Management Case Studies

CASE STUDIES
Case Study 1: Business Ethics

In a book entitled Cheaters Always Prosper: 50 Ways to Beat the System
without being Caught, James Brazil (a pen name), a college student from the
University of California, Santa Barbara, has provided fifty ways to obtain a
“free lunch”. One suggestion is to place shards of glass in your dessert at a
fancy restaurant and then “raise hell”. The manager or owner will then come
running with certificates for free meals and probably waive your bill.
Another suggestion is, rather than spend $400 on new tires for your car, rent a
car for a day for $35 and switch the rental car tires with your tires. So long as
your car tires are not bald, the rental car company employees will not notice,
and you will have your new tires for a mere $35.
Questions:
a) Are these suggestions ethical?
b) Was publishing the book with the suggestions ethical?
c) Do any of these suggestions cost anyone any money?
Case Study 2: BHEL’s Strategic Intent

Bharat Heavy Electricals Ltd. (BHEL) is major Indian public sector enterprise
in power, engineering, and manufacturing. It has 14 manufacturing divisions
and centres spread all over the country. It exports to more than 45 countries.
The Vision 2001 statement of BHEL is as below:
Mission: To be the leading Indian engineering enterprise providing quality
products, systems, and services in the fields of energy, transportation, industry,
infrastructure, and other potential areas.
Values
1) Meeting commitments made to external and internal customers.
2) Foster bearing, creativity, and speed of response.
3) Respect for dignity and potential of individuals.
4) Loyalty and pride in the company.
5) Team playing.
6) Zeal to excel.
7) Integration and fairness in all matters.
Business Mission
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To maintain a leading position as suppliers of quality equipment, systems, and
services in the field of conversion, transmission, utilisation, and conservation of
energy for application in the areas of electric power, transportation, and gas
exploration and industries. To utilise company’s capabilities and resources to
expand business into allied areas and other priority sectors of the economy like
defence, communication, and electronics.
Company Objectives
1) Growth: To ensure a steady growth by enhancing the competitive edge of
BHEL in existing business, new areas, and international operations.
2) Profitability: To provide a reasonable and adequate return on capital
employed primarily through improvements in operational efficiency,
capacity utilisation, and productivity and generate adequate resources to
finance the company’s growth.
3) Customer: To build a high degree of customer confidence by providing
increased value for his money through international standards of product
quality, performance, and superior customer service.
4) Technology: To achieve technological excellence in operations by
development of indigenous technologies and efficient absorption and
adaptation of imported technologies to suit business needs and priorities
and provide a competitive advantage to the company.
5) Image: To fulfil the expectations which stakeholders like government as
owner, employees, customers, and the country at large have from BHEL.
Questions:
a) Discuss the case in brief.
b) Analyse the vision statement of BHEL and comment on its positive and
negative features.
Case Study 3: Swatch Manufacturer
Narendra Mohan says that a chief executive has to believe in excellence. The
chairman of Swatch Manufacturer corp. has persuaded other most notably
automobile executives, to believe along with him.
He, after all heads a company whose product the low-cost, Swatch timepiece
with the plastic bandhas sold more than 1,000 units since its 1983 debut in the
process of becoming a collector’s item. Now, although sales of Swatch’s other
larger-scale product clothing, telephones, and sunglasses  haven’t taken off,
Narendra and a partner, Daimler-Benz AG’s Mercedes-Benz unit, are readying
the prototype of the Swatchmobile.
Observers won’t be able to test-drive the car until the 1996 Olympics; it won’t
be available for months afterward. But the interval between the announcement
and the introduction of the Swatchmobile is part of Narendra’s plan to make the
car known to the world. To Narendra, a car is an “emotional consumer item,
like a watch. I was born to sell emotional consumer products.”
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The Swatchmobile, a two-seater expected to come in snappy colors, will
combine what Narendra calls the three most important features of the Swatch;
affordability, durability, and stylishness. He says the car will cost well under ` 5
lakhs and measure less than 10 feet long. Not only will it perform well, says
Narendra the Swatchmobile “will have the crash security of a Mercedes.
Some questions whether the marriage of Swatch and Mercedes can work. A
Swatch partnership with Volkswagen AG fell apart early last year; VW officials
determined that the project wouldn’t turn a sufficient profit. Narendra, however,
says other top auto-industry executives came begging. Confident as he is with
his product, Narendra needs Mercedes for its distribution system, if not its
manufacturing facilities. (Britain Board of Trade has already asked Narendra to
consider basing production there).
Mercedes, already planning to introduce a series of small “A-class” luxury cars

in 2000, thought the collaboration with Swatch a daring bid to broaden its
presence in the mass market. It hasn’t disclosed many details of the partnership,
including how many Swatch mobiles it would aim to produce, what price it
would charge, what quality standards it would set, how much it would invest, or
how closely it would tie the new car to its prestigious Mercedes name.
Narendra is not reluctant to boast that the project will aim to sell 100,000 cars
in the first year, possibly 2000 or 2001 and up to 10 lakhs annually in the fifth
year. The car will succeed on low price and with-it image, he asserts.
Others take issue with Narendra’s assessment. Even one of the company’s own
engineers says those features alone won’t do it. “There are too many small cars
on the market already” says Daniel. He maintains that the Swatch mobile’s only
unique swelling point will be its environmental friendliness. When operating on
electricity, it will emit virtually no pollutants, and when operating on gas, it will
go great distances on one gallon, thanks to an engine that weighs one-tenth as
much as any existing engine with equal power. Yet he concedes that even that
selling point may falter. Solar products and other “green” ideas are slow starters
in the marketplace, giving Narendra “a masterful public relations and marketing
challenge.”
Questions:
a) Analyse the Swatch mobile’s industry using Porter’s five forces model.
b) Based on your analysis, what strategy would you recommend to Mercedes
and Swatch for their new product? How would you
i) Produce,
ii) Position, and
iii) Price the Product?
c) Based on your analysis, what do you see as the biggest threat to the
strategy you proposed above? From which competitors would you expect
serious retaliation in the market?
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Case Study 4: Khadi Industry
Earlier in 1957, in order to popularise Khadi among the masses, the
government set-up the Khadi and Village Industries Commission (KVIC) with
the broad objective of providing employment at the village level, the economic
objectives of producing saleable articles and the wider objectives of creating
self-reliance amongst the poor and developing a strong rural community spirit,
KVIC promoted Khadi and associated articles though exclusive outlets called
Khadi bhandaadrs. Ever since, then, government has continued to support
Khadi. However, over the years, problems have steadily mounted. According to
designers production of Khadi was inconsistent and the cloth was prone to
shrinkage and fabric stretch. Fabric colours were also limited. Red tapism and
bureaucracy were prevalent throughout KVIC. Corruption was rampant, as
there were many middlemen. In addition, there were many bogus Khadi units
operating in the country, which made verification of rebates to be paid an
extremely time consuming process.
The production of Khadi is a labour intensive process. To support khadi, KVIC
also encouraged village production of toilet soaps and detergents, honey,
handmade paper etc. But still public interest was declining.
In order to revive Khadi, several initiatives were taken by government as well
as by private individuals. KVIC organised fashion shows. In 1990, Ritukumar
presented her first Khadi collection. Rohit Bal also promoted fashion in Khadi.
On the organisation front, the government took steps to re-structure the Khadi
industry. The global consulting firms, Arthur Anderson, were called to make
recommendations. They suggested that KVIC be converted into a policy
making body and that an independent marketing body to be formed to handle
sales, distribution and promotion. KVIC also registered Khadi as a brand name.
Technological innovations, such as blending of Khadi with tencil in a 70 : 30
ratio, were introduced. An Austrian company also proposed to modify and
blend the fabric to about 50% more moisture.
The government has also allocated a large advertising and promotional budget
to KVIC. It proposed to set-up Khadi shops in all international airports.
However, Khadi like any other craft of India would need to face the challenges
of quality and producing contemporary designs, that would appeal to the taste
of present generation.
Questions:
What are the implementation factors that you feel are critical to the success of
Khadi in future?
Case Study 5: Controlling

Everyday, in the hands of ten thousand salespeople, Frito-Lay uses hand-held
computers to track the 14 million Frito-Lay products sold of shelves and from
vending machines. These notebook size computers produce a vast quantity of
data that flows into the data centre at Frito-Lay headquarters in Texas. It is
* *
combined with other data into a gigantic database used to generate vital market
information on Frito-Lay’s snack food empire. This vast database is updated
daily, funnelling up-to-the-minute sales figures into comprehensive financial,
historical, and competitive data. The database integrates more than twenty
gigabytes of sales information; the equivalent of 47 million pages of typed data.
It monitors every move of the 4 1/2 billion packages of Frito-Lay snacks sold
each year through 40 manufacturing facilities, 1900 warehouses, 200
distribution centres and 4,00,000 stores across the nation.
Robert Beebe, CEO of Frito-Lay, says “What we have here is incredible assess
to almost real-time information on every aspect of our business. Take any
market; we know more about what is going on in the snack category there than
the regional competitor who only operates in that market. We know how much
shelf space he has, his share of displays, his share of the market, his actual
pricing – and we know it for his competitors too. That is a mighty powerful
competitive tool”.
With the hand-held computer, a Frito-Lay salesperson can key in orders for
each customer on-the-spot; then print out a sales receipt, with tax, discounts,
and promotions and no errors. They link-up with the mainframe computer at
headquarters each night to upload the day’s data and download information for
the following day’s route. Such enhancements to Frito-Lay’s Transaction
Processing Systems (TPS) is estimated to save from 30 to 50 thousand man-
hours of paperwork every week. But a greater advantage is the power the
uploaded data places in the hands of Frito-Lay’s management.
Questions:
a) What are the benefits that Frito-Lay gets from using computer in
controlling?
b) What are the challenges that can be faced by the Frito-Lay while using
computer in controlling?
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CASE STUDIES

Case Study 1: Business Ethics

Case Study 2: BHEL’s Strategic Intent

Mercedes, already planning to introduce a series of small “A-class” luxury cars

Case Study 5: Controlling

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