Kung Long's Big Dream of the Blue Ocean

Chiawu Lin, Tsai-Hsin Chu and Kuo-I Chang

This case discussion looks at the challenges that an enterprise might face during its transition into a new industry by describing Kung Long Corporation’s transition from the stone industry to the deep-sea water industry. Kung Long’s case reveals the importance of strategy formulation when an enterprise shifts into a new and unfamiliar industry. The effectiveness of strategy formulation depends not only on how well the five essential elements (i.e., arenas, vehicles, differentiators, staging, and economic logic) are integrated into the strategy (Hambrick & Fredrickson, 2001), but also on the strategy-maker’s awareness of the differences between industrial properties and, thereafter, changing her or his mindset accordingly (Ansoff, 1990). In this case analysis, we firstly assess Kung Long’s advantages and its limitations in the deep-sea water industry. Then, we look into the two important challenges for strategy formation. First of all, we focus on Kung Long’s strategy in the deep-sea water industry and analyze the integration level of the five dimensions in strategy formation (Hambrick & Fredrickson, 2001), so as to highlight the potential problems in Kung Long’s current strategy. Second, we illustrate the challenge of management mentality in this transition into deep-sea water business. In this part, we discuss the differences between the stone industry and the deep-sea water industry in order to present the managerial challenges that Kung Long needs to overcome. Finally, we apply the perspective of double-loop learning (Sterman, 1994) to recommend the learning style and mentality that best suit the deep-sea water industry.

H. & R. Johnson (India) Limited in Gujarat  

Ramendra Singh

This case is written at a time when organized retailing in India was booming, opening up opportunities for numerous big indigenous and foreign players. Also, with the rising disposable incomes of the Indian middle class and their changing tastes and preferences, they were becoming more and more demanding. The case is written at this crucial juncture of the changing economy wherein a mammoth like H & R Johnson, with a rich lineage of product and process innovations and international and domestic (Indian) market leadership needed to make the best out of the changing economy. Should HRJIL ride the retail wave by offering different products from its broad range of products, like ready-made kitchens, living rooms and the like; or should the company, given its dreams and present capabilities, utilize the unmet customer service gaps to provide services required of laying tiles, and in the process, develop servicing capabilities to become an end-to-end solution provider to its customers. The purpose of this case is to enable students to practice making decisions for the company at this important point in time with regard to the market opportunities by considering the capabilities and the core competencies of the company, its business model, and the existing distribution network.

South Beauty Group: In Quest of a ‘Beautiful’ Growth Story

Xu Leiping & S Ramakrishna Velamuri

Since 1990s, China’s catering industry had boomed sharply with over 15% CAGR (Compound Annual Growth Rate). In 2007, the catering market size of RMB1,200 billion (US$155 billion) accounted for 4.87% of GDP (Gross Domestic Product) in China. This percentage was only 1.5% in 1978. China’s restaurant market was in a typical state of perfect competition, not only in terms of the number of players, but also in terms of the food varieties. Intrigued by the successful story of western fast food in China, the leading Chinese players were exploring how to expand their scale through the development of restaurant chains. Considering the difficulties of standardizing Chinese cuisine, the scale expansion of the Chinese Dinner segment was slower than that of Hot Pot and Chinese fast food segments.

It was October 18th, 2007. As an innovative upper-middle player in the Chinese Dinner segment, the South Beauty Group, with 20 restaurants and two soon-to-be-opened restaurants under three different brands, was dreaming about expanding its scale to 100 restaurants in three years (35 in China and 65 in the international market). To meet this ambitious target, the Group faced many challenges, including standardizing Chinese cuisine, selection of domestic and international locations, development of franchising operations and the launch of an IPO. Moreover, as the only Food Service Partner of Chinese cuisine for the 2008 Beijing Olympics, the Group also had to organize the company’s resources efficiently to fulfill this prestigious contract.

This case had been developed mainly for MBA and EMBA students, with the main teaching objective being to understand the challenges of growth. The students will also be exposed to the dynamic Chinese business environment and the dreams, innovativeness and decision-making behaviors of Chinese entrepreneurs, even in such a traditional industry. An audio-visual support, including an introduction to the company, the restaurants and the dishes, and two interviews with Ms. Zhang Lan is available to instructors.

Diffusion of Innovative Teaching Method: Case of The Heritage School (A) and (B)   

Meeta Dasgupta & Arun Sahay 

This case comes in two parts: case (A) and (B). It traces the journey of The Heritage School, Gurgaon (India) from 2003, when  the school was deliberating to launch an innovative teaching methodology in the junior school to 2007 when the school had to make a decision whether to extend the teaching methodology to the senior school. The new teaching methodology based on experiential and project based learning, questions the relevance of the conventional teaching methodology which was based on memorization of content. The case highlights the changing opinion and attitude of the teachers and parents, towards the new teaching methodology. It also deals with how the school management went about implementing the innovative teaching methodology. The case allows students to examine the fundamental challenges in diffusion or acceptance of innovation by potential users. It aims to discuss the dynamics of the innovation and diffusion process, and the factors which drive or hinder the process of diffusion.

Knowing When to Merge: A Small IT Business in Korea Considers Its Options

Chan-Soo Park

This case study focuses on how a Korean software firm, CCMedia, executed a successful global strategy by merging with its technology partner to gain access to international markets. The case study also reviews the key challenges CCMedia faced after the merger. Intangible assets, such as IT technology, could allow CCMedia to earn overseas capital investment through the merger. With capital and human resources backup from IT Inspire Inc., its former technology partner, CCMedia could enter foreign markets. This case examines the transformation of a strategic technology alliance to a hierarchical structure as a result of a merger. It shows that technology-related alliances could play an important role in possible takeover activities. It provides insights into strategies that technology-based small businesses in Korea could follow to enter international markets.

Aroc Limited: Launch and Closure of a Ready Mix Cement Plant

Margie Parikh

Arco Limited was a Projects and Infrastructure-sector conglomerate. Some of its key officials believed that entering the Ready Mix Cement (RMC) could be beneficial for Arco and planned entry into the manufacturing of RMC through its subsidiary, EG Ltd. (EGL). A feasibility report was ordered in 2004 on the basis of preliminary market leads which included detailed survey reports. Kolkata was identified as one of the locations for the business where high growth potential was sensed. Projections were made for demand and cost components. Government-prescribed formalities associated with starting the business were identified. Two alternate locations for Kolkata were identified and one of these two was recommended. Cement was one critical component for the business but the company did not have its own source of cement. One strategic option recommended was to tie up with one of the cement companies on back end. Alternatively, since the conversion of potential demand into orders depended upon construction projects, a tie up with a construction company on the front end could also be possible. There was a delay of a year in commissioning the plant and thereafter a number of factors caused the projections to be revised. The senior General Manager rejected and returned the revisions in the estimates apparently because of the managerial failure to foresee the market realities. After a few months’ operations and losses, EGL closed down the RMC operations and rented it out because ‘it was actually a stupid decision.” This case deals with challenges in decision making in uncertain environments.

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