1st Block Assessment

 

  CASE STUDY

 

In November 2017, China’s largest online travel agent (OTA), Shanghai-based Ctrip.com International Limited (Ctrip), announced the acquisition of the US-based travel recommendation service, Trip.com (Trip), for an undisclosed sum. This was the latest among several moves by Ctrip that signaled its ambitions to expand beyond Asia. Earlier in 2016, Ctrip bought Skyscanner, a Scotland-based flight Search Company, for about US$1.74 billion, making the travel industry sit up and take notice. The Trip deal was expected to help Skyscanner leverage Trip.com’s capabilities on its own platform. Travis Katz, CEO and founder of Trip, said, “The idea of this deal is for Skyscanner to marry in-destination reviews content in Trip’s arsenal to Skyscanner’s platform. The aspiration is not to only add static details, such as about the opening times of restaurants or museums, but to also enable Skyscanner users to see and eventually add social reviews within Skyscanner’s website and apps,”

 

Founded in June 1999 by James Liang, Neil Shen, Min Fan, and Qi Ji, Ctrip started out as a trip advisor service provider. The company aggregated information on hotels and flights and enabled customers to make informed and cost-effective hotel and flight bookings. Its inception and growth coincided with the travel boom in China and its revenues increased from Renminbi (RMB)6.9 million in 2000 to RMB105.3 million (US$12.7 million) in 2002.

 

Even the outbreak of the Severe Acute Respiratory Syndrome (SARS) in 2003 did not have a significant impact on Ctrip’s business. By October 2003, Ctrip had established room supply relationships with over 1,700 hotels in China and over 450 hotels internationally. It went public in December 2003, with its IPO soaring on the debut day. On Nasdaq, the shares opened at US$24.01, and at one point went up to US$37.35, thereby making Ctrip’s first IPO double its US$18 offer price on day one of trade.

 

COMPETING WITH TECHNOLOGY

 

Ctrip had constantly been acquiring new technologies to serve its customers. Artificial Intelligence, big data, and intelligent hardware employed by Ctrip were crucial in providing a superior travel experience. Jane Sun (Jane), Ctrip’s Chief Executive Officer, said, “For the user interface, we want to make sure that we know every customer who has purchased or searched on the Ctrip website. So when we list our products for them, it’s not millions of items that they have to search through -- the user experience wouldn’t be maximized. Hopefully we can personalize the display. All of that is in our design. When the customer purchases with us, they (may not) know what they want, but we know what would fit them. That’s a way technology will help us” .

 

CTRIP’S STRATEGIC INVESTMENTS AND ACQUISITIONS

 

Ctrip maintained its leading position through a series of strategic investments and acquisitions. From 2013, the company began expanding aggressively expanding internationally. Feifei Xu, Director of Brand Strategy, Labbrand, said, “Their international expansion aims to offer Chinese out-bound travelers or foreign companies in China an extension of their value-chain platform of tourism. By international expansion, they are mostly targeting outbound Chinese travelers.” In 2013, Ctrip invested in travel search engine Kuxun, hotel app Economy Hotel Manager, social trip sharing platform Chanyouji, and car rental services Yongche and eHi Car Services

 

CHALLENGES AND OPPORTUNITIES

 

The acquisition of Skyscanner, while contributing substantially to Ctrip’s growth, intensified both domestic and international competition. To compete effectively with Ctrip, other OTAs in China made attempts to attract large investments. Meituan Dianping raised US$4 billion in a funding round led by Tencent Holdings . Interestingly, Priceline, which was Ctrip’s largest shareholder, also participated in the funding round. Agoda.com, owned by the Priceline Group, established a strategic partnership with Meituan Dianping. This strategy of Priceline investing in Ctrip’s domestic competition indicated that it perhaps saw Ctrip as a potential threat and thus made an investment in Meituan Dianping that could lead to hedging its bets against Ctrip. However, analysts felt that Ctrip was strong enough to take a further share of the Chinese OTA market and its long-term growth prospects in China remained strong.

 

Adding Skyscanner’s revenue to Ctrip’s total boosted Ctrip’s Q3 2017 transportation-ticketing revenue by 41 percent to US$515 million. Cindy Wang, Chief Financial Officer, Ctrip, said, “The total number of transactions made by direct booking increased almost three-fold since May (2017), the month we launched the engine on Skyscanner, through September.”

 

 

 

 

1. For expansion of C Trip International Ltd. , what strategy was adopted ?

Acquisition of US based Trip .com

Selling of Trip .com

Becoming a Parter of Trip.com

None of the options

 

 

2. To enable customers to make informed and cost-effective hotel and flight bookings , The company aggregated information on ?

On hotels and flights

on budget hotels

on international flights

both a & b

 

3. Ctrip had continously been acquiring new _____ to serve its customers?

Customers

Technology

Offers

None of the options.

 

4. what technological tools were employed by Ctrip in providing a superior travel experience ?

Artificial Intelligence, big data, and intelligent hardware

Excellent Software

Market Research

Both B&C

 

5. Co. adopted a strategy of using technological tools and make customer purchase easier by?

Knowing what would fit customers , as customers (may not) know what they want

Giving promotional offers

Giving discounts, customers always know what they want

None of the options

 

6. Ctrip maintained its leading position through ?

series of strategic investments only

a series of strategic investments and acquisitions

Focussing on Industry Competition

Focussing on Attracting maximum customers

 

7. Investment strategy adopted by Ctrip was into field of?

Car rentals , Hotel Apps & travel search engines

Car rentals only

hotel app Economy Hotel Manager only

Both B & C

 

8. The strategy adopted for acquisition of Skyscanner, by Ctrip  helped in?

growth of international market

Growth in Foreign Lands

growth of both domestic and international markets

growth of domestic market

 

9. Main investment strategies adopted by the Companies in this case study were related to ?

Selling of a Product Line

Competitor analysis

Scanning Environment

Acquisitions

 

10. ______ has played a major role in this case study , and for capturing a wide market share by the company ?

Technology

Competitors

International Markets

Both B& C

 

2nd Block Assessment

 

 CASE STUDY

 

Navroze Godrej (Navroze), the young executive director for Strategy and Innovation at Godrej and Boyce, the holding company of the India-based Godrej Group, is a fourth generation scion of the Godrej family. Keen on bringing about a major change in his company’s design thinking, he set himself the goal of changing the Godrej Group’s old-world, engineering driven mindset into a forward looking design driven mindset. He aimed to shape the Godrej Group into a company that inculcated a culture of open collaboration between different work groups and businesses. As part of his efforts to fulfill this aim, he created a suitable ambience and office infrastructure to break down the organizational hierarchies. He also started the Godrej Design Lab to encourage young designers to showcase their work. The selected designers were mentored and their designs displayed at national level exhibitions. The case discusses whether the initiatives taken by Navroze to bring about organizational transformation to make the Godrej Group design, innovation, and consumer focused can succeed. The case gives enough scope to analyze whether the influx of young talent is capable of bringing in novel ideas to shape the company’s future.

 

In 2005, Navroze Godrej (Navroze) was inducted as a management trainee into Godrej & Boyce (G&B), the holding company of the Godrej Group. Navroze, a fourth generation-scion of the Godrej family which owned the Godrej Group, was all of 23 years old when he joined Godrej. He was quite different from the previous generations of the family in terms of being more agile and wanting to bring in change within the company. When Navroze was in his early twenties, he met Professor Hemmant Jha, (Jha) of the Institute of Design, Chicago, US. It turned out to be a momentous meeting and was a turning point for Navroze as it kindled in him a love for design, which soon turned into a lasting passion. Navroze was so impressed after chatting with Jha that he persuaded the professor to join G&B. Analysts said this was a smart move by Navroze – one that drove G&B toward innovation. After hiring Jha, Navroze and his team at G&B brought out novel designs and innovations which were patented under Godrej.

Godrej, one of the largest Indian privately-held diversified industrial companies, was founded by Ardeshir Godrej (Ardeshir) in 1897. Ardeshir, a lawyer by profession, gave up his career in law to pursue his passion for making high quality locks and safes. The business was expanded further by Ardeshir’s youngest brother, Pirojsha Godrej (Pirojsha), who joined the company in 1906. In 1909, Godrej secured its first patent for spring-less locks which Ardeshir sold under the Anchor brand. During the 1920s, Ardeshir manufactured the first of Godrej’s sturdy steel cupboards branded as ‘Storwel,’ that became a trend in Indian homes. Ardeshir launched a washing soap as well and the world’s first vegetable oil based toilet soap. The toilet soap was considered to be the best in its time, as it revolutionized the manufacturing process. Up till then, soaps were made from animal fat. Godrej earned a name for itself with the superior quality of locks and soaps it sold. In 1952, Godrej bagged a contract to manufacture ballot boxes for India’s first general elections. Every day, 15,000 ballot boxes were made at its Vikhroli factory in Mumbai, to supply the target of 1.2 million boxes.

In 2013, after Navroze graduated with a Master’s in design, he returned to join G&B and spearheaded a pilot project on a disruptive business model. One of the things he changed was the layout of the (office) shop-floor. Unlike the previous directors who worked from their closed office space, he preferred to sit with his project teams around a big table and discuss matters with them. The new furniture layout was intended to support both individual and group work. Navroze felt traditional desk arrangements created a barrier and prevented openness and collaboration.

GODREJ INNOVATION CENTER

In 2013, Navroze took the bold move of setting up a 25,000 square foot ‘Innovation Center’ in Vikhroli, Mumbai. This was a research and development center to conduct explorative study in areas involving security, lifestyle, well-being, energy, productivity, and connectivity. The innovation center had a fixed 20-member full-time team, while at any given time there were at least a 100 other employees who belonged to other departments deputed to accomplish time-bound projects. As Navroze believed in diversity, the members in the teams came from different backgrounds such as, design, marketing, research, business, engineering, and others. The center had enough space for meetings and lectures, and the furniture was such that it could be reorganized for display of prototype product designs, a collection of material types, and for any other informal interaction as well.

SPRINT PROGRAM

Navroze led the Sprint program that caused a cultural transformation in the company. He facilitated a bottom-up approach, where he invited all the employees of Godrej to submit ideas at the innovation center. Based on their ideas, Navroze set up work groups. For the first time, people with 20 years of experience and those who had joined just six months earlier began working together. The groups came up with ideas that ranged from cooking appliances to recycling of waste, to looking at resources and services for transit population.

GODREJ DESIGNLAB

In 2013, Navroze set up the Godrej DesignLab, (GDL), which was established in collaboration with a Mumbai-based design studio, Elle Décor. GDL was a platform for designers to co-create, experiment, innovate, and challenge the boundaries of product design. GDL aimed at providing a holistic support system to designers who could give a whole new level of futuristic designs. GDL was a forum where designers could submit their work in four categories of furniture, furnishings, lighting and home décor, & accessories.

THE HUBBLE

In April 2014, Navroze spearheaded the development of a second innovation center, the Hubble. It was conceived to serve as a hub where people could interact informally to encourage the culture of creative thinking. The Hubble was built on a spacious 25,000 square foot space in the Vikhroli office itself, to function as an eat, work, and play space with a coffee-shop-kind-of-atmosphere. It encouraged both private and collaborative work among the employees.

REINFORCING THE DESIGN TRADITION

The Chief Design Officer, of GPL, Anubhav Gupta (Gupta), said that though there was no vertical on design in the Godrej group of companies, design was considered a business horizontal as it had become omnipresent in all aspects of the Godrej Group. He said innovation at GPL was not about playing it safe but it required an ability to tolerate failure before earning superlative success. Innovation, according to Gupta, was finding the best possible or the most optimal design.

 

 

1. A smart strategy adopted by Navroz in the starting phase ,after getting impressed with professor Jha was ?

Strategy related to innovation

strategy related to acquisitions

Strategy related to controlling systems

strategy related to diversifications

 

2. The first patent secured by godrej , was related to which product?

spring-less locks

Almirah’s

Safe’s

Refregirator’s

 

3. The strategy adopted by godrej in respect of innovation , was done in respect of ?

achieving greater market share

to attract more & more customers

Both A& B

None of the options

 

4. Godrej revolutionised the manufacturing process, and created world’s first _______?

Animal fat based toilet soap

vegetable oil based toilet soap

Herbal Soaps

All

 

5. It was felt that old structure of traditional desk arrangements created _______?

efficient working environment

Prevented positive work culture

Barrier ,prevented openness and collaboration

All

 

6. On what kind of activities godrej majorly focussed in the innovation centre ?

Research & Development

cost cutting strategies

strategies to attrat customers

None of the options

 

7. Godrej earned a name for itself in the starting phase for which of the following products ?

Refrigerators

superior quality of locks and soaps

Soaps Only

Electronic Appliances

 

8. People/ employees in Godrej were allowed to interact informally which lead to encouragement of ___?

the culture of creative thinking

collaborative work among the employees

Both A & B

None of the options

 

9. In order to breakdown the organisational hierarchies , what basic strategy was adopted ?

Creation of a suitable ambience and office infrastructure

Creation of a friendly environment

Creating a competitive Environment

Both b & C

 

 

10. for India’s first general elections , what kind of contract was bagged by Godrej ?

to manufacture Lockers

to manufacture Soaps

to manufacture both ballot boxes & soaps

to manufacture ballot boxes

 

 

3rd Block Assessment

 

CASE STUDY

 

This case discusses about the acquisition of Florida-based Elizabeth Arden Inc, (Arden), a cosmetics, skin care, and fragrance major by Revlon Inc. (Revlon) another cosmetic giant. Post-merger, Revlon reported a 21.9% increase in its net sales in 2016. The case highlights the journey of both the businesses and also the tough time they faced prior to the merger. While Revlon had been weighed down by its debt, the sales of celebrity fragrances, a key part of Arden's portfolio, had declined. Arden's losses and increasing debt load left the company with few options to survive as a stand-alone business. Revlon pursued the deal largely in order to achieve scale.

 

Revlon bought Arden in a $870 mn deal in June 2016. The merger brought together the two cosmetics majors amidst hopes that a combined distribution network and marketing strategy could broaden their appeal. The industry showed a mixed response to the union. While some experts felt the synergy was not very realistic few other opined that it would revive the fortunes of Arden.

 

The case also discusses Revlon’s plans of restructuring the business. It headed towards shifting to a brand-centric structure aimed at identifying investment areas quicker and reacting faster to consumer needs in the domestic and international markets.

 

In March 2017, New York-based cosmetics, skin care, fragrance, and personal care company Revlon Inc, (Revlon) reported its net sales rose to $2.3 billion in 2016, a 21.9 percent increase compared to 2015. Revlon witnessed growth across all segments. This growth in sales came amidst Revlon’s plans to shift to a brand-centric structure after initiating a restructuring plan in 2016. The restructuring followed Revlon’s acquisition of Elizabeth Arden Inc, (Arden), a Florida-based, cosmetics, skin care, and fragrance major, for $ 870 million. The merged company was expected to leverage the strength of its brands and adapt to the changing behaviors and preferences of consumers to serve them better. In addition to expanding categories, channels, and geographies, Revlon expected to hit $5 billion in sales in the next five years. As part of the integration, it announced the elimination of 350 positions worldwide and streamlining of certain operations. In addition, project integration-related restructuring activities were estimated to cost between $65 million and $75 million by 2020.

THE JOURNEY OF ELIZABETH ARDEN

Born as Florence Nightingale Graham (Graham) in 1878 in Ontario, (Canada), Graham was the youngest of five children in a poverty stricken family. She dropped out of school due to a lack of finances and began training as a nurse. During nursing training she met a chemist experimenting with a facial cream that could help acne sufferers. The idea fascinated her, leading to her believing that most women would give anything for beauty. Graham took up a number of odd jobs that gave her an opportunity to display her salesmanship. While working briefly as a bookkeeper for the E R Squibb Pharmaceuticals Company in 1908, she spent hours in their lab learning about skincare. This further inspired her to fashion a small lab for beauty products of her own. To pursue her dream, she quit her job at Squibb and joined as an assistant in a newly established beauty parlor. Graham later worked for beautician Eleanor Adair as a “treatment girl” and gained valuable industry experience. In 1910, Graham borrowed money from her brother William and started ‘Red Door Salon’ with a partner, Elizabeth Hubbard . The first shop was opened on Fifth Avenue. The partnership soon dissolved and Graham became the sole proprietress. She decided to name her salon ‘Elizabeth Arden’. The name was derived from her former partner’s name and from Alfred, Lord Tennyson's poem ‘Enoch Arden’. The new name raised the prestige and glamor of not only the business but Graham as well. Thus, Graham changed her name to Elizabeth Arden (Arden) in 1915.

THE JOURNEY OF REVLON

The history of Revlon Inc, one of the world's leading cosmetics companies based in New York, can be traced back to 1932. Two brothers, Joseph Revson and Charles Revson, conceived of the idea of creating a nail enamel using pigments instead of the normal dyes. They collaborated with a local chemist named Charles Lachman (who contributed the ‘L’ to the Revlon name), to come up with their first product. Revlon developed a variety of new shades of nail polish. Seeing the booming beauty salons and the growing popularity of manicures they targeted beauty salons as a market to sell their nail polishes.

Arden was known for its fragrances including those licensed from celebrities like Marilyn Monroe, Catherine Zeta-Jones, Britney Spears, Justin Bieber, Taylor Swift, and many more. However, in 2014, the company posted the biggest ever quarterly loss in its history, a 28 per cent drop in revenue. The company was hit hard mainly because of a fall in the sales of its celebrity perfumes. The company statement said, “While the company had expected weaker sales comparisons due to the lower level of fragrance launch activity in fiscal 2014 versus fiscal 2013, the decline in sales of celebrity fragrances, particularly the Justin Bieber and Taylor Swift fragrances.

In June 2016, mired in financial woes, Revlon decided to pick up Arden. The company agreed to buy Arden in an $870 million deal. The wager was expected to create a beauty business with annual sales of $3 billion along with creating a platform in categories like mass, prestige, professional, color cosmetics, skin care, and fragrances. In addition to greater purchasing power, the merged entity was expected to benefit from cost savings of nearly $140 million by eliminating overlaps, integrated manufacturing, and distribution networks of both companies. Garcia said, “We see great opportunities for growth where they are strong and we are not.”

Some analysts expected a negative outcome from the union. They felt that Revlon was buying a troubled competitor with an elevated debt load. Although Revlon pointed to the expected synergies, experts found this unrealistic and opined that it could possibly result in higher leverage ratios. Wendy Liebmann, CEO of WSL Strategic Retail, stated, “There’s so little other business synergy. Arden is a fragrance and skin care house. Revlon is a color cosmetics and hair-color business. Different price points and distribution.

The deal not only marked a turnabout for investors, it also put an end to speculations that Revlon would be an acquisition target – rather than a buyer. Before the acquisition was announced, Arden's market capitalization was $280 million. Shares had fallen 40 percent off their 52-week high. But as soon as the news of the acquisition came in, Arden’s shares soared by as much as 50 per cent and closed at $14; Revlon rose about 6.6 percent to close at $33.25.

In January 2017, Revlon decided to divide and organize the business into four categories: the Revlon brand, Elizabeth Arden, fragrances and portfolio brands, (which included Almay, Mitchum, Gatineau, Sinful Colors and Pure Ice cosmetics. Each Revlon team was required to prepare a three-year growth plan and set priorities and strategies for their labels. The core corporate functions including finance, human resources, supply chain, research and development, legal, communications, and corporate social responsibility departments were to be reorganized to provide better support to the new brand-centric and regional structures.

 

 

 

1. In this case study, What strategy was adopted by Revlon for the purpose of Growth in the Market ?

Acquisition as growth strategy

Industry Analysis as growth Strategy

Leadership strategy

Competitor analysis strategy

 

2. This case study is about which two major companies ?

Revlon International & Mac

Maybelline & MAC

Elizabeth Arden Inc & Revlon Inc

Mayabelline & Revlon

 

3. In order to serve the customers better ,what strategy was adopted by Revlon ?

adapt to the changing behaviors & preferences of consumers

adapt to the changing Market conditions

adapt to the changing Political environment

adapt to the latest Technology

 

 

4. The case study discusses Revlon’s plans of____?

Restructuring the business

Closing the business

Both A& B

None of the options

 

5. This case study , highlights __?

the better condition of Elizabeth Arden Inc prior its acquisition

the journey of both the businesses and also the tough time they faced prior to the merger

the downfall of Revlon Inc . before the acquisition

None of the options

 

6. Revlon headed towards shifting to a brand-centric structure aimed at identifying investment areas quicker and reacting faster to _____?

consumer needs in the domestic and international markets

consumer needs in the domestic market only

consumer needs in the international markets

None of the options

 

7. As per this case study , Initially Arden was known for ?

Nail enamel

Face Creams

fragrances

Both A & B

 

8. Revlon decided to adopt restructural strategies - to divide and organize the business into categories, what were these categories ?

the Revlon brand

Elizabeth Arden brand

fragrances and portfolio brands

All of the options

 

9. In this case study , each Revlon team was required to prepare a _____ growth plan and set priorities and strategies for their labels?

three-year

Five Year

Ten years

seven Years

 

10. Main Motive behind the acquisition& merger strategy adopted in this case study was related to ?

Increasing the sales

attracting More & More customers

Capturing Major Market Share

All of the Options

 

 

 

4th Block Assessment

 

CASE STUDY

 

When a new technology comes along that is capable of improving dramatically the products of a whole industry, every firm in that industry has vital strategic decisions to make. It must ask itself:

• How far and how quickly should we amend or abandon our present products?
• How far and how quickly should we embrace the new technology?
• Are we big enough and capable enough to accomplish all the

essential changes on our own?

• How can we come out of this time of change stronger than we went in?

Once taken, these key decisions have to be implemented.

Technological change > Strategic decisions > Strategic Implementation

All this makes for exciting times within the industry, for producers and also for consumers, who also have some adjusting to do.

Imaging is one of the world’s growth markets and new technology is making its mark; imaging has ‘gone digital’. It is not a complete transformation. Analogue imaging has not been abandoned and still has millions of satisfied consumers. However, the industry will move on. This is because the new technology:

• is genuinely innovative
• has undeniable advantages in some key aspects
• has been shown to work
• is proving reliable
• is capable of further development
• will become cheaper in the long run.

The pace of change is accelerating. Abandoning former practices and establishing new ways of working is generating not only excitement, but also stresses and tensions. The new technology requires new skills, new attitudes and new approaches from both producers and consumers.

This case study looks at how AGFA, a leading player, is taking full advantage of the digital revolution. The company is using the new technology as:

• an engine for growing its business
• a means of providing its customers with better product possibilities and with greater flexibility and choice.

Agfa

Agfa is a leading name in the imaging industry. The Agfa-Gevaert Group de-velops, produces and distributes an extensive range of analogue and digital imaging systems. Agfa has divided its operations into three segments.

Segment: Consumer imaging.    

Activity/Products: Wide range of products using both digital and analogue technologies for taking, processing and manipulating photographs.

Segment: Graphic systems.    

Activity/Products: A wide range of electronic and photographic systems for the graphics industry, including workflow management systems, scanners and laser image setters.

Segment: Technical imaging.

Activity/Products: Medical uses eg X-ray equipment; non-destructive fault-testing eg in aircraft and pipelines; industrial imaging for motion pictures; document management systems and micrographics.

Agfa’s operations involve a high level of innovation. The company’s willingness and ability to work at the leading edge of technology help to make it a leader in its field.

 

For Agfa to remain a market leader, its managers must concern themselves with the future and ask themselves:

• Where is the industry heading?
• What are our competitors likely to do next?
• Where do we go from here?

With imaging, the answers currently are:

• The industry is heading towards greater use of digital imaging.
• Our competitors will invest in research and development aimed at enhancing quality at affordable prices.
• We look to get there first, with better products to sell to customers who are prepared for using them.

This approach requires a willingness to invest heavily in new projects that maximise the benefits of new technology.

- Every proposed project undergoes investment appraisal. This procedure establishes whether a particular project is worth taking forward. Managers will ask key questions about a proposal, including:

• How expensive are the initial outlay and the final total outlay likely to be?
• For how long are we likely to be spending money without any financial return?
• How long is it likely to be before we recover, from sales, all the money we have invested?
• What return can we reasonably expect from our investment in the long term?
• How big are the risks? What events over which we have little or no control could cause this project to falter or fail? How likely are they?

Risks for the imaging industry include:

• a significant rise in the cost of borrowing to finance investment
• a downturn in business activity worldwide that persuades industrial customers to postpone their own purchase of new plant and equipment
• poorer job prospects for the general public that deter private consumers from spending on the latest products.

Agfa must consider these factors as it contemplates large scale investment in new digitally based technologies.

During 2000 Agfa invested around 224 million Euros (equivalent to 4% of its sales revenue) in research and development. Part of this involved working with external partners eg universities and leading research centres. Much of the work reflected the need to move forward in:

• developing the transition from analogue to digital solutions
• meeting a wider variety of customer needs
• helping Agfa to create new market sectors and to enter them profitably.

Digital technologies are changing the way in which people take, process and use images. New processes allow customers to work with images quickly and efficiently, without requiring extensive expertise and knowledge. Take, for example, the newspaper world. With newspapers, speed is vital and editors want the best pictures to go with the latest stories.

• Digital technology is transforming newspaper production. For example, sports photographers no longer have to dash back to the office to develop prints, wondering anxiously what they have captured. They know immediately the quality of the image they have and they can despatch it immediately too. As a result, the publisher soon has on sale a comprehensive local Saturday night ‘sports special’ carrying action photos of spectacular moments that occurred hundreds of miles away just a short time earlier.
• The new technology is also transforming photography for the general public. For example, crystal clear photos of a baby can now be available to proud, anxious grandparents thousands of miles away within a few minutes of an infant’s birth.
• Technological advance does have a downside, in that demand for new products affects sales of older ones. As a market, analogue photography has almost reached maturity. It is still

significant in size with almost 70% of the market. However, with plenty of scope for further product developments and for repeat business. The growth of digital technology has not deterred Agfa and its competitors from bringing out new, improved products for use with ‘old’ technology.

• The real difference between analogue and digital lies in how images are recorded and processed. Analogue photography uses traditional cameras to expose silver-halide film. This still remains the most widely used way to capture images. Customers are well served with a variety of excellent products, from traditional slide and print films to Advanced Photo Systems (APS) films and single-use cameras with enhanced capability.
• Compared with digital systems, recent analogue advances are ‘low tech’, but so too is their cost. Image quality is excellent, and represents optimum value. The technology can also be applied widely; even single-use cameras take good pictures. However, analogue images cannot be viewed instantly, take time to enlarge or reduce and are on prints or negatives that cannot be re-used. Negatives need optimum storage conditions to remain in good condition long term. The chemicals used in processing also raise some environmental issues. Digital technology represents a genuine advance because it removes many of these difficulties.
• Digital images
• Digital images are based upon a grid or matrix. They vary in the quality of their resolution, which is expressed in pixels or dots per inch (dpi) or millimetre. The higher the resolution, the better the picture, and the more expensive the equipment producing it.
• There is a wide range of affordable digital cameras on the market now, offering varying levels of quality, capabilities and prices. There are also thousands of commercially available CD-ROMs offering images, graphics and more, all at different quality, sophistication and price levels. Consumers can also turn to the Internet, where millions of images are available for downloading to a PC.
• Digital offers some real advantages. Images are held in a digital file and are available for use immediately. They can be transferred immediately from camera to PC, where they can be compressed, amended, altered and despatched using e-mail, fast ISDN lines and the internet. They can be downloaded and printed or transferred to CDs using recently developed copying equipment that retains image quality at a high level.
• Consumers can take CDs to an Agfa Image Center where the quality, format and resolution can be chosen. Digital images have transformed access, ease of use and transmission of images to provide a flexible series of solutions for customer needs. With instantaneous image capture, digital images require only minimal storage facilities. Images can also be manipulated and altered and only the chosen images need to be put into print format.
• However, at the present stage of development, really high quality digitally produced images do not come cheap; the equipment required is expensive. Professional users face high set-up costs, but in industries where speed, quality, and flexibility in use really matter, the price is worth paying. Imaging is an industry where copyright is jealously guarded, and ease of transfer brings with it problems of security and copyright protection. Digital files can also be lost or become corrupted, so some form of back-up is vital. Agfa is aware of these additional consumer and business needs and continues to work on ways of meeting them.
• The imaging industry now has two main product markets: analogue and digital. Each product has strengths and weaknesses, the importance of which varies according to customer needs and requirements.
• There remains a need for both analogue and digital imaging, depending upon the requirements of client groups. For example, during construction, gas and oil pipelines need their joints X-rayed with periodical follow-up checks so that cracks and defects can be detected. This is a job for tried and tested analogue systems.

 

On the other hand, digital technologies have helped to transform the work of hospital radiologists. For example, a software package developed by Agfa called MUSICA (Multiscale Image Contrast Amplification) enables radiologists to manipulate X-ray images in various ways. Edges can be sharpened up to reveal key details, and images can be rotated to offer alternative perspectives. Users can zoom in on details, and select and sort images in a search for recurring patterns. Images can be shared across a number of hospital workstations and can also be transmitted for immediate expert analysis elsewhere.

The best investment programmes are supported by painstaking research: market research into what consumers require and product research to establish what the new technology can and cannot do for them. Agfa is at the heart of changes in imaging brought about by new technology. It is leading. It is also listening and learning. In a highly competitive industry, Agfa’s thorough approach is enabling it to retain important competitive advantages over its closest and fiercest rivals.

 

1. Some of the Vital strategic decisions in respect of new technology can be ?

How far and how quickly should we embrace the new technology

"Are we big enough and capable enough to accomplish all the essential changes on our own "

How far and how quickly should we amend or abandon our present products

All

 

 

2. Techonological Factors are related to which type of Environment ?

External Environment

Internal Environment

Competitive Environment

Structural environment

 

3. The product market related to Imaging industry is/ are ?

analogue only

Analogue and digital

digital only

none of the options

 

 

4. What is /are the reason/s , that the company adopts to new technology ?

Is innovative

Is reliable

good scope in long run

All

 

5. The downside of Technological advancement can be ___?

New technology becomes immediately popular

sale of older technology is not at all affected

sale of older technology is affected

All of the above

 

6. In the context of this case study , Adoption of New technology requires investment . is the statement true ?

Yes, Investment is required

Investment is not at all required

Both A & B

None of the options

 

7. Market Research for the Investment Purposes in context of the consumers is related to ?

Identification of their needs or wants

identification of Competitors

Both A& B

None of the Options

 

8. In a competitive industry , Agfa’s main approach is to gain ____________ over its competitors ?

technological Advantage

Competitive advantage

Economic Advantage

None of the Options

 

9. Advantages of using Digital Images according to this case study are ?

available for use immediately

can be transferred immediately from camera to other devices

can be downloaded and printed or transferred to CDs

ALL

 

10. As per this case study , the Organisational Structure Adopted by Afga is ?

Divisional Structure

Bureaurocratic structure

Line structure

Line & Staff Structure

 

90/100

 

5th Block Assessment

CASE STUDY

 

This case discusses how Beijing-based multinational technology giant, Lenovo Group Limited (Lenovo), emerged as a global brand from China. After becoming a market leader in the Chinese PC market, several international acquisitions helped the company establish a presence in global markets. The company’s 2005 acquisition of the PC division of US-based multinational technology giant International Business Machine (IBM) gave the Lenovo brand global recognition. Lenovo’s 2011 acquisition of German electronics manufacturer, Medion, in 2011 and a joint PC venture with Japanese multinational technology company NEC Corporation helped the company transform from a small Chinese electronics company into the world’s largest PC maker by shipping over 53 million units in 2013.

 

After some initial success with its ‘Protect and Attack’ strategy, Lenovo started to face reverses. In 2017, it lost its PC crown i.e. market leadership in the global personal computers (PCs) market, to its arch rival Hewlett-Packard (HP). Lenovo also found the going tough in the smartphone business that it entered in 2010 as part of its ‘PC Plus strategy’. Lenovo’s gamble of acquiring Motorola Mobility from Google failed to pay off, according to some analysts. By the end of 2015, Lenovo’s fortunes in the mobile market had dipped dramatically. It slipped to eighth position in China’s smartphone market as new and nimbler Chinese competitors such as Huawei, Xiaomi, Oppo, and Vivo continued to grow rapidly. Critics stated that Lenovo lacked innovation at a time when its rivals were upping their game in both the PC and smartphone markets. The challenge before Yang Yuanqing (Yang), CEO of Lenovo, was how to orchestrate a turnaround in the fortunes of the company and restore it to its past glory.

 

In August 2017, Beijing-based multinational technology giant, Lenovo Group Limited (Lenovo), reported a quarterly loss of US$ 72 million for the quarter ended June 30, 2017. It had made a profit of US$ 173 million for the same quarter of 2016. Lenovo also lost its market leadership in the global personal computers (PCs) market to its arch rival Hewlett-Packard (HP). HP led the global PC market with a 22.8% market share for the second quarter of 2017 while Lenovo stood second with a market share of 21.6%, according to International Data Corporation (IDC). Analysts attributed Lenovo’s troubles to the maturing PC market where demand was falling with consumers shifting to smart phones and tablets for daily activities including surfing the Internet. Critics opined that Lenovo’s products, be it PCs or smart phones, lacked innovation while HP had taken over the PC crown by launching a series of cool products targeted at gamers. In the smart phone market too, analysts felt that Lenovo had failed to read the market signals, while its competitors such as Huawei Technologies Co. Ltd. (Huawei), Xiaomi Inc. (Xiaomi), Oppo Electronics Corp. (Oppo), and Vivo Electronic Corp. (Vivo) were rolling out stylish and inexpensive smart phones and gaining market share in China.

The history of Lenovo dates back to 1984 when it was started as New Technology Developer Inc., the predecessor of the Legend Group Ltd. (Legend), by Founder and Chairman, Liu Chuanzhi (Liu), along with ten colleagues at the government-owned Computing Institute of the Chinese Academy of Sciences (CAS) with US$ 25,000. The company was started with the aim of commercializing the research and development (R&D) activities conducted at CAS. In 1985, as its first business deal, the company took over the responsibility of receiving, checking, and maintaining IBM computers imported by CAS and of training CAS staff.

 

The company invested the profits of US$ 146,583 it had received from servicing IBM computers in the design, production, and marketing of its first product – the Chinese character card – HanCard. The Chinese character card, which translated English operating software into Chinese characteristics, was based on the original concept developed by the Institute of Computer Technology (ICT) of CAS. At that time, foreign vendors were not able to come out with such an operating system for PCs in China. The successful launch of the Chinese card boosted Lenovo’s growth in the early 1990s.

In the 1990s, Lenovo was the first company to introduce the home computer concept in China and it grew into a national company cornering a market share of 27% in the domestic market. Lenovo’s competency was its deep understanding of the domestic market and its quick response to the demands of local consumers. The success of Lenovo and other domestic computer makers in China confounded the predictions made by several market analysts. According to Business Week , “It wasn’t supposed to happen this way. A few years ago, most analysts were convinced that the global players would gobble up the Chinese market, with locals like Lenovo stuck in second tier status – at best.”

 

Lenovo believed that to become a global brand, it was not enough just to be identified as a global firm. Establishing a presence in more developed and highly globalized markets such as the US and Europe was essential for its overall strategy. By 2001, though Lenovo’s market share had reached 30% in China, it realized that it would not be able to grow much more given the stiff competition in the country. In addition to this, the domestic market for home PCs was shifting toward laptops rather than desktop PCs. This posed a challenge to Lenovo despite its recording profits of US$ 130 million for the FY 2002-2003, as laptops were not just costly to manufacture but also involved tough competition from rivals such as Dell and HP. In a bid to combat these challenges the company decided to step into international markets.

 

The global economic slowdown in mid-2008 led to Lenovo posting a loss of US$ 226 million. During this time, the company’s CEO William Amelio stepped down in favor of Yang, while Liu returned to assume the role of Chairman.

Lenovo’s Protect and Attack strategy helped the company taste success in China as well as in other global markets. For the FY ended 2013, the company also emerged as the number one PC company in global emerging markets, as well as three of the seven largest PC markets in the world – China, Japan, and Germany. For the quarter ended June 30, 2013, Lenovo’s smartphone business.

With the acquisition of Motorola, Lenovo had ambitious plans to capture a portion of the pie in the global smartphone market. However, the company’s fortunes declined when its smartphone shipments decreased by 53% in China with Lenovo maintaining a meager 3% market share for the Q4 of 2015, according to Canalys. In the global market for smartphones, the company stood at fifth position with a market share of 5.7%.

In a bid to arrest the decline in sales in its smart phone market, Lenovo planned to focus on its Moto brand. According to Yang, “Singular branding will benefit the business.” Stating that the new strategy might not bring in much success to Lenovo, Steven Tseng, an analyst at Daiwa Capital Markets, said, “Customers are also really confused by the company’s strategy.”

Despite the challenging outlook in the global smartphone market, Yang remained optimistic about turning around Lenovo’s struggling mobile business. He stated that there was a US$ 110 million sequential improvement in operational pretax income, attributable to improvements in the mobile and data center businesses in the quarter ended June 30, 2017. Yang added, “Not only did this gave me more confidence we will turn around our mobile business in the second half of FY2018, I think the entire Lenovo is entering a new phase of growth.” .

 

 

1. As per this Case Study, Strategy adopted by Lenovo ,after some initial success was ?

Protect Strategy

Protect and Attack strategy

Merger Strategy

None of the Options

 

2. According to this case Study , Lenovo lost its market Leadership in 2017, to which of its Rivals ?

Apple

Samsung

Hewlett-Packard (HP)

Sony

 

3. Lenovo lacked ____ , when its rivals were upping their game in both the PC and smart phone markets.?

Innovation

strategic Decisions

Acquisition Strategy

Both B& C

 

4. What strategy was adopted by Lenovo , that contributed to its success in the global PC market ?

Retrenchment Strategy

Internal Restructuring Strategy

Internationalization Strategy

Functional Level Strategy

 

5. what strategical change/s in respect of the products,  was/were adopted by the Lenonovo’s competitors to attract the customers ?

Group of answer choices

Making product more stylish

attractive pricing strategies

Both A& B

Only B

 

6. As per this Case study, The main Objective of the company Lenovo as New Technology Developer Inc. in the start was ?

Commercialization Of Research & Development activities

To beat the competitors

Both A& B

None of the Options

 

7. In the starting Phase of the company, What was Lenovo’s Competency ?

deep understanding of the domestic market

quick response to the demands of local consumers

Both A& B

Only B

 

8. According to Lenovo to become a global brand - Apart from being identified as a global firm , what other strategy was also required ?

Establishing a presence in more developed and highly globalized markets

Improvement in Client servicing

adherence to International Standards

Both B& C

 

9. What challenge Lenovo had to face , despite of its recording profits ?

Shifting of Domestic Market from Home PC’s to Laptop’s

Shifting of Domestic Market from Laptops to Home PC’s

Shifting of Market Demand to Other Electronic Items

None of the Options

 

10. In a bid to arrest the decline in sales in its smart phone market, Lenovo planned to focus on which brand ?

Samsung Brand

VIVO Brand

Sony brand

Moto brand

 

 

Full Syllabus Assessment

 

 

CASE STUDY

 

Aggregate minerals are an important resource and their use is essential to national prosperity. They are vital for building new or improved housing, hospitals, schools, factories, roads and leisure facilities. Everything from a garden path to the Channel Tunnel. The processing of aggregates also provides materials for a whole range of non-construction uses: in agriculture, water purification, medicines, paint, toiletries, paper, plastics and steel making. Mineral working can have a significant effect on the landscape and on the living conditions of the people. It is essential that the industry operates to high environmental standards and manages its operations in a manner which minimises their impact on the environment. Business managers have to take these matters seriously as public awareness and concern has significantly increased over the last decade.

Companies are judged on the achievement of their “traditional” business objectives, such as return on investment, growth, market share etc. and now on their environmental performance and this is often looked for in specific statements, objectives and strategies set by a company. It is not only environmental campaigning groups or concerned consumers who realise the importance of the environment. Research has shown that three-quarters of managers feel that more emphasis should be placed on these issues. Where does this attitude spring from? There are a number of important influences and these include UK and EU environmental legislation, public opinion, pressure groups, influence of employees’ families and friends, the company’s own sense of social responsibility and, last but not least, market pressure from customers and end-users. These pressures are expected to grow, so a well managed company should prepare itself to respond to the concerns and take appropriate action.

The RMC Group has become the world’s largest producer of ready mixed concrete, also diversifying into a number of other construction material sectors. It employs the principle of vertical integration to secure raw materials - sand, gravel and crushed rock - required to sustain the production of ready mixed concrete and other added value finish

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