CORPORATE CULTURE AND STRATEGY Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

CORPORATE CULTURE AND STRATEGY Case Study Solution

Abstract

The case illustrates the strategic management decision situation in the company HIL,headed by Baily, who was appointed after two consecutive losses the water plant SBU made, which made the investors appoint Baily to rectify the situation. The company operates through four divisions, namely software technology, online marketing, educational publishing and Water pump manufacturing. The project manager Vera, led the water pump project successfully till 1990’s, but the position of Vera along with his team is in jeopardy due to two consecutive project failures. Since the shareholders and investors have appointed Baily to take down the Water pump division, he also has to see if the new project which Vera has designed can bring back the profitability and thus has to decide between the shareholder's demand and the business proposal by Nakul Vera.

The deadlock presented in making the decision in favor of one party may have to be defended through strong evidence depicted on the balance sheet.

Keywords: Corporate strategy, Culture, Leadership, Strategic Management

CORPORATE CULTURE AND STRATEGY

Head start Industries limited (HIL) started its operations back in 1990’s, with the initial vision of catering different markets with different products by inculcating technology and Innovation.The company operated in three divisions namely software development, online marketing and water pump manufacturing/designing. For the last few years, the company performed outstandingly with the tremendous growth of market share and sales.

The project water pump was initiated by Vera, the project head, along with his team. The team worked tirelessly to bring the SBU to the top star product list of the company, when all of the sudden, the project faced two setbacks in 2000.The incident made the board directors appoint a new CEO, Baily, who could rectify the wrong decision and bring back the profitability to the company. In doing so, it has been expected from the CEO to cut off the WATER PUMP SBU from company’s portfolio as it was regarded as the dog product.

Baily knew the undisturbed, consistent hard work of Vera and his team, and his belief in the new project, yet he also understood the stance of the board of directors who have appointed Bailey with the vision of closing the SBU.So a daily deadlock has been developed to choose one option while supporting it with strong evidence and should be accepted by both parties. The proposal was also required to fulfill the responsibility and demand of his Role as a CEO of the company.

External Environment Analysis

Background of the Company

Head start Industries Ltd, is a top multi-business corporation that operates under eight SBUS.The company was founded by Ravi Gavin, while the project manager of water pump businesses was headed by Mukul Vera.

Among those eight Sbu’s, the company performed tremendously in Educational publication, software development, online marketing and Water pump businesses. These Four SBUs contributed immensely in making the company profitable.

The company incorporated latest innovation and technology to cater he markets and changing paradigm of the market forces. The company drew its focus to online marketing due to tremendous rise of ecommerce and online buying in Indian Market. The company started its operations in Madhya Pradesh, the second largest state of India, to cater the market through innovative means.

Industry Over-view

The company operates in Indian Market, in the second largest state Madhya Pradesh .Since the economy of the India is ranked under developing Economies, the issues of clean water supply is an issue, which is no catered by the government.

The trend gives rise to the employment of water pump to extract clean water from the earth. Since the population of India is continuously rising, the market has potential to support the business and offer sustain ability in the long run .In addition, the company also operates in online marketing segment, where it sells goods and services through an online portal. The trend was raised due to the evolution of technology into the business paradigm. A tremendous shift in consumer behavior to purchase online and the ease to set up online portal transformed the market. Under the following circumstances, HIL operated its business starting by inculcating innovation and technology into the business strategy.The approach offered great sales and profits and took the company to 70 billion INR in 2000.

Competition

China and India are both emerging markets, with economic status nearly equal to each other. China has the competitive advantage of producing cheap products with an innovative strike in it.Hence, the Chinese companies invaded the MADHYA Pradesh market which affected the profitability and also caused the company’s market share to shrink. The Chinese companies offer water pump at cheaper rates with increased technological innovation in it.The product reputation out ruled the popularity and market share of HIL water pump.

These Chinese companies offers the same product as of HIL, at alow price compared to HIL pricing in the market.

Major Challenges Firm Face

The firm faces immense challenges in maintaining the pricing strategy with the Chinese firm. Since the other firms in the industry utilize cost leadership strategy, which the company cannot adopt in current years due to immense pressure to maintain the profitability of the SBUin company’s portfolio.

CORPORATE CULTURE AND STRATEGY Harvard Case Solution & Analysis

In addition, the firm cannot put its product in luxury items, because the major customer base has the low disposable income to spend on a dispensable item. Also, the company faces immense pressure from the investors and committee members to divest the unit, because of non-profit able operation, while in such situation, getting the aid of 8 million INR, to finance the new project to save the SBU from diluting is also a challenge....................

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