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TURNAROUND OF CANAL PLUS: BEGINNING OF A NEW ERA |
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Abstract
In late 1984, Andre Rousselet created the first encrypted pay TV (television) in France and in Europe with the help of Generale des Eaux, a French public limited company (leader in waste-water management) and Havas Media Group. In 1994, Pierre Lescure took over as CEO (Chief Executive Officer) after being the blue-eyed boy of Rousselet for the past ten years. Canal Plus, with an increasing number of subscribers, was the undisputed market leader with no visible signs of competition. Between 1996 and 2000, Jean-Marie Messier, CEO of Generale des Eaux, formed Vivendi Universal that boasted businesses in music, publishing, TV and film (Canal Plus, Universal Pictures, Universal Studios), entertainment parks, telecom (Cegetel and SFR - two major mobile operators in France) and Internet with a controlling stake in Canal Plus. By 2002, when the Internet bubble had burst, the telecom market had crashed, and economic slow down had crept in the US and Europe, Vivendi Universal's debt level had reached 13 billion euros and its stock price had decreased by 80%. In 2002, Jean-Marie Messier was ousted by the board of Vivendi Universal and Jean-Rene Fourtou was ushered in as the new CEO. Canal Plus in 2002 had a net debt of 5.1 billion euros despite a turnover of 4.8 billion euros, and a net loss of 325 million euros. Fourtou immediately appointed new top-management in Canal Plus with Bertrand Meheut, as the new CEO. The case describes the successful financial and organisational restructuring of Canal Plus in a record 18 months and raises key issues about: (a) alignment of strategy, human resources and control in the organisational restructuring process; (b) challenges of the TV industry; and (c) managing business in a highly volatile technology driven industry. | |
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VODAFONE: OUT OF MANY ONE |
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Abstract
In 2004, Vodafone Group PLC was the world's largest cell phone provider in terms of revenue. Since 1999, Vodafone had invested US$270 billion (Euro 225 bn) mostly in stock, building an empire spanning 26 countries. It controlled cell phone operations in sixteen countries and had minority stakes in companies in ten other countries. This case traces the history of Vodafone's growth and its capability to transform and adapt itself to the dramatically changing market environment in the dynamic telecommunication sector. The case analyzes Vodafone's growth through acquisitions and the subsequent integration of acquired units with a key focus on how it manages to coordinate its businesses on a global scale. | |
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SAINT GOBAIN: THE EXPANSION OPTIONS IN EMERGING MARKETS |
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Abstract
Saint Gobain, is a French company and is amongst the leaders in the float glass industry. The company has the strategy of steady, strong and profitable growth. Saint Gobain has been achieving this target by both organic growth and by external growth through acquisitions.
Saint Gobain has 66% of its revenues coming from Europe, 27% from North America and the remaining 7% from emerging economies in Asia. However the markets in Europe have reached the maturity stage and hence the company has to focus on the emerging markets for future growth opportunities. To fuel this growth, the company is considering investments in two of the fastest growing economies in Asia, namely China and India. Not only do these countries provide significant domestic demand but also have to potential to be used as a hub for exporting to countries in South Asia and East Africa.
The company needs to analyze the investment and growth opportunities in these two countries and to evaluate whether such an investment would be in line with its overall strategy. | |
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SANOFI SYNTHELABO-AVENTIS (A): THE FRENCH CONNECTION OF MEGA MERGERS |
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Abstract
Monday, January 26, 2004, the 64-year-old chief executive of France's Sanofi-Synthalabo SA shocked the genteel French business establishment by launching a Euro 48 billion hostile bid for local rival Aventis SA, a company twice the size of his own by sales. This case presents the situation of Sanofi-Synthalabo and Aventis before the hostile bid led by Sanofi. The case gives an overview of the pharmaceutical industry, the European market and the current trends. Within this backdrop the case discusses the companies Sanofi-Synthalabo and Aventis, their history of evolution, product pipe-line and their global strategies. The purpose of this case is to bring the reader to understand the complexity of megamergers and acquisitions, in the backdrop of the French context. Some of the issues raised in the case are:
- Do pharmaceutical companies need to globalize to survive? (Industry analysis and Globalization)
- Are mergers and acquisitions a better way forward than internal organic growth? (Global logic of megamergers, hostile bid and defense strategy)
- Are alliances necessary as the costs of bringing new drugs to market continue to increase? (Strategies for synergy with respect to product portfolio, product pipelines, international presence)
- European Union and the French State (Creation of National Champions).
The case provides a stimulating environment for discussion on these topics related to strategy and international management in the pharmaceutical industry.
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LVMH: MANAGING THE MULTI-BRAND CONGLOMERATE |
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Abstract
LVMH Moët Hennessy Louis Vuitton, based in France, is one of the world's leading luxury goods companies. It operates in wines, spirits, fashion goods, leather goods, perfumes, cosmetics, watches, jewelry and retailing. The company employs approximately 56,000 employees. Its global distribution network grew from 828 in 1998 to 1,592 stores in 2004. The majority of sales are derived from the Fashion and Leather goods division, with Europe (including France) being the biggest regional contributor. The company is the largest and most widely spread luxury goods company, with a strong brand portfolio and distribution skills. LVMH's 'star brands' is a key foundation of the group's strategy. It has built over time one of the strongest brand portfolios in the sector, counting 60 top brands amongst its five divisions and other operations. At the core of the Fashion and Leather business is the Louis Vuitton brand itself. This 'star of star brands' is estimated to generate over 80% of earnings in the segment.
The case discusses the following critical challenges for LVMH
(a) sustaining it organic growth strategy
(b) competition strategy
(c) managing multi-brand strategy with star brands
(d) managing a decentralized conglomerate
(e) leadership and charisma of Bernard Arnault in creating, maintaining and managing a global conglomerate
(f) people issues in the luxury industry. | |
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CARREFOUR CHEVERE! **Second Best Case written by an author from outside the United States at the North American Case Research Association (NACRA), Sedona, Arizona, USA, 2004** |
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Abstract
Carrefour, since its merger with Promodès in 1999, is ranked as the French world challenger and the European leader in the retail industry. Carrefour followed an aggressive growth strategy by started becoming global from early 1970s. Its first mover advantage in the international retail sector market and reaching a leadership position either by acquiring local actors or by adapting itself to local cultures and consumer habits has made it the second largest retail company worldwide. Carrefour did witness much success in penetrating the developed markets of the United States and the UK but Carrefour has successfully implemented its multi-format strategy in Europe, Asia and Latin America. The Latin American market has been an area presenting the highest growth rate for Carrefour specially in countries like Colombia where the growth rate at comparable exchange rates has been over 30% in year 2003. The case discusses and highlights the (a) entry strategy of Carrefour and the Latin market (b) its growth strategy by acquisitions (c) the linkage of its strategic intent of profitability, core competence, organizational capability and it business strategy (d) marketing, pricing, branding, use of private label strategy (e) its overall strategy of conquering markets by fast local adaptation to individual markets and its responsiveness to local businesses focussing on Latin America and the Colombian market. | |
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LAFARGE: EVOLUTION OF A FRENCH CEMENT COMPANY TO A GLOBAL LEADER **Award Winner at the Carnegie Bosch International Institute Conference, Pittsburgh, USA, 2003** |
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Abstract
Lafarge is a French company that has become the largest building and construction material company in the world. In the last decade, Lafarge accelerated the pace of its growth into new countries, by acquiring companies, expanding into new businesses and new products through its four divisions - cement, aggregates & concrete, roofing and gypsum. Numerous acquisitions and joint ventures in all four divisions, and on every continent, particularly Asia, have seen Lafarge continue consolidating its position as a world leader in cement. Lafarge, today, operates in 75 countries with 77,000 employees, and Euro 14.6 billion of annual sales through its four divisions. Barely five years ago, in 1997, Lafarge operated only in 35 countries with 35,000 people and had a sales turnover of Euro 6.4 billion.
This case describes Lafarge's policy of 'growth and profitable growth' by successful acquisitions and post-merger integration. The case deals with both the issues of internal restructuring of Lafarge to fuel its external strategy of growth and it traces the process of internationalization of a French cement producer. The case also examines the basis for globalization of what many would think of as a very 'local business'. It presents an opportunity to examine the logic of global competitive moves. The case focuses on five of the key issues Lafarge needs to address in exploring globalization:
(a) continuing its growth strategy (strategy)
(b) realization of benefits from its restructuring program (structure)
(c) fast integration of the acquired companies to create synergy and hence value (systems and processes)
(d) internationalization of its work force and developing managers to be mobile and to operate in a wide variety of markets and with people of diverse cultural backgrounds (culture)
(e) managing its human resource which has doubled in the last five years (people)
Lafarge's with its transfer of best practices, managing its people by 'Lafarge Way' and the way it is manages cultural diversity provides a basis for discussing the sources of superior performance in a global context. In addition, the wide array of benefits that Lafarge derives from its operations in different countries broadens conventional notions of why firms globalize.
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LAFARGE VIDEO: INTERVIEW WITH BERTRAND COLLOMB, CHAIRMAN OF LAFARGE |
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Abstract
The interview of Bertrand Collomb, Chairman of Lafarge is an exceptional teaching material that completes the Lafarge Case. It is also a rich document about Lafarge, from its history to 'The Lafarge Way' of managing people in a global company. | |
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EVOLUTION OF ALSTOM: ROLE OF THE FRENCH STATE |
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Abstract
The case traces the evolution of Alstom from a family owned company to an industrial diversified multinational which is currently in financial troubles. Alstom has been known for its technological excellence which ranges from the power generation industry to the high speed trains (TGV) - both France's and Alstom's flagship of technological success.
In June 1998, GEC ALSTOM floated the company on the New York, London and Paris stock exchanges under the new company name ALSTOM. This IPO is now seen as the main reasons for Alstom's current financial turmoil. It is said that synergies which were in place between Alstom and other subsidiaries of the former Alcatel-Alstom conglomerate were lost and value destroyed after the launch of the IPO. Furthermore Alstom had to pay a special dividend of Euro 1.2 billion to Alcatel and General Electric Co which severely diminished its available cash flow and hence its capability to innovate and destroying its core competence.
The case tries to illustrate the evolution of a French conglomerate and its relationship with the French State since its inception in 1898. Historically the French state has helped Alstom from its inception starting from establishing its technological prestige through the TGV project, de-merging Alstom from Alcatel, and finally when refinancing Alstom with a bail-out package of 3.4 billion Euros to prevent it from going bankrupt. The case tries to understand the issues of competitive advantage of nations and the role of the state in the light of the Alstom example. | |
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RENAULT: THE CHALLENGE OF RESTRUCTURING |
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Abstract
In 1998, after a period of ten years just prior to the decision of forming an alliance with Nissan, Renault SA had transformed itself from a loss-making French government-run social welfare organization to a profit-oriented company. This had been possible because of the redesign program that Renault undertook in 1996 when it laid off 40,000 employees, closed its Belgian Vilvorde factory and was privatized. The research case discusses the restructuring of Renault under the stewardship of Carlos Ghosn. By 2000, Renault met its objective of becoming the most profitable and competitive European car manufacturer in terms of quality, cost and time. In 2003, the turnaround of Renault SA and its success in the Renault-Nissan alliance was termed as 'radical transformation' as the redesigning at Renault reflected on its organizational chart, on new policies, creation of an alliance board and transforming the once French company to a bi-lingual internationally reputed company. The case discusses the rationale behind the restructuring initiatives of Renault (with which it later on restructured Nissan successfully), costs and consequences of restructuring programs, changes in organizational structure in response to changes in business environment on performance and profitability, role of HR during organizational restructuring process and in the French context, 35 hour work rule and role of unions and legislation in the restructuring process. | |
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MASUKI LIMITED: CHALLENGE OF REDESIGN OF A JAPANESE JV IN INDIA |
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Abstract
Masuki (name disguised) was established as Joint Venture company with Kisuzu (name disguised) Motor Company of Japan and the Government of Indian Company in February 1981 with the objectives of - modernizing the Indian automobile industry, producing fuel efficient vehicles to conserve scarce resources and producing indigenous utility cars for the growing needs of the Indian population. Masuki today is a Rs 74 bn ($1.5 bn) company producing over 3,70,000 vehicles per year out of a total of 1.2 million cars produced in India. Masuki (subsidiary of Kisuzu), has made profits every year since inception except 2000-01. In 2001-02, it made a profit (before tax) of Rs. 1.2 bn. In 2002-03, the profit (before tax) rose to Rs. 2.8 bn, recording a growth of 138.4% over the previous year.
The case discusses the liberalization of the Indian economy and the deregulation of the automobile industry. It discusses how the Indian automobile industry went through a transformation process of having three automobile companies and a handful number of car models to that of all the major car manufacturers of the world setting up shop in India. The case discusses how to save itself from the onslaught of hyper-competition from both new domestic and foreign players Masuki had to undertake an organizational redesign process. The case traces the history of Masuki, its redesign program, the effects of redesign on the company's strategy, its shared vision and values, changes in the organizational structure and the role of strategic human resource management in the redesign process.
The case focuses on five key issues (a) liberalization and privatization in an emerging country context and the deregulation of the automobile industry in India (environment) (b) the redesign process (structure and process) (c) cross-cultural integration of Indian and Japanese Management practices (d) role of strategic HRM during redesign process (people) (e) difficulties faced in the implementation of the change process (performance).
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ORGANIZATIONAL REDESIGN AT BPCL: THE CHALLENGE OF PRIVATIZATION |
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Abstract
Bharat Petroleum Corporation Limited (BPCL) is an Indian oil major that produces a diverse range of products, from petrochemicals and solvents to aircraft fuel and specialty lubricants and markets them through its wide network of Petrol Stations, Kerosene Dealers, LPG Distributors, Lube Shops, besides supplying fuel directly to hundreds of industries, and several international and domestic airlines.
With the liberalization of the Indian economy and the deregulation of the petroleum industry, to be more competitive and customer focused, BPCL undertook an organizational redesign program to restructure its business portfolio in 1998 with the help of international consultants. The case traces the history of BPCL, its redesign program, the effects of redesign on the company’s strategy, its shared vision and values, changes in the organizational structure and the role of strategic human resource management in the redesign process.
The case focuses on five key issues (a) liberalization and privatization in an emerging country context and the deregulation of the petroleum industry in India (environment) (b) the linkage of shared vision and values to the redesign process (strategy) (c) the redesign process (structure and process) (d) role of strategic HRM during redesign process (people) (e) successful implementation of the change process (performance). The case ends with the impending privatization of BPCL. | |
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