Case Studies of Crisis Management and Market Domination

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The Harvard business school case study based on Boston Consulting Report and An Insider's Account of Honda Entry into the US Market by Richard Pascal illustrate to us on how Honda Succeeded in taking down the American and British biking industries. [1] 

However below are the key lessons that we get to learn from comparison of these two different accounts of the same strategy:

Need for thorough research:

Language: Mr. Pascal's insider report, explains on how the new president on American Honda Mr. Kawashima struggled because he spoke poor English, the difficulties would he have faced in interacting with customers.

Price: Honda offered an amazing price range in which even the normal living standards of people could afford it and use it in their daily use. I.e. Honda was for $250 in a retail shop while other bikes were for $1000 going upwards.

Distribution: This was a major effect to other biking companies because they had a poor distribution effort, as there where only 3000 motorcycles in United States out of which only a 1000 of them where open 5 days a week.

Learning from Mistakes: Honda underwent a major disaster in their image when reports came in that their machines were leaking oil and had clutch failures; this should be taken as a lesson to rectify their mistakes.

Modified strategy: the strategy needs to be look over thoroughly every time by the managers as the taste of consumers change, taking today's world u cannot expect a teenage guy going to college with a scooter, he thinks it affects his image, he needs a proper 1000cc bike so that it can suit his image.

The above therefore are the key lessons that I have learnt from comparing the two different accounts.

Case 2

"LAURA ASHLEY"

Core values are principles that guide an organization's internal conduct as well as its relationshipwith the external world. [2] 

Laura Ashley being the strongest competitors in the market in 1970's, proved to be the rare success story, where by it grew high in spite of having competitors like supermarkets and internet retailers, its mainly because the core values were set for success. [3] 

Core values adopted by Laura are as follows:

Unity: Laura Ashley experienced a great downfall, after which a new Team A was brought in to rescue Laura Ashley from collapsing, therefore this team came in with amazing strength and unity within themselves and this made their core value of working as a team was made up in order to achieve efficient products.

Experience: failure that was experienced by Laura Ashley forced the managers to learn the reason of the downfall, so as to rise with better products and quality as demanded by the customers.

Good quality products: as Laura having too many competitors who are strong like supermarkets and internet retailers, so it has to focus on the products quality that can win more customers towards it.

Loyalty to customers: as the main core value in all organization Laura Ashley also emphasizes more on satisfaction of the customers by giving them quality products and services.

Therefore above are the main core values that Laura Ashley has implemented in order to grow and achieve a higher position in the market and to maintain its reputation.

Case 3

"Applying a Balanced Scorecard"

The balanced scorecard is a strategic performance management tool - a semi-standard structured report supported by proven design methods and automation tools that can be used by managers to keep track of the execution of activities by staff within their control and monitor the consequences arising from these actions. [4] 

L & D

BALANCED

SCORECARD

PROCESS

FINANCE

CUSTOMERS

As per my understanding I think Organizations often find the balanced Scorecard difficult to implement in practice because: [5] 

Limited number of Measures: Referring to the Harvard Professor Robert Kaplan and Consultant David Northon who are the leaders in developing the BSC, clearly suggest that management should focus on just 20 or 30 measures, i.e. more than that can lead to ineffective results.

Care: A BSC can actually mislead if the measures are selected wrongly. So selecting the measures require great care from the management.

Basic rules must be followed: For Implementing a BSC, managers are highly required to follow the basic rules of it, or else the results shall be ineffective, i.e. Mr. John McMahan, senior business adviser at the company explains that most company get little value out of score cards because they have not followed the basic rules that make then effective.

Misunderstandings and confusion: This is a common case while implementing a balance scorecard, as Mr. Kaplan and Mr. Northon quotes; unless the strategic objectives fit with each other and with the measurements, the scorecard is likely to create more confusion than clarity.

Time consuming and Expensive: Implementing a BSC needs time, as Charlotte Bhiladvala, head of business development at the company says "You can't hurry it you must let people understand it", i.e. people need time to understand and start implementing.

Therefore the findings above prove that Organizations often find BSC Difficult to implement in practice

Case 4

"FIAT: REBIRTH OF A CAR MAKER"

Fiat till 2004 was undergoing some drastic crises due to poor managerial decisions.

Below is SWOT analysis of year 2004 which shows the stand of Fiat's reputation in the market: [6] 

SWOT ANALYSIS (2004)

STRENGTHS

THREATS

Wide Variety of vehicles:

Fiat offered amazing range of car models depending on people's needs and wants.

Financial Crises.

Rivalry increment in market.

WEAKNESSES

OPPORTUNITIES

Unstylish Cars:

Fiat made cars that were not the customer's choice; they made cars that they thought were nice. Cars were not at all stylish and would not match the customer's choice or personality.

i.e. this was one reason Fiat faced difficulties with rivals like Ferrari and Maserati.

Panda:

For Fiat Panda was a HIT because while manufacturing this vehicle they had minimized their expense and a new tiny panda was manufactured which made them come up in the car business without which the dream of car business would have ended there and there.

The above analysis clearly shows what situation Fiat was facing in year 2004.

Mr. Marchionne was then brought to FIAT in order to pull it out of Crises, below is the SWOT analysis to prove his capabilities.

SWOT ANALYSIS 2008

STRENGTHS

THREATS

Technology: Fiat was developing faster and was designing new products like Bravo and 500; they decided to rely on computer stimulations rather then the lengthy traditional routes of making series of prototypes.

The greatest threat that Fiat faced was from its competitors who were strongly growing, i.e. Peugeot and Volkswagen.

WEAKNESSES

OPPORTUNITIES

The greatest weakness of Fiat was that they failed to perform well in the Chinese market in China.

The best opportunity that Fiat got was by terminating the contract with GM, as Fiat could stand on its own legs and reach the top of the market.

Consequently by the above SWOT analysis shows the fruits of Mr. Marchionne's hard work that brought success to FIAT in 4 years time.

Case 5

"The Profitability of UK Retailers"

Profitability: is the result of total revenue being greater than the total cost. [7] 

As a result of comparing British Supermarket to European and US counterparts as per my understanding I would support the British supermarket as they make more profit then European and US Counterparts as proved below: [8] 

Cost of Labor: the cost of labour effect the company in its profit as depending on the cost of labour the company calculates its cost per product or services provided by them.

Therefore comparing British supermarkets to European and US counterparts the cost of labour is low in the British because both the social costs are lower and the proportion of the part time labour in the supermarkets are higher then else where.

High Demand: the products that are well in market which has a higher level of demand by the customers are most likely to bring the most profit in the company.

Products that were own - labeled in the supermarkets in Britain had the highest penetration and it had a higher demand, this leads us to average cost of goods sold is lower comparing to the rest of Europe and US counterparts.

Short Lead Time: is the time between order and delivery; the best method of winning a customers heart is by giving him the goods as per promised in the appropriate time or even earlier if possible, to make them happy.

British companies have always had the lead in applying IT to Logistics, they are fast in getting the goods ready for delivery then the time promised to customers, as their distribution systems are all centralized.

The above listed points show that the Britain Supermarkets are profitable then the European and US counterparts.

Case 6

"The Novotel Value Chain"

Competitive advantage is an advantage over rival gained by offering consumer greater value. e.g.: by means of lower prices or by providing greater benefits and services that justify higher prices. [9] 

However I have presented a structural model of Competitive advantage below to elaborate more on the definition.

Below are Competitive Advantages offered by Novotel: [10] 

Multi - skilling: Senior manager of Novotel introduces this new approach of staffing in the hotel sector whereby staffs are developed as a team to perform tasks and work in a flexible manner.

Partnership Program (purchasing efficiently): the best advantage that makes Novotel a better competitor in the market as they use sole partnership program with their suppliers. E.g. the furniture supplier uses Novotel for the stay of their guests or when they go on a holiday.

Good Hospitality: Novotel provides its customers with an amazing hospitality services, whereby the staff starts with a warm welcome/ greeting and as soon as they enter they are taken in the reception where they are given full details about the rooms and services offered by Novotel and all the necessary things are taken place with great care of the customers pleasure.

Location: Novotel is trying to be worldwide, with a specific logo so that they are recognized by their symbol of their hotel and attract more people to it then the competitors.

Staff Training: Novotel provides the best staff training compared to any of its competitor, i.e. Accor Group (Novotel's parent) is the center of all training for staff, which is located just outside Paris from where all the staff training is designed and delivered.

Therefore the above listed are the advantages that Novotel offers to its customers that are better then any of their competitors.

Case 7

"The Levi's Personal Pair Proposal"

Strategic Clock represents different positions in a market where customers (or potential customers) have different requirements in terms of value for money. [11] 

STRATEGIC CLOCK

4

5

3

2

1

6

7

8

Benefits

To

Customers

PRICE

Key:

1: No Frills.

2: Low Price.

3: Hybrid.

4: Differentiation.

5: Focus Differentiation.

6 -7 - 8: Ultimate Failure Strategies.

As per my understanding on the case, Levis falls into the 4th position which is "Differentiation".

Differentiation: is whereby the firm seeks to provide product that offer benefits which are different from those of competitors and that are widely valued by customers. [12] 

Why Levis falls under Differentiation:

Unique Products: Levis is a company that is very flexible with its customers regarding their style and taste. Jeans can be customized in style and fit to meet each customer's unique taste and style.

New Technology: Levis in collaboration with Custom Clothing Technology Corporation (CCTC), introduced matching each customers personal customized pair of jeans that would be with a choice of the customer.

Highly developed systems to understand their customers purchasing preference, developing a system to look after their customers in which the company gets to know what would attract their customers more, taking Levis in mind; they offered the same system to approach their customers and look after what they want, and they produced jeans for ladies whereby it fitted them perfectly, the company attracted more customers who were even ready to pay a little extra for the fittings.

Therefore the above listed are the reasons as to why Levis falls into the 4th category in the strategic clock which is "differentiation"

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