The Salim Group: The Art of Strategic Flexibility

Marleen Dieleman

This case describes the rise and fall of the Salim Group, a large Asian family business conglomerate based in Indonesia with a turnover of US$20 billion prior to the Asian financial crisis. During the Asian crisis, the diversified and international Salim Group was barely able to survive. The present CEO and president, Anthony Salim, was faced with the task of developing the new strategy for the Group. Rather than focussing on core businesses, he insisted on remaining flexible in order to capture whatever opportunities might arise in the Asian region, regardless of the products or services. The case is useful for the examination of strategy in a changing environment. 


Leveraging Technological Capabilities across Polarized Cultures: Shanghai Delco Electronics Limited

Lucy A. Ojode

Rallying its units for an impending spin-off from General Motors, the Delphi Automotive Systems division cleared the Delphi Delco Electronics (Delphi-D) unit to begin planning for entry into China in 1994. Delphi saw China as ideal for leveraging its technological and innovation capabilities as well as the enormous General Motor heritage and reputation from years of experience delivering quality products to the automotive industry. Delphi-D found a perfect partner in Shanghai Changjiang YiBiao Factory (SCY) (name disguised to protect the firms) that held nearly 50% of the Chinese automobile instrument cluster market.  SCY was keen on acquiring new technology to meet increasingly sophisticated customer demands in order to retain market lead as well as to tap into the international market.
 
After rounds of negotiation the two firms formed a fifty-fifty joint venture, Shanghai Delco Electronics Ltd. (SDE) in August 1996.  However, SDE started experiencing problems almost immediately. The Delphi-D team at SDE assumed their SCY counterparts would willingly integrate proposed technology and the requisite processes at the joint venture.  However, the SCY team resisted prescriptions from the Delphi-D team that they sometimes perceived as “haughty”.  Broiled in culturally-loaded misunderstanding in a market that was becoming complex by the day as the government legislated new regulations and other manufacturers jostled for a piece of the market, SDE’s management sought focus by developing a five-year plan that captured the partners’ goals in 1998.  However, as the end of 2002 approached, SDE’s five-year plan remained largely unrealized. This case shows how implementation challenges can affect the realization of joint venture objectives and illustrates specific challenges that can mar even a well-formulated technology intensive international joint venture strategy.


Packages and Mitsubishi – International Joint Venture Negotiations

Humaira Arif and Arif Nazir Butt

This case covers the course the negotiations between Packages Limited, Pakistan (Packages) and Mitsubishi Corporation, Japan (Mitsubishi) for the formation of a joint venture to produce Biaxially Oriented Polypropylene (BOPP) film in Pakistan. Packages was established in Pakistan in 1957 as a joint venture between the Wazir Ali Group and AB Auckerland and Rausing of Sweden. Packages manufactured paper and board and converted them to packaging products. Mitsubishi was one of the biggest conglomerates in Japan, operating internationally. In 1992, Syed Babar Ali, founder and advisor to Packages proposed establishing a joint venture with Mitsubishi, during his visit to Japan. Upon returning to Pakistan, he asked Packages’ senior management to negotiate a joint venture agreement with Mitsubishi. Both Packages and Mitsubishi agreed in principle to establish a joint venture to manufacture BOPP film in Pakistan.
 
In the case, the negotiation process was divided into three phases. The case describes the issue discussed and tactics employed by the two sides during the three phases. The major issues discussed included the price and capacity of the plant, the reimbursement of Mitsubishi’s investment if the company suffered repeated losses, raw material supply from Mitsubishi, equity participation, and the control of the management and the board of the new company. In April, 1993, Mr. Javed Aslam, the Deputy General Manager of Packages, received a quotation of US $6.4 million for a 6000-ton plant from Mitsubishi Heavy Industries (MHI). He had to decide if it was feasible for Packages to go ahead with the joint venture with Mitsubishi and what counter offer to make to Mitsubishi Heavy Industries.


Attock Refinery Upgradation Project

Ahmed Nawaz Tariq and Arif Iqbal Rana

This case is about a major expansion and upgradation project undertaken at a refinery in Northern Pakistan in the 1990s.  The project was the biggest expansion project since the company’s inception in the 1920s.  The project was carried out by a Japanese contractor, and was marked by changes in CEO's and Project Managers.  Despite the vicissitudes in relationships between the construction team and company management, the project was completed in time and within budget.
 
The case looks at project management from the client's perspective. It can be used in a module on Project Termination, or Project Monitoring and Control (in a course on Project Management).  The case highlights the importance of project planning, and monitoring; the managing of inter-personal relationships; and ‘post-mortem’ analysis and learning from projects.


Gurgaon Branch

Abinash Panda, Rajen K. Gupta and Satish K. Kalra

Gurgaon Branch was a branch of a leading public sector bank in India. Though the bank was financially sound, there seemed to be a leadership crisis in this branch. The aggregate deposit had been consistently falling over the past three years. The branch had not been able to disburse fresh advances or recover outstanding advances. Moreover, the employees were unhappy with both the branch head and the accountant.
 
This case is concerned with transforming the culture of a public sector bank’s branch that has been plagued with officers-staff conflict, inter-union rivalry and bureaucratic culture and consequently, poor financial performance, weak customer orientation leading and poor customers’ satisfaction. This case provides a useful basis for discussing the issues and challenges involved in the process of transforming highly politicized culture to a desirable team-oriented customer centric performing culture.


Sau San Tong: A Paragon of the Slimming and Beauty Business

Susan Tai

Sau San Tong Holdings was established in July 2000 and initially sold Chinese herbal slimming medicines. In 2001, it moved into the full-body slimming business. Within three years, the company has transformed itself into a Growth Enterprise Market listed company, operating four slimming centres in Hong Kong and two in Shanghai. The major shareholder, Shirley Cheung Yuk Shan (the former TV artist) controls over 50% of the company. Shirley Cheung, who has strong marketing skills and a special talent in selecting celebrities as successful and persuasive spokespersons, had developed Sau San Tong into a paragon of the slimming and beauty business. This case explores marketing strategy and communications for a service.


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