Proceedings of Case Study Synopses (DBA Case Study Symposium-2017)

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Anatomy of Collective & Bargaining Process: A case study of mesh manufacturing organization in Sri Lanka.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Divakara, S. A.
Collective bargaining process has become a passion in today's context between employers and employee's trade unions on resolving employee’s related issues. Both parties do not willing to lose as both are strong in power. Hence collective bargaining process tends to conclude with a win-win situation as an integrative solution. Collective bargaining process is a formal process of agreement having between two parties of employer and employee. The anatomy explored many anthropological scenarios and it unveil facts of contribution and impact to the organizational growth when having collective bargaining agreements. Employer and employee relationship makes better organizational growth which is the most significant fact expected by having collective bargaining process. Both parties were empowered by different supportive forces such as authority, synergy, financial, political etc. Proactive management practices help one way to resolve human related issues within the organization. The case study explored the inside story of the collective bargaining process associated with the experiences of steel mesh manufacturing industry in Sri Lanka. The company had a history of 50 years excellence in mesh manufacturing in Sri Lanka. The organization was started with few workers in 1965 and later expanded to 200 employees over a period of 50 years. The startup was with entrepreneurship and later incorporated with intra-preneurship. The startup was chaotic and stressful. While the organization was slightly picking the market by building a expandable product portfolio, issues related to human resources also were started booming. Organization expanded the employee base with capacity augmentation in late 90s. The increase of permanent labour force in the organization was a wave for the startup of a trade union. Hence employees of the organization were started a trade union affiliated to Sri Lanka Freedom General Workers Union in 1994 having around 80% of work force of the organization as members.The main concern on having collective bargaining agreements was to adjust the salaries par to the country inflation. Therefore two types of increases had been practiced by the organization for signing agreements during last two decades. Those increases were prepared based on lump sum and percentage of their current salaries. There were six collective bargaining agreements had been signed during the period of 1995 to 2015 by the organization with Trade unions. The first collective bargaining agreement was signed in 1996 taking into account of percentage increase proposed by a retired labour officer. Then latter collective bargaining agreements also had been considered on same increases until 2010. That had made a huge anomaly of salaries of employees recruited after years. That affected severely on retaining employees (operative category) in the organization in later stage. The government had announced a revision of minimum wages in October 2012. Again revised in 2013 due to high scarcity of skilled technical personnel. The organization had been categorized under engineering trade under wages board act 1947. The highest minimum wage was introduced for that category by Department of Labour due to high labour demand in the industry. The increase of salary proposed by the government in 2012 were paid as a separate payment for all employees by the organization. Later in year 2013 salaries of all employees were revised considering all the revisions made by the government in 2012 and 2013 in addition to the increases proposed by collective bargaining agreement. CBA negated intermediate increases imposed by government unless it exceed proposed minimum salary of all employees. The period of 2010 to 2013 branch union was weak in strength and leadership. Hence Employer Federation of Ceylon proposed to repudiate the union agreement. The repudiation of the branch union in 2013 made a jolt to reunite the branch union again in 2014. A letter informing a reformation of trade union was received in February 2014. Since Membership was more than 40% of employees, the management of was compelled to recognize the trade union. A check off agreement was signed in April 2014 and subsequently all employee related issues were discussed with participation of trade union until it was dissolved in 2015. There were plenty of demands forwarded by the trade union to the organization through their parent union. All correspondence were made by two intermediate parties of parent union and Employer Federation of Ceylon. The increase of salaries incurred considerable amount of increase in cost of production. Following table depict the additional cost increase over the period of last eight years. Amount increase in cost of production was not be bearable to the organizations, and the organization found difficult to survive under high competition in certain periods. Annual expenditure on salary increases Year 2007 2008 2009 2010 2011 2012 2013 2014 Salary Increase % 20% 7.5% 7.5% 20% 7.5% 7.5% 15% 10% Total Exp. (million) 2.683 1.207 1.298 3.721 1.674 1.800 3.871 4.510 Sourced: Annual report EFC & Authors survey 2017 The Business of mesh manufacturing was started with entrepreneurship at the inception. The entrepreneur’s tacit knowledge involved in managing human and work environment of the organization. That created an opportunity for trade union on demanding their basic requirements according to the need hierarchy. The dyadic scenario of entrepreneurial and intrapreneurial culture gives better result to have better relationship and faster growth which occurred in later years in the organization. The anatomy of collective and bargaining agreement disclose many avenues on thinking further on managing business environment effectively. There are many factors contributed on having CBAs in local industries. Both parties employer and employee has to think and understand of their accountabilities and responsibilities. Humans are considered as resources in modern management. Organizations should take proactive rapid measures solving issues especially on human related. Concern to literacy level the older crowd has a very low level of qualifications in the organization but new generation has far better level of education. That reflect on radical decision making. Organization should work proactively with employees maintaining close relationships. The organization had started Quality circle projects to address issues prevailing in the operation in 2015 which was most successful to have better relationship and maintaining dynamism throughout. Many annual events were organized to break monotonous life of working. Rewards and recognition enhanced the motivation level of employees in recent years. The study discussed advantages and disadvantages of two methods of salary increases lump sum & percentage in collective and bargaining agreement. The application of best suitable method to be selected after a proper study depending on economical and social factors. The integrative approach of collective bargaining gives a win-win solution in many occasions, however it takes a long period to have the best solution. In other side that makes a huge loss to the organization by creating various disciplinary issues while disrupting industrial harmony. The responsible government body, Department of Labour had made several legitimate framework for resolving issues by the act of collective bargaining agreement 1947 (No 98) in 1978. In 1999 the right to collective bargaining was strengthened after making it mandatory to bargain with unions which had a 40% membership. Also the amendment introduced a list of unfair labour practices by employer for industries for their negotiations however that was not strong enough to support the business organizations under various political influences. The trend of Joint consultation committees has become popular within the industry nowadays as latest trend. That has no effect of political intervention and department of labour monitored the performance and progress. Joint consultancy committees had been accepted by some of manufacturing industries instead of trade unions in Sri Lanka.
Bogawantalawa Tea Estates Plc : Success Joint Venture Strategy with Dilmah.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Samarakoon, R.M.
BPL tea estates were started with the development of estate related bungalows in Sri Lankan context which was established with a related objective of enhancing and maximizing revenue and profits related to tea tourism under a merged agreement.Ceylon Tea Trails by BPL and DILMAH are probably the most coveted place to stay in Sri Lanka, and a perfect place for history and tea lovers like us. Nestled among the scenic tea-carpeted hills of the Bogawantalawa region, you’ll find five colonial-era tea planter bungalows which have been turned into a private luxury resort. Each of the historical bungalows has its own distinctive character and offers a boutique luxury experience in Sri Lanka’s Tea Country. Each of the bungalows offers 4 to 6 unique rooms and a dedicated butler, chef, and house staff. Ceylon Tea Trails was the first Relais& Châteaux property in Sri Lanka and remains one of only two in the country. A stay here is worry and bill free as rates include all meals, most drinks, laundry, taxes, and services. A typical day here includes waking up to a traditional Bed Tea each morning served by the butler, spending the afternoon by the pool or taking a scenic hike, and then finishing the day with canapés and an evening drink by the fire before heading off to a 4-course dinner. For the active, there are guided hikes and climbs of Adam’s Peak, day excursions, tennis, croquet, a tour of a tea factory, kayaking, and swimming. For those who crave relaxation, there are swimming pools, the gardens, board games, in-room spa treatments, paneled libraries, and bay windows framing beautiful scenery. The DilmahTea world popular brand named as Ceylon Tea management by Ceylon Tea Services Plc., also had an idea to bring tourists from European Countries to promote their brand through showing the picturesque Tea Plantations in the Upcountry areas in Sri Lanka.With the initial discussion Bogawantalawa Plantations Ltd., and Dilmah had entered into a joint venture and renovated five bungalows spending nearly 200 million. They were targeting a high trend marketing and to cater for that they have upgraded the bungalows of Summerville, Castelreigh, Norwood and Tientsin and thereafter Dunkled. These Bungalows having all facilities including Swimming Pool, Tennis Court, Badminton Court etc. The charges per night is around 500 Dollars per day, per room and all the time the occupants rate of these bungalows are 100%. Other areas have been developed time to time to suite to the Visitors and other competitive advantageous. By this joint venture Bogawantalawa Plantations Ltd., and Dilmah both had a strategic advantage. At present, it is the best example as to how the Tea Tourism could be promoted, especially in the areas of Up-Country. Accordingly, when it comes to the business concept & Tourism is one of the world’s largest economic sectors as providing direct employments over to 100 million as well enormous indirect employments for different sectors and regions (World Travel and Tourism Council). International tourist arrivals grew by 4.4% in 2015 to reach a total of 1,184 million in 2015, according to the latest UNWTO World Tourism Barometer. With the gradual development of the tourism sector, people willing to engage in new tourism experiences and concepts as niche tourism emerged as a new concept (Fernando, 2014; Fernando 2015). Niche tourism refers to how a specific tourism product canbe personalized to meet the needs of a particular tourist segment as Tea tourism has been identified as one niche Tourism segment emerged. Tea could be stated as a beverage, a plant, an art, a meal service, an export, an agricultural product, an industry, a religion or a dedicated pastime (Yang, 2007) and tea is an integral part of food service (Jolliffe, 2007). Tea plant had its origins in China and later introduced to other countries and adopted as a beverage in different cultures and owning tea traditions. A peripheral industry built up around tea focuses on the production of goods for a tea-loving public, including tea accessories, books on tea, and a variety of tea-themed gift wares. Tea combination has developed as an art (Shalleck, 1972) and in some societies, such as Japan, as a religion. For many, the romance and history of tea and the experience of consuming tea is a pastime (Pratt, 1982) as includes collecting, either associated with the purchase of tea and related items such as teapots and teacups, or the seeking out and build-up of tea experiences, individually or as part of an organized tea tour. Tea Tourism noticeably has the potential to enhance the brand image and marketing of tea-producing destinations as contemporary tourists seek out authentic and unique experiences related to the appreciation and consumption of the beverage and tea encourages both consumption and the development of relationships. Climatic and geographic conditions have formed appropriate possibility for tea cultivation and historical evidences proved that tea tree has a long history dates back to the late 19th Century. Ceylon Tea and Tourism are inseparable words as Sri Lanka’s tea growing areas are undoubtedly the most beautiful places in the island as well attractive tourism destinations (Ceylon Tea Land, 2013). Potentials for the development of the segment is enormous with the strengths as the tourism industry needs to push to strengthen Tea tourism being practiced to day to reap the optimum results and benefits, particularly with regard to the focused marketing efforts aimed at the high spending visitors. In the overalldocument,the story is developed related to the chapter wise flow of the business evolution in the business venture connected to the development of the target market. Bogawantalawa Tea Estates Plc originally named as Bogawantalawa Plantations Ltd., was formed in 1992 with the state owned Janatha Estates Development Board and Sri Lanka State Plantations Corporation Estates were handed over to 22 Regional Plantation Companies. With Bogawantalawa Plantations Ltd., taking over of 11 estates in the Up-country area, mainly in Bogawantalawa Region and Lower Dickoya and 17 Estates in low Country. Bogo Valley is famous as Golden Valley of Ceylon Tea surrounded with Adams Peak mountain range and the Horton Place virgin Jungle. The picturesque Tea Estate is one of the most attractive area for the locals and tourists. With Bogawantalawa Plantations Ltd., managing Estates after about 10 years time have identified the management of core-business alone as a challenge and have a great impact to the bottom line since there were numerous internal & external factors beyond their control. There were about 5 – 6 bungalows as in excessive and maintenance of those were additional expenditure for the Company. With the availability of the bungalows and the natural resources the Board of Directors have decided to do a Tea Tourism by using the above bungalows. In terms of the highlighted flow of the story,Ceylon Tea Trails by BPL and DILMAH are probably the most coveted place to stay in Sri Lanka, and a perfect place for history and tea lovers like us. During the first year of the establishment, the initial profits were at a significantly lower levels ranging to a - 5% to + 3% ROCE reported on the invested capital . Also the two companies had a high staff turnover nearing to 13% on quarterly basis which has inclined the wage costs nearing to 45%. The joint venture initially had a calculated payback period of 6 years which had to be re 4estimated toa nearof 11 years with the drop of the market. The tourism inflow rate has declined by a near of 16% in the initial two quarters where the business had to reschedule for its costs to enhance the profit margins. Also, the business had to seek for additional borrowings worth of 56 million LKRS after thefirst 3 quarters since the sales and revenue patterns were declining compared to the original estimates. The business needed a recovery plan with enhanced promotional and marketing strategies connected to the foreign market and the tourism based niche market segment It can be held that Ceylon tea trails by DIMPAH AND BPL in Sri Lanka has a relatively higher potential of growth which shall be rendered in terms of the tea plantation based eco-tourism . As aresult with the developed context of ecotourism and tea plantation with regards to the enhancement of tourism investment both the government and private sector need to agree and work on a collative basis of industrial and sectored based investment actives. Planning Proper planning guides to be the success in all the cases. Here also customer can satisfy as well as possible when having a proper planning since it guide to more convenience and quality service Protected nature area Natural environment has given a better opportunity to the tourism industry since most of the tourists are willing to travel to see the natural beauty. In the case of having a protected natural area, the tourists are automatically attracted to those suitable hotels to have fun as well as for the protection. Financing Most of the tourists are willing to pay additional chargers also for having ecofriendly environment to travel by them. Understanding when one party implements the ecofriendly practices, it guides to others also to follow the same practice. In this case also when tourism industry uses this practice, other parties also aware about the value of having this kind of environmental friendly practice and they also motivate to act as that. Therefore, it can be held that thejoint venture by DILMAH AND BPL is one of the most profound business ventures which has targeted itself in the successful brand development pioneering many future ventures in the niche business segment of eco-tourism and tea tourism. The business with its recovery strategies was able to ensure that the excepted targets were neared by 87% by the end of 6th quarter . Hence they business seemed to be growing from its fetes and the board of management had to come up with exclusive high end marketing and service strategies focusing on supreme and premier quality. With the development of the new strategic approach the company was then able to minimize any financial risks and capital risks with labor management to ensure that the business will achieve its targeted ROCE in the 5 yearned plan nearing to 25% on annual basis Currently, business is rated as the 3rd highest revenue and profit earning tourism venture in terms of tea tourism and other general tourist based ventures conducted at corporate level. The business also have future plans connected to venturing in a joint form with an international brand to ensure the necessary liquidity and expansion growth for the business can be achieved and ensure a higher brand awareness and equity will be extended to the European market.In conclusion it can be held that the overall development in the tea tourism based venture of Dilmah and BPL has paved profound pioneering business model in the tourism industry with alternative substitution of existing resources and business process of the two companies to a novel degree of enhancement in business re development . As a result it it’s expected that with the achievement of the corporate goals of the venture it will set space and complementary scope for other substitute and competitive businesses to arise nourishing the industry.
Case story on leadership transformation & Patterning Organizational performance of Harischandra Mills PLC.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Wijayasinghe, C.
The authorized and published papers revealed that the persistence of family businesses is controversial in future. There is empirical evidence to prove the fact that only 30% of family businesses span to the second generation and that only about 10% to 15% survive by the third generation. The major reason behind this failure is improper succession planning. This case story describes the leadership transformation pattern of a well-known Sri Lankan family business called Harischandra Mills PLC. While this case focuses on the generational differences and the leadership transformation pattern between the founder and the successors of Harischandra Mills PLC, it also offers some important guidance for the micro and macro perspectives in entrepreneurship. The Company has a long history of over seventy-three years along with a household brand name with quality assurance. During the period of 1943 – 2016, the contribution made by the family of the Harischandra PLC had been drastically declined to 57%. The conflicts existing among family members on succession process or their indifference towards business would have been the main reasons for this drastic reduction. Thus, this case review will pave a platform for the company to reconsider the succession gaps and take appropriate actions to ensure a solid succession process. “Harischandra” is a well-known family-owned business, originated in the district of Matara of the Southern Province of Sri Lanka. The Harischandra Mill was founded by C. A. Harischandra, in 1943, with an initial capital of Rs. 25,000/- on a plot of land of 20 perches. The Company has a long history expanding over 73 years and a household brand name, derived as a token of quality assurance. The vision of the company has been laid down to enhance the status of the heritage brand and also to serve the nation, providing enormous employment opportunities to people of the area, utilizing the local raw materials as well. The company was converted to a Public quoted Limited liability Company on 14th December 1959 under the name of Harischandra Mills PLC. At present, Harischandra is the household name for coffee, noodles, Kurakkan flour and Ulundu flour, leading the market in Sri Lanka. In addition, the company has an appreciable market share for rice flour, laundry bar soap and blue washing soap. Currently, the company offers a wide range of household goods and bakery products as well. All the “Harischandra” brands fall under two main marketing segments viz food and soap, being produced by a process involving a mix of traditional and state-of-the-art technology. Company’s business model focuses primarily on optimum human resources. Moreover, the company ensures maximum manual operations in the manufacturing and packaging processes whilst using state-of-the-art technologies for the manufacturing of bulk products. C. A. Harischandra is the very first manufacturer of noodles in Sri Lanka with a highest current market share in the local food industry. The “Quality Assurance” policy of the company is but to enhance the quality of the products constantly and also to enhance customer satisfaction in order to increase the market share effectively. The brand “Harischandra” has earned the respect as well as the appreciation from consumers mainly because of their quality products. The company has a strong and loyal customer base. Thus, for over seven decades, “Harischandra” has been able to maintain its market position at a remarkably higher level. C. A. Harischandra was a great industrialist, endowed with the talent for entrepreneurship. His theme was “Paribogikayata deviyek lesa salakanna (treat the customer as a god)” and hence he had advised his employees never to destroy the credibility of the business. He knew that the customer loyalty and the brand equity were the most important elements in dealing with household food commodities. He believed in his own ability to meet challenges and had the self-confidence to accomplish the set goals. He had greater entrepreneurial capabilities to wisely capture the correct and potential market share and opportunity. The founder of “Harischandra” was not aware of Corporate Social Responsibility (CSR) as a concept, yet intuitively practiced various CSR initiatives during his tenure. C. A. Harischandra was the first industrialist to have introduced the “Employee Provident Fund (EPF) for his employees in 1952 and ended up becoming the local business pioneer in the Southern province, by allotting 40% of the business- shares to its employees. Therefore, he could be referred to as the ‘God Father’ of CSR in Sri Lanka. C. A. Harischandra died in 1985 at the age of 74 years. He had always been maintained close rapport with the employees and with the general public. Hence, the company’s culture developed based on those relationships. After the demise of C. A. Harischandra, his wife Cornelia Harischandra became the Managing Director of Harischandra Mills PLC. Cornelia Harischandra passed away in 1989. Afterwards, the post of Managing Director (MD) was passed on to Senaka Samarasinghe, the Grand Son of C. A. Harischandra, and to-date he is holding the MD position. The present headship seems to be not maintaining close rapport with the employees and with the general public. Thus, the company’s culture has been transformed under the present leadership. When considering the period starting from 1982 to 2016, a significant drop can be identified in Return on Equity (RoE), where at the places of the transition of the business leadership. Within the same period, the company’s Current Asset Ratio had fluctuated remarkably 2:1 to 4:1, dropping some culinary household products from the manufacturer to market. The oil mill had remarkably shut down in 2003. The founder of the company had spent so much time on building and running the business and in the process of which he lost the attention in planning the succession. Therefore, at the time of the death of the founder, the next generation was not prepared to take over the business. Any postponement of the succession plan diminishes the value of the succession process. If the family has not planned and identified a proper successor to take up the business after the death or the retirement of the incumbent, the members of the family will have to face a serious problem of appointing a new successor. The success of a family-oriented business entirely depends on its ability to maintain the stability of the business. The planning of the succession process is vital for family-oriented businesses. Today, most of the family-oriented businesses give less attention for grooming future successors and succession planning responsibilities. The Harischandra Company needs a solid succession plan to ensure long-term success and smoother transition of leadership. A good business strategy will act as a roadmap for the succession process. However, succession planning would be more effective if it is performed at all levels in the company instead of focusing only on the top management.
Combating War for Talent: Staff Retention Strategy of Industry Leader to Retaliate Against Challengers to Sustain Strategic Position.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Kannangara, P.D.C.T.
Sri Lanka Tourism industry is expected to grow by 22.3% year-on-year with the supporting external environment, according to SLDA** in-order to achieve 2.2 million tourist arrivals at the end of 2016 and 4 million tourist arrivals by 2020(Asian Hotels and properties PLC -Annual Report 2016/17).In today’s context hotel industry is very attractive for investors. Golden Ray Colombo is performing extremely well in terms of revenue with 31% market share and creating strong brand to be the market leader. With the increasing competitive situation, industry itself is creating lot of market opportunities for its players and for the employees. Research results indicates that, Golden Ray has introduced lot of initiatives as proactive strategy elements. Althoughtourism industryin its growing status, market opportunities are increasing as Sri Lanka has been recognized as the emerging hotspot to travelers. Golden Ray Colombo (GRC*) is the market leader in Colombo city five-star hotel business and posted a profit before tax of Rs.1.591billion and profit after tax of 1.448 billion indicating a 3% growth over the year 2016. (Asian Hotels and properties PLC -Annual Report 2016/17)profit growth is due to the fact that 6% increase in revenue and as well as management’s constant efforts to save the operational cost. Golden Ray Colombo accounted for 65% of Group Revenue and recorded year on year revenue growth for group leisure sector. The Average Room Rate displayed a growth of 3% with GRC* averaging Rs.18,885, while occupancy averaged at 76%, with totaling 138,460 room nights during the year 2016. There is a 5% growth of GRC* room revenue. F&B at Golden Ray added Rs.2.37 billion to total revenue compared to year 2015 , Rs.2.2 billion. However Cost of Sales was increased by 2%. This can further increase due to increase in marketing activities (Advertising & Promotions) in the future. Last year, relatively flat year for this strategic group. This is due to the fact that majority of travelers are from business visitor segment who pay frequent visits to mega projects in the country.Reason being increased room capacity added to the industry, these travelers are being absorbed by the three and four star class hotels, between Colombo and Negombo area. This had resulted a decline in crew & stopover segment. Nonetheless, arrival of global industry giants are attracting talent from existing players while creating a war of talent situation in the industry. On the other-hand industry players including the market leader Golden Ray Colombo are currently combating war for talent.Due to this fact, a platform has been created for skilled and semi-skilled employees to demand a pay rise from their employers. Author will elaborate and discuss strategies executed by the industry leader to face the industry changes and to compete the war of talent. According to SLDA government decision to increase room capacity up to 75,000 and to abolish the minimum room rate. That will definitely create a bigger challenge and higher risk for existing firms. Global hospitality giants like Shangri-La, Sheraton, Movenpickentered in to Colombo five-star city hotel business during the year 2014 and 2015.Movenpick already launched their business operations in Sri Lanka by the 1st quarter of the year 2017 specially focusing Colombo city hotel business. Shangri-La hotel commenced the business operations in Hambanthota in 2016 and they have already planned to launch Colombo city hotel business operations in September 2017. GRC* competes in the five-star city hotel category. There are higher chances that the market leader can be challenged by new entrants and existing three and four star class hotels in the future. Growing competition will be a bigger challenge for the hotel to retain its market position. Golden Ray has implemented few strategies to become market leader in the Colombo city five-star hotel business. Further GRC* has executed rigorous defensive strategies with a top focus to develop the hotel’s human capital in-order to face upcoming highly competitive market with international hospitality giants like Shangri-La, Sheraton, Movenpick and etc. As part of the human capital development and retention strategies,Hotelinvested significant amount for training & development, employee engagement strategies, enhance occupational health and safety, work life balance, diversity and inclusion, recognition and etc. Global Giants are seeking to hire best skilled and semi-skilled employees from the hospitality industry.Shangri-La launched a massive recruitment campaign at the beginning of the year 2017 while offering very attractive remuneration packages for potentialcandidates. One of the Shangri-La main strategy was to hire top key positions from market leader and to attract highly skilled and well trained employees. GRC* has identified that threat of losing good employees as one of the key business risk at the moment. They came up with various suggestion and initiatives to improve GRC* retention strategies. Due to this reason GRC* carried out a market salary survey in-order to identify the current market ratesfor each position and suggested to adjust salaries of key positionswith anincrement for all employees after screening their performance and competency levels. Employees who did not receive the market adjustment had major concerns as to how the other team members were entitled for same market adjustment scheme. There were series of meeting and discussions organized by the hotel management to explain thisprocess for those who haven’t received market adjustments. Human resources department allocated three consecutive days for associates to come and talk to them about their concerns regarding the market adjustments. The main staff union of the hotel also had series of meetings with HR department in-order to discuss about the market adjustments and they proposed a difference scheme to increase their salaries byconsidering their number of years’ service to the hotel. Similarly each department of hotel had to spend considerable amount of time with their associates to explain this exercise in details and to motivate all the department employees to achieve business objectives. On the other hand all these sequence of event took place towards the end of the financial year .Actually this became a real challenge for the hotel management to conclude the financial year successfully while achieving all the business objectives set at the beginning of the financial year. Even after implementing this key staff retention strategy, GRC* was not be able to retain 100% key talent. GRC* is currently smoothly operating the business with existing key talents. But the sustainability as the market leader will be a question mark in the near future as and when all global hospitality giants commence their business in full capacity in Colombo.
Developing a Market Leader Brand in Cable Market of Sri Lanka.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Munasinghe, M.A.L.A.
Main competitor acquired by the market leader brand and acquired Company developed better than the acquiring company in cable market Sri Lanka. Both companies catered to the same market segments adopting different marketing strategies whilst People development and motivation delivered exceptionally well results for the acquired company. Presently both brands are house hold brands in the minds of consumers and are delivering customer expectations. Further Electrical consultants, Electrical engineers and Electricians are equally recommending both brands for their customers and institutions. In 1999, ACL Cables was the market leader in the Cable industry in Sri Lanka and the main competitor was Kelani Cables. Both companies were public quoted companies and they supplied 70% of cable requirements in the country. When going through the total share capital of Kelani Cables, 67% of shares were owned by pacific Dunlop Cable Group (PDGC) of companies in Australia,08% shares were owned by DFCC Bank and 25% of shares have been traded among the share Holders in Sri Lanka. Pacific Dunlop Cable Group decided to discontinue the operation in Sri Lanka and based on the agreement between DFCC and PDGC, 67% shares were acquired by DFCC Bank which was owned by PDGC. The share capital of DFCC bank went up to 75%. DFCC Bank wanted to sell out total shares and they got two offers, one from ACL cables and another offer from Hatton national Bank jointly with the management of Kelani Cables. After evaluating all the avenues and considering the future of Kelani Cables, finally DFCC decided to sell the total shares to ACL cables. With this decision, the market leader acquired its main competitor in the cable industry in Sri Lanka. DFCC Bank may have considered the future of Kelani Cables as they had 300 workers and the strength of the acquiring company before they took the decision. When acquiring Kelani Cables, turnover ratio was ACL: Kelani, 79%:21% after seventeen years of acquisition the turnover ratio became ACL: Kelani, 50%:50%.It is an important point to learn how the acquired company reached this level and what strategies and new methods were adopted by Kelani Cables to come to this junction. Chairman Mr Upali Madanayake, Deputy Chairman Mr Suren Madanayake and board of Directors gave a high degree of autonomy to run Kelani Cables independently to get the maximum benefit to the group. This was considered as the most important strategic decision taken at the initial stage for visualizing the future of both companies. Today two strong brands are competing with each other for individual market shares and finally benefitting the group. The other important area was to keep strategic interdependence at a low level and they wanted to operate Kelani Cables independently. Both companies operated based on their own strategies. Mr Suren was well aware of cultural incompatibilities of both companies and he wanted to grow both companies their own way by adopting modern technology. Preservation approach was continued from acquisition to date as Kelani cables operated with a high degree of autonomy and independence. ACL Cables and Kelani Cables had same product portfolio and they catered to the same market segments. Most important and difficult part was to manage two organizations without having conflicts with each other. Mr Suren always set guide lines for both marketing operations and everything did with the intention of growing both the companies. From 1999 to 2003 Mr Suren managed the company as Managing director of Kelani cables and with his busy schedule he couldn’t spend much time and finally Chairman, Mr Suren and board of directors decided to appoint Mr Hemantha Perera as the Managing Director (MD) of Kelani Cables. He managed the company from 2003 to 2010 and during the period many initiatives were taken place for the growth potential of the organization. This was a leadership turnaround of the company. First thing he did was, brought the vision of the organization as “Market Leader in the Cable Industry” and subsequently changed the logo with strategic meaning and with blue and green colors. Even today this is depicted as one of the best logos in Sri Lanka. MD realized that with the union he cannot bring the company to the next level and step by step discontinued the union with so much of difficulties. Parallel a joint consultative committee (JCC) was formed and all workers problems were handled through JCC by giving immediate solutions for their day today problems .Un unionized environment immensely contributed to implement new systems and new things. New HR system introduced to the organization and new employee evaluation system introduced to measure annual performances beneficial way to the workers and to the company. Non-performers were weed out and right people placed to the right positions. Finally performance based increments were implemented at all levels of the organization. Discipline environment created everywhere in the organization, stern disciplinary actions were taken against the people who deviated from set rules. At the same time a considerable amount of money was spent for training and development of people and all company promotions were given based on the performances. This is the set of human resource turnaround took place in Kelani Cables in uplifting its corporate journey. Brand differentiation strategy was started and Kelani brand was differentiated as the safest brand in the category and effective marketing campaigns carried out in his period. The positioning of Kelani brand continue to be associated with safety at all times. Kelani brand visibility has been increased dramatically in the market and this has no doubt helped to increase consumer and dealer loyalty. New product development mechanism was brought to the system and many new products developed and marketed successfully. Service levels improved dramatically and continuous customer feed backs monitored to ensure Kelani service levels. A technical services department was created and free technical services made available for local and international customers on cable selection. Meanwhile, company identified that electrician plays a major role in influencing on cable brand selection and an electricians club was started with the objective of building up relationship between company and the Electricians .Presently more than 7000 electricians are benefited in various ways. In 2007 a “Kelani Saviya” CSR project was started with the assistance of the University of Peradeniya and 50 Electricians are accommodated annually by the University for a one year Program. This program continued for 10 years and extended for another five years by Present Director/CEO and the same program has been started at the University of Jaffna naming “Kelani Shakthi” by his direction. This is one of the remarkable initiatives took place for branding perspective. In 2010, Mr Mahinda Saranapala was appointed as chief executive officer (CEO) of Kelani Cables and he maintained the same growth momentum with the team .He contributed a lot for implementing and maintaining 5S concept in the organization. He came with an engineering background and contributed a lot to development of the operation area. Many productivity improvements were done in many areas in the organization. He maintained the same discipline level what Mr Hemantha Perera initiated and practiced. Presently he serves in the capacity of Director/CEO of Kelani Cables. In brief, those initiatives strengthened the value chain of the company to deliver premium brand value proposition via differentiation. Likewise, the event of ACL acquires Kelani Cables was not just a matter of acquisition but left a proven corporate lesson. Conclusively, this is one of the greatest success acquisitions in Sri Lanka. It is important for management students to learn how competitive advantage is created as a group to develop successful growth strategies through acquisitions. Out of different types of integrations, this can be treated as an example for “preservation approach” where high degree of autonomy and low level of interdependence. The overall content of its case story provides insights to navigate in finding answers on how transformational leadership practiced in an organization and how people motivation delivered exceptionally well results whilst it invites leaners to explore how acquired company grown better than the acquiring company during the last 17 year period.
Evolvement of a Strategic Journey: A journey of a poultry company toward a vision of a food conglomerate.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Rifkhan, A.H.R.M.
A’saffa Food SAOG’s journey gives a simple answer to never ending chicken or egg dilemma while requires a detailed explanation to answer its transformation from a poultry company to a vision of a food conglomerate. If anyone is reading the latest news or the recent annual report of A’saffa Foods S.A.O.G(“A’saffa”, “the company”), a company quoted in Muscat Securities Market (MSM)in Oman may have difficulties in believing that the same company was struggling just before a decade to manage its poultry only business in the name of A’saffa poultry Farms S.A.O.G. Conversely, for a company analyst or a researcher who followed each foot step of the company for last ten years, listing A’saffa foods S.A.O.G as one of the fastest growing companies of Omanin the United Securities Survey 2015 by Oman Economic Review (OER)1 and considering as a business that is agile, have an ability to think and respond to setbacks swiftly, generate consistent returns to its shareholders and post good results consistently may not be that surprising. A’saffa’s this transformation can be termed as one of the fastest journey from poultry to food conglomerate using its own resources and capabilities. The reality of this journey of the company might appear as fiction. However, as we know sometimes truth is stranger than the fiction. Firms journeys towards growth come via many approaches such as using internal resources, acquiring competitors, integrating backward and forward or by using combination of one or more of these methods. However, in general the fastest method for a growth of a company is being always portrayed as via acquisition and the slowest is through using internal resources.Nevertheless, A’saffa’s transformation debunk this notion. The company’s journey toward growth started with an organic approach to overcome its initial struggle that threatened the company’s survival by revamping its internal resources. Subsequently, building on its own competences and expertise in poultry farm and production management system and swiftly moving towards very closely related further processed food and food production areasset an excellent example how a firm can grow to a conglomerate purely building on its own resources. The company possessed key ingredient of physical as well as human resources to support this organic growth. The physical resource was primarily its huge farm area with plenty of space for expansion and the human resource of the company included all the employees in general. However, the key resource was its senior management lead by the CEO and CFO whom under the guidance and support from the board members able to manage the ongoing changes in the company effectively and make the right decisions at the right place and time to keep the company growing. A’saffa journey started when it was setup as the largest integrated poultry farm in Oman in the year 2001.Yet, when the operations were started in the year 2004 the journey did not look that pleasant, within just couple of years the company lost two third of (66%)2its shareholder’s wealth putting a great pressure on company’s performance and cash flows. Due to this initial struggle, the company had to first concentrate on revamping the business by introducing measures such as strict cost control, better resource optimization and optimal cash flow management. As soon as these measures indicated to give the desired results, company started focusing on improving its business via introducing new products and enhancing the productions by expanding the facilities. In the meantime, company also concentrated on the export market and started growing its presence in the gulf region. As the company kept on progressing using its own resources and capabilities the board of directors set a new vision for the company to become a conglomerate. Subsequently, to accommodate the journey toward a conglomerate, name of the company was changed from A’saffa Poultry to A’saffa food S.A.O.G and launched two new brands in the name of Khayrat and Taybat introducing new products and expanding the current products range. Moreover, the company moved backward and forward in its value chain to control most of its value chain, firstly by establishing further processed food plant and a logistic company, then leading the breeder farm joint project with other partners to ensure not to rely on outside supplies for the ‘hatching eggs’, main input of poultry business. During this journey from the inception till date the company had to make several crucial timely decisions. The initial decision to optimize the cost of the company by making necessary layoffs in the middle management and taking the risk to go for a direct sourcing of raw materials in bulk was the first turning point of the company towards its successful journey. Then the board’s direction to move towards a food conglomerate to grow the company in line with the newly set Oman government’s strategies resulted in company’s second phase of growth and paved way for the authorities to consider A’saffa as a key strategic partner. In addition, the company’s courage to go for a further processed food plant building on the experiences it has gained so far on the chicken production plant and placing trust on its resources was an important step in the road towards company’s appetite to obtain more control over its business and take more responsibility. Finally, accepting to lead country’s food sustainability and security program was so important to the relationship with the government and to demonstrate a direct role in country’s economy. As this project is focused on the Gulf Corporation Council (GCC)3 it will also assist the company in spreading its wings to the GCC’s food sector. Throughout the journey A’saffa has set many examples. Firstly, ithas shown the importance of internal capabilities for a company in every stage of a company’s growth including struggles and proven that a firm can build on its own resources to grow and become a conglomerate. Secondly, it has indicated that in the beginning stage of the company its always better to be lean with few decision makers doing most of the work and when company is in a struggling stage indicating early warning signs, the board of directors has a fiduciary duty to act swiftly to identify the key issues and address them head-on without much delay and damage to the shareholder’s wealth. Thirdly, it had shown that for a company to grow and become a leader in a market it has to assert some of the key control and management measures such as cost control, financial control with optimal cash flow management and managing the human resources. Finally, in order for a company to become successful in its business it has to keep on moving forward without getting stuck to the comfort zones taking calculated risks to grow in many angle such as launching new products, taking control of its business by moving backward and forward in its value chain while keeping a close eye on its internal and external environment and adjust the business to the changed environment. Moreover, it has signified that for conducting and growing business it is important to build relationship with key stakeholders such as the local authorities and government.
Failure of Excellent Corporate Story: Case Learning Experience in Plantation Sector.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Perera, A.A.D.C.
The founders of Austin Plantation opted to do many things different from others, and strong tradition of looking outwards to the plantation community they serve. Having a heritage of 174 years, the company were known to follow the best practices and core values throughout. Thus, the company has been established a reputation for generations. Further, it was noted that until 2011 the financial position of the company was very healthy and the company had a strong asset base. Further Austin Plantation had been earning over 200Mn profits every year. However, when carefully analyzes the financials since 2012; it was noted that the performance of the company had started to decline. Further, it was evident that the company has been making continuous losses since 2012 and the recorded net loss after tax in 2014 was Rs. 225.0 Mn. This was mainly attributed to reduced gross profit margin and high financing cost. In 2015, the operating loss was Rs. 230.2 Mn and resulted a net loss of Rs 449 Mn. after tax. Accumulated losses as at 31 December 2015 stood at Rs. 804.7 Mn. Thus, net of revaluation reserves of the company had recorded a negative net worth position in the referred period. Austin Plantations boasts of long standing heritage of its mother company Sheerwoods and following best practices. However, if the company has actually been able to withstand the crisis faced by the tea industry in general, thanks to the reputation and heritage of its mother company otherwise, are there any unrevealed factors affecting the performance of the company. In that case, have the company effectively made use of value chain and the competencies to overcome current situation of Austin Plantation. Have the company properly aligned the strategy to value chain seem to be very pertinent questions to be raised. This case attempt to explore and ascertain the answers for above questions via this case study. With a manifested vision “to be the benchmark among plantation companies”, Austin Plantations Ltd was established in 1992 as a fully state - owned plantation company managed by Sheerwoods Plantations (Pvt) Ltd. After a study of publicly available information on the company, the writer has been able to establish that the company had been going through a major financial crisis that resulted in disposal of the company. Subsequent to a careful analysis of the company’s financial statements since 2011, facts found on numerous news articles and paper articles that are available online (Colombo stock Exchange site, paper articles) and information obtained from public, the writer is of the view that the failure of the company could be attributed to number of reasons. The first reason being financial indiscipline by the company as it was notable that the company had not followed or concerned about the various rules and regulations issued by relevant authorities in the financial management context. The second main issue would be family involvement of strategic decision making process of the company while having conflicts among them, as a result it is highly doubtful whether they were able to effectively contribute to enhance the value of the company since their emotions will lead the decision making rather than rational decision making process. The third main issue is in the context of working capital management which led the company to a position where their daily operations were badly disturbed. Finally there is a major concern in the area of poor HR policy practices and people management by the company. In addition, the writer is in the view that the core values, competencies of the founders and knowledge sharing had not been transferred to the next generation of the company. Thus, they have failed to manage the company. This gap reflected the way they handle the current crisis in the tea industry whereas many competing companies apparently have effectively managed same which reflected in their financial performances. These companies have subsidized the losses incurred in the tea industry by operational excellence and diversification which is a hybrid strategy that had worked extremely well, thus contributed towards creating value for their shareholders. In the traditional view of a company, only the owners or shareholders of the company are important, and the company has a binding fiduciary duty to put their needs first, to increase value for them. However subsequently this stance had changed and instead argues that there are other parties such as employees, customers, suppliers, communities and government etc.. who are connected to the business. Finally due to above reasons Austin plantation was up for disposal and has been acquired by Green Company PLC., with a controlling shareholding of 60.8% that was previously held by Sheerwoods Plantation Private Limited. Further study of available information disclosed that Mr. Perera,Chairman of Sheerwoods Plantations, has arbitrarily disposed the said shareholding without due authorization and approval of the shareholders of Sheerwoods Plantation Private Limited. Although Green was able to acquire Austin Plantations after a prolonged controversial period, Green did not hold it but sold to another leading corporate in Sri Lanka. Lakpro, the latest major shareholder of Austin Plantations, is particularly known for its focused strategy and innovative business model. It would be interesting to find out what has motivated Lakpro to make this investment. Could it be a strategy which might help their core competency? This case study followed content review methodology and has been developed with the support of secondary data obtained from annual reports, web sites, company publications and other secondary sources. In the ensuing section, the writer makes an attempt to elucidate the significance of having well managed working capital requirements of the company, how HR policy could be supportive to the sustainability of an organization. Prior researches have confirmed the significance of matching the characteristics of senior executives with requirements of strategies of their organizations. Firms that have achieved higher levels of “strategy‐manager alignment” at both corporate and business unit levels were found to have correspondingly higher levels of organizational performance. Further this synergy could have brought well effective solutions for the industry crisis as well. Accordingly it is evident that there is a strategic gap where the said gap has sealed the fate of the Austin Plantations.
Game of changing perception: Providing unmet need of “Casual sufferer”
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Punchibandara, M.M.T.
So many brands and companies are constantly reinvigorating their businesses and positioning them for growth. There is a constant need to innovate, reinvigorate, update, recalibrate, or just simply fend off the competition in an effort to better explain "why buy me." To move forward, companies and brands need to first take a look at their current brand positioning. But for a moment, even a brief moment, it would make sense to go back to the brand drawing board to answer the question, just what is brand positioning anyway? Brand positioning creates a specific place in the market for your brand and product offerings. It reaches a certain type of consumer or customer and delivers benefits that meet the needs of several key target groups and users. The actual approach of a company or brand's positioning in the marketplace depends on how it communicates the benefits and product attributes to consumers and users. As a result, the brand positioning of a company and/or product seeks to further distance itself from competitors based on a host of items, but most notably five key issues: Price, Quality, Product Attributes, Distribution, and Usage Occasions. As companies and brands today look at brand repositioning, they first have to ask what the reasons for repositioning the brand are. They can include declining sales, loss of consumer/user base, stagnant product benefits, or the competition, including issues such as increased technology and new features. Abbott Laboratories S.C started business in Sri Lanka by the year of 2007. Though products were available in the country for more than three decades, but this was the first time Abbott global decided to operate as an affiliate in Sri Lanka. With a span of 29 products and 24 field staff Abbott was moving positively in the pharmaceutical market especially in the Gastro Intestinal (GI) segment. 2010 was a milestone year for Abbott Sri Lanka, Abbott global acquired Solvay pharmaceuticals, the Netherland pharmaceuticals company which added another 12 products to the basket which giving further strength to the established GI franchise to become stronger.Since three decades of presence in the market throughout various channels, Abbott was able to establish market equity with products like DIGENE, CREMAFFIN, BRUFEN, etc. Digene, the biggest brand to the business (33% contribution) was declining from 2011onwards. Abbot took many initiatives with more emphasis on the ethical side but not able to gain strong hold in the antacid and anti- flatulence (Acid and Acidity problems) market. “Doctors Choice” the campaign laid to acquire the doctors and patient’s preference but entire 2012 product was not moved a single digit of market share instead of lost 2%. There was an impact of price increase which took place in 2010 which lead the brand to be “off the shelf” of many stocking doctors where Digene was generating good revenues from this category. There were some sales promotion activities conducted at both retailers and stocking doctors, was unable to capture the lost share from them. “Doctors choice” campaign was able to make some noise towards the doctor chambers but at the consumer front, it was not as expected. 2013 Q1 brand team decided to expand the positioning to larger target market while changing the positioning statement. The new positioning statement was “Doctors choice for Acidity and acidity related problems”. The positioning was expanding the large target market by reaching the ultimate desire of patients. This attempt was to tap the lifestyle issue of consumers who associate with acidity or other discomforts. The campaign was still focused on the therapeutic segment where materials and inputs were based on the “Doctors choice”. On one hand, this campaign gave some important communications to stake holders about the areas which was not discussed earlier by Digene and it made some space to expand his/her therapeutic diagnosis to a different level. After extensive efforts on the new positioning, still the result was the same, unable to attend the expected out come after investing 12,000$ on all the campaigns and it brought the company to re-think it’s approaches towards customers and consumers.Home remedies are the first line use for medications for GI related issues and it represent the large market which is even unknown till today. In the positioning quadrant it represents “Casual but effective, Good for me” with “Conservative/ Mature”. Largely this category is dominated by Ayurvedicproducts largely no brand name. Kalla, Guli, Churrna, more dominant formats in this category and mostly prepared as household level. Some local Ayurvediccompanies have operating this segments in very low profile manner but there were no proper data been published on reputed source to quantify the size of the market. Glaxo Smithkline Healthcare Limited (GSK)identified this market as a lucrative business and penetrate with more “contemporary and vibrant” way while creating new market segment. ENO the revolutionary brand which changed the market dynamics of Antacid category while investing a large amount of money. “Professional and Scientific/Conservative and Mature segment represents 90% allopathic Antacid market where market is driven by majorly on prescription. Certain amount of OTC (over the counter) sales are happening but largely doctors recommendations are dominating this category. Gaviscon, the market leader in this segment continues to focus on doctors’ level and heavy promotions in scientific manner and thus being able to create the “Original” perception towards the brand. “Gaviscon Dual Action” created a great hype among the medical fraternity in the market which discuss about the functional value of the product to the doctors. There are some brands which operates in the lower section of the same quadrant serving more towards the price as a key driving factor. The market here is a very price sensitive and where great volumes are available. Especially stocking doctor segment where they dispense product which available in their clinic or dispensary. Brands like Belcid, Antiget, Maxajet etc., operates heavily in the segment which continuous fights for sales is observed. Digene as a brand which is stuck in the middle of both Gaviscon and low priced brands. Brand needs to find clear destination how it moves in future. Michel Porter in his book called “Competitive Advantage: Creating and sustaining superior performance” mentioned that trying to "hedge your bets" by following more than one strategy. One of the most important reasons why this is wise advice is that the things you need to do to make each type of strategy work appeal to different types of people. “By strengthening the scientific image and in-clinic relevance of DIGENE Gel, while initiating consumer centric initiatives in Tablets and Newer formats, DIGENE will retain its equity while revitalizing the image with contemporary audience and scale up to lead the antacid category”. Anurag concluded the meeting while endorsing that Digene would be reinforced to a new category of a target market to meet the unmet need of “the casual sufferer”. He also made clear instructions to support the entire value chain of Abbott to succeed the repositioning strategy (Minutes of the meeting- Abbott archives 2013) Also visit insight of case study following revealed inputs could be concluded. Based on the theoretical aspect, Martin Lindstrom author of “Brand revitalization principles 2014” book revealed that four types of repositioning could take place based on the “Market “and “Product. At this scenario it is revealed that the product being kept unchanged and market changed (casual sufferer) where the product was not positioned earlier. Based on that, this case study revealed “market repositioning” principle where product was kept unchanged while taking the product to a novel market. Case study also provides an example of evidence based on decision making, where decisions are being based on the real time data by both market and product level. Since it was found that brand becomes obsolete and no relevance to ethical level backed by continuous loss of market shareand therapy shift to newer formats leading the thinking process of repositioning the brand. It also considers the high brand equity in Digene and using the same existing quadrant of the positioning to leverage it towards the scientific approach. It is also reveals that company mitigated the risk by keeping one format in the ethical wing (Digene Gel) and transformed Digene tablets to fully consumerization where in case the failure company still has option of returning to ethical wing where product equity has been preserved. This revealed that “Strategic risk diversification” is an important criterion during the repositioning process. Looking at the point of growth perspective of this brand, needs the clear understanding that how company project next 5 years’ lifespan of Digene. Moving one quadrant to another and doing revitalization have certain limitations as well. It’s a kind of a dilemma that company will face soon that the product with high brand equity and obsolete perception playing in different market will sustain in long run? As the perception towards Digene is simple and common among the consumers where one point even in the current positioning also will make the issues and brand needs to find other available revenue generating options to move forward. Managing life of the product in both physically and emotionally import to drag the lifespan. Though the differentiation makes on the product but it has limitation which unexpectedly downturn the business. Too much concentration on the brands, make short term changes to the brand, new market penetration need to be manage while sensing the anticipate consequences in future. “Obsolete you brand at right time”, great marketing Guru Theodore Levitt mentioned in his Marketing Myopia paper published in Harvard Business Review (1960). The Myopic cultures, Levitt postulated, would pave the way for a business to fail, due to the short-sighted mindset and illusion that a firm is in a so-called 'growth industry'. This belief leads to complacency and a loss of sight of what customers want. To continue growing, companies must ascertain and act on their customers’ needs and desires, not bank on the presumptive longevity of their products. In every case the reason growth is threatened, slowed or stopped is not because the market is saturated. It is because there has been a failure of management and practices. Future of Digene may not be the Digene. Too old, less manage the life cycle, decline perception on both stakeholders (doctors & consumers) and playing in low growth segment need to be considered by the management of Abbott. Still Abbott myopicon the brand name which may lead to greater consequences in coming years.
Greening the “grey” &“Sustaining the way”
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Hamangoda, D.R.
Insee Cement Lanka is a fully owned subsidiary of Siam City Cement Company, Thailand and it was called Holcim (Lanka) Ltd before it was acquired by Siam City Cement. Insee cement is the only integrated (go through the fully manufacturing process converting limestone into cement) cement manufacturer in Sri Lanka. Sri Lankan cement market is highly commoditized and mainly driven by price. There are more than 27 cement brands in the Island, including five main “Branded” players and all others are low priced economy versions. In late 90s company strategically understood the future threats expected from these economy players as the company started losing share for low end brands. As a multinational, Insee always wanted to maintain its “premium-ness” as a leading brand in the market specially in terms of quality and pricing.Cement as a product has so many limitations in brand differentiation. Technical benefits which are used by most cement manufactures are common to almost all cements and everyone tried being differentiated highlighting some of those and customers are confused. Insee brands were always above all brands including its main competitors i:e Tokyo cement and Ultratec cement. When local and international players started to gain the share from the market, Insee (previously known as Holcim) wanted to deploy an enduring strategy to hold and gain share in the long run. The approach was two-folded, one was to have short and midterm plans forfeited with traditional marketing activities. Second approach was to introduce Sustainability Marketing which is also called Green Marketing which can drive the brand in the long run. Cement production process produces lot of emissions to the environment and its contribution to global carbon dioxide (CO2) emission is 5%. Manufacturing of cement utilizes substantial amounts of energy via coal thermal power and electricity. Main raw material used for cement production is limestone and it is heated under very high temperatures to convert limestone into cement. Carbon dioxide is mainly produced in two occasions, one is during the limestone conversion and the second occasion is burning coal to generate heat. Excavation of limestone too contributes to some environmental complications. “Sustainability development” is considered as the development that meets the needs of the present without compromising the ability of future generations to fulfill their own needs.“Traditional Marketing” activities will make adequate profits for the manufacturer and create consumer satisfaction. However, that approach will not certainly look at long term impacts to the environment and society. “Sustainability marketing” is a new notion in marketing and business, but it is promising to become the game changer. Based on theories of social sustainability, Sustainability marketing seeks to meet the needs of this generation without compromising the future.In late 90s Insee (then known as Holcim Lanka) adopted Sustainability Marketing replacing their “Sanstha” cement formula with a new environmentally friendly blend which is called Portland Limestone cement (PLC). This green product produces substantially low amount of carbon dioxide to the atmosphere and consumes less water in construction process while offering all other technical requirements which cement must produce. More than reducing emissions, green cements consumes certain industrial waste material and at the same time improve the longevity of the limestone reserves as it consumes less limestone. This was nominated as Sri Lanka`s first and only Green Labeled cement. Recently Insee introduced two more sustainable green products called Insee Rapid Flow Plus and Insee Mahaweli Marine Plus. With all these products, Insee drives the Sri Lankan cement market towards the green direction, where the company can easily out beat competition and gain share. It will be extremely difficult for their competitors to gain green status and Insee will use this massive competitive corporate advantage to be ahead of their main competitors. Along with that the Company launched a state-of-art sustainable initiative called Insee Ecocycle (known as Holcim Geocycle before the acquisition). This concept introduced professional waste management systems for industrial and hazardous waste and converted them as alternate fuel for heating the limestone in the cement kiln, where cement clinker is produced. This methodology reduces carbon dioxide emissions in comparison to traditional waste management processes and at the same time these materials will replace coal to a certain extend inside the kiln. This sustainable initiative made Insee cements much greener. Insee launched many programs to propagate the concept called “Green Building” or “Sustainable Construction”. These will help to reduce the global carbon footprint to a greater scale as lot of construction is going on in line with current rapid urbanization. The company started many projects to promote sustainable construction and usage of green products starting from construction craftsmen level to university professor level. Insee has many professional tie-ups with industry stakeholders to promote green construction. While activating all such green initiatives, Insee made sure to give more visibility to their green cements which are essential for sustainable constructions. The company uses key industry figures to introduce these products and concepts thus Insee is becoming one of most respected players in the industry. As the Company completely rehabilitates the escalated quarry and rescues all animals during the process, environmental impact is virtually zero. Not only in manufacturing but in inbound logistics too the Company uses creative sustainable avenues to minimize the carbon footprint to the environment. At the same time Insee in the mission of promoting other cement related building products, which will bring Insee image more greener and making an impact on sales. Marketing and Sustainable development departments of the company makes sure all such products and initiatives are professional communicated and marketed among and all stakeholder groups. There are three intentions behind Insee`s green marketing strategy, one is to position Insee products as green/sustainable product in order to generate some differentiation against competitors. We can define that as “generating Green Equity” around the Insee brand. Because no competitor has entered in to that market space yet and that will obviously create a unique competitive advantage in the medium and long run. Growing the green building market in order to get the highest share via their green products is the second objective in Insee`s Sustainability marketing strategy. The third objective, Insee capitalizes its green agenda to generate “Corporate Brand Equity” to position Insee as a superior socially responsible corporate brand. These help the company to achieve lot of corporate objectives and get lots of industry approvals to boost cement volumes. After all these efforts Insee maintains a very dominant position in the Sri Lankan cement market being the most high-priced cement. Through this Sustainability marketing strategy company is making sustainable construction a “must to have” with heavy stakeholder involvement. With this,Insee creates its future markets in which the Company has its ready-made green cement portfolio. While doing that, Insee never neglects even a single stakeholder group in the industry as they invest a lot to make contacts in all possible touch points with its green message. This approach is creating a huge barrier for competitors to conquer and makes an unbelievable competitive advantage and customer loyalty to promote Insee.
INSPIRED TO GO BEYOND: A JOURNEY TO SUCCESS.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Tennakoon, S.D.
One of the key need for the economic and social development of a country is to fulfil its industrial and domestic power demand. Sri Lankan government anticipated the need at that time in 1970s and made plans to utilise hydroelectric power by implementing new projects. Sri Lanka mainlydepends on hydroelectric power since it is a country rich in water resources and rainfall. The main focus was on Mahaweli River and the government commenced feasibility studies to assess the yield. To expedite the work, they established a separate body called ‘Mahaweli authority’ to implement this massive development scheme planned to complete in a 30 years’ time. To supervise the work, the government established an organisation called ‘Central Engineering Consultancy Bureau’ (CECB) to work as the local partner to the consultant and the project manager to resettlement works. After a new government came into power in 1977, the new president of the country wanted to reduce the 30-year duration to six years. To facilitate this acceleration, he established a separate ministry and a separate minister to look after the total program and related works. Thereafter, CECB was given the power and authority to look after this accelerated program as the local partner consultant while shouldering the resettlement work related to the development work. To strengthen this newly formed organisation, the president appointed one of the eminent engineer, Dr A.N.S.Kulasinghe as the first Chairman of CECB. Chairman Kulasinghe managed to expand the resource base of CECB by recruiting engineers and other technical staff in various engineering disciplines to cater to this massive hydropower development scheme. Mahaweli development scheme consisted of four major reservoirs; Victoria, Kothmale, Randenigala and Rantembe. All the projects were handled by reputed international contractors and looked after by international consultants together with CECB as the local partner. By working in this massive scheme, CECB gained experience and also developed its capabilities and competencies to become a world-class consultancy firm. In the late 1980s almost all the major works had been completed leaving only people’s resettlement work and township improvements. Consequently, CECB faced with a great difficulty in retaining their competent and well-trained staff and moving forward as a viable organization. However, the leadership together with the senior management undertook the challenge of implementing a change program to overcome the issues.During its change program, the leadership was changed in two times, but all the leaders contributed to their maximum to drive the organization through a difficult change process. The most difficult task faced by the management was to change the mindset of employees and retain them in the organization. As an initial step, CECB changed its objectives and added many areas to its objects statement. This allowed them to carry out construction in addition to consultancy activities. Accordingly, they set up a separate construction unit and expanded to provincial level at a later stage. CECB was vigilant on market behaviour and was ready to grab opportunities which were relevant to their scope. They set up their own engineering laboratory to carry out investigations to facilitate their own design work. Later they hired their services on the commercial basis, creating an additional income to the organization. CECB was acting as a one-stop shop and it was capable of delivering fast-track solutions to many engineering problems. It undertook various activities including construction, geotechnical investigations, environmental studies, engineering surveys and also maintenance work. While going through the change process, CECB took a bold decision to go international. Pioneered by the Chairman Nihal Rupasinghe, CECB secured many contracts in the international arena, allowing its regular employees to go and work on those projects. During this period, CECB was entrusted with many projects including post-conflict development works in Northern Sri Lanka. While going through this massive development work by shouldering more responsibilities, CECB decided to set up its own subsidiary company. To fulfil this need, CESL- Central Engineering Services (Pvt) Ltd started its commercial operations in 2011 to assist CECB as its construction wing. CESL carried out many construction activities in different disciplines securing many rewards for its quality of work.It was the visionary leadership and the competent management who undertook the challenge of sailing the organization through troubled waters. Researchers have identified that many companies have failed in the first phase of their change process due to the main reason of underestimating how hard it can be to drive people out of their comfort zone. Theories explain that the personnel changes occur when change forces strengthened or restraint forces lessen or both occur simultaneously. Some of the driving forces were leadership changes, changes in organizational structure, changing attitude towards work, increased competition and internationalization. Personal restraint forces were the fear of failure, loss of status, and fear of unknown. CECB continuously communicated their changes and vision to employees and removed obstacles by changing the structure. They recognized the good work of employees and rewarded them for new improvements. Moreover, they implemented further changes by assisting their employees through training programs to match their skills and to gain knowledge relevant to the new system. As a state-owned organization, CECB gave a good example to the corporate sector about implementing an effective change process while being in a crisis situation. Their story is an eye-opener to the government-owned business organizations to track their competencies and compete with the corporate sector organizations. Further, it clearly shows that a change process needs the right decision at the right time. Implementing a change process is not that easy if the right order is not followed. This story clearly shows that the organization allocated a considerable time to convince the employees continuously about their vision and the milestones to be achieved. Communicating the vision is one of the key factors identified by a successful change process. The success story of the CECB identifies many effective leadership inputs to the change process. Throughout the process, many strategic decisions were taken to uplift the organization and to be in the competition. This story also identifies different leadership styles emerging in different situations to give different flavors to manage the change process. It further investigates the assistance rendered by the management as a guiding coalition to make the change process effective.
Leaning through Macro Environmental Perspectives: case Issues of SAITM.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Pushpakumara, B.M.A.
Sri Lanka’s tertiary-level student population is quite mobile – in part because higher education in Sri Lanka has insufficient capacity to address student demand. This can be identified as problem. As solution, Sri Lanka’s government promotes this interest in study abroad and especially government support for an increase in the number of private higher education providers in the country may alleviate capacity issues and impede that growth at least somewhat. SAITM has been established as a private campus in Sri Lanka to teach Medicine, Engineering, ICT and Media and Business Management. Also, this is the first time that the private sector has been able to enter the field of higher education in Medicine in Sri Lanka. However its final analysis may be that it is an essential feature of democracy. But it is necessary to re analyze and revisit the particular issue, subject to such discussion in the country, to ascertain whether it is the ‘Real’ problem, which should be focused on. I hope to discuss this ‘Real Problem’ through the issue at hand, namely, the Private Medical College problem, or the SAITM issue. The SAITM issue has come to the forefront in the media, just as much as the Ragama Medical College issue which came under discussion a decades ago. One group expresses its view in its favor, while the other group speaks against it. It is unfortunate that these speakers focus on the symptoms of the ailment without making an effort to find out the cause. SAITM of the intention is to produce educated young men and women with good motives by the name of SAITM. They aim to provide affordable higher education opportunities to many prospective students. One of the greatest challenges that a business faces is to figure out how to balance burgeoning human activity with the processes and resources of the natural world in a way that will sustain the health and well being of our planet in the longer term. With surging populations and rapid economic development across the globe, we are beginning to see limits on the ability of the earth to handle the demands we place upon it. There is no point in allowing the SAITM issue to continue for so long without a solution. The government or the country should be able to resolve such problems within a reasonable time. In the meanwhile, the government has come up with varies Point Proposal to the situation. From the look of them, they fall far short of the ‘demands,’ the other expert proposals or the key issues of the controversy. As reported in The Island lead article (“SAITM Crisis Takes New Turn,” 4 May), they are as follows. Frankly speaking, the first and the key proposal of “Listing of SAITM in the Colombo Stock Exchange” is like ‘Koheda Yanne, Malle Pol’ (Where are you going? Coconuts are in the basket!). This is not to say that resolving such a problem is easy. But most difficulties are related to the present; the confrontation seems to be mainly the government, or certain sections of the government, and the GMOA (General Medical Officers Association), although there are several other stake holders. SAITM seems to have taken a back seat, tactfully or not, and their medical students have become the main victims of the situation. Learned people and others from different walks of life express their views based on the way such topics are highlighted in the Media. It is just because the SLMC decreed that the clinical training provided by PMC is not sufficient to be qualified for SLMC recognition. This is where the problem is and now we can get to the crux of the issue. People start talking about the quality when they seek medical care and that is the basic need of patients and consumer behavior. This is main social and cultural issues for SAITM. It is a vast field that has even created tens of thousands of job opportunities around the globe. Not to boast about Medicine but it is a well-known science in the world that has it’s own largest discipline for its educationists. If we explore Sri Lanka’s culture through the lens of the 6-D Model, we can get a good overview of the deep drivers of the culture of Sri Lanka relative to other cultures of the world. Power Distance deals with the fact that all individuals in societies are not equal. It expresses the attitude of the culture towards these inequalities amongst us. In Individualist societies people are supposed to look after themselves and their direct family only. In Collectivist society’s people belong to ‘in groups’ that take care of them in exchange for loyalty. The next determinant is income inequity which is an ever growing issue since 1948. People increasingly tend to think that bridging this gap isn’t a tough task as far as they have a cling to a corrupt politician.Power Distance dimension deals with the fact that all individuals in societies are not equal. It expresses the attitude of the culture towards these inequalities amongst us. Power Distance is defined as the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally. With a slightly high score of 80%, Sri Lanka is a relatively hierarchical society. This means that people accept a hierarchical order in which everybody has a place and which needs no further justification. Hierarchy in an organization is seen as reflecting inherent inequalities, centralization is popular, subordinates expect to be told what to do and the ideal boss is a benevolent autocrat. The shift of the focus of education has changed in terms of the structural adjustments in policies of the IMF, and the World Bank, and other international lending organizations for underdeveloped and low-income countries. These organizations push their hidden agenda, such as cuts in government expenditures, market liberalization, currency devaluations, reductions of government subsidies, price controls, and most importantly the privatization of public services such as health and education. This level can be identified as opportunities for SAITM. SAITM has more external threats for their business so they should develop an appropriate business model to face this critical issue. Now, they face high risk, sometimes they can earn high return in future according to high return high risk theory. It has been impossible to find a possible solution as the key question can be identified – ‘Can the Medical Education be provided by the Private Sector? It has not yet been understood. Hence it is too vital to understand the key issues and search for a possible solution immediately. We should dedicate to find the answer even though it is not visible. The efforts by SAITM may be considered admirable. But the efforts have failed. Singapore, the epitome of Asian capitalism doesn’t have a Private Medical College (Duke-National University of Singapore is a semi government graduate medical school largely funded by the government and attached to NUS). Therefore, the suggestion here to solve this issue is to join with the government and do the business as semi government business, medical faculty strongly control by the government.
A new Triple Helix.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Wijayanama, P.T. C.
A triple helix is not a new concept for a science student -It’s comprised of congruent geometrical helices along with the same axis differing by translation. A bio-science student may even relate this to the DNA structure. Third year science students of the University of Colombo are offered a credit bearing course that resembles a triple helix. Here, the University, Corporate organizations, and Community represent the helices. The bond between the helices is the Service Learning program. Service Learning is a new pedagogical tool that provides opportunity for the students to acquire learning outside the classroom activities. As it associates an effective learning method of experiential learning, the students can extract firm understanding of the concepts taught in the classroom. However, Service Learning is yet to become a natural choice in Sri Lankan university curricula despiteof its benefits. Unemployment rates in Sri Lanka over the past several years have been at a healthy rate of 4%-5%. However, graduate employability rates paint a different picture with average unemployment rate at 26.4% in 2012. Employers -especially in the private sector from where the large part of Sri Lanka’s economic growth comes from, employers lament over lack of soft skills in fresh university graduates. On the other hand, having selected through a highly competitive selection process, the main expectation of the students out of university education is to get employed immediately after graduation. However, the education students receive in Sri Lankan universities is not primarily targeted at employment. In a developing economy like Sri Lanka, universities hold a key responsibility in preparing the knowledge workers to participate in economic development process early as possible. Therefore its timely for the educators to adopt innovative solutions for improving employability within university curricula. Service Learning can be a catalyst for sharpening soft skills that are valuable to fresh graduates in securing employment Service Learning uses an experiential learning and intuitive learning method that uses reflection as an integral learning mechanism or learning. Reflection allows the student to critically evaluate the situations and questions the general assumptions. This is a way to build the thought process inductively that develops the student beyond memorization. There are multiple opportunities for reflecting throughout the Service Learning program. At the first stage, students learn ahead of the program by gathering background information, developing project plans, and visualizing possible issues ahead of the actual experience. At the second stage, students reflect during the delivery of the service. Operational issues can be analyzed and best possible action for the given situation can be formulated through the reflection process. Thirdly, by end of the delivery of the service, students reflect on behavior and resources that worked well, that didn’t work well and how they can be organized for a similar situation in future. These three stages of reflection can be done individually or in a group facilitated by a coach. Collaborating with corporate organizations in Service Learning programs is mutually beneficial for the parties involved. By providing Corporate Social Responsibility (CSR) projects, corporate organizations can support the students to get real life cases at less or no cost burden to them or the university. At the same time, corporate organizations who have constraints in mobilizing adequate people resources to carry out their CSR projects are also benefited from engaging students in their CSR projects. The universities benefit from improving the quality of education provided to the students and building closer links with the corporate organizations and the communities. CSR has become a common practice with the multinational organizations and Sri Lankan blue-chip companies. By engaging the employees in CSR activities organizations can reinforce a positive relationship between the employees and the organization. Small and Medium Enterprise organizations (SMEs) are likely to face a challenge to sustain CSR activities as they find it difficult to allocate dedicated organizational resources for activities with fluctuating intensity and resource requirements. However, this situation can be addressed by involving university students in their CSR activities. Well timed and planned activities by the corporate organizations and delivered in good coordination with the universities can deliver good results that benefit mutually Service Learning program from the science faculty of University of Colombo offers students to take part in multiple Service Learning projects each year. The partnership between the university, a corporate organization and a group of students benefited resembles a triple helix. A CSR projectof a reputed corporate organization that is hypothetically referred to as National Bank provided university students a project to implement a stand-alone learning tool for key course subjects that was supposed to reinforce and complement the taught content in several schools. This project provided university students the opportunity to gain deeper insights into some of the challenges faced by school children and teachers due to lack of sufficient numbers of teachers for key subjects like Science, Mathematics and Commerce. Getting to students to the habit of self-learning can be supported if required infrastructure is available. However, in rural areas availability proper infrastructure remains to be a challenge in Sri Lanka. The insights from the project includes some of the challenges faced during project roll-out, available opportunities, and options for them. There are other stakeholders that are important to Service Learning program delivery: Career Guidance Unit of the university is responsible for the logistical arrangements and assessments of the students. The program mentor plays a vital role in helping the students reflect on the situations faced and developing solutions for the issues. Since the learning at large comes from the interactions with the community and the society, the most expected learning outcome from Service Learning programs is social competence – This covers the ability to critically evaluating complex situations and finding sustainable solutions that suits multiple stakeholders. In addition to this, students sharpen their Communication skills, Team skills, Leadership skills, Analytical skills, and Problem-solving skills. These skills are closely associated with employability skills that are sought after by employers. Students go beyond their familiar domain of the university into where they meet other players in the society such as regulators, business leaders and communities and their leaders. The contacts and networks they build may even become useful in their search for the first employment. In combination of skills and the networks students build through stakeholder engagement, Service learning gives a boost to their employment. This case may be used to bring up multiple threads of discussions during topics of Talent and Skills Development, Employability and Career Development, CSR and Sustainability. Such discussions would help the learners to appreciate the multiple factors that can be considered in finding a robust solution to associated issues. This case may also be useful to educators, program developers and educational policy makers as Service Learning is a new concept that can be adopted not only in the universities but also in other educational institutions such as primary and secondary level schools.
OCEAN TO PLATE; NAVIGATING THROUGH THE TURBULENT ENVIRONMENT.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Miranda, N.K.
Ceylon Fisheries Corporation (CFC) is a statutory government organization which is fully owned by the state & has its unitary status as the apex body of the fisheries industry under the purview of the Ministry of Fisheries & Aquatic Resources Development (MFARD). CFC was established on 1st of October in 1964 in order to supply quality fish at affordable prices to consumers while securing the producer. CFC is rested with the responsibility of purchase and sale of fish, provision of cold room facilities, production and sale of ice and sale of fishery products. CFC operates a network of Regions, Provisional Offices, Purchasing Centers, Sales Outlets, Fillet Factory & Circuit Bungalows. Initially the responsibilities of CFC were vested for boats construction, providing fishing gears for such boats, fishing at sea (deep and also shallow waters) by using such boats, managing harbors for those boats coming from harvesting, repairing, replenishment and maintenance of such boats at harbors, supplying the fish catch to the market place, maintaining the market price by providing quality fish at reasonable price, catering the protein requirement of the citizen of Sri Lanka Being a government owned organization there is an immense potential for making profit and functioning as an apex body of the Fisheries Industry. However, CFC has been evolved as a lost making organization and failed to achieve its goals and objectives. Highly politicalized environment has created ruthlessness organizational culture inside the CFC. Poor management practices, lack of supervision, untidy appearance, absence of proper systems and unprofessional work force have negatively affected for CFC progress. Efficiency, effectiveness and productivity of CFC was lacked and driven towards the financial lost due to aforesaid factors. The politically appointed management was bias with the ruling party Trade Unions. The union multiplicity is high but the union intensity is low resulting 07 number of unions and the membership is at the marginal level in more unions. The conflict among the Trade Unions are observed and badly affected for the smooth functioning of CFC. Moreover, highly unionized en environment disturbing the management and reduced the organizational instrumentality. The unionization of employees was associated with poor financial performances and negative effect on the profit. The Top Managements appointed by the line ministers in time to time, had failed to manage the corporation with the dedicated manner. Malpractices, corruptions, mismanagement, misbehavior and poor leadership qualities were the salient features for the negative impact of CFC. The organization culture has been tarnished by the political leadership. Main departments such as Marketing, Operations, Finance and Human Resources Management were not functioning with the best practices in accordance with the common goal of CFC. The government of Sri Lanka granted immensely for the operation of CFC, but resulted the bad repercussions. The main reason for such lost was the poor management in highly politicized atmosphere. Therefore, the policy decision was taken to manage CFC as a Public Private Partnership business entity which was approved by the Cabinet of Ministers in early 2016, as the last option. However the arrival of the new management in the last quarter of 2016, implemented the better courses of action for CFC operation. In this case story the author has discussed the major issues encounter by the corrective as well as the preventive actions implemented by the new management. The top management implemented appropriate action based on the current situation demand in different aspects. Human Resources Management Department, Finance Department, Operation Department and Marketing Department were integrated to common system. The ultimate object was to achieve the success in Fisheries business arena. The new management is able to manage the industrial relation climate understanding of behavioral and non-behavioral variables associated with unions and union employees. Strategized the Union Avoidance policy by building a positive work environment and able to reduce the power of existing unions at CFC. Courses of action executed by the new management, resulted that CFC is moving towards the positive direction. Supervision, guidance and monitoring are made available to drive CFC as a profit making organization after 57 years of history. Visionary leadership initiatives of the Top management was able to minimize the corruptions and to achieve the success. The business of CFC focuses through impressive Human Capital Management practices. The revenue has driven by the adaptation of a comprehensive Financial Management System. Being the major organ of the organization the Operational Department achieved the business excellence triggering through the comprehensive initiatives. Ground level marketing tactics were promulgated and activated in order to achieve the overall marketing strategy. Disciplinary admiration is devised to enhance the productivity by maintaining the trustworthiness and adopt the rules and regulations. Integrity and ethics are considered as the most significant factors in the field of business as well as at organizational culture. This case story is about how to manage all negative aspects of an organization towards the positive direction. The new management has immensely contributed their tireless extra energy for the success of the organization. CFC has been functioning as a profit making organization since December 2016 slowly but steadily. CFC achieved the highest net profit in July 2017 reaching the best milestone of the corporation. This case story proved that the closed supervision of the activities, leading through the grass root level, managing with the shared ideas of the members, minimizing the corruptions in multi directions of activities, working with the team spirit can change the entire organizational culture to improve the employee performance and organization productivity. The top management believes that the leadership should set example for followers, rather than insisting to perform. The Chairman’s experience in the field of highly unionized and various kind of work force, the Managing Directors intellectual knowledge in the subject of Finance and Accounts. The General Manager’s experiences in Sri Lanka Navy devised immensely to manage the organization especially during the critical situations aroused. The major concepts of the Principles of War equipped to apply as and when required in the field of Marketing Management and Human Resources Management. The top management is being working as a team having a common goal to achieve a competitive advantage. Today CFC is functioning without any financial grants from the government and running as a profit making corporation in Sri Lanka. Finally the Cabinet of Ministers commended the task accomplished by the Top management and advised to take measures for sustainable growth of CFC wishing a fair winds, calm weather and enough water underneath of “the CFC ship”. Bon Voyage.
REDEFINING THE BOUNDRIES OF SUCCESS, A CASE STUDY ON MAS HOLDINGS, SRILANKA.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Disabandara, D.R.
A success Story “Redefining the boundaries of Success” on MAS Holdings, Sri Lanka, is to identify insights of the apparel industry in Sri Lanka, and to emphasize the Key factors which have contributed MAS Holdings to become one of the country’s highest foreign-exchange earners for several decades, Although a plethora of local companies were involved in the manufacture of apparel for global brands, few companies have been able to sustain the momentum, and have created opportunities to build an enduring organization. As the global apparel manufacturing market became more sophisticated, there was a shakedown, not least in Sri Lanka, where only the preferred manufacturing partners for large global brands survived the challenging market forces. MAS is one such success story. As South Asia’s largest intimate apparel manufacturer, It’s extremely important to assess how MAS has achieved set goals to become the region’s fastest-growing supplier of sportswear and how company manages the entire value chain, from product design, development, manufacturing and raw-material supply whilst commanding the latest technology and knowhow. In addition this study drills down to find out how Innovation the second nature to MAS has helped MAS to become the lead strategic partner for Victoria’s Secret (VS), servicing numerous global brands including Marks & Spencer (M&S), Triumph International, DIM Branded Apparel, Nike, Speedo, ADIDAS, Reebok, GAP and Banana Republic. This paper will also justify the success story and emphasize on lessons learnt as to how entrepreneurial minds brought life and change which revolutionized the apparel industry of Sri Lanka. What started as a humble manufacturing process has developed in to a US$ 1.6 Billion revenue generator and a significant contributor for the growth of country’s socio economic factors by improving wealth, providing employment, enhancing life styles by demarcating country’s name in the global arena.Major theories found in this case story can be highlighted as related and unrelated diversification, differentiation, leadership style driven by philosophy of customer-centric innovations. Company has the habit of practicing value chain analysis keeping quality as the value proposition. Following can be identified as key learning points of the case study. The company manages the entire value chain, from product design, development, manufacturing and raw material supply whilst commanding the latest technology and knowhow. With in-house research, design, development and product engineering capabilities, providing sophisticated concept to deliver solutions to its customers has helped MAS become successful. Product Innovation is second nature to MAS. From working with Victoria’s Secret on fast replenishment models to lean manufacturing with rapid product changeovers, the company’s fully integrated model allows it to innovate across the value chain. Creating Strategic partnerships on a regular basis is a key, in the international market to survive as MAS is the lead strategic partner for Victoria’s Secret (VS), servicing numerous global brands including Marks & Spencer (M&S), Triumph International, DIM Branded Apparel, Nike, Speedo, ADIDAS, Reebok, GAP and Banana Republic. Opening up overseas ventures with vertical integration has helped MAS to position Sri Lanka and the region as a center of excellence for intimate apparel and sportswear. The visionary leadership went beyond financial performance and has created opportunity to become world class. Driven by a philosophy of sustainability, the company represents the balance it strives for in social and environmental spheres alongside its operational excellence in all vendor interactions. The group reflects a passionate and competitive spirit balanced by unmatched commitment towards employee wellbeing. MAS differentiate itself through its best practices to position Sri Lanka as the preferred destination for ethical apparel solutions. MAS has a part of its corporate DNA. By correctly anticipating which way the market was moving, and by adjusting its approach accordingly has been able to position themselves to enjoy a first mover advantage when customers came looking for more than price and quality. Customized product designing is a salient feature of MAS Holdings thus working towards the deadlines placed by customers is decisive factor to maintain the long term partnering with their customer network. Buyers are more conscious about the quality that company maintains throughout the production process.The MAS philosophy of customer-centric innovations and flexibility has served well in acquiring and sustaining a prestigious portfolio of customers. MAS Holdings implements a web based ERP system that offers all customers the visibility to check the progress of orders placed from anywhere in the world. The system is updated by the factory at the end of each manufacturing process, enabling the customer to keep close tabs on the order placed.The intellectual capital becomes a common problem for whole apparel industry, the working culture of MAS Holdings apparently is different. The employee empowerment is highlighting feature in its working culture, as a result of that the company enjoys a negligible rate of employee turnover. MAS Holdings (Pvt) Ltd used diversification strategies also to their long term plans to achieve the vision and the mission of the company. Diversification can be applied in as related to the industry or else as unrelated to the industry where the company currently focusing on. They started BNK trading company to control the procurement process in the MAS Holdings. Here BNK supplies stationery to MAS Holdings as they could make a drastic reduction in their expenses. South Asia apparel conglomerate, MAS holdings took a significant step recently, as it sealed its commitment to become the first Sri Lankan company to commence manufacturing in the United States. MAS will achieve this through the acquisition of the Business operations of Acme McCrary Corporation, which is established in North Carolina. The company has been reinvesting their profits in new technology and expansion programs. That is one major reason for their growth in a comparatively short period. They regularly look at cost cutting solutions; when the costs go up owing to recession or slowing down of export markets, they introduce cost reduction methods. IT is widely used and the employees ‘dealings with IT is given the latest equipment to work with. Most areas of the production line are semi-automated. The company has also taken measures to minimize the use of power by introducing green energy solutions such as skylights and solar power systems for manufacturing plants and the water is recycled and used for gardening and toilets in an effort to conserve water. The impressive building structure and the offices with a blend of natural and power generated lights are testimony to this. The company plan to go for total green concepts sooner. MAS Holdings becomes the latest apparel and textile manufacturer to become a value chain affiliate of the Zero Discharge of Hazardous Chemicals (ZDHC) group, as it works to move the industry towards a goal of zero discharge of harmful chemicals to the environment by 2020.Mr. Mahesh Amelean is a frequent traveler. He and his team are regular visitors to international apparel fairs and conventions. During these visits they learn about new technologies and trends and pick what is necessary to improve their business back at home. The MAS journey is far from over. Content of this case story could assist as a managerial literature for practitioners and a learning platform for students in combining theoretical aspects with emerging workplace realities. Students can learn ways in which companies are managed, handling different types of managerial challenges and opportunities intelligently, as it gives wide range of business management applications, specially focusing on Entrepreneurship Development and Strategic Management.
Review on Successful Entrepreneur: A Case Story on Green Marketing Application of DSI Samson International PLC.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Madhusanka, J.D.T.
Recently, concerns have been expressed by manufacturers and customers about the environmental impact of products. Manufacturing organizations have directed their attention towards environmentally friendly products and aspects of green marketing. The Sri Lankan community also realizing the importance of the green marketing concept. Green marketing is the marketing of products that are presumed to be environmentally safe. Thus, green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. This paper aims to study DSI Samson international PLC,which is being operated with the Sri Lankan identity by investigating Business trends, procedures, environmental issues and appropriate solutions. Always, rubber related products have been a direct linkage and an impact on the environment. The need of an environmental friendly production and marketing process was emerged more and more to those strategic business units and subsidiaries due to the potential effects which may occur on the environment. “Green Marketing" refers to holistic marketing concept wherein the production, marketing consumption and disposal of products and services happen in a manner that is less detrimental to the environment with growing awareness about the implications of global warming, non-biodegradable solid waste, harmful impact of pollutants etc., Both marketers and consumers are becoming increasingly sensitive to the need for switch into green products and services. While the shift to "green" may appear to be expensive in the short term, it will definitely prove to be indispensable and advantageous, cost-wise too, in the long run.Being a leading business corporation in the Sri Lankan market, the firms which are producing rubber and PVC related products and connected to DSI Company are now moving towards the profitability and success by using aspects of green marketing perspective. The company has established Sri Lankan Symbol in the mindset of foreign customers as well as Sri Lankan by entering the international market. This is a story of success which many lessons could be learnt. DSI Samson Group proudly stands tall today as the country’s premier business conglomerate and leading manufacturer of footwear and rubber related products in Sri Lanka. The company is driven by innovation, adaptation and a keen sense of responsibility, combined with customer service excellence, high business ethics and a committed workforce for over 52 years. Samson International Ltd is a sister company of the renowned DSI Samson Group. It is one of a major Rubber Products manufacturers and exporters in Sri Lanka, Samson International Ltd., strives to provide products of the highest quality. With almost 25 years’ experience in the manufacturing industry, which have established an experienced and remarkably efficient management team consisting of over 300 employees. There were so many obstacles at the start of this successful journey. In 1962 Mr. D.S. Rajapakshe– Founder, Chairman along with his children launched D. Samson & Sons business outlet in Fort (Colombo), to sell local and imported footwear started as a small outlet. In 1988.10.14 the Samson International LTD was started as a sub company of the DSI Corporation. The company faced a challenge to find the solutions which are concerned about the environment aligned with production and marketing processes, Because of the company engaging Rubber related products, which may have the considerable impact towards the environment. The success of any organization depends on consideration and the satisfaction of the customer community. So, Samson International Company, which is offering vast variety of product ranges to both international and local markets, has been studied on consumer perception and consumer behavior under the context of green marketing. The products those are manufactured through green technology and that caused no environmental hazards are called green products. Promotion of green technology and green products are necessary for conservation of natural resources and sustainable development. Research and development department and market research team investigated and studies about following theoretical aspects and models. They were realized the importance of the green marketing after having a thorough understanding about the different theories.Basically, the company has been moving to green designing concept. At the stage of conceptualization, company considered about sustainable material and environmental friendly production processes. Processes were planned with the consideration of waste recycling procedures. Next they are using “green positioning” to establish an attractive environment friendly brand image in the customer’s mind about the product which they are offering to the market. At the phase of “green logistics” the company concentrates another few critical factors. Value chain has been considered about the environment friendly packaging other than production and distribution process elements. When it comes to Green disposal phrase, company has been taken into consideration in various stages of product life cycle (from production to disposal), to dispose the wastage without any harm to the environment or human health. Now the organization is being implemented 3R method (Reduce – Reuse –Recycle) which is identified as a very practical and useful model Company adopt the 3R method of Reduce- Reuse- Recycle since 2005. This method covers in waste rubber and water management. Waste rubber is being recycled. Energy consumption has been minimized by eliminating energy waste, installing capacity banks, using transparent roof sheets and energy saving bulbs. Company monitor electricity consumption on a daily basis with sub-meters and energy audits are carried out from time to time. The Samson PLC has been adopted the environmentally friendly production method. The company uses electricity, paper and other power sources conserving approach and reinvest the saved resources for the benefit of the production value chain. One of the mainly concerned facts of the organization is the measuring of the timely impacts on the environment. Through these institutional protocols, inefficiencies are being corrected. To use this advantageous green marketing technique, The Samson International PLC uses the contribution of everybody in the group. The company often set up the “Green discussions” on the methods in production and marketing tactics with the employees and its main focus is based on the environment friendliness. Through this method the employees can suggest ideas to protect the environment. This boosts morale and generates goodwill as every person in DSI can contribute to the organizational environmental goals.Environmentally friendly measures are being taken in the supply chain of the factory as well. The purchasing orders are done to obtain raw materials in a well-planned manner. As a result the frequency of deliveries can be reduced also the packing materials supplied by the suppliers are re-used. Another important rule of green marketing is focusing on customer benefits. Always the company considering about the primary reason why do consumers buy certain products in the first place, and what are the reasons to motivate consumers to switch brands or even pay a premium for the greener alternative. It is not going to help if a product is developed which is absolutely green in various aspects but does not pass the customer satisfaction criteria. This will lead to green myopia. Also, if the green products are priced very high, then again it will lose its market acceptability. Samson international PLC has been provided careful attention regarding Green marketing myopia as well. In addition to the above information, Samson PLC has been following a unique green marketing and forest conservation approach. It is named as FSC approach. Under the FSC approach DSI group is following the below mentioned principles. 1). Compliance with all applicable laws and international treaties, 2). Demonstrated and uncontested, clearly defined, long–term land tenure and use rights, 3). Recognition and respect of indigenous people’s rights, 4). Maintenance or enhancement of long-term social and economic well-being of forest workers and local communities and respect of worker’s rights in compliance with International Labor Organization (ILO) conventions, 5). Equitable use and sharing of benefits derived from the forest, 6). Reduction of environmental impact of logging activities and maintenance of the ecological functions and integrity of the forest, 7). Appropriate and continuously updated management plan, 8). Appropriate monitoring and assessment activities to assess the condition of the forest, management activities and their social and environmental impacts, 9). Maintenance of High Conservation Value Forests (HCVFs) defined as forests containing environmental and social values that are considered to be of outstanding significance or critical importance, 10). In addition to compliance with all of the above, plantations must contribute to reduce the pressures on and promote the restoration and conservation of natural forests.The performance in the rubber segment has been improving day by day. The Company will further extend the rubber-related product range with an environmentally friendly manufacturing and green marketing aspects. The biggest challenge to the Company is to turn around the PVC segment in the next few years seven though there was remarkable progress. There is a radical change in consumer preferences and lifestyles. There has been a change in consumer attitudes towards a green lifestyle. The company is actively trying to decrease the negative impact on the environment. Through their unique initiatives the Samson International PLC, which is a subsidiary of the DSI group have been resulted in a competitive advantage for the organization. However, Due to the shift from traditional marketing to green marketing, management and decision makers are facing many contemporary challenges and have to investigate new strategies on Green marketing approach.
Shaking a cold market with a hot flavor–Clogard entering the toothpaste market in Sri Lanka with Clove Oil.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Wimalana, K.W.N.
‘Sunlight’, ‘Signal’, ‘Sunsilk’, ‘Vim’, ‘Lifebuoy’ and ‘Lux’ brands marketed by Unilever dominated the Sri Lankan market during the decade of 1980’s in home care and personal care sectors along with ‘Astra’ margarine, ‘Lipton’s tea and ‘Knorr’ in the food category. These products were ‘must have’ for any FMCG dealer to run the business. They occupied the supreme leadership position in the Toothpaste market after successfully eradicating local players who directly competed with them. ‘Forhans’ and ‘Orafoam’ from Maharajas, ‘Superdent’ and ‘Prodent’ from D.A.Abeysinghe, ‘Protect’ from Swadeshiwere disappearing from the market by 1990’s while ‘Supirivicky’ from Siddhalepa and ‘Vendol’ from Godakanda were holding a small share under the herbal category. These companies did not have the same financial, technical, marketing and distribution power to challenge the supremacy of Unilever. Therefore the success of the game on challenging the giant totally depended on creativity. Sheik HasannallyEsufally founded Hemas Drugs limited in 1948 after leaving from his family business of E. G. Adamally& Company. By 1990, the company was managed by 4 of his grandchildren and they had commenced manufacturing of FMCG products and held another business arm in Travels. As a local upcoming star, Hemas Drugs Limited had embarked on their attack to the Baby Care market controlled by ‘Pears’ of Unilever with brand ‘Cheramy’.In 1992 Hemas launched ‘Clogard’ toothpaste with the ‘time tested goodness of clove oil and scientifically tested fluoride’ challenging the market dominated by Unilever with brand ‘Signal”. Successfully battling a court case filed against by Unilever and turning more than one problem into opportunities, Clogard captured 28% market share within 6 years and increased that up to 33% subsequently.Due to the excessive market dominance of Unilever in home care and personal care categories, they had the strength to operate with strict trading terms that were not solicited by the trade who had no option but to follow. This market sentiment was providing a hint to the Hemaswho had already made headway with their ‘Cheramy’ brand to consider toothpaste to be launched through their FMCG Category. There was a similar situation successfully captured by Balsara in India fighting against 4 multinational giants with their ‘Promise’ brand that was introduced with clove oil. After launching the product in 1978, within a very short period of 5 years, they became the 2nd biggest player below ‘Colgate’. Any successful new product development has to commence the journey with idea generation. In the Clogard story, it is a classic example of picking the idea from the market itself which is the most important place for a success or failure of a product. The opportunity had already been created due to the success of their ‘Cheramy’ that pitched against ‘Pears’ of Unilever. They were in the best position to leverage on the support from the trade to challenge the dominance of a giant who had the power to control the trading condition to their favor. In the stage of idea screening, the cost factor has to be evaluated. That is where the second hand machine that had been brought in but not used by ‘Lankem’ came to the radar screen of Hemas. Following all the steps up to commercialization successfully, Hemas demonstrated that a properly executed theory can bring the ultimate success. In the case story, the birth of the local giant Heamsis discussed along with significant milestones of their journey. A family business turning into a world class conglomerate cannot happen unless utmost professionalism is imbedded with the family members who are in the driving seats. That conversion does not happen overnight and it is a process that has to be managed carefully within a reasonable period of time. When Hemas became a reasonable challenger in the FMCG Market, they got into accelerate mode. Identifying the core competence was done by them successfully in the area of toothpaste since there were many failures experienced by some other local giants still operating in the market. Those companies were not failures looking at the businesses run by them but they all had failed in toothpaste business and that was a huge challenge taken by Hemas. While looking at the failures in the local market, there was one success story in the nearby India where a local company had successfully challenged the toothpaste market of India dominated by 4 multinationals. Balsara in India had become the 2nd biggest player with their ‘Promise’ brand within a very short period of time due to their insights on the Indian Consumer. They launched the first toothpaste in India with clove oil and managed to occupy the above position within 5 years.The case story discusses the pre and post launch of Clograd by Hemascombining ‘the time tested goodness of clove oil and scientifically tested fluoride’. The company had clearly understood the repercussions if they launched the product with only one of them. They had to fight against the biggest FMCG player in the market who had enormous power in financial abilities, distribution and over the retail trade. But Hemas was aware of the weaknesses of their opponent and knew how to target their campaigns to reach the consumer. When Unilever took them to the courts and stopped Clogard for a few weeks and it was taken as an opportunity by Hemas to get free publicity on their brand. Eventually when they won the case, the PR activities conducted by them brought very positive results winning public opinion in their favor. The orchestrated attack on Signal using all possible ATL and BTL activities covering all stake holders in the business including sales force, distributors, trade and consumers are discussed in this story. The key point in the case story is identifying the opportunity precisely correct, coming out with the most appropriate strategy and executing that against all expected and unexpected obstacles. It does not matter how many players have tried the same idea in the past and failed. Important point is to understand what you can learn from other’s mistakes as well as other’s successes. In this case, while Hemas found many failures in Sri Lanka they found one success in India from which they could learn an important lesson. Another learning point for the readers is to understand how Hemas turned all their problems into opportunities very creatively. The hot flavor that was not liked by kids against usual mint flavor was projected as the effectiveness of good germ killing toothpaste. Not having the technology to create 3 strips on the toothpaste was converted to be modern against old fashioned toothpastes with red strips. This case story can be considered as a classic success of a new product development. The reader will understand the significance of following a theory with utmost care to the details and how to maneuver at each point when faced with a problem. Some say that this is the David and Goliath case history that was the toast of marketing fraternity in Sri Lanka.
“Standing tall amongthe pioneers of Business”.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Weeratunge, R.A.D.D.
Today, EB Creasy (EBC) is a diversified group of companies spanning a wide spectrum of activities ranging from import, export, manufacturing &distribution of FMCG products and freight forwarding to formulating and trading in chemicals, hotels, renewable energy and plantation management.The Groupis having a strong foothold in Homecare, Personal care, Health & Nutrition, Pharmaceuticals and Hardware products. It has diversified into many businesses and has experienced rapid growth over the years. The underlying strategy when making new acquisitions or expanding existing business primarily have been capitalizing on existing synergies, either raw-material, production techniques, human expertise, focus on complementary products and/or integration in to an existing value chain, concentrate on products of mass appeal to uphold the company’s brand image within the households, no inhibition in reaching island-wide customer base since EBC has over the years built-up a robust , highly trained and motivated sales and distribution network covering the whole island though the Company has colonial roots in its corporate ancestry, it has since recognized the importance of being a truly Sri Lankan company whilst carrying the name of its colonial forefathers which still provides an aura of dependability in the minds of Sri Lankan public when it comes to product acceptance. Having recognized this mission to foster a Sri Lankan identity, EBC embarked on a product localization or import-substitution programme as a strategy of importance and urgency. By this time EBC was having a well-established of product portfolio which were predominantly imported. To achieve this planned integration with the local economy EBC adopted a two-pronged strategies of integrating and assembling imported key components with locally manufactured components for international brands under franchise and starting end to end total manufacturing process in Sri Lanka. Darley Butler & Co. is the core of EB Creasy group and mainly engages in marketing a range of FMCG categories that are well-known brands in the country. To successfully market the brands, the company has a team of Brand Managers who have hands-on experience in handling FMCG categories and are well-versed in the sphere of brand management. To maximize distribution of these products, the company relies on its key strength, its current distribution infrastructure consisting of 184 professionally trained sales representatives and 36 sales management and supervisory staff. To facilitate the distribution, the company has a modern fleet of commercial vehicles and the services of 70 long-standing stockists located strategically throughout the country. EB Creasy partnered with Pettah Pharmacy Ltd, a former subsidiary of Muller& Phipps Ceylon Ltd, one of Sri Lanka’s pioneering pharma companies established 1956 with more than 40 years of experience in agency-distributor business operation lines partnering with global pharmaceutical giants on ethical product lines. The energy and lighting interest of E B Creasy is put in to action under Laxapana Batteries PLC, a Public Quoted Entity. The subsidiaryis in the business of manufacturing batteries and assembling CFL bulbs. In April 2015, EB Creasy acquired Lanka Special Steels Ltd, which was incorporated in Sri Lanka under BOI in Nov 2003. Lanka Special Steels Ltd is the largest domestic manufacturer of Galvanizing Wire in Sri Lanka.The production facility operates with ISO 9001: 2008 certification and the GI products are certified as per SLS 139:2003. The Homecare Division has been known for its innovativeness and responsible product portfolio. EB Creasy follows globally certified manufacturing processes and offers an Eco-Friendly product range to the market. The company was the pioneer in introducing the first Sri Lankan made aerosol product under the brand “Ninja” as an alternative to imported products. As a step to fight against the dengue epidemic, the company also introduced the Ninja Protector which too is a totally new innovative product and also pioneered in introducing a two scents joss stick of their brand Amritha-an innovative introduction that totally changed the foreign brand dominated Sri Lankan joss stick market. Amritha provides 7 different fragrances which caters to Sri Lankan aromatic preferences. Another remarkable innovation is the introduction of Bio Clean. A toilet sanitization product which is not just effective in its functions but also first and the only biodegradable toilet bowl cleaner available in Sri Lanka. Bio Clean is a biodegradable toilet cleaner made of an organic acid which fully degrades in to the soil after use. This product is the first of its kind as the introduction of a bio-degradable toilet cleaner makes the existing intense competition from other big players such as Harpic irrelevant creating a brand new uncontested market space for its product. EB Creasy offers two star class brands under personal care. Bic is the number one shaving range in Sri Lanka with a market share of 75%.Exceeding 11 million in global sales each day, Bic Shavers are today the No. 1 disposable razor in Sri Lanka. EB Creasy also offers tooth brush brand under the brand name Denta which is currently the market leader in the toothbrush category.In a time when the toothbrush market was focussing on oral hygiene, Denta came up with a turnaround strategy turning the attention of toothbrush users from cavity free oral hygiene to beauty and appearance. The company identified the original buyers of toothbrushes as the mothers and therefore came up with a strategy which associated aspirational values to the brand. This change of targeting opened up a new market space for Denta which helped it to eventually be the market leader in toothbrushes. The communication focus changed from addressing functional benefits to one which addressed the emotional benefits of the consumers.The company is also engaged in manufacturing confectionery products as well as importing food products through its subsidiaries. Its flagship product is the internationally renowned medicated candy “HACKS” which is manufactured under license from Cadbury Schweppes Overseas Ltd, U.K. since 1985. EB Creasy has their own flavoured candy under the brand name “Candyman”. They also produce bakery ingredients such as Darley margarine and yeast. Company had faced failures in their attempt to launch some products such as Tooth paste, ball point pens, importing & selling three wheelers due to the broad reasons of lack of product knowledge and after-sales, launching of products which couldn’t draw strength from existing distribution network being a non-FMCG, choosing wrong marketing and product placement strategy etc. However, in each case the decision to withdraw has been quick and decisive and prevented any negative goodwill descending on any complementary products or the company image.
Strategic Alliances for Success: Story of IFS Japan.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Somathilake, C.D.
Seventeen years after the dawn of new millennium, IFS and NEC celebrated 19th Anniversary of their very successful journey. IFS was an ERP company founded in Linkoping, Sweden in 1983.IFS Applications was single, integrated ERP suite developed by IFS that enabled global and demanding business to successfully handle four core process, namely service and assets management, manufacturing, projects and supply chain management. As of 2015 Gartner recognized IFS Applications as a leader in the Gartner Magic Quadrant for Single-Instance ERP for Product Centric Midmarket Companies. By year 2016, IFS’s revenue had reached 3.6 Billion SEK. IFS business model was to conduct the product development at R&D centres in Sweden and Sri Lanka and to develop global and local cooperation with partners to enable continued development of the company’s competence and market presence with lower risk and capital requirements. IFS’s partnership strategy was dating back to its roots even though it was found to be very challenging to be implemented. As of June 2017, some of IFS regional offices totally relied on direct sales and some employed mixed mode. The strategy of IFS Japan was to totally rely on the partners by becoming a “Partner Enabler” and “the communication link between partners and IFS global organization, in particular R&D”. IFS Japan was a very compact organization with a flat structure, open door management and with many other distinct characteristics and was very different to the other regional organizations in APAC region. With the acquisition of Avalon in 1996, a US based ERP vendor which had presence in Japan, IFS started its operations in Japan by formation of IFS Japan in January 1997. The partnership Avalon and NEC had before Avalon’s bankruptcy, paved the way to IFS Japan to approach NEC. With successful negotiations backed by deep insights, IFS and NEC became partners in May 1998.NEC was a huge well reputed Japanese multinational company with wide spread global presence, providing information system services and products. NEC was a very experienced player in system integration and was a resourceful company. Even though formation of strategic alliances were believed to be the divine formula to be successful in ERP industry in terms of implementation and selling and also the prime drive from the IFS Global from its inception, IFS as a company was far behind the competition, as the formation and continuation of successful alliances were quite challenging and difficult to execute. Whilst NEC and IFS Japan Partnership was believed to be the most successful channel partnership in IFS Global, many partnerships IFS formed, even within the APAC region had not delivered the intended results. This had been the case for partnerships, even with NEC, outside Japan. The first section of this full paper describes the background of IFS and its initial sales and partnership strategies. Then the ERP industry growth, IFS Focus Industries and IFS Architecture in Late 1990swould be discussed briefly. The next section would be focused on IFS entry to Asia Pacific Region,Japan Economy, Japanese Manufacturing Industry and IFS entry to Japan. This will shed light on to understand why Japan was an attractive market to IFS in the light of its strengths in manufacturing functionality. Final part of the paper would be focused on analysis of strategic alliance formation, structural preferences and alliance performance, in the light of the resource based theory for strategic alliances developed by T.K.Das and Bing Sheng Teng in year 2000 and also based on transaction cost economics. The resource based theory for strategic alliances propose and discuss four essential components of strategic alliances: rationale, formation, structural preferences, and performance. The resource based rationale highlight the value maximization of firms trough combination and utilization of valuable resources. The overall rationale for entering into a strategic alliance is to aggregate, share, or exchange valuable resources with other firms when these resources cannot be efficiently obtained through market exchanges or mergers/ acquisitions. The resource-based logic suggests that the competitive advantage of alliances is based on the effectiveintegration of the partner firms’ valuable resources. According to this theory, the performance of alliance can be measured by its endurance, profitability and objective attainment and the performance is a function of resource alignment. The resource alignment is referred to the pattern whereby resources of partner firms are matched and integrated in alliance. The strategic alliance arrangements must be mutually beneficial to all the parties in the alliance to make sure the sustainability of it. The performance of alliances are greatly dependant on the type and the value of the resources contributed by each partner and on the accuracy of resource alignment. As per the transaction cost economics firms ownership decision is based on minimizing the sum of transaction and production cost rather than maximizing the firm value. As of June 2017, IFS Japan had the highest EBIT percentage (Earnings before Interest and Tax over revenue) in Asia Pacific Region (APAC) and all the other IFS regional companies were far behind it. And also IFS Japan had been able to maintain this record in APAC region for many years while maintaining highest absolute EBIT. In addition to that, IFS Japan was one of the most compact regional organizations in IFS Global who had been able to maintain such a fascinating record throughout. The partnership between NEC and IFS was flourishing and relationship between them was being strengthen day after day even though they have had disagreements over priorities and resource allocations time to time in their journey. As of June 2017 IFS had about 100 customers in Japan and NEC was using IFS Applications companywide as their manufacturing ERP. Additionally, NEC was a shareholder of IFS parent company (5%) from 2004 to 2016. Even though strategic alliance between NEC and IFS Japan was proven to be very successful, it is quite risky for IFS Japan to restrict their partnership to NEC, as bad patches in NEC could directly affect IFS in a big way. Therefore IFS should be looking to form good strategic alliances with other companies in NEC nature. And also they need to reconsider the adequacy of staff if they decide to form strategic alliances with other organizations and also they may need to do slight adjustments to existing model based on the demand of new partners when dealing with them. All the modifications to existing model must be done without affecting the relationship with NEC. The prime purpose of this case study is to demonstrate the performance of successful alliances in comparison to the direct selling strategies and employing mix modes in ERP industry and to guide, on how to make decisions at the formation, deciding on a partnership mode, alignment of resource and execution of strategies to yield greater performances. And also this case study will discuss IFS Japan’s strategy, management style, shared values, systems, organizational structure, staff and their skills behind this successful relationship. The intended learning of this case study could also be relevant for other industries.
Succeeding on the pillars of failure – Successful repositioning of two and three-wheeler automotive appearance (convenience range) category by Trade Mines.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Srirajakulendra, A.P.I.
Trade Mines (pvt) Limited, acts as the sole agent for the import, distribution, promotions and sales of Waxpol automotive & industrial Lubricants, polishes and waxes in Sri Lanka. Incorporated in 2010, TM’s initial monthly sale was less than LKR one million a month, with a mere distribution network covering 68 sales outlets in metropolitan of Colombo. Waxpol is one of India’s regionally known niche players in the state of east & west Bengal, but has considerable presence in around 18 states including Delhi & Tamil Nadu. Waxpol has six product lines which include automotive and industrial lubricants, hydraulic fluids, grease, coolants, Automotive appearance and hardware & household. The entity was established in 1946 as a manufacturer of automotive polishes but have expanded their portfolio throughout the years. Members of leading car forums in India, regard Waxpol paste wax and polishes as the choice of hard core car detailers who prefer a reasonably priced product as against the pricier high quality imports.Waxpol is also known in India as a supplier of cheap synthetic lubricants for two and three wheelers, where the product is sourced from China but is badged in India. From 2011 to 2015 the total population of two & wheelers have had an exponential growth as per department of Motor Traffic Sri Lanka which hit almost 15% markin Sri Lanka in turn creating a boost in the demand for lubricants being used for two wheelers and three wheelers. As per the local regulator, there are 13 licensed lubricant importers to Sri Lanka (importing almost 15,900 Kilo Litres of lubricants in 2015 as per the Public Utilities Commission), where the highest volume and market leadership is being held by Chevron Lubricants (close to 26,000 Kilo Litres of lubricants) popularly known as Caltex. For some two and all three wheelers, the prices of oil become a key element especially if they are two stroke engines, as for each refuelling 2T oil should be used as an additive. Predominantly, for three wheelers this will be loose oil supplied by Lanka lubricants (owned by CEYPETCO), Lanka IOC or LAUGFS, but unbranded. Few years ago, Caltex tried to brand this market with Revtex range but it was not well picked up by the market. In 2011 TM decides to enter this market via importing and supplying Waxpol synthetic engine oils for two wheelers and three wheelers. The primary decision behind this was to make use of a market space which was uncontested by any of the existing players with synthetic products. The product supplied by Waxpol was 10-15% increased than the conventional oil, but due to the synthetic oil having a dedicated pack, branding, technical specifications and being a product of India itself where over 90% of the two & three-wheeler engines are originated from the product started taking off in the shelves.From 2011, TM’s most successful range under the Waxpol umbrella was, the synthetic oil range for two and three wheelers. From a mere monthly turnover of LKR 200K a month within two years the revenues shot up to over LKR 10Mn a month. The sales teams predominantly focussed at the low-end service stations for two wheelers & three wheelers, by specifying that this is a synthetic oil but only a fraction of difference of the price. Even the colour of the oil was red in line with some of the high-quality performance oils, which further increased the acceptability of the oil and from at a fraction of price premium a branded seal packed product was made available to the two & three wheelers.Although it was a popular perception that two and three-wheeler owners are not very much concerned about the quality of the oil, the recent fragmentation of the market & the ATL advertising effort being put up by some of the new players in the industry, the interest for a proper branded lubricant was evident. Especially after the contamination issue of 90 octane petrol in 2011, many trishaw and two-wheeler owners became much cautious about the fuels and lubricants they use. The fact of being able to get a sealed pack, branded and above all it being a synthetic Waxpol two and three-wheeler oils gained immense popularity among the target users. The association of lubricant importers has been continuously pressurizing the government and their regulator the public utilities commission to regulate the non-conventional lubricant market as well. The collective argued on the fact that there should be control & regulation over the quality of the synthetic lubricants which are being used in the market. However, the small-time importers counter argued the fact mentioning that it was a more by the big players to further consolidate the synthetic oil market to further increase their profits. The petroleum minister Hon Chandima Weerakkody in a statement to the Daily Mirror,mentioned that the appeal from the collective of lubricant importers has been considered by him, and he will call for regulation of all conventional and synthetic oil importers. In view of the statement of the Hon minister, Trade Mines made a policy decision to appeal for an import license to the Department of Import Control under a copy to The Public utilities commission. A considerable time was involved in the decision-making process and subsequently after a period of over three months, the government responded that a license cannot be granted to Trade Mines for the import of synthetic oils. It is believed that the government has taken a policy decision to limit the number of licenses being issued to lubricant importers to further regulate and consolidate the market. With the government decision in play the BoD immediately decided to curb all imports of synthetic lubricant and greases from Waxpol. By the time the decision was made, Waxpol lubricants were contributing to almost 70% of the total turnover figure. The entity was relying heavily on the lubricant part of Waxpol, that it had lost interest on the primary set of products which were meant for automobile appearance enhancement. At the board meeting, immediately after the decision to withdraw the synthetic oil was taken in to consideration two key elements were being discussed by the Board. A) To have a bridging plan to recover the lost revenue due to the discontinued sale of synthetic oils in the portfolio and B)To consider the portfolio of product mix being mismatched between Sri Lanka and India. After the BCG portfolio analysis, the management wanted to critically relook at the relative product positioning in the market in retrospect to the brand repositioning principles by Martin Lindstrom. However, the product being badged under the convenience range actually in Sri Lanka started to repel the consumers as they were unaware of Waxpol’ s proficiency in the hardcore wax and polish market. The full campaign which took flight under the slogan of “Painters trust Waxpol convenience” kind of backfired where the local consumers did not trust the convenience range to provide performance up to the hardcore level. Waxpol was continuously trying to pitch the product to professional auto painters and detailers pressing them to use the product, but the concept of “convenience” was driving this category away. The casual user did not want to risk using the product as it was positioned as a professional detailer’s material. They did not prefer to use a professional use product and then risk any unanticipated damages to their paintwork, and even the channel was not encouraging casual users to try it. The primary damage was done at the activation point itself. The management immediately noted that there has been a fatal flaw in the original positioning of the product category at the inception. Due to the confusion caused at the activation point the product was not taking off from the shelves. The positioning was decided to be immediately changed to the quadrant where appearance conscious clients who were beginners / casual users of the product. The tagline for AA convenience was changed from “painters trust Waxpol convenience” to “Waxpol- professional level detailing in minutes”. As accordingly the Waxpol convenience range was introduced to the modern trade channel and the advertising material was changed to reflect vehicle owners using the product in contrast to previous representations with professional painter characters. To better support the everyday user, the packs were equipped with a hand sprayer and the bottle shape was aligned to ensure it could fit in the door pockets of an average car, with a free distributed polishing mitt. The pack sizes were made smaller from the traditional 01 litre packs to 100ml & 250 ml packs, and the package branding and graphics were upgraded to suit the casual consumer. The trade channels were modified with new activations done at automotive consumable sales outlets, professional service stations, modern trade outlets, vehicle agent sales outlets and pop ups stores activated during exhibitions. Special interest was focused on increasing the online sales where proposals were made to Wow.lk, Mydeal.lk and Retailgenius.lk to promote the product online with a dedicated delivery service. By early 2016, AA convenience range obtained traction in the local market. More and more casual users were looking at purchasing Waxpol and the trade volumes have been showing a mom growth of around 2%. The smaller pack sizes jump started an entirely new SKU which occasionally had stock out situations due to the high demand. By end of 2016, the convenience category was performing a highly satisfactory level, recording a turnover representation of almost 35% out of the total category mix, signing one of the most successful repositioning conducted for the entire Waxpol range.
Transformational Leadership &Innovation as a Spring Board to Traditional Tea Industry: Success Story of Lumbini Tea.
(Proceedings of Case Study Synopses ,DBA Case Study Symposium-2017, University of Kelaniya, Sri Lanka., 2017) Liyanage, P.W.
Sri Lanka as the gateway to South Asia and with its strategic location along the silk road, famous for its gems, spices, tea, cricket & beauty attracted foreign invaders for centuries. The first tea field was planted in Sri Lanka in 1867 under the British rule and celebrating its 150th anniversary by year 2017(Ceylon Tea Board). Ceylon Tea the flagship brand popular all over the world, is one of the most significant industry in Sri Lanka economically as well as culturally. For the last few decades Sri Lanka has lost its market share in the market apart from few significant tea brands perform well in international level. Even though, the world production of tea grew 6 percent from 4,990 in 2013 to 5,304 billion kilograms in 2015 (ITC ,2016) our tea export haven’t increased accordingly. This is due to Increasing competition from countries such as Kenya, India and Indonesia has resulted in reduced market share and low prices in the international market. It is a must we have to look back why we have lost the competitive edge and the market position in the world tea map. Apart from few Sri Lankan brands all other tea producers are selling bulk tea through the commodity markets due to short term financial benefits where we lose an ample opportunity of value added tea and other new emerging markets. Even though Sri Lanka is catering to Ceylon tea lovers, it has to face the challenges in increasingly competitive beverage market as variety of teas in the world market is now increasing while consumption of unbranded tea is declining (Wanninayake and Disanayake, 2006). To gain a competitive advantage in the tea industry value creation and the change management can be used as fundamentals. To drive this effort leadership is a must for any organization. “if you wanted to do something new always select something that can be done every day and continuing “is the advice of Mr. D,Jayawardane , founder/chairman of Lumbini Tea Valley to his son and workers in the organization Mr. Jayewardene, charismatic visionary entrepreneur hailing from down south has established Lumbini tea factory in 1984 and despite all the odds he has developed it to become a forefront tea factory in Sri Lanka which fetches highest price range merely because of its quality which never compromised. Nevertheless, his effort to up bring the Lumbinito this stage he has decided to transfer the batten to the second generation smoothly which took almost a decade where he groomed his son to take the reins. Even today he stands behind them and involved with the factory where he plays a shadow role. With the new young leadership Lumbini has taken another turn with his novel management practices and dedication to take the brand global. “Once I have taken the control I have increase the human resource and welfare budget with a considerable amount and this has led to the increase of the productivity. While doing all these changes I have never up-side down my father’s management systems, but I have changed them the way I wanted gradually” Stated Chaminda during the interview. Turnaround of the company has happened in 2003 when they decided to participate in a Tea competition held in USA and won four awards and it has become a catalyst for the morale boosting and to decide to go beyond boundaries. While pumping innovation in to the product and process he has open the doors to open innovation practices where in enabled flow the external knowledge gains from stakeholders as well as out flow from the organisations. Lumbini’s innovation has been multi-pronged. In the area of product development, for instance, finding new products and existing product enhancements in terms of the tastes and aroma is a key area. In terms of market innovation is often about finding solutions to meet imagined or real consumer needs and looking for new markets or expanding the existing market has been forefront. “We have given the freedom to do our experiments and come up with novel ideas to improve the products and processes of tea making. This kind of practices I have never come across any factory in Sri Lanka”, On of his employees expressed his view on the innovations. Chaminda’sleadership &change management practices with strong human resource focus coupled with social responsibility effort bonded to its core business and employees paved way to make a delighting environment for the staff and the coworkers. Also long term rewarding and appreciations strengthen the sustainability of his change management efforts. While keeping focus on new value added tea varieties and novel branding effort Lumbini keep continuing to tap untapped market where they see a blue ocean without competing on already cluttered markets. The effort of keeping the price point high without compromising the quality and conveying the buyers is done through tea experiencing with tea fares worldwide and participation in the competitions where Lumbini has won numerous accolades under their brand giving them a good exposure. Even though they are going strong in exporting and among the tea exporting companies in Sri Lanka the brand name of “Lumbini “has not come forward much to the general public in Sri Lanka which he decided to do some branding and visibility exercises as well and it has paved way to establish tea centers around the country focusing the tourist and up market tea consumers where the first experience center is establishing in Lumbini factory premises itself. Now they have three customer experiencing tea centers including Ella & Hikkaduwa targeting the tourist and tea lovers where at Deniyaya “Dalu” Tea center can experience their own tea trail and make your own tea cup. Among the top innovative products “Tea Ring” product, “Jaya-Chakra”, first part from the name of the founder chairman and the latter was derived from the shape. (Chakra is for the shape of ring in Sanskrit) won many accolades in country as well as overseas. Management has granted an immediate cash reward for the innovator of this tea and though he is not working for the company now still pay a royalty fee for him and this has encouraged and with this innovation drive so far employees of Lumbini has come up with 5 innovative patented teas. By adopting a concept of Vine Yards in France and in European countries they have decided to promote “Lumbini Tea Valley”, with the Lumbini Estate which is situated bordering Sinharaja World Heritage rain forest and special soil condition which gave a unique taste and aroma to the tea. With the prevailing high labor and other cost for production in tea industry it’s impossible to fight with low cost tea producing countries like Vietnam & Kenya. Therefore, the best way to get away from this obstacle is value added tea and high branded teas where we can sell high price, high quality tea as a strategy. Lumbini was the first to export tea direct to a buyer from a tea producing factory. Where the Dilma as a brand have done the brand marketing for Ceylon Tea they also started buying from tea auction and until at the latter stage they went for their own production facilities. Nevertheless, the respect and the gratitude should go to founder of Dilma Mr. Merrill J Fernando, who pioneered to take the Ceylon tea brand in to niche markets around the world and showed the way. The Dilma revolution has paved way for the new entrants like Lumbini and many more where no one believed that we can brand “CeylonTea” at the highest level in the world tea market and capture the premium sector. Along with this Lumbini has selected Going global as a strategy for growth. Usually the internationalization or expansion of the firm across many foreign markets, is related to psychic distance where the initial entry is to a foreign market which is familiar and closer in terms of psychic distance to the host country, followed by subsequent entries in markets with greater psychic distance. Psychic distance is defined as the "sum of factors preventing the flow of information from and to the market. Examples are differences in language, education, business practices, culture and industrial development". But in the case of Lumbini they have taken a unique approach where the new markets are totally new territories and psychic distance is high like Mexico & Latin American countries. They have selected exporting to direct buyers and subsequently joint venturing as mechanisms and first JV they have established “Lumbini Tea Valley USA” to promote tea in North & Latin America. Also Lumbini has nurtured a culture where they use education as a tool for promotions by participating exhibitions and tea tasting events all over the world. This case story is a good example of transformational leadership which drives the innovation within the company and establishment of change management to reach the next level where open innovation has become key instrument of growth with other supporting factors. With the present growth pace and direction Lumbini is in the acceleration stage and ready to be the next big Sri Lankan specialty tea brand in the world.