Managing a Business/help for mba assignments
Pl provide the answers for these questions
1.Discuss the different types of diversification strategies adopted by WIPRO and VIDEOCON.
2.Why Corporate Image is better than Brand Image? What happens if the latter is powerful than the former? Explain.
3.Explain elaborately the impact of globalization on the strategy formulation and implementation in Indian industries.
ONE ANSWER LEFT OUT DUE TO SPACE CONSTRAINT.
4.discuss the different types of diversification strategies adopted by WIPRO and VIDEOCON.
Growth has four faces: organic; acquisitions; diversifications and joint ventures. Premji's growth strategy over the past years shows a marked change from earlier patterns. Between 1966-2000, Wipro grew through diversification, partnerships and organically, through innovations it pioneered. Today, growth is also through acquisitions and borrowed ideas, and there are fewer partnerships.
Interestingly, Premji's entry into the BPO (business process outsourcing) was remarkably late in coming, and seems to be a somewhat knee-jerk reaction to slowing growth rates in his core businesses. In July 2002 Wipro acquired Spectramind in a Rs4320mn deal. The takeover caused a few rumblings amongst analysts who felt that Wipro overpaid for India's largest non-captive call-center (GE's operations in India are estimated to be larger) but Spectramind is already a growth driver, contributing about 4% to Wipro's total revenues.
Moving up the value curve is another growth strategy. It is no secret that Premji would like Wipro to join IBM and Accenture in the sophisticated and lucrative tech consulting business, helping customers design their IT systems, and not labor in the lower level space of offshore coding. Moving towards this goal, he bought NerveWire Inc, a financial services consultancy located in Newton, Massachusetts, for Rs912mn.
The next shot in the arm was the November 2002 acquisition of American Management Systems Inc, a Boston based 100 person energy practice, for Rs1152mn. Today research led consulting represents 7% of Wipro's revenues, up from zero two years ago. Enroute he has made some impressive gains: in April 2002, Wipro won a contract to provide tech services to the Scandinavian TeliaSonera, beating world leaders like Oracle Corp on their own turf.
Premji's acquisition strategy has burnt a small hole in Wipro's pocket. It has also affected share prices, which are down 24% since January 2003 though sales are up by 19% over the past three years. In any other business, a manager would be happy to report a CAGR of 19%, but not in the IT business and not in Wipro. But as Premji is frequently quoted, "The company is run to deliver its long term and short term goals, not with any view of the stock price. "Which is not to say that Premji is not conscious of the need to be investor-friendly, even if less than 20% of the company's stock is publicly held. A conference call is organized when quarterly results are posted for investors to raise queries. Wipro's top management, including Premji, is usually available to answer these.
Meanwhile Premji is trying to make his company even more customer-centric. "The end objective of our 'customer-in' concept is that we want to build the voice of the customer in our products and services. This is opposite to the concept of 'product-out', which is the way the world has been operating for some time," he warned Wipro's top management in a 2 May 1997 address. Wipro, with its blue-chip roster of customers such as Microsoft, Sony and Nokia is India's third largest software exporter.
But as Businessweek's Manjeet Kriplani highlighted, the "fastidiously frugal chairman figures those accounts must be zealously guarded every minute." With competition heating up as never before, top managers have to "get off their asses and get into the field," Premji told her. And to get closer to his customers, Premji has begun expanding beyond Bangalore. Four years ago, he moved Wipro's tech headquarters to Santa Clara, California.
According to Premji, "a time of stress is always a good time for companies to become more efficient." So he is streamlining his already lean organization. Wipro's prices are now marginally lower than those of competitors such as Infosys and Sapient, which helps it to retain customers in hard times. It also helps that Wipro has diversified. Half its revenues come from research and development for clients such as Alcatel and General Electric.
Apart from his willingness to cut prices, Premji has been working on processes that can consistently deliver quality. One of the tools widely used is Six Sigma, a program Premji introduced to India soon after USA's Motorola developed it. Currently Wipro has the most mature Six Sigma program in India and it willingly shares its experiences with the corporate sector. Over the last two years, 91% of projects are completed on schedule, much above the industry average of 55%. Wipro was the first company in India to receive SEI-CMM Level 5, the highest global distinction in quality from the Software Engineering Institute of the US, for its entire software business.
If Rahul Bajaj has a rival for the title of India's most hands-on manager, Premji is probably high on the candidates' list. Bajaj, it is famously said, used to sign every check at the two-wheeler company. Premji likes to check the costs of airline tickets and frequent flyer statements.
"Premji makes Uncle Scrooge look like Santa Claus," a Bangalore tech manager was once quoted. "He monitors the number of toilet paper rolls used in Wipro facilities and demands that employees switch off the lights when leaving their offices; Premji himself makes random checks to see that the lights are out at the end of the day.
There are no limos awaiting Premji or Wipro staffers when they arrive at an airport. They take taxis or trains. Premji often takes a three-wheeled autorickshaw from the Bangalore airport when returning from his travels. His only car is a 1996 Ford Escort. While on the road he does his own laundry and stays in three star hotels - and requires his employees to do the same.
On the flip side, people who have left Wipro speak highly of their former boss: a rare tribute in our dog-eat-dog world. Som Mittal, President and CEO of Digital India (Hewlett-Packard) recounts, ''I could tell right away that Mr Premji was very demanding, because he interviewed me for eight hours before hiring me and he'd prepared the interview very carefully. During my five years at Wipro, Mr Premji never insisted on a specific workload or strict working hours. But by magic, or by fear of disappointing him, employees exercised self-discipline. When I told him I was leaving, he was really sad. He's very possessive. Today, we run into each other regularly at conventions. I still respect him greatly and, unlike many of his colleagues, would never dare to call him by his first name."
Premji firmly believes that ordinary people are capable of extraordinary things. The key to this is creating highly charged teams. He takes a personal interest in developing teams and leaders and invests personal time in his managers. Managers agree that Premji is happy to work alongside them, making sales calls with the marketing team, and is said to welcome criticism. A just boss, if a stern master. "I demand of others only what I demand of myself," he says.
That's fine if you also happen to enjoy working fifteen hours a day. Mistakes are not penalized but deception is akin to waving a red flag in front of a raging bull. There's a legend (true!) that Premji once preferred to face a tough, three-month strike rather than rehire an employee who had submitted fraudulent expense accounts. "The person said he was traveling in first class, when in fact he was traveling in second class and pocketing the difference," he recalls, "that was unacceptable."
To be able to predict the future and rightly predict it is what differentiates smart managers from managers. And Premji has proved himself as a manager with a finger on the pulse of the world. The future, according to him,
will see significant changes in technology, economy and society. "But what will remain unchanged is the need of the customer for an organization with a human face," he said.
The Videocon group's core areas of business are consumer electronics and home appliances. They have recently diversified into areas such as DTH, power, oil exploration and telecommunication.
In India the group sells consumer products like color televisions, washing machines, air conditioners, refrigerators, microwave ovens and many other home appliances, through a multi-brand strategy with the largest sales and service network in India.
In November 2009, Videocon launched its new line of mobile phones. Videocon has ever since launched a number of innovative handsets ranging from basic color FM phones to high-end Android devices. And in February 2011, Videocon Mobile Phones launched the revolutionary concept of ZERO paise per second with pre-bundled SIM cards of Videocon mobile services along with 7 of its handset models.
Colour picture tube glass
Videocon is one of the largest CRT glass manufacturers in the world, operating in Mexico, Italy, Poland and China.
Oil and gas
An important asset for the group is its Ravva oil field with one of the lowest operating costs in the world producing 50,000 barrels of oil per day.
In 2009, Videocon launched its DTH product, called 'd2h'. As a pioneering offer in the Indian DTH market, Videocon offered LCD & TVs with built-in DTH satellite receiver with sizes 19" to 42". This concept in the DTH service is relatively new in the presence of other players like ZEE TV's Dishtv, Tata Sky, Air tel Digital TV and Reliance's BIG TV providing only the set top box.
Videocon Telecommunications Limited has license for mobile service operations across India. It launched its services on 7 April 2010 in Mumbai.
Acquisition of Thomson SA
Videocon through its Wholly Owned Offshore Subsidiary acquired the Color Picture Tube (CPT) businesses from Thomson S.A having manufacturing facilities in Poland, Italy, Mexico and China along with support research and development facilities.
The acquisition came at a time when Thomson was facing a fall in demand in developed markets for television with CPTs and was moving more towards Flat-screen and Plasma Television. However, Videocon saw an opportunity in the emerging countries for CPTs and hence pursued with the acquisition. Besides, the acquisition gave Videocon, the access to advanced technology giving the company control over an R&D facility in Agnani, Italy. The major reasons behind this acquisition were:
Cost cutting – Videocon was better positioned to shift the activities to low-cost locations and also it could integrate the operations with the glass panel facility in India with the CPT manufacturing facilities acquired from Thomson S.A. Videocon wanted to leverage its position in the existing parts of the business and this acquisition would give it a strong negotiation position and could reduce impact of glass pricing volatility. Videocon could also reduce the costs by upgrading and improving the existing production lines.
Vertical Integration – The acquisition helped Videocon in vertically integrating its existing glass-shell business where it had been enjoying substantially high margins. Videocon’s glass division had the largest glass shell plant in a single location. This gave the company an unrivaled advantage in terms of economies of scale and a leadership position in the glass shell industry. The acquisition also gave Videocon a ready-market for its glass business and it was part of Videocon’s long-term strategy to have a global vertically-integrated manufacturing facility.
Rationalization of Product Profile – Videocon modified its product profile to cater to the changing market needs like moving away from very large size picture tubes to smaller ones.
Apart from the overall strategy Videocon also had a plan on the technological front. It wanted to improve the setup for the production line and line speed post-merger. Its focus was to increase sales while reducing the costs and thereby improving the productivity of the existing line. The company also wanted to foray in a big way into LCD panels back-end assembly . On the sales front the company wanted to leverage on the existing clients of Thomson and build relation as a preferred supplier to maximise sales. Also, Videocon could benefit from OEM CTV business with the help of Videocon’s CTV division, invest for new models and introduction of new technologies.
5.why corporate image is better than brand image? what happens if the latter is powerful than the former? explain.
Corporate image and corporate identity are two key marketing tools. The creation of both for a business utilises personnel from marketing, branding, design and copywriting and draws heavily on behavioural psychology. In a global marketplace, crowded with brands, it is the elements of image and identity that attract attention, maintain consumer loyalty, and, overall, sustain business success. The essential difference between the two is this: corporate image is the public perception of the company, whereas, corporate identity is how the company wants to be perceived by the public.
Corporate identity concerns a company's visual appearance. The company logo is a central part of this, as are website design, annual report, company stationery --- both paper and electronic --- signage, retail outlet design and any other items, such as mugs and pens, produced by the company as client gifts. Companies tend to modify the corporate identity at intervals. Radically changing a company's visuals is not recommended as it confuses consumers and leads to perceptions of instability and a change in company values. Modernisation of the corporate identity is more effective when the core visuals remain easily recognisable. As Paul Temporal explains in an article on "Branding Tips," in general, people don't like dramatic changes in the behaviour of people they know, and this applies to companies.
Building and maintaining corporate image requires some different methods and skills to those used in creating corporate identity. The corporate image is public perception, and handling that perception is crucial. Public relations personnel protect and promote the corporate identity to create a corporate image in people's minds. This includes managing negative media stories. The ultimate aim of a company is the exact alignment of corporate identity with corporate image, that is, the public views the company exactly as the company wants to be seen.
Communications is also an important part of corporate identity. Communications include things like advertisements, press releases, news features, and phone service. Usually, a company focuses on providing uniform communications which present the corporation in a positive light. These communications also encourage consumers to think of the company when they need a specific product or service.
Finally, corporate behavior and ethics are a crucial component of corporate identity. Since some consumers actually base their buying habits on how companies act, many companies focus on presenting a very specific image. For example, a company may promote its use of green energy, the rejection of sweatshop labor, or products manufactured in a specific country. Publicly scrutinized members of the corporation are also generally expected to behave impeccably, ensuring the consumers think of the company in a good light.
Managing corporate identity is serious business, especially in a crowded market. Specialists may work extensively with companies before they launch, and every time they introduce new products or services. These specialists ensure that the company is acting in a way which is consistent with its corporate identity, keeping the company's position in the market strong.
Brand Identity and Image
Corporate image and identity are both facets of establishing a brand. Brand identity is more important, overall, than either of these two tools, which support the brand. Brand identity is defined as the "total proposition" a company makes to consumers, according to Paul Temporal at BrandingAsia.com. This proposition includes brand benefits, performance, values, quality and customer service. Brand identity gives products a personality and set of values that establish it in the consumer's mind as embodying these things. Brand image, by contrast, is how consumers perceive a brand, overall. Companies work on the consumer experience to maintain brand image and ensure that consumers think about the brand in the way a company wants them to.
a corporate identity is the "a" of a corporation which is designed to accord with and facilitate the attainment of business objectives. It is usually visibly manifested by way of branding and the use of trademarks.
Corporate identity comes into being when there is a common ownership of an organizational philosophy that is manifest in a distinct corporate culture — the corporate personality. At its most profound, the public feel that they have ownership of the philosophy. Corporate identity helps organizations to answer questions like “who are we?” and “where are we going?” Corporate identity also allows consumers to denote their sense of belonging with particular human aggregates or groups.
In general, this amounts to a corporate title, logo (logotype and/or logogram), and supporting devices commonly assembled within a set of guidelines. These guidelines govern how the identity is applied and confirm approved colour palettes, typefaces, page layouts and other such
Corporate identity is often viewed as being composed of three parts:
• Corporate design (logos, uniforms, corporate colours etc.)
• Corporate communication (advertising, public relations, information, etc.)
• Corporate behavior (internal values, norms, etc.)
Organizational point of view
This definition regards identity as a result of social interaction:
• Corporate identity is the way corporate actors (actors who perceive themselves as acting on behalf of the company) make sense of their company in ongoing social interaction with other actors in a specific context. It includes shared perceptions of reality, ways-to-do-things, etc., and interlocked behaviour.
• In this process the corporate actors are of equal importance as those others; corporate identity pertains to the company (the group of corporate actors) as well as to the relevant others;
• Corporate actors construct different identities in different contexts.
Best Practices The following four key brand requirements are critical for a successful corporate identity strategy.
• Differentiation. In today’s highly competitive market, brands need to have a clear differentiation or reason for being. What they represent needs to be stand apart from others in order to be noticed, make an impression, and to ultimately be preferred.
• Relevance. Brands need to connect to what people care about out in the world. To build demand, they need understand and fulfill the needs and aspirations of their intended audiences.
• Coherence. To assure credibility with their audiences, brands must be coherent in what they say and do. All the messages, all the marketing communications, all the brand experiences, and all of the product delivery need to hang together and add up to something meaningful.
• Esteem. A brand that is differentiated, relevant and coherent is one that valued by both its internal and external audiences. Esteem is the reputation a brand has earned by executing clearly on both its promised and delivered experience.
Corporate visual identity plays a significant role in the way an organization presents itself to both internal and external stakeholders. In general terms, a corporate visual identity expresses the values and ambitions of an organization, its business, and its characteristics. Four functions of corporate visual identity can be distinguished. Three of these are aimed at external stakeholders.
1. First, a corporate visual identity provides an organisation with visibility and "recognizability". For virtually all profit and non-profit organisations, it is of vital importance that people know that the organization exists and remember its name and core business at the right time.
2. Second, a corporate visual identity symbolizes an organization for external stakeholders, and, hence, contributes to its image and reputation explored possible relationships between corporate visual identity and reputation, and concluded that corporate visual identity plays a supportive role in corporate reputations.
3. Third, a corporate visual identity expresses the structure of an organization to its external stakeholders, visualising its coherence as well as the relationships between divisions or units. Olins (1989) is well known for his "corporate identity structure", which consists of three concepts: monolithic brands for companies which have a single brand, a branded identity in which different brands are developed for parts of the organization or for different product lines, and an endorsed identity with different brands which are (visually) connected to each other. Although these concepts introduced by Olins are often presented as the corporate identity structure, they merely provide an indication of the visual presentation of (parts of) the organization. It is therefore better to describe it as a "corporate visual identity structure".
4. A fourth, internal function of corporate visual identity relates to employees' identification with the organization as a whole and/or the specific departments they work for (depending on the corporate visual strategy in this respect). Identification appears to be crucial for employees, and corporate visual identity probably plays a symbolic role in creating such identification.
The definition of the corporate visual identity management is:]
Corporate visual identity management involves the planned maintenance, assessment and development of a corporate visual identity as well as associated tools and support, anticipating developments both inside and outside the organization, and engaging employees in applying it, with the objective of contributing to employees' identification with and appreciation of the organization as well as recognition and appreciation among external stakeholders.
Special attention is paid to corporate identity in times of organizational change. Once a new corporate identity is implemented, attention to corporate identity related issues generally tends to decrease. However, corporate identity needs to be managed on a structural basis, to be internalized by the employees and to harmonize with future organizational developments.
Efforts to manage the corporate visual identity will result in more consistency and the corporate visual identity management mix should include structural, cultural and strategic aspects. Guidelines, procedures and tools can be summarized as the structural aspects of managing the corporate visual identity.
However, as important as the structural aspects may be, they must be complemented by two other types of aspects. Among the cultural aspects of corporate visual identity management, socialization – i.e., formal and informal learning processes – turned out to influence the consistency of a corporate visual identity. Managers are important as a role model and they can clearly set an example. This implies that they need to be aware of the impact of their behavior, which has an effect on how employees behave. If managers pay attention to the way they convey the identity of their organization, including the use of a corporate visual identity, this will have a positive effect on the attention employees give to the corporate visual identity.
Further, it seems to be important that the organization communicates the strategic aspects of the corporate visual identity. Employees need to have knowledge of the corporate visual identity of their organization – not only the general reasons for using the corporate visual identity, such as its role in enhancing the visibility and recognizability of the organization, but also aspects of the story behind the corporate visual identity. The story should explain why the design fits the organization and what the design – in all of its elements – is intended to express.
Corporate colours, (or company colours), which are one of the most instantly recognizable elements of a corporate visual identity and promote a strong non-verbal message on the company's behalf. Examples of corporate colours:
• Red for Coca-Cola
• Blue for IBM, nicknamed "Big Blue"
• Brown for UPS, "What can Brown do for you"
• Light Teal for Korean Air
Visual identity history
A trademark became a symbol of individuals’ professional qualifications to perform a particular skill by the 15th century. For example, the caduceus on a physician’s sign signified that the doctor was a well-trained practitioner of the medical arts. Simple graphics such as the caduceus carried so much socioeconomic and political weight by the 16th century, that government offices were established throughout Europe to register and protect the growing collection of trademarks used by numerous craft guilds.
The concept of visually trademarking one’s business spread heavily during the Industrial Revolution. The shift of business in favor of nonagricultural enterprise caused business, and corporate consciousness, to boom. Logo use became a mainstream part of identification, and over time, it held more power than being a simple identifier. Some logos held more value than others, and served more as assets than symbols.
Logos are now the visual identifiers of corporations. They became components of corporate identities by communicating brands and unifying messages. The evolution of symbols went from a way for a king to seal a letter, to how businesses establish their credibility and sell everything from financial services to hamburgers. Therefore, although the specific terms "corporate image" and "brand identity" didn’t enter business or design vocabulary until the 1940s, within twenty years they became key elements to business success.
Visual identity designers
The visual identity design profession has substantially increased in numbers over the years since the rise of the Modernist movement in the United States in the 1950s.
Media and Corporate identity
As technology and mass media have continued to develop at exponential rates, the role of the media in business increases as well. The media has a large effect on the formation of corporate identity by reinforcing a company's image and reputation. Global television networks and the rise of business news have caused the public representation of organizations to critically influence the construction and deconstruction of certain organizational identities more than ever before.
Many companies proactively choose to create media attention and use it as a tool for identity construction and strengthening, and also to reinvent their images under the pressure of new technology. The media also has the power to produce and diffuse meanings a corporation holds, therefore giving stakeholders a negotiation of the organizational identity.
The ideas of corporate identity may be applied to national identity. For example, although the United States is not a corporation, it still has organizational components and has a certain image and identity. The US is founded on certain principles, values, and beliefs, and at the same time, has a diverse and widely recognizable popular culture. Because of distinct founding principles, and the way US culture operates, the US too can be observed as a brand. Former United States Secretary of State Colin Powell once said, "We’re selling a product. That product we are selling is democracy."
Images and identity do not always have to be planned and built by an organization, they also can be attributed to an organization by others' interpretations. During the Cold War, Coca-Cola, Marilyn Monroe, and Baywatch were booming in popularity and became obsessions of popular American culture. These images portrayed confidence and superiority in American media, therefore the USA seemed more secure and superior during the war. With the growth of the media, popular culture and celebrities still seem to define America in certain ways. Images of Brad Pitt and Mickey Mouse are easily associated to the US. The US has evolved into a nation with industries focused solely on celebrity gossip, TV shows, music, and blockbuster hits, making the US a highly-mediated nation with a strong focus on celebrity.
In addition to the "celebrity" identity factor, there have been more strategic and patriotic images used to re-brand the country as well. After the September 11 attacks, Bush administration initiated the re-brand of the United States from "global bully" to a "compassionate hegemon". Many American citizens contributed to the act of patriotism by placing American flag bumper stickers on their cars, purple ribbons on trees in their yards, or hanging flags in their windows, all to recreate the feeling and image of nationwide pride and support.
It is important to distinguish between corporate identity, brand identity, and brand image. Corporate identity is concerned with the visual aspects of a company's presence. When companies undertake corporate identity exercises, they are usually modernizing their visual image in terms of logo, design, and collaterals. Such efforts do not normally entail a change in brand values so that the heart of the brand remains the same - what it stands for, or its personality. Unfortunately, many companies do not realize this fallacy, as they are sometimes led to believe by agencies and consultancy companies that the visual changes will change the brand image. But changes to logos, signage, and even outlet design do not always change consumer perceptions of quality, service, and the intangible associations that come to the fore when the brand name is seen or heard.
The best that such changes can do is to reassure consumers that the company is concerned about how it looks. Brands do have to maintain a modern look, and the visual identity needs to change over time. But the key to successfully effecting a new look is evolution, not revolution. Totally changing the brand visuals can give rise to consumer concerns about changes of ownership, or possible changes in brand values, or even unjustified extravagance. If there is a strong brand personality to which consumers are attracted, then substantial changes may destroy emotional attachments to the brand. People do not expect or like wild swings in the personality behavior of other people, and they are just as concerned when the brands to which they have grown used exhibit similar "schizophrenic" changes.
On the other hand, if the intention is to substantially improve the standing of the brand, then corporate identity changes can be accompanied by widespread changes to organizational culture, quality, and service standards. If done well, and if consumers experience a great new or improved experience, then the changes will, over the longer term, have a corresponding positive effect on brand image. If you are spending a vast amount of money on corporate identity, it is as well to remember this.
Brand identity is the total proposition that a company makes to consumers - the promise it makes. It may consist of features and attributes, benefits, performance, quality, service support, and the values that the brand possesses. The brand can be viewed as a product, a personality, a set of values, and a position it occupies in people's minds. Brand identity is everything the company wants the brand to be seen as.
Brand image, on the other hand, is the totality of consumer perceptions about the brand, or how they see it, which may not coincide with the brand identity. Companies have to work hard on the consumer experience to make sure that what customers see and think is what they want them to.