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Questions: 1. How should Mr. Durant assess the opportunities in various countries around the world? 2. Should Carrefour adopt Wal-Mart's strategy of "low prices everyday"? What would be the advantage or disadvantage of such a strategy? 3. How could Carrefour differentiate itself from Wal-Mart? 4. Identify cultures in selected countries that need to be considered in order to be successful?
CASE STUDY : 2 International Case : Reengineering the Business Process at Procter & Gamble
Procter & Gamble (P&G), a multinational corporation known for products such as diapers, shampoo, soap, and toothpaste, was committed to improving value to the customer. Its products were sold through various channels, such as grocery retailers, wholesalers, mass merchandisers, and club stores. The flow of goods in the retail grocery channel was from the factory's warehouse to the distributors' warehouses before going to the grocery stores where customers selected the merchandise from the shelves. The improvement-driven company was not satisfied with its performance and developed a variety of programs to improve its service and the efficiency of its operation. One such program was electronic data interchange, which provided daily information from the retail stores to P&G. The installation of the system resulted in better service, reduced inventory levels, and labor-cost savings. Another approach, the continuous replenishment program, provided additional benefits for P&G as well as for its retailer customers. Eventually, the entire ordering system was redesigned, with the result of dramatic performance improvements. The 2|P ag e
reengineering efforts also required restructuring of the organization. P&G had been known for its brand management for more than 50 years. But in the late 1980s and early 1990s, the brand management approach pioneered by the company in the 1930s required rethinking and restructuring. In a drive to improve efficiency and coordination, several brands were combined with authority and responsibility given to category managers. Such a manager would determine overall pricing and product policies. Moreover, the category managers had the authority to withdraw weak brands, thus avoiding conflict between similar brands. They were also held responsible for the profit of the product category they were managing. The switch to category management required not only new skills but also a new attitude. Questions: 1) The reengineering efforts of P&G focused on the business process system. Do you think other processes, such as the human system, or other managerial policies need to be considered in a process redesign? 2) What do you think was the reaction of the brand managers, who may have worked under the old system for many years, when the category management structure was installed? 3) As a consultant, would you have recommended a top-down or a bottom-up approach, or both, to process redesign and organizational change? 4) What are the advantages and disadvantages of each approach.
In 1996, top management reassessed the company's position and its 1995 unsatisfactory results from its operations. It was discovered that the company was exposed to currency fluctuations that affected profitability. The company's image was also blurred because of the ventures into many different kinds of industries. The management board decided to cut its losses and chart a new direction for the company, with greater emphasis on profitability. The organization structure was tightened and certain businesses were divested. In fact, policy decision from an earlier period were reversed. The unprofitable AEG Group and the Dutch aircraft manufacturer Fokker did not receive financial support. Since both the Dutch government and Daimler-Benz withdrew support, Fokker filed for bankruptcy. Although these and other drastic decisions helped reduce the 1995 financial losses, the company's goal was not to emphasize maximizing short-term profitability but to work toward medium- and long-term profitability. A number of other managerial decisions were made to achieve the ambitious goals of reducing costs and improving profitability. Employees close to the operations were empowered to make decisions necessary to carry out their tasks. The organization structure was simplified and decentralized so that organizational units could respond faster to environmental changes. Moreover, the new organization structure was designed to promote an entrepreneurial spirit. Control was exercised through a goal-driven, performance-based reward system. At the same time, the new structure was designed to promote cooperation. In 1997, the board of management restructured and integrated the Mercedes-Benz Group into Daimler-Benz. Consequently, Mercedes-Benz's chief, Helmut Werner, who had been given credit for a successful model policy, resigned from the company.
Questions: 1) What is your assessment of Daimler-Benz's operations in many different fields? 2) Should the various groups operate autonomously? What kinds of activities should be centralized? 3) Daimler-Benz is best known for its Mercedes-Benz cars. Why do you think Daimler bought AEG in the first place and why did it venture into the Aerospace and Inter Services businesses? 4) Given the apparent mistakes in acquiring non-automotive businesses, what should Jurgen Schrempp do now?
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Questions: 1) Prepare a profile of the potential buyer of the Lexus. 2) What should Mercedes and BMW do to counteract the Japanese threat in the United States and Europe? 3) Why has the Lexus model been very successful in the U.S. but has not been marketed in Japan? (Suggestion: Review the frequency of repair records of luxury cars. Also talk to Lexus dealers or Lexus owners). 4) Do you think Lexus will succeed in Japan? Why or why not?
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