Shanghai Automotive and Ssangyong Motor: A Tale of Two Dragons (C)  

Xu Leiping and Steven White

This final case of the 3-case series describes the grim situation facing SAIC in late 2008, pummeled by the financial crisis after seemingly overcoming some of the major challenges of the first two years as controlling shareholder of Ssangyong. The Ssangyong union was again resisting proposed changes that SAIC saw as inevitable to ensure Ssangyong’s continued solvency.  SAIC was now faced with the decision to push through the necessary changes in spite of union response, give up control to a court receiver, or divest its share of Ssangyong.  The case serves as a basis for discussing the decision of whether and when to divest and, particularly relevant for high-profile acquisitions by Chinese firms, the economic, strategic, political and reputational rusks of a “failure” abroad.

ALTools Case Study: How ESTsoft Lays Golden Eggs?

JoongHo Ahn, Sangwook Ha and Hyunmi Baek

ALTools is a suite of utility software offered by ESTsoft, a Korean software company. ALTools includes eight programs: ALZip (compression and archiving utility), ALSee (image viewer and editor), ALFTP (FTP client and server), ALSong (music player with lyrics), ALShow (media player), ALToolbar (toolbar for Internet Explorer), ALPass (password manager for websites) and ALYac (antivirus). As of 2010, according to KoreanClick market research, over 20 million people were using ALTools in Korea and many of the ALTools programs were ranked first in their respective product categories.

ALZip, the first ALTools application, was initially created for internal use, for an employee at the ESTsoft company who did not know how to use an English file archiver program. But after it generated significant public interest, ESTsoft decided to expand the “AL” series product line, releasing ALFTP in July 2000, ALSee in August 2000, ALPass in October 2002, ALShow in July 2004, ALSong in November 2004, ALToolbar in May 2007, and ALYac in December 2007. To manage the expansion of its product line, the company packaged them into one software suite, named ALTools in 2002 and developed an additional program that could assist users in keeping the AL series software titles up to date. It also commercialized ALTools in 2002, adding banner ads in ALTools products and selling software licenses to public institutions and private companies. However, they offered ALTools for free to individual users.

ESTsoft is now looking for new business opportunities in the global market for ALTools. In February 2010, ESTsoft established ESTsoft, Inc. in the United States and entered the U.S. market directly. This is its second overseas branch, following ESTsoft Japan (September 2007). Do you think ALTools will be able to continue its success in other countries, outside of Korea? What challenges might it face?

Hindustan Unilever Ltd

S. R. Vishwanath and Kulbir Singh

In early 2008 an analyst at a prominent Investment Bank in India was analyzing the dividend policy of Hindustan Unilever Limited (HUL), a well-known multinational. The case protagonist, an equity analyst, must figure out the implications of the firm’s dividend policy on the investment and financing activities and the valuation of the firm. She also has to decide what investment recommendation she should give in the light of the analysis. The case describes the Indian FMCG industry as India enters the new millennium. The case details HUL’s financial position in an era of increasing competition. Priya must decide whether the dividend policy of HUL is sustainable.

StickOn Adhesive Limited: A Strategic Pursuit in Challenging Environment

Sumita Rai and Ashok Banerjee

This case focuses upon the issues that have arisen as StickOn Adhesive Limited (SOAL) faces the challenges of competition in the industry though two-pronged strategies – backward integration and product diversification. The case discusses various initiatives taken by SOAL to meet strategic goals. SOAL has initiated changes in its marketing policies, re-layered the organization structure, and empowered the internal management to realize growth objectives. The case examines the corporate dilemma of finding the right growth path and discusses whether backward integration is a cost reduction or a growth strategy.

Sacombank-SBS Securities in Vietnam: Creation and Sustenance Processes

Anurug Ruangrob and I. M. Pandey

The creation and sustenance processes of new ventures in emerging economies are challenging due to low productivity, lack of innovation, lack of capital, lack of skilled labor, and more importantly, unclear policies or poor implementation of policies by the government that elevate risks. This case illustrates a successful new venture in Vietnam in spite of the constraints as mentioned above. Sacombank-SBS Securities was established at the end of 2006 to offer securities brokerage and investment banking services to take full advantage of this growing market. Within just a few years, the company was able to become a leading player in the market. It also won different awards including the best domestic investment bank in Vietnam in 2009 and 2010. This case offers an insight into Sacombank-SBS in terms of its organizational evolution, strategies, processes, systems and what made Sacombank-SBS Securities so successful.

Russian Restaurant with Japanese Cuisine Makes Foreign Markets’ Selection: The Case of Two Sticks

Andrei Panibratov

The case considers the problem of the expansion strategy of the Russian Japanese restaurant Dve Palochki (Two Sticks). The focus of the case is the exploration of the regional and international opportunities for the company, particularly on the Chinese market. This case is recommended for discussion in study groups in an international business strategy course when considering the following issues: choosing a foreign market entry strategy; internationalization of SME; a marketing and HR policy of a firm that is I n the process of initial internationalization.

This case is intended for analysis of the decisions a medium-sized enterprise’s management has to make regarding its foreign expansion. Students are expected to examine the problems linked to quality management, the development of marketing activities, the adjustment of the brand concept, and the organizational restructuring. The analysis can be carried out with the following aims: to evaluate the business environment of newly internationalizing firms in the Japanese restaurant sector as it exists today in the Russian market; to realize the perspectives and difficulties of working in developing and developed markets for a firm in the process of internationalization; to carry out comparative analysis of the advantages and disadvantages of foreign strategies based on strong marketing and HR policies; to examine the promotion process by the restaurant in Russia and evaluate the options for implementing its principles in new oversea locations.

Proton: Its Rise, Fall and Future Prospects

Jane Terpstra Tong, Robert H. Terpstra and Lim Ngat Chin

This case focuses on the challenges faced by a Malaysian state-owned automobile manufacturer, Proton. In so doing, it exemplifies the political context in which businesses, both domestic and foreign, operate in Malaysia. What makes Proton unique is its origin as the brainchild of Tun Dr. Mahathir bin Mohammad, Malaysia’s fourth Prime Minister. Mahathir was one of the longest-serving leaders in Asia when he resigned in 2003. Over his 22-year reign, Mahathir and his government made several fundamental changes to Malaysia’s institutions and his legacy is still reflected in the current social, political and economic institutions. One of the more controversial economic programs he championed was the National Car Project, under which Proton was established. When Mahathir decided to industrialise Malaysia’s economy, he did not look to the west for direction, but instead turned to the east – Japan. He adopted the Japanese economic development model that emphasises hands-on government involvement in the economy. To form Proton, he selected Japanese Mitsubishi Motors as the joint venture partner and within two years Proton was rolling out its own vehicles, which in effect were the “rebadged” version of Mitsubishi’s Lancer. To ensure there were customers for Proton vehicles, the government raised import tariffs, making it very expensive to buy foreign imports.  It also made Proton the official supplier for almost all government passenger vehicles.

Under the protection policies of Mahathir, Proton grew to dominate the domestic market.  However, it was unable to succeed in obtaining the desired technology from its Japanese partner, or in developing the ability to survive independently and compete effectively, especially in the international market. Part of Proton’s weakness stemmed from its social agenda, which favoured bumiputera suppliers, even at the expense of cost and quality efficiency. Proton therefore serves as a good example to illustrate what can happen to a business when it is over-protected, and when business decisions are not made on merit-based principles. Proton’s weaknesses were further exposed when the government allowed the establishment of a second national automaker, Perodua, in 1993. The recent free-trade policies adopted by the ASEAN countries, and also by China and India, have put even more pressure on Proton to transform. But the question is how

Sajo Group’s Journey: Re-entering a Mature Market

Namgyoo K. Park and Jeonghwan Lee

This case study looked into Sajo Group’s re-entrance into the already-mature canned tuna industry. Commonly, re-establishing brand identity that once disappeared from customers’ memories is normally considered harder than launching a new brand. Even still, Sajo ambitiously decided to bring back “Sajo’s Canned Tuna.”

Sajo faced a management crisis from over-expenditure and failure to expand the market after launching Sajo’s Canned Tuna. In order to overcome this, Sajo sold its factory and dissolved its sales organization responsible for direct sales of the product. Although many similar companies exited from the mature fishing and seafood industry when the competition became severe, Sajo remained in the business. The company conducted many M&A transactions focusing on what they knew well and in which they maintained strength. Well-managed M&As enabled Sajo to enhance its business through structural integration, thereby functioning as a new stepping stone for the company’s leap back into the market.

When Sajo decided to end its sales consignment strategy and resume direct sales of Sajo’s Canned Tuna, Sajo secured a supply of high-quality, raw tuna, realizing economies of scale, and re-organized their sales network by merging with Sajohaepyo. Sajo also improved its products’ competitive quality by obtaining HACCP certification as well as differentiating its marketing and promotion strategies from those of its competitors. Further, Sajo sought to improve its in-store presence percentage, which had dropped to almost 50%, while trying to persuade shop-owners to rearrange displays that were predominantly taken by Dongwon and Ottogi. Sajo also resumed advertisement and sales promotions. As a result, Sajo was able to achieve an over 200% increase in market share in two years, thereby elevating the company to the number two spot in the industry.

Although Sajo had substantially improved the company’s sustainability in both the fishing and seafood industry, its competitors, Dongwon’s aggressive marketing strategies and Ottogi’s strong sales network are sure to continue to be a serious threat. It is time for Sajo to plan additional strategies in order to overcome its competitors’ attack

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