Homework answers / question archive / Q1)This case deals with the failure of the online grocery website webvan

Q1)This case deals with the failure of the online grocery website webvan

Business

Share With

---

Q1)This case deals with the failure of the online grocery website webvan.com. During its launch Webvan received a large amount of funds from several venture capitalists, which it invested in the development of an automated technology platform for its warehouses. The case discusses at length Webvan's extravagant lifestyle and how it continued to spend even with declining profit margins. It also discusses in detail the strategic alliances entered into by the site and the fallout of these partnerships. It then elaborates on the e-tailing model of the site. Finally, it analyses Webvan's decision to close its store in mid-2001, due to huge financial and logistical problems. The case also takes a brief look at other online grocers who were not successful.

 

Issues:

» Analyze the business model of Webvan, an online store launched with great expectations and discuss how its plans differed from those which preceded it

 

» Study the strategies adopted by Webvan to begin as an online grocer and eventually expand its range of products

Q.2)The case details the strategies adopted by the world's largest advertising conglomerate, the Omnicom Group, to become a global marketing and communications major. It takes an in-depth look at Omnicom's growth vis-à-vis the advertising industry's evolution through the late-1980s. The company's strategic focus on growth through mergers and acquisitions is explored in detail. Finally, the case discusses the success secrets of Omnicom and examines its future prospects in light of the changes taking place in the global advertising industry. It also provides information on the advertising agency business and profiles the leading players in the business in 2003.

 

Issues:

» Understand the dynamics of the global advertising industry and study its evolution over the decades

 

» Understand the role played by an advertising agency in a company's advertising efforts

Q.3)The case examines the modern dairy development efforts undertaken in India, which helped the country emerge as the world's largest milk producer by the end of the 20th century. It describes in detail the Anand Model of dairy co-operatives and examines the rationale for establishment of the National Dairy Development Board (NDDB). It then talks about the initiatives taken by NDDB as part of its 'Operation Flood,' program. The achievements of the 'Operation Flood' program are analyzed and the other initiatives taken by NDDB to build on the program's success are discussed. Finally, the case discusses the future of the co-operative movement in India in the light of the widening rift between GCMMF (which owns the Amul brand), and NDDB.

 

It also throws light on the changing face of dairy co-operatives due to the regulatory changes and increasing competition due to the entry of leading FMCG companies (Nestle, Britannia and HLL) into the dairy market.

Issues:

» Understand the nature of the dairy industry in India and the need for modernizing dairy development in the country

 

» Understand the need for dairy co-operatives and the benefits that these provide to the milk producers

Q.4)The case discusses the transformation of Hughes Electronics Corporation (HEC) from a defense communication systems, weapons and aircraft manufacturer into a leading digital media and communications service provider. After taking a look at the company's history, the reasons underlying its decision to shift its focus to the media and communications business (under GM's ownership) are explained. Thereafter, the case describes how HEC structured itself into four divisions and the various strategic alliances it entered into, to grow and expand. It also discusses the products and services launched by the four HEC companies to strengthen themselves in their respective industries.

 

The restructuring efforts undertaken in 2000 to increase the focus on digital media and communications services are described. The case ends with a discussion on the future of HEC in light of its strategic alliance with the media giant News Corp in late 2003.

Issues:

» Understand the strategies adopted by a multinational corporation to shift to a new business domain

 

» Understand the strategies adopted by a multinational corporation to increase its share in the US media and communication services industry

Q.5)The case deals with the growth strategies adopted by Henkel Spic India Ltd (Henkel), the Indian subsidiary of the German detergents, adhesives, cosmetics and toiletries major Henkel KGaA. It provides detailed information about the various business as well as marketing strategies adopted by Henkel to strengthen its competitive position in the Indian Fast Moving Consumer Goods (FMCG) market. The case describes how Henkel, using strategies like new product launches, brand acquisitions, strengthening of retail and distribution reach and aggressive marketing, gained market share in the detergents and cosmetics/toiletries market in India. Towards the end, the case discusses Henkel's future growth prospects in India.

 

Issues:

» Examine the various strategies a multinational company can adopt in order to grow in the 21st century Indian FMCG market

 

» Understand how a company can speed up its growth by acquiring existing (popular local brands) and marketing them along with its international brand portfolio

Q.6)The bid by General Electric to take over Honeywell International Inc. was set to become the biggest merger in industrial history, when the European Commission barred it from taking place. One of the biggest companies in the world, GE was attracted by Honeywell's aerospace businesses which fit in neatly with GE's own businesses in the area, thus creating remarkable synergies for both companies. The merger had been passed by the United States Department of Justice, with the recommendation that GE divest itself of Honeywell's military helicopter unit, to protect the US military. However, approval from the EC was not so easy to obtain.

 

After conducting a thorough investigation, the EC and its Competition Commissioner Mario Monti, determined that a merger between GE and Honeywell would create too powerful an entity and consequently, have adverse effects on the competitive position in the aerospace industry. The merger would give the two companies a very huge combined market share in the common markets in which they operated, along with providing them with the opportunity to bundle their complementary products in future. This would harm competitors as well as customers by creating a near monopoly situation.

The EC demanded that substantial chunks (amounting to almost $ 7 billion) be divested by the two companies, and restrictions be imposed on the operation of the highly profitable GE Capital Services arm. The demands were far more than GE was ready to concede, and the deal fell through. The GE-Honeywell merger case marked the first time that transatlantic regulatory authorities differed in their decision on a merger approval.

Issues:

» To understand the impact of international relations and global business environment on corporate business decisions

 

» To examine transnational differences in approaches to businesses issues and how they influence business dynamics

Q.7)A technical marvel, the Concorde was the only aircraft offering commercial supersonic travel to passengers. Designed and built in the late 1960s and early 1970s, Concorde represented the dream of traveling faster than the speed of sound. The Concorde project was a collaboration between the governments of Britain and France and was launched with the expectation of revolutionizing air travel. In the initial stages, the project generated a lot of interest and Concorde received purchase orders from 16 major airlines by the late 1960s. However, as the drawbacks of flying these aircraft began to come to the fore, especially after the fuel crisis of the 1970s, most of the airlines backed away. Eventually, British Airways and Air France were the only airlines operating Concordes.

 

In 2003, British Airways and Air France decided to discontinue Concorde services and retire their fleet to aviation museums around the world. This decision was taken because of several problems that the airlines experienced in flying Concordes including, high noise levels, excessive fuel consumption, the advancing age of the fleet, safety issues (especially after an Air France Concorde crashed in 2000) and the declaration of maintenance partner Airbus that it would not support Concorde operations after October 2003. On 24th October 2003, the last Concorde flight landed at Heathrow, drawing to an end an era of supersonic aviation. The case examines the reasons for Concorde's inability to succeed at a commercial level, despite its technical superiority and discusses the important elements which determine the success of aircraft.

Issues:

» To understand the operation of a one-of-a-kind aircraft, that was technically superior to any other comparable product of its time

 

» To examine the relationship between technical excellence and commercial success and how the presence of the former does not automatically guarantee the latter

Q.8)The case describes the acquisition strategy of the US based networking giant Cisco Systems (Cisco), a company that by 2003 had acquired 80 companies. The case explains the methodology adopted by Cisco to acquire companies. This included evaluating the target company, determining its compatibility with Cisco and integrating the acquired company's operations with Cisco. The case also examines the measures taken by Cisco to integrate the cultures of the acquired companies with that of Cisco. The case also discusses the flaws in Cisco's acquisition strategy that led the company into financial problems in 2001. Finally, the case describes the revision made by Cisco in its acquisition strategy and the progress made by the company.