Australian insurance market was only the company from getting diluted as the strategic transformation process will help growing between 4% and 6% a year. Would company grew bigger in size. With hurdles Nestle achieve its long term objectives of IAGL be able to outgrow the risk and to cross, would MindTree achieve its Vision being a leader in nutrition, health and achieve its financial goals and enhance for the future? wellness? shareholder value?

Pedagogical Objectives Pedagogical Objectives Pedagogical Objectives • To understand the analysis behind setting • To understand the changing trends in • To discuss the expansion strategies of Vision, Mission and Goals Vision, Mission and Goals Vision, Mission and Goals Vision, Mission and Goals Vision, Mission and Goals up of a company’s Mission and Vision health and wellnessindustry Insurance Australia Group Limited (IAGL) statements • To discuss the takeover of medical • To analyse how a mid-sized IT firm nutrition business of Novartis • To discuss the strategic fit between UK achieved its Vision within a short span International AG by Nestlé and its insurance industry and IAGL implications of time • To analyse the acquisition decision of • To study the various challenges • To discuss the strategic transformation IAGL. MindTree would face in its pace of of Nestlé from a food company to nutrition, health and wellness company Industry Insurance growth in the future Reference No. VMG0012A • To analyse how MindTree would achieve • To discuss the future growth strategies Year of Pub. 2007 its set goals in the midst of competition of Nestlé to achieve the goal of Teaching Note Available from other mid-sized IT firms and the becoming the leader of the industry. Struc.Assig. Available IT giants in India. Industry Food & Beverages Keywords Reference No. VMG0013A Industry Information Technology Insurance Australia Group Limited; Vision, Year of Pub. 2007 Reference No. VMG0014B Teaching Note Available Mission & Goals Case Study; IGA; Australia Year of Pub. 2007 Struc.Assig. Not Available Prudential Regulatory Authority (APRA); Teaching Note Not Available Insurance Industry; Carbon Credit; Carbon Struc.Assig. Not Available Keywords Neutral; UK insurance market; Motor Keywords Insurance; General Insurance; Market Nestlé; Strategic transformation; Nestle Share; Claims; Risks; Managing Costs; MindTree Consulting; Subroto Bagchi; IT; Nutrition; Healthcare Nutrition Market; International Regulations; Financial Vision, Mission & Goals Case Study; Vision, Mission & Goals Case Study; Food Services Authority [FSA]; Strategy; Infosys; Wipro; Satyam; TCS; Mission; and Beverage; Health and Nutrition Foods; Sustainability; Mission; Vision; Acquisition; Vision; Global Outsource; Offshore; Novartis Medical Nutrition; Synergy; Gross Written Premiums; Segments of Software Solutions; IT-ITES; Mid-size Strategic fit; Nutrition; Health and Insurance Business; Social Security; Wellness industry Community; Peripheral vision; shareholder value Nestle’s Strategic transformation: Insurance Australia Group: Will it be successful? Expansion Strategies Lego Toys: A Makeover in Nestlé S.A., was one of the world's top Corporate Philosophy five, most respected, food and beverages Insurance Australia Group Limited (IAGL) company. Besides being the world's no.1 faced with competition back home The LEGO® Group is the sixth-largest toy food company in terms of sales, Nestle recognized the need to generate scale in manufacturer of the world. Although the was also the world leader in coffee Australia and New Zealand and diversify Group was a great toy maker, it was not a (Nescafe), food and nutrition. The the Group’s business by geography, product great toy company. In the 1990s, company’s international Research & and distribution channels to spread its risks children’s interest in toys had gradually Development network supported products and ensure sustainable profitability. The shifted from traditional toys to video games made in more than 500 factories in over Group also planned to expand and Xbox’s, but LEGO stuck to its old 84 countries. internationally to achieve its targeted Gross philosophy of creating traditional toys. As Written Premium growth rates over a long a result, the company faced huge financial Most food companies worldwide were term and with UK purchase the group was losses in 2003 and 2004. However, things focusing on catering to health conscious expecting GWP growth rates at the higher changed for the better in 2004, when consumers and increase their reach into end of the range. Jorgen Vig Knudstorp took over as CEO of health care segments. On the same To be successful and remain profitable over the company, and in 2005, the company premises, Nestlé acquired the medical saw its profits grow. The case discusses the nutrition business of Swiss pharmaceutical a long period of time in the general insurance business and be able to generate various restructuring strategies undertaken major, Novartis International AG in 2007, by Jorgen. It also discusses his greatest striving to reposition itself as nutrition, annual compounding double-digit growth 50 www.ibscdc.org

contribution of transforming the corporate keywords team were accused of failure in directing

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S culture of a “do good” company to one the company in the information I – Y G E T A R T S that was more focused on profitability and Microprocessor; Pentium; Paul Otellini; technology age. In 2001, under compulsion sustainability in the long run. integrated circuit; Centrino; mature PC to change, Reuters had appointed Tom market; dual-core; innovation; business Glocer, a lawyer and software developer as model; product line-up; Core; ingredient Pedagogical Objectives Chief Executive Officer (CEO), a non- brand; Andy Grove; Moore’s Law; Intel. journalist for the first time in the • To discuss the corporate restructuring company’s history. In 2004, Niall strategies of Lego Fitzgerald, former chairman of Unilever, • To discuss the Change management ‘Global Vision 2010’: Toyota’s was appointed as the chairman to the strategies of Lego’s top management. Strategic Initiatives Reuters board. Niall Fitzgerald took up initiatives to make the board competent Industry Toy In 2002, Toyota Motor Corporation, the to lead the company in the 21st century. Reference No. VMG0011K No.2 carmaker in the world, released its Year of Pub. 2006 ‘Global Vision 2010’, in which it Pedagogical Objectives Teaching Note Not Available highlighted, among others, its concern for Struc.Assig. Not Available environmental protection. Although • To highlight the failure of Reuters in Toyota has been criticised for representing facing competition Keywords a false environmental friendly image, • To discuss the changes initiated by Niall Toyota has constantly been involved in Lego Toys; Change Management; Fitzgerald to make the board competent activities like initiating environment Leadership. to lead the company in the 21st century. protection plans and manufacturing hybrid cars. The company believes that through Industry Information Collection and this it would be able to achieve its aim of Delivery The Changing Face of Intel becoming the No.1 carmaker in the world Reference No. VMG0008 and occupy 15% of the global automobile Intel, the undisputed leader in the Year of Pub. 2005 market. microprocessor industry faces slowdown in Teaching Note Not Available growth in its biggest market, the personal Struc.Assig. Not Available Pedagogical Objectives computer (PC); even as cellphones and keywords handheld assume greater importance in • To highlight Toyota’s efforts towards Reuters Group Plc.; Tom Glocer; Niall people's lives. Paul Otellini (Otellini), environmental protection as part of its Fitzgerald; Bloomberg; Board of directors; Intel’s new CEO tries to reinvent Intel. global vision Otellini has created business units for each Financial information providing business; product area – home, enterprise, mobility • To discuss whether Toyota would achieve Running a board; Competency of board. and digital health, and scattered the its goal of becoming the leading processor experts among them. He intends carmaker in the world by 2010 by to set up a fifth division that will focus on establishing itself in difficult markets. Semiconductor Industry: customising products for particular Industry Automobile Manufacturing Samsung’s ‘BHAG’ countries or regions. Otellini has decided Reference No. VMG0009 to pay greater emphasis on marketing, Intel is the number one company in the Year of Pub. 2006 realising that the only way Intel can semiconductor industry, with a market Teaching Note Not Available succeed in new markets is by share twice that of its nearest competitor, Struc.Assig. Not Available communicating more clearly what the Samsung. However, a turnover rate much technology can do for customers. To keywords higher than that of Intel’s encouraged redefine the Intel brand, Otellini has Samsung to announce its big, hairy and dropped its famous tagline and launched a Vision; Business ethics; Hybrid cars; Global audacious goal (BHAG) of becoming the new logo. It has entered into partnerships expansion of Toyota; General Motors; leader in the global semiconductor industry. with top corporate like Apple, Nokia and Ford; Market positioning; Market leadership; Corporate image; Social Samsung among others. He has reorganised Pedagogical Objectives the company from top to bottom, responsibility of an organisation; Product assigning new tasks to most of Intel’s differentiation. • To discuss the strategies of Samsung to 98,000 employees. Most of the executives become an industry leader have been recruited from outside the • To discuss whether Samsung would company and include software developers, Running a Board: The Reuters’ achieve its goal (BHAG) by competing doctors, sociologists, and ethnographers. Way with the other players of the Is Otellini’s new strategy the right path semiconductor industry. for Intel? For long, Reuters had made its reputation as a reliable news agency with its speed, Industry Semiconductors, Pedagogical Objective accuracy and impartiality. But it earned Microprocessors, Chips much of its revenue by transmitting Reference No. VMG0007 • The case outlines Intel’s growth strategy. financial information like share quotes, Year of Pub. 2005 Its old marketing strategy, its new currency values and commodity prices with Teaching Note Not Available branding strategy and its new business the same efficacy as its news. Since its Struc.Assig. Not Available model. inception in 1849 through to the 1990s it had a formidable presence in the financial keywords Industry Microprocessor Industry information providing business. In the Reference No. VMG0010P Samsung Electronic Co. Ltd.; 1990s, it lost to the start-ups, which used Year of Pub. 2006 Semiconductors industry; Microprocessors information technology, the Internet in Teaching Note Not Available and memory chips; Semiconductor Industry particular, effectively, seized the business Struc.Assig. Not Available Association; Intel Corporation; Flat panel from Reuters and grew big right under its LCD (liquid crystal display) televisions and nose. The board and the senior executive 51 www.ibscdc.org display products; Big, hairy and audacious of being present in all segments of the • To discuss the company’s acquisition goal (BHAG); Digital convergence digital market and how far the strategy strategy in Australia and China. technology; Growth rate; Industry boom; is relevant in today’s fiercely Digital appliances; DRAM (dynamic competitive world. Industry Information Technology (IT) random access memory) chips; Strategic Reference No. VMG0004 alliances; Technology development Industry Printing and Imaging Year of Pub. 2004 partnership; Competitive strategies. Equipment Teaching Note Not Available Reference No. VMG0005 Struc.Assig. Not Available Year of Pub. 2004 keywords Teaching Note Available PwC's Ulysses Programme: Struc.Assig. Available Infosys; Global delivery model; IT Preparing Future Leaders keywords (information technology) consulting Through CSR services; NR Narayana Murthy; Nandan Hewlett-Packard (HP); Corporate clarity; Nilekani; Moving up the value chain; PricewaterhouseCoopers (PwC), one of Corporate identity; Carleton S Fiorina; Infosys’ enhanced service delivery model. the world’s big four accounting firms, Printing and imaging equipment; Computer introduced a unique training programme industry; Hardware industry; Compaq; IT called ‘Ulysses’, for preparing future leaders solutions providers; The HP way; for running its global business in the 21st Microsoft Under Steve Ballmer Decentralisation; Agilent Technologies; century. The programme focuses on Corporate restructuring; HP and Compaq Riding on the personal computer (PC) nurturing leadership skills in executives merger; Dell and IBM (International revolution of the 1980s, Microsoft has Vision, Mission and Goals Vision, Mission and Goals Vision, Mission and Goals

Vision, Mission and Goals Vision, Mission and Goals through corporate social responsibility Business Machines Corporation). emerged to become the reckoning force of (CSR) initiatives, working in partnership the global tech industry. But in the late- with non-governmental organisations 1990s, Microsoft had a huge challenge – (NGO’s) and the local communities in the the Internet. Many felt the company had developing world. Infosys: Moving up the Value Chain missed the boat due to its belligerent attitude about its future. Microsoft’s woes became Pedagogical Objective In April 2004, India-based Infosys noticeable in 1997 when it came under the • To discuss as to how PwC’s Ulysses Technologies Limited became the first legal scanner for antitrust violations. programme, makes a case for leadership listed IT (information technology) Incidentally, when Bill Gates named Steve development, ethics and social company to record annual revenues of $1 Ballmer as the CEO of Microsoft in January responsibility, and business strategy. billion. Since its inception in 1981, the 2000, many felt the move would usher in a company has constantly moved up the new era of leadership for the company. Steve Industry Financial Consulting Services value chain - from custom software Ballmer, who was known for his ‘bulldog Reference No. VMG0006 development to standardised products, to demeanour’, was also popular for his steely Year of Pub. 2005 business process outsourcing and IT and discipline and marketing blitzkrieg. Teaching Note Not Available business consulting. However, major rival Struc.Assig. Not Available Indian companies such as TCS, Wipro, Pedagogical Objectives keywords Satyam etc., are also following similar business models and moving into IT and • To understand the need for changing the PricewaterhouseCoopers (PwC); PwC’s business consulting. Competition was also company’s mission statement as a part Ulysses programme; Corporate social intensifying from global majors such as of reorganisation at Microsoft responsibility (CSR); Leadership IBM (International Business Machines • To understand the leadership style of development programme; Culturally Corporation), EDS (Electronic Data Steve Ballmer. diverse global business environment; Systems Corporation), Accenture, HP Responsible and sustainable business; (Hewlett-Packard), etc. • To discuss Ballmer’s initiatives to bring Thought leadership; Action learning; in widespread changes at Microsoft and United Nations Development Programme Pedagogical Objectives in steering and orchestrating the (UNDP); Mergers and acquisitions; CSR and company’s activities. sustainability; Community-based • To discuss the evolution of Infosys over Industry Computer Software organisations; Small enterprise the years and its future plans Reference No. VMG0003 development; Business in the 21st century. • To discuss the changes in Infosys’ Year of Pub. 2004 organisation setup aimed at meeting Teaching Note Not Available business and client needs Struc.Assig. Not Available Hewlett Packard’s Biggest • To discuss the pros and cons of the global Threat: Its Corporate Clarity keywords delivery model, and if any changes Steve Ballmer; Microsoft’s antitrust By the turn of the 21st century, the US needed to be made, considering that the violations; Microsoft’s mission statement; computer behemoth had probably bitten model can be replicated Microsoft's vision Version 2.0; Microsoft’s off a little more than it could chew. It was • To discuss Infosys’ main focus on banking re-organisation; Richard Belluzzo; into everything which sounded digital - products and if they need to expand their Microsoft’s stock options; Microsoft’s from providing billion-dollar tech services product portfolio business division. to manufacturing $100 cameras. In all its business segments, except for its printing • To discuss the company’s foray into and imaging business, it was competing business process outsourcing when it had against focused competitors. already established itself as a dominant Harley-Davidson: Making of the player in high end services Cult Brand and After Pedagogical Objective • To discuss the opportunities and risks Schoolmates Arthur Davidson and William • To discuss on how and why HP (Hewlett- that Infosys would face in the IT and S Harley shared a passion for mechanics, Packard) has subscribed to its strategy business consulting services especially for motorcycle engines. Both 52 www.ibscdc.org

longed to join the ranks of motorcycle

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S

S T R A T E G Y – I – Y G E T A R T S S T R A T E G Y – I – Y G E T A R T S pioneers. By 1901 they had designed four I – Y G E T A R T S motorcycle engines ready to be fitted into bicycle frames. With time, Harley- Davidson emerged as a cult brand.

Pedagogical Objective • To discuss the making of this cult bike.

Industry Automotive and Transport Reference No. VMG0002 Year of Pub. 2005 Teaching Note Available Struc.Assig. Available keywords Harley-Davidson; Cult brand; Baby boomers; Motorsport; Outlaw image; Hell’s Angels; Harley Owners Group; Open road tour; Brand loyalty; Brand extension; Cult branding; Linux; Apple computer; Customer communities; Business life cycle.

The Strategic Initiatives at HBS Harvard Business School (HBS), throughout its 95-year-old history has always been a pioneer in management education and practices, nurturing future CEOs for generations. Throughout the 1990s, several socio-political events like the collapse of the old communist economies, the rise of the European common markets and the rise of free market economies in many countries due to globalisation, changed the dynamics of business worldwide. All these changes coupled with a slowdown in the US economy in the 1990s, caused a dip in HBS’ revenues. To stay tuned with the latest trends in world business and to shore up its revenues, HBS embarked on a three- pronged strategy in the late 1990s.

Pedagogical Objective • To discuss the strategic initiatives undertaken by HBS and its plans to generate the funds required by these initiatives ‘to educate leaders who make a difference in the world’.

Industry Management Education Reference No. VMG0001 Year of Pub. 2003 Teaching Note Not Available Struc.Assig. Available keywords History of HBS; Case studies from HBS; Entrepreneurship programmes at HBS; Capital campaign at HBS; Strategic initiatives of HBS; Revenue and expenses of HBS; Harvard Business Review; Messages of Kim B Clark; HBS Press; Harvard University; Technology initiatives at HBS; Global research centres of HBS; Endowment funds of HBS; Alumni of HBS; Financials of HBS. 53 www.ibscdc.org