What did coke do and what could have been done differently
- 1. Assignment Solutions, Case study Answer sheets Project Report and Thesis - Contact aravind.banakar@gmail.com www.mbacasestudyanswers.com ARAVIND – 09901366442 – 09902787224 International Management Case Studies Woman CEO Manages by the Textbook (20 Marks) The demand for managers with an international background is great. Consider Marisa Bellisario who was one of the most soughtafter executives in Europe. She was the first woman to head a major industrial firm in Italy, the state – controlled ITALTEL Societa Italiana. This company is the biggest Italian firm making telecommunications equipment. Bellisario’s background, however, is international. After receiving her degree in economics and business administration from Turin University, she worked at Olivetti in the electronics division. When Olivetti sold its date processing unit to General Electric, she spent time in Miami working on GE’s worldwide marketing strategy for computers. She left GE to head corporate planning at Olivetti. As the CEO at ITALTEL, she turned the company around, showing a small profit. (The firm had experienced huge losses in the past.) Her managerial approach has been characterized as “straight out of the textbook,” and companies such as GTE Corporation, IBM, AT&T, and other European and Japanese firms are interested in recruiting her. Answer the following question. Q1. Why was Ms. Bellisario a muc– sought – after CEO ? What was her career path ? Q2. What special problems may she have encountered as a woman heading a major company in Italy ? Q3. If she was successful managing by the textbook, why do some managers still think that management cannot be taught ?
- 2. Coke’s European Scare (20 Marks) What seemed like an isolated incident of a few bad cans of CocaCola at a school in Belgium turned into near disaster for the soft drink giant’s European operations. In June 1999, Coke experienced its worst nightmare a contamination scare resulting in the recall of 14 million cases of Coke products in five European countries and huge blow to consumer confidence in the quality and safety of the world’s most recognizable brand. After the initial scare in Bornem, Belgium, Coke and Coca – Cola Enterprises (CCE), a thought they had isolated the problem. Scientists at the CCE bottling plant in Antwerp found that lapses in quality control had led to contaminated carbon dioxide that were used in the bottling of a recent batch of Coke. Company officials saw the contamination as minor problem and they issued an apology to the school. At the same time that the problems were being dealt with in Antwerp, things were breaking down at Coke’s Dunkirk, France, bottling plant. In Belsele, 10 miles from Bornem, children and teachers were complaining of illnesses related to drinking Coke products. The vending machines at the school were stocked with Coke from the company’s Dunkirk plant’s practices were being questioned. What initially seemed like an isolated incident was now a crisis. Immediately following the second scare, Belgium’s Health Minister banned the sale of all precuts produced in the Antwerp and Dunkirk plants. Things got worse when Coke gave an incomplete set of recall codes to a school in Lochristi, Belgium, resulting in 38 children being rushed to the hospital. Immediately following this incident, French officials banned the sale of soft drinks produced in the Dunkirk plant. It was believed that fungicide on wooden shipping pallets were the cause of the illnesses at the Dunikrik plant. On June 15th, 1999, 11 days after the initial scare in Bornem, Coke finally issued an explanation to the public. Most Europeans were not satisfied. Coca – Cola officials used vague language and often contradicted one another when making statements. France’s Health Minister, Bernard Kouchner, stated, “That a company so very expert in advertising and marketing should be so poor in communication on this matter is astonishing.” After three weeks of testing by both Coke officials and French government scientists, it was concluded that the plants were safe and that there was no immediate threat to the health of consumers. Coke has destroyed all of the pallets in Dunikirk and tightened quality control on CO2. How could this
- 3. happen to the company that is revered worldwide for its quality control and the superiority of its products ? Coke has spent decades building its reputation overseas and the European market now represents 73% of total profits. While the scare has had some effect on Coke’s profits in Europe, the company is more concerned with damages to its reputation and consumer confidence in its products. Many critics say that Coke’s slow response time, insisting that no real problem existed and belated apology have severely damaged the company’s reputation in Europe. Some would disagree and feel that Coke handled the situation as best it could. “I think that Coke acted in a responsible, diligent way,” says John Sitcher, editor of Beverage Digest. “Their first responsibility was to ascertain the facts in a clear and unequivocal way. Any as soon as Coke knew what the facts were, they put out a statement to the Belgium people.” The character and quality of a company can often be measured by how it responds to adversity. CocaCola believes that this crisis has forced the company to reexamine both its marketing and management strategies in Europe. Coke executives in Brussels are predicting that the company will double its European sales in the next decade and that this setback will only make the company stronger. Wall Street analysts seem to agree. Only time will tell. Answer the following question. Q1. What are the management issues in this case ? Q2. What did Coke do and what could have been done differently ? Q3. What are the key factors that were or should have been considered by management ? Profiles of Two Visionaries – Bill Gates & Steve Jobs (20 Marks) Two men who gave their hearts and souls for developing their visions have driven the personal computer revolution. However, the way in which each of theses men went about this quest has been different. Steve Jobs and Bill Gates have changed the way the world does business, but the story of their leadership styles is even more compelling than the success and innovation spawned by Apple and Microsoft. Bill vs. SteveThe Early Years Bill Gates started developing his computer skills with his childhood friend
- 4. Paul Allen at Lakeside School in Seattle. At the age of 14, the two had formed their first computer company. After high school, Allen and Gates left Seattle for Boston. Gates was off to Harvard , Gates and Allen left Boston for Albuguerque to develop a computer language for the new Altair 8080 personal computer. This computer language would become BASIC and was the foundation for Microsoft, which was created as a partnership in 1975. After five years in New Mexico, Microsoft relocated to Bellevue, Washington in 1980 with BASIC and two other computer languages (COBOL and FORTRAN) in its arsenal. Later that year, IBM began developing its first PC and was in need o an operating system. Microsoft development the Microsoft Disk Operating System (MSDOS) for IBM while two other companies created competing systems. Gates’ determination and persuasion of other software firms to develop programs for MSDOS made it the default IBM platform. As Microsoft became more successful, Gates realized that he needed help managing Microsoft. His enthusiasm, vision, and hard work were the driving force behind the company’s growth, but he recognized the need for professional management. Gates brought in another one of his friends from Harvard, Steve Ballmer. Ballmer had worked for Proctor & Gamble after graduating from Harvard and was pursuing his MBA at Stanford. Gates persuaded Ballmer to leave school and join Microsoft. Over the years, Ballmer has become an indispensable asset to both Gates and Microsoft. In 1983, Gates continued to show his brilliance by hiring Jon Shriley who brought order to Microsoft and streamlined the organization structure, while Bailmer served as an advisor and sounding board for Gates. Microsoft continued to grow and prosper in the 1990s and Gates has become the richest man in the world. Microsoft dominates both the operating system market with its Windows application and the office suite software market with Microsoft Office. Gates recognized that his role was to be the visionary of the company and that he needed professional managers to run Microsoft. Gates combined his unyielding determination and passion with a wellstructured management team to make Microsoft the giant it is today. The other visionary, Steve Jobs, and his friend Steve Wosniak started Apple Computer at Jobs’ garage in Los Altos, California in 1976. In contrast to Bill Gates, Jobs and Wosniak were hardware experts and started with a vision for a personal computer that was affordable and easy to use. When Microsoft offered BASIC to Apple, Jobs immediately dismissed the idea on the basis that he and Wosniak could create their own version of BASIC in a
- 5. weekend. This was typical Jobs: decisive and almost maniacal at times. Jobs eventually agreed to license Microsoft’s BASIC while pursuing his own vision of developing a more usable and friendly interface for the PC. Many see Jobs as antiGates. He is a trailblazer and a creator as opposed to Gates who is more of a consolidator of industry standards. Jobs’ goal was to change the world with his computers. He was also very demanding of his employees. Jobs was different from Gates, Allen and Wosniak. He was the person selling the idea of the personal computer to the public. Jobs made the decision to change the direction of Apple to develop the Macintosh using a new Graphical User Interface (GUI) that introduced the world to the mouse and onscreen icons. Jobs forced people to choose between the MicrosoftIBM DOS operating system and his GUI Macintosh OS. In the beginning, jobs was the visionary who changed the computer world and Apple dwarfed Microsoft. With all this success, there was a major problem brewing at Apple Steve Jobs was overconfident and did not see Gates and Microsoft as a serious threat to Apple. Soon after the release of the Macintosh computer, Jobs asked Microsoft to develop software for the Mac operating system. Gates obliged and proceeded to launch a project copying and improving Apple’s user interface. The result of that venture was Microsoft Windows. This cocky attitude and lack of management skills made Jobs a threat to Apple’s success. He never bothered to develop budgets and his relationship with his employees has been criticized. Wacintosh due to differences with Jobs. In 1985, John Scully, CEO of PepsiCo replaced Steve Jobs as president and CEO of Apple Computers. The 1990s saw Microsoft and Apple go in two very different directions. Microsoft became one of the most profitable companies in the world making Bill Gates the world’s richest man. Microsoft Windows became the industry’s standard operating system. Apply fell from grace and became a niche market player. Jobs went on founding NEXT, a small computer manufacturing company and Pixar, the animation house that produced Toy Story and A Bug’s Life. Microsoft and Apple at the Turn of the CenturyAn Industry Giant and a Revitalized Leader With the success of the Windows operating system, the Office application suite and Internet Explorer software, Microsoft has become a household name; Bill Gates has been hailed as a business genius. The fact that Microsoft’s competitors, the press, and the US Justice Department have called Microsoft a monopoly reinforces Gates’ determination to succeed. Many people question whether Microsoft can survive that Justice Department’s decision.
- 6. Bill Gates, however, has shown that he is the master of adapting to changing market conditions and technologies. Apple had gone in the opposite direction in the 1990s. The outdated operating system and falling market share eventually led to a decrease in software development for the Mac. Something needed to be done. In 1998 Steve Jobs returned to Apple as the “interim” CEO. His vision, once again, resulted in the innovative iMac. The design was classic Jobs. In the 1980s he created the simpletooperate Macintosh to attract people who were using IBM PCs and their clones. Now he has developed a simple, stylish, and internetfriendly computer to add some muchneeded excitement to the computer market. Jobs has also changed as a manger and a leader. He has matured and looks to his professional staff for advice and ideas. Although he is the interim CEO, Jobs has sold all but one share of his Apple stock. Larry Ellison, Oracle’s CEO and Apple board member, attributes Jobs’ ability to lead Apple to this fact: “He owns only one share of Apple stock, yet he clearly owns the product and the idea behind the company. The Mac is an expression of his creativity, and Apple as a whole is an expression of Steve That’s why, despite the ‘interim’ in his title, he’ll stay at Apple for a long time.” Many people believe that this will lead to continued success for Apply and a renewed battle between Gates and Jobs. Answer the following question. Q1. How did Bill Gates and Steve Jobs differ in their leadership style ? Q2. Compare and contrast the managerial practices of Gates and Jobs. Q3. What do you think about the future of Microsoft and Apple Computers ? How to Win at Westinghouse (20 Marks) Westinghouse founded the Westinghouse Electric Company in 1886, over 100 years ago. From the beginning, the hallmark of the company was one of entrepreneurship and creativity. By inventing a new for tr3nsmitting electric current over long distances, the firm penetrated the fledgling electric industry. Its aptitude for technological innovation led the firm into the development and creation of diverse products, from household appliances to watches to nuclear power equipment. The firm also demonstrated creative
- 7. diversity, branching into such endeavours as radio station operations, softdrink bottling, and low income housing Today, the Westinghouse Corporation is organized into six operational groups broadcasting, commercial, electronics systems, energy and utility systems, financial services, and industries. As Westinghouse grew and began its expansion into foreign markets, it became apparent that the firm’s organisational structures and communication systems would have to be modernized to provide the flexibility demanded by overseas operations. Rigid procedures and red tape had to be eliminated, and ways had to be developed, by which key employees around the world could communicate with each other rapidly, so that their giant company could adequately react to changing conditions around the world. To meet this communication support challenge, Westinghouse established a changeresponsive high-tech communication network to support its farflung operations. A new commuter system allows employees at all levels of the corporation to communicate through decentralized support networks. Westinghouse employees from different divisions and different departments can linkup in order to share information around the world. The new support system, called the Westinghouse Information Network (WIN), links more than 600 Westinghouse facilities, providing both voice and data transmissions as well as an electronic mail system. Westinghouse employees can link WIN to their homes or to their laptops when travelling. WIN offers videoconferencing, which reduces or eliminates the need for costly and timeconsuming travel to meetings. WIN also contains an advanced negotiation system, called EDGE, which supports sales personnel during complex sales negotiations. Every working day, over 90000 Westinghouse employees utilize the WIN system, which provides the flexible online support that Westinghouse needs to expand its global enterprises. Answer the following question. Q1. Describe the ways in which international business has an impact on your life. Q2. Pick an Indian corporation with which you are familiar and analyse the reasons why it might be motivated to expand its internationalism. Q3. What sorts of adjustments might McDonald’s have to make in its operations in India? Q4. What do you believe India must do to improve its international competitiveness?
- 8. Assignment Solutions, Case study Answer sheets Project Report and Thesis - Contact aravind.banakar@gmail.com www.mbacasestudyanswers.com ARAVIND – 09901366442 – 09902787224