Sobha Developers Limited: Competitive Advantage through CRM

P. Sanjay Sarathy and Sanjay Patro

Sobha Developers was a public-listed real estate company. It developed a self-sustaining integrated customer relationship management (CRM) model which was tested over a period for its robustness. Several concerns and issues were raised and business decisions were taken over these. The model enabled an increase in customer retention growth rate.          

The company’s vision for the next five years was to make Sobha Developers an industry leader and incorporate the integrated CRM model in every real estate company in India and Asia. Having achieved the strongest growth rate in the past few years, Sobha Developers had stabilized its real estate operations not only in Bangalore but also in other cities of India. The contract works with corporate could potentially treble the revenues of Sobha Developers in the coming two years and lend further financial strength and muscle to the company’s operations.

KB Kookmin Bank in Korea

Moon-Kyung Cho, Ho-Young Lee and Dan-Bee Song

KB Kookmin Bank (KB) was the most prominent commercial bank in Korea. However, KB faced two challenges: declining firm performance and a lack of transparency in corporate governance at the level of its financial group, KB Financial Group (KBFG). By the end of 2012, KB was not a market leader in Korea any more. In addition, a conflict arose between the CEO and some members of the board of directors (BOD) of KBFG when an insider leaked private information to the International Shareholders Services (ISS). The insider reported that certain BOD members decreased firm value by disrupting the senior management’s strategic plan to increase the firm’s long-term competitiveness, which required attention from institutional investors.            

KBFG had three issues based on the inside information provided and an independent analysis. First, its CEO had been selected from outside KBFG, and he was under pressure to improve firm performance before his term was over. Second, some KBFG BOD members did not represent the interests of the company’s general shareholders, including foreign institutional investors and the National Pension Services of Korea. Finally, the heavy influence of the Korean government was culturally ingrained within the corporate governance structure of KBFG.

Hike in Royalty Payments by ACC

Pitabas Mohanty and Supriti Mishra

During the period of 2010–2013, many MNCs in India were in a hurry to increase royalties to their parent companies as a proposed regulation in India was going to make it difficult after October 2014. In December 2012, the Board of ACC decided to increase the royalty payments from 0.6% to 1% of net sales to Holcim, the parent company of ACC. The market reacted negatively and the stock price of ACC fell by 2% on the date of announcement and around 10% in the two-month period following the announcement. There was widespread resentment among investors. Many questioned the corporate governance practices followed by MNCs in India.   

By 15th February 2013, the shareholders of ACC had to decide whether to vote in favor of the proposal. If Holcim, which controlled more than 50% stake in ACC, decided to participate in the voting, then the proposal would automatically be approved. The case explores the different options available to the shareholders of ACC and presents material to enable the shareholders to evaluate the merits of each of these alternatives. The case gives the readers an opportunity to value the stock of ACC and decide whether the market overreacted. The case also gives an opportunity to discuss the merits of the decision taken by ACC and to critically assess the corporate governance practices followed by ACC.

Vertical Brand Extension at Vinamilk, Vietnam

Nguyen Quang Tri, Winai Wongsurawat and Rian Beise-Zee

This case study illustrates the role of marketing instruments on the success of a vertical brand extension executed by a leading dairy company in Vietnam – Vinamilk. In 2011, the company launched a fortified liquid milk line as a step-down vertical brand extension from its previous and more premium line – 100% fresh milk. The key issue in the study is to understand how Vinamilk used marketing communication and distancing techniques (or differentiation tactics) to influence the performance of the vertical brand extension.   

The case findings show that despite quite serious cannibalization on the core brand, the vertical brand extension at Vinamilk was deemed a successful launch. The success was attributable to marketing communication that was rooted in profound consumer understanding - the right product offered to the right target at the right price supported with heavy consumer pull and trade push marketing. Vinamilk’s strong umbrella brand and wide distribution network also contributed to the successful launch.    

The most serious challenge was cannibalization on the previous premium product line – Vinamilk 100% fresh milk. As Vietnamese consumers grew wealthier and more sophisticated, non-reconstituted, fresh milk would likely become the biggest seller in the future, a sector Vinamilk could not afford to lose. Competition in this premium market was already heating up, requiring the company to strengthen this product line. For longer term strategy, Vinamilk had been forced to revisit its liquid milk product portfolio. A more clearly defined role for each product line along with effective differentiation would be required.

National Fans Limited of Bangladesh

Jashim Uddin Ahmed, Mohammad Jasim Uddin, Nahid Farnaz and M. Akbar Ali

The case explores the marketing and business strategies of National Fan Limited (NFL). The company was one of the most successful domestic companies and leading ceiling fan manufacturers in Bangladesh. Specifically, the case focuses on the strengths and challenges of the company. The company had continuously expanded its operations and made a leading position in the industry since the early 1980s. It had adopted numerous dynamic strategies to sustain competitive advantage. The company, however, had experienced unprecedented challenges and setbacks to manage its growth. Besides numerous political challenges, the major issue was widespread existence of counterfeit products. Though the demand of ceilings fans had increased, the company had been struggling to keep pace with market growth due to the dearth of capacity. Other challenges were associated with raw materials and entrance of new rivals. The case allows students to explore strategies to overcome the challenges and increase market share.

G-Auto Business Model: Diversifying and Sustaining Under Duress

Shubhabrata Basu

This case traces the evolutionary and competitive challenges faced by Nirmal Kumar (Kumar), a social entrepreneur, in the process of diversifying and sustaining a fledgling corporation. Kumar, an MBA graduate from Indian Institute of Management Ahmedabad, Gujarat, was severely ill-treated by an auto rickshaw driver when he refused to yield to unfair price demand. That traumatic experience and the risk it posed to the vulnerable section of the society, motivated him to search for a solution. He found that overcharging was not endemic to all auto drivers. With his own limited resources, he started organizing the good auto drivers, leveraging his prior experience in procuring external unencumbered funding. He articulated well-defined value propositions to the stakeholders and created G-Auto.    

G-Auto proved to be a safe and efficient para-transit alternative. He obtained politico-regulatory and financial support to expand and standardize the operating model across other cities of Gujarat. Within a couple of years, he had organized around 10,000 auto drivers under the G-Auto banner. He further differentiated the service according to specific needs. He arranged training for the drivers and designated them as G-Auto Pilots to enhance their dignity.  He further leveraged the auto network to diversify into the under-skilled job market and the fruit and vegetable supply chain and attempted to give a corporate form to his diversified ventures.   

In the process, the basic stewardship character of his initiative appeared to be compromised, besides drawing unwanted attention from competitors coupled with threats and violence to him and his auto-pilots.  With waning stewardship characteristics, would Kumar be able to grow and sustain his initiatives? Would he be able to command the same goodwill trust from his old and new stakeholders? If not, how would he sustain his existing and new initiatives all on his own? 

Micro-Innovation Strategy: The Case of WeChat

Xiaoming Yang, Sunny Li Sun and Ruby P. Lee

Tencent was the third-largest Internet company in the world, behind Google and Amazon. Tencent’s primary product, WeChat, was the world’s four-largest mobile messaging apps. This case discusses how Tencent used micro-innovation strategy to develop and improve its product, WeChat, as well as manage its powerful competition. It also discusses Tencent’s innovative strategies such as functional additions through micro-innovation, reverse micro-innovation by subtraction, and strategic alliances for internationalization, among others.

Build to Last, Discount or Defer?: Examining Lotteā€™s Entry into the Beer Industry

Young-Sang Yi, Hyoung-Goo Kang and Hannah Jun

This case represents the first part of a two-part case that analyzed the entry of LotteChilsung (“Lotte”) into the Korean beer industry. With regards to market structure, the market was characterized by a duopoly that was commanded by Oriental Brewery Co. (“OBC”) and HiteJinro (“HJ”). Lotte would be up against stiff competition should it go through with its intended plans to enter the beer industry.    

On the one hand, Lotte announced a two-step entry plan that began with a small plant. This case highlights the small plant as a real option since the two-step plan was not financially justifiable under classical NPV analysis. With the real option, Lotte could either expect to buy OBC or HJ at a much cheaper price, or wait for better timing to minimize potential losses from investment in a large plant while remaining a minor player in the beer market. Rather than highlighting a typical success or failure study, this case places participants in the driver’s seat of current events and asks them to critically analyze costs, benefits, and strategy.

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