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Their new partners assured them that this was a normal occurrence for this part of the world. Other disturbing news started to trickle down as comments of the need to make facilitation payments arose. The U.S team automatically countered with their need to abide by the Corrupt Foreign Practices Act, but their hosts assured them that it would be they who would take care of things, not the American's, but that the American's should know that such a arrangements existed and were a part of everyday life if you wanted to do business in this part of the world. The trip was concluded with a lavish good bye dinner and further entertainment, "Asian" style. The team was in a jovial mood when they arrived back in Florida and were congratulated by the CEO for their accomplishment. Their Asian counterparts meanwhile prepared for the new pre-qualification process and asked for intensive documentation. A joint project team was established for the project and earnest work commenced to supply their consortium partners with the necessary materials to win the pre-qualification bid. At the same time hints that certain facilitation expenses were being made to government authorities were being relayed to the American company over the phone. But, never in writing. After a while, these vague remarks became very much clearer as their foreign partners started to talk numbers. The US stance was the same. We cannot be involved, we don't want to know about it. Two months after the signing of the consortium agreement, the new pre-qualification bid was held, and their consortium failed to qualify. Their Asian counterparts blamed them in part for not assisting them in paying up the facilitation fees, and claimed that they would have won had the size of the payment been larger! They vowed to have the pre-qualification tender cancelled and the process renewed once again. Surprisingly within two weeks they had actually managed to do just that and the tender process was restarted. This was apparently a business tactic that was used frequently to disrupt and delay the tendering process. But by this time, the American company had lost faith in their partners having allocated resources freely against the promise of lucrative rewards and had decided to withdraw from the project. The Asian partners accused the American's of being short sighted, inflexible, and shallow. The American's accused the Asian's with being untruthful, slow, and not results oriented. Both sides threatened each other with law suits and asked for damages. Lawyers wrote letters back and forth, but even they had problems communicating. Both sides refrained from going to court because the cost of litigation would have been too expensive, but wrote letters of complaint to their respective embassies. The culture gap between the companies had played an important role in how this project went bad. Communicating across cultures can be extremely difficult. What the beginning is for one
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culture can well be the end for another. If you enjoyed this case study please review some of the other cases by Jim Kayalar which come with instructive teaching notes.
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4. Pro Clean Tennessee: The owner of a carpet cleaning operation in Tennessee is urgently looking for solutions, after his business expansion project has failed. The owner has emulated the business model of a well-established competitor, hoping that what has worked for his competitor would also work for him. The business is churning cash fast as a result of the additional cost of personnel and equipment and could face bankruptcy in the near future. Read More: Special Citation: Pro Clean, Tennessee chosen by Harvard Business Publishing, Teaching Materials Newsletter 2009, in the field of Competitive Strategy & Entrepreneurship. Read More:
5. MIA, Philippines: The newly appointed country director of MIA Philippines, a non-profit organization with a mandate to alleviate poverty in developing countries, is faced with the challenge of designing and managing a development assistance project that would establish a go-to-market supply chain for a remote Filipino fishing village. The country director has to enter a new country, launch the project, deal with the constraints of a foreign culture, manage the expectations of major stakeholders whilst trying to manage a multi-cultural team and conclude the project on time. The value of the case lies in the realistic assessment of stakeholders' motivation, their capabilities and assets, and project constraints during the design and implementation stages. Value chain analysis, value added analysis and stakeholder analysis are used to assess the applicability of project design, impact and long term success. Read More:
6. Otoyol Motor Company: Otoyol Motor Company, a large commercial vehicle manufacturer, is on the verge of being liquidated by its shareholders. Despite all efforts to maintain its competitive position, the company has been caught in a downward spiral. Erosion of its first mover advantages, shifts in industry core competencies and changes in consumer preferences have depreciated the company's value proposition and deteriorated its market share. Utilizing empirical data, this case illustrates the evolution of the commercial vehicle industry in Turkey, changes in industry conditions, and competitive strategies employed by the incumbent and its Japanese rivals in various life cycle stages. Puppy dog ploy, market penetration, product strategy, long term market share acquisition stratagems employed by challengers, and the incumbent's counter moves are chronicled. Read More:
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7. Bon Star Hotel: A management consultant is dispatched to a Central Asian Republic to conduct an operational analysis of an underperforming hotel. Initially the objective of the assignment is to turn around the business. The scope of the intervention, however, changes dramatically as the consultant finds himself in the midst of a high stakes stakeholder standoff with numerous parties vying for ownership of the business. Based on an actual consulting assignment, the case will present insight into the management consulting profession, relay a realistic account of the onsite operational analysis and business audit process, and impart the challenges managers and entrepreneurs confront in international business settings. Read More (English): Read More (Chinese):
8. The Generics Pharmacy: The price of pharmaceuticals in the Philippines is second only to Japan in Asia and one of the highest in the world despite the Philippines being a less developed country and nearly half of its population living on US$2 a day. The case illustrates how The Generics Pharmacy a local pharmaceutical company challenged the existing industry business model and became the largest pharmaceutical retailer in the country within a period of only three years. Under the strategic leadership of CEO Benjamin Liuson, The Generics Pharmacy succeeded in formulating a superior value proposal by focusing on the supply and demand side constructs at the bottom of the pyramid and bringing affordable high quality medicines within reach of low income individuals. Superior leadership, management and strategic initiative succeeded in integrating and balancing tenets of corporate social responsibility, entrepreneurial foresight and resource based strategy to catapult the company into a leadership position. Read More (English): Read More (Chinese):
9. We Are So Sorry: Sedang Premier Resort: North American and European branded hotel chains in their quest to maximize shareholder wealth have recently shed ownership of assets and freed up capital to focus on their core businesses with the help of strenuous contracts. The ensuing pursuit of further business development has expedited the internationalization process and a new business model of franchising the brand/value proposition in international locations has evolved. Globally accepted brands hold the promise of global quality. It is widely believed that Western brands deliver more value than brands from emerging nations, such that they can charge global prices to global customers. Service delivery failure is encountered frequently in the accommodation and food services industry. Such failures can act as an important performance measurement criteria. Managers are taught how to recover from service delivery
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failure and address loyalty issues of existing customers. They fear losing them as the cost of acquiring new customers may exceed the cost of keeping existing customers. The case illustrates how a globally branded North American hotel chain disregarded the basic tenets of maintaining the global brand promise, ignored generally accepted North American customer service standards, failed to instigate delivery failure recovery and leveraged firm specific capabilities to maximize shareholder wealth. The reaction of the local counterpart, the reaction to countermand the imbalance in the ensuing business relationship and adaptation of the value proposition are told from the perspective of a vacationing couple that experienced the diluted brand firsthand. Read More:
10. Wujiang Motor Company: Wujiang Motor Company a large cash flush Chinese commercial vehicle manufacturer is getting ready to realize its first overseas acquisition in Europe. WMC is assessing the purchase of Hispano Commercial SA, a shuttered commercial vehicle operation in Spain in its quest to expand its overseas operations in light of the surplus manufacturing capacity in its domestic market. WMC plans to break into the European automotive market and use Spain as a stepping stone to launch its foray into the American market place. The case can be best used in a strategic management, mergers and acquisitions or operational analysis class.
11. The Fish Whisperer: This case depicts the start-up and business development challenges faced by a streetwise entrepreneur who has invented a unique fishing rod. The capabilities necessary to invent, prototype and bring to market a limited quantity of product versus the challenges of larger scale product commercialization and managing a growing business are illustrated chronologically. The case primarily addresses why some entrepreneurial ventures succeed and grow to become large-scale corporations whereas others stay small and insignificant and why a majority of entrepreneurial initiatives eventually fail. Indigenous constructs such as entrepreneur and organization specific factors and exogenous constructs such as industry, location and time specific factors that may predetermine the outcome of an entrepreneurial venture are illustrated. A business plan, which has attracted angel investment, is presented for critical assessment. The background storyline subtly depicts that all businesses, regardless of size, face resource constraints and trade-offs and that managers must continuously adapt and upgrade their business models, competencies and management style to match the evolving threshold market standards. Read More:
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12. Green Hills Hospital - Leading Change Management: Performance measurement research indicates that most organizations actually destroy rather than create value as a result of their operations. The new global competitive order requires that organizations adapt, change and restructure business models quicker and with less mistakes than ever before in order to maximize value for shareholders. Most organizational change initiatives only deliver subpar results necessitating yet further rounds of restructuring initiatives which destroy yet further value and negatively impact the organization. Private healthcare has become a lucrative business and the Hippocratic oath "Primum non nocere" (First do no harm) may be eroding to be gradually subjugated to "Primum lucrum" (First make profit). The case presents a change initiative at a large healthcare facility that aims to maximize shareholder value by introducing lean healthcare. Whereas change management performance can be measured in financial terms, what happens when a mishandled change initiative starts to endanger the lives of patients and change starts to kill? Read More:
Books Marketing Strategy: Standardization and Practices in the Commercial Vehicles Industry Adaptation
The globalization of markets has disrupted the existing status quo, delineated the first mover advantage of incumbents and their entrenchment strategies. Changes to the auto industry have been especially drastic in the traditional North America and European markets where the very existence of industry icons, such as General Motors, Ford and Chrysler have come into question. Japanese manufacturers with their seemingly unbeatable innovative approaches to time-to market, process and product design have achieved superior performance standards and taken global leadership. A new era of competition is on the auto industry dictating the way value is created for customers and shareholders. Incumbent firms with decades of heritage and legacy must adapt to the new competition or be faced with a grim future of gradual decline. This book utilizing a resource based perspective analyzes how competition between American, European and Japanese companies evolves historically in emerging market settings, illustrating competitive marketing strategies and the use of standardization and adaptation practices in the pursuit of competitive advantage.
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