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Bhalerao Industries Ltd. Was the main supplier of machined castings of sugar machinery manufacturers in India. The company consistently faced problems of delayed supply of high-grade castings from their vendors. The threat of losing business to the company's competition was looming large at its doorstep.
Bhalerao Industries Ltd. Was the main supplier of machined castings of sugar machinery manufacturers in India. The company consistently faced problems of delayed supply of high-grade castings from their vendors. The threat of losing business to the company's competition was looming large at its doorstep.
Bhalerao Industries Ltd. Was the main supplier of machined castings of sugar machinery manufacturers in India. The company consistently faced problems of delayed supply of high-grade castings from their vendors. The threat of losing business to the company's competition was looming large at its doorstep.
CASE STUDY - The Aggressive Koreans It was a hot summer day in June 1986. The senior executives at Bhalerao Industries Ltd. (BIL) were keenly awaiting the arrival of a delegation from M/s Hyundai Castings Ltd. of South Korea to discuss the supply of huge, high-grade castings to sugar machinery manufacturers in India. BIL was the main supplier of machined castings of sugar mills to most of the sugar machinery manufacturers in India and had also received some orders for export to certain African countries. However, the company consistently faced problems of delayed supply of high-grade castings from their vendors, besides the usual issues of poor quality and escalation in unit price at frequent intervals. This forced it to look for a long-term solution wherein they can breathe easy on their continued supply to their valued customers who were constantly pressurizing the company for maintaining delivery schedules and good quality of supplies, besides participating in the company's cost reduction programmers by offering to reduce prices in view of continued business relations. The competition to BIL was also increasing in view of government's incentives to sugar manufacturers who planned to establish new factories and expand their businesses. The project team at BIL sent enquiries to a few of the global suppliers of heavy-duty castings and also to certain Indian suppliers of high-grade heavy-duty castings. The objective of this exercise was to establish once and for all reliable suppliers who could meet huge castings requirements, which were repetitive and in quantities of nearly a thousand tons per year. Kishore Dole, the project manager, and R. K. Sood, the materials in-charge, were given the ultimatum by their managing director, H. D. Parekh, that it is imperative for them to drastically improve the quality of the company's inputs, mainly the heavy-duty castings that formed nearly 90 per cent of its raw materials. This was particularly important as BIL was bleeding constantly on account of heavy rejections of its castings and its inability to meet supply schedules. The threat of losing business to the company's competition was looming large at its doorstep. This was a do-or-die situation for the project team under Kishore Dole. Hence, the entire team was eagerly looking forward to having purposeful long-term arrangements with a global supplier who can ensure quality supplies at reasonable prices and maintain supply schedules. QUESTIONS 1. What are the special features of the Korean Global Business Model, which make them market leaders in majority of market segments they have ventured so far? 2. How do you explain the success of Korean products in gaining major market shares across the world by edging out the might of the Japanese, big General Motors, Fords and Chryslers? Which do you think are the main reasons for the Korean's resounding global success: marketing capability, product positioning, technical superiority or government's support in terms of subsidies and incentives? 3. What type of sustainable business model do you recommend for the other players in the market for achieving a competitive edge over the aggressive Koreans?