PGP 2011-12 SMII Slides Third Set PDF

Xerox and Fuji Xerox
Srinivas Gunta
Assistant Professor
Strategic Management
Discussion questions
1. Why was Fuji Xerox incubated? How has the

relationship between Xerox and Fuji Xerox changed
over the years?
2. What would you recommend that the Codestiny
taskforce do?
3. Should Fuji Xerox be considered as an alliance in
the spirit and the meaning of the term? More
fundamentally, can alliances and acquisitions be
viewed as different ways of reaching similar goals?
Srinivas Gunta PGP 2011-12 Strategic Management II
Xerox: The early years
Xerox: 914 and operating model

Machine rental scheme
Phenomenal growth: Fastest in US to $1bn. sales
Forms Rank Xerox

Rationale for JV?
Advantage for Xerox?
What happened in 1964 in terms of marketing
rights?
Fuji Xerox: The early years
Fuji Photo Film the only non-electronics suitor

Why did Rank enter into an agreement with Fuji?
Why did Rank insist on a JV?
What role did Fuji Photo Film play?
FXs subcontractor. Primarily manufacturer. Why?
1971: FX combines Mfg. & Mktg. under one roof
What made FPF become passive?
What happened to Rank Xerox equity structure in
1969?
Planning for resources
Partnerships
Why enter partnerships?
51:49 JV between NHPC and OHPC

How should they move in future?
What do you think of the codestiny task force?

What do you make of the relationship options in
marketing?
research?
development and manufacturing?

Pop Quiz
1. Kobayashi believes that goals of Xerox & Fuji Xerox

can be described as mostly compatible and partly
conflicting. Do you agree? Justify. (8 marks)
2. Which option in Exhibit 11 under Research options
should Codestiny task force recommend? Justify. (8
marks)
3. In Exhibit 11, under Marketing options, what

depicts the relation followed in 1970s? Why? (4
marks)

Xerox and Fuji Xerox
Successful alliance?
Reasons for alliance?
Changes in the reasons?
Who is controlling whom?
Is Fuji Xerox better off alone?

Acquiring and Allying: Similar?
What should Praja Rajyam have done?

HP-Compaq vis--vis ArcelorMittal
HP-Compaq ArcelorMittal
Characterized as merger Characterized as takeover
Post-event name: HP Post-event name?
Target smaller than acquirer Target larger than acquirer
Compaq: #2 in PCs in USA Arcelor: Global #1 in Steel
Deal offer: $24 billion Deal offer: $32.4 bn. (2006;
(2002) Original offer of $23.3 bn.)
US firm taking over another Dutch firm taking over
US firm Luxembourgese firm

HP-Compaq vis--vis ArcelorMittal
HP-Compaq ArcelorMittal
Opposition within the board Geo-political opposition
and from substantial (France, Spain); Bid from
number of shareholders Russian firm Severstal
Fortune Global 500 2011: Fortune Global 500 2011:
28th, $126 bn., $8.76 bn.; 74th, $83 bn., $2.92 bn.
Revenues higher than IBM
(2011)

When to do what : Pretty neat, eh?
Any issues with the above framework

of Dyer, Kale & Singh?

Planning for resources

Various ways of skinning the cat?
CSB KEY
Strategic group 1
Strategic group 2
Strategic group 3
PSB Strategic group 4
PSB Pooling strategic block

CSB Complementary strategic block
HB Hybrid block or continuum block
Within each block, the relations can be

anywhere on the continuum of fully
connected to star structured.
HB
My interpretation of Nohria & Garcia-Pont (1991) Global Strategic Linkages and Industry Structure Strategic Management Journal, 12(S1): 105-124

Tech. Familiarity & Mode of Engagement
Bilateral Alliances
Unilateral Alliances M&A

Internal R&D Embodied Acquisition
High Technology Familiarity Low
Srinivas Gunta PGP 2011-12 Strategic Management II Research by Ashwin, IIM B

Transaction Costs & Mode of Engagement
Bilateral Alliances
M&A
Unilateral Alliances
High Transaction Costs Low

Paradox?
Bilateral Alliances
Unilateral Alliances M&A
High Technology Familiarity Low
Bilateral Alliances
M&A Unilateral Alliances
High Transaction Costs Low

Framework
High M&A Internal R&D

( Hierarchy)
TRANSACTION
COST Bilateral Alliances
Low
(Market) Embodied Technology
Unilateral Alliances
Acquisition
Low High
TECHNOLOGY FAMILIARITY

Organizational Design and Control
Bartlett, Ghoshal & Birkinshaw, 2003. Developing Coordination and Control:

The Organizational Challenge. Transnational Management: Text, Cases &
Readings in Cross-Border Management, 4th ed. McGraw-Hill: 339 355
Srinivas Gunta
Assistant Professor
Why have alternate paths?
Why is an
international division
preferred initially?
Who calls shots in
different models?
Why did Grid not
work as prescriptive
model?

Orientations & Approaches
Headquarters orientation
Ethnocentric
Polycentric
Geocentric
Strategic approach to managing businesses

Multinational (Early European models)
International (Early US models)
Global (Early Japanese models)
Organizing as a Decentralized Federation
Multinational
What is achieved?
What orientation?
What sort of control?
What about synergies?

Organizing as a Coordinated Federation
International
What is achieved?
What orientation?
Who calls the shots?
What was the relation
Fuji Xerox had with
(Rank) Xerox in the
early 1970s?

Organizing as a Centralized Hub
Global
What is achieved?
What orientation?
What does
subsidiary do?
How does it
compare to
coordinated
federation?

Common pitfall across the models?
No scope for
interaction
amongst the
subsidiaries

How is this an improvement?
Multidimensional Perspectives
Local responsiveness
Global efficiency
Best practice transfers
Distributed, interdependent
capabilities
Frequency & Content of
interactions goes up
Flexible integrative process:
Management as orchestrator
Centralization
Formalization
Socialization
Understanding the Being
Anatomy
Formal structure and responsibilities
Physiology
Interpersonal relationships and processes
Psychology
Individual attitudes and mentalities

Transnational: Integrated Network Model
Anatomy
Microstructural tools such as
committees
Physiology
Formal and informal channels of
communication
Psychology
BHAGs
Formalization
Actions of senior managers
Tough to change

The Strategy Structure Paradox
Heard of Chandler?
To implement a strategy, you need a structure
Structure follows Strategy
What would happen when you need to
change strategy?
Strategy follows Structure
Why? What does that imply?

Which one makes sense and why?
Anatomy Physiology Psychology
OR
Psychology Physiology Anatomy

House of Tata:
Acquiring A Global Footprint
Srinivas Gunta
Assistant Professor
Why is internationalization tough?
Distance matters!
CAGE distance Pankaj Ghemawat
Cultural
Administrative
Geographic
Economic

Discussion questions
Does the Tata group contribute positively in

the internationalization efforts of its group
companies?
What is the role of Tata group center?
What do you think should be the guiding
principles in deciding on internationalization
decisions such as the Jaguar and Land Rover
deal?
Should Tata Motors go for JLR?
Some additional issues
Is growth important?
Is globalization necessary?
How did Tatas prior international forays fare?

Section F Surprise Quiz No. 1
Name:________
Roll number:___
1. Page 5, 3rd line of the case reads to disaggregate
their value chains... Explain what it means and
illustrate with an example from the case. (8 marks)
2. I dont think you can drive too many things
centrally in the Tata system (page 10). How/ Why
is it different from GE? (8 marks)
3. Provide 2 different reasons for (or) against Tata JLR
deal. (4 marks)
Tatas over the years

Tatas and the group center

From Exhibit 5
1800.0
1600.0
1400.0
1200.0
Tata Motors
1000.0
Indian Hotels
TCS
800.0
Tata Steel
Tata Tea
600.0
Sensex/10
400.0
200.0
0.0
Sep-99
Feb-00
Jul-00
Dec-00
Sep-04
Feb-05
Jul-05
Dec-05
Nov-98
Nov-03
Aug-97
Jan-98
Jun-98
Apr-99
May-01
Mar-02
Aug-02
Jan-03
Mar-07
Aug-07
Oct-01
Jun-03
Apr-04
May-06
Oct-06

Recasting Exhibit 5
450.0
400.0
350.0
300.0
Tata Motors
250.0
Indian Hotels
TCS
200.0
Tata Steel
Tata Tea
150.0
Sensex
100.0
50.0
0.0
Sep-99
Feb-00
Jul-00
Dec-00
Sep-04
Feb-05
Jul-05
Dec-05
Nov-98
Nov-03
Aug-97
Jan-98
Jun-98
Apr-99
May-01
Mar-02
Aug-02
Jan-03
Mar-07
Aug-07
Oct-01
Jun-03
Apr-04
May-06
Srinivas Gunta PGP 2011-12 Strategic Management II Oct-06
Tata Sons Shareholding Structure (% held)
90
80
70
60
50
40
30
20
10
0
Tata Tata TCS Tata Indian
Motor Steel Tea Hotels
2003-07: Major Tata Co.s Performance
Companies Net Total Total Net Income

Income: Assets: Liabilities: Margin:
CAGR CAGR CAGR CAGR
Tata Motors 50.94% 6.97% 25.22% 18.23%
Tata Steel 32.30% 31.19% 29.87% 8%
Tata Tea 39.96% 17.31% 19.2% 30.56%
Indian Hotels 67.52% 11.59% 9.91% 35.58%

Tata Motors vis--vis peers: 2007 D/E
180
M&M
160
140
120 Tata
100
80
Ashok
60 Leyland
40 Maruti
20
0
Debt/equity
Tata Steel vis--vis peers: 2007 D/E
180
Tata Arcelor Mittal
160
140
120 Nippon
100 SAIL
80
60
40
20
0
Srinivas Gunta 1st Qtr
PGP 2011-12 Strategic Management II
Tata Tea vis--vis peers: 2007 D/E
250 Tata
200
150
HUL
100
Nestle
50
0
Indian Hotels vis--vis peers: 2007 D/E
100 Indian Hotels
90 Shangri-La Asia
80
70 Hongkong & Shanghai
60
50
40
30
20
10
0
What are Tatas up to?
Buy 30% of EBI; sell it the next year

Management contracts in hotels along with
presence in Gateway cities and even think
of acquiring a chain
Low-end Nano and High-end Jaguar

Growth strategies Consistent?
Huge differences in growth strategies

Between entrepreneurs and managers
Between emerging economy firms and developed
country firms
5 ways in which resource-starved developing
countries lead rich nations (by C K Prahalad)
Affordability; Leapfrog technologies; Service
ecosystems; Robust systems & Add-on
applications
Reverse innovations become possible
Tata Nano to Pixel

Godrej Chotukool Refrigerator; Mitticool
GEs ECG machine GE MAC 800
P&G Vicks Honey Cough
Nestles Low-cost Low-fat dried Noodles
(Maggi)
Tata Swach
The Competitive Advantage of Nations
Srinivas Gunta
Assistant Professor
Competitive Advantage
Is competitive advantage inherited or
created ?
How far does home environment go in
contributing towards creating and sustaining
competitive advantage ?
Universally companies achieve competitive
advantage through acts of innovation in
adopting new technologies and by new ways
of doing things. Agree?

Determinants of Competitiveness?
At National Level
Labor cost
Interest rates
Exchange rates
Economies of scale
What is meant by national competitiveness?

Sustaining Competitive Advantage
Global approach to Strategy

Making a current advantage obsolete

Nations in Context of Globalization
WTO Factor mobility & Outsourcing

Entry barriers?
SEZs and FTZs

Borderless World by Ohmae
Customer
Company
Competition
Currency
Country

Role of Governments?
IT and beauty

Determinants of National Competitive Advantage

Section A Surprise Quiz No. 2
Roll number:__
1. Take an industry where India is competitive (e.g.
S/w services, Pharma, Textiles, Gems & Jewellery,
Auto components) and analyze it with respect to
the four determinants in Porters diamond. (12
marks)
2. Having done the above, do you agree with the

framework of Porters diamond? Justify. (8 marks)

Across Industries
Export performance post 1990-91
18
Value (in U.S. billion $)
16
14
12
10
8
6
4
2
0
91 93 95 97 99 01 03 05
19 19 19 19 19 20 20 20
IT Gems & Jewellery Readymade garments
Year
The Top 8 Indian S/w Exporters
Yr.\Rank 1 2 3 4 5 6 7 8
1980-81 TCS TUL Computronics Shaw Wallace Hinditron Indicos ORG
1985-86 TCS TUL PCS Hindistron Infosys Datamatics DCM DP COSL
1989-90 TCS TUL COSL Datamatics TI Digital PCS M-BT
1993-94 TCS TUL HCS HP Digital ICIM Wipro Pemtafour Patni
1994-95 TCS TUL Wipro Pentafour Infosys Silverline Fujitsu Digital
1996-97 TCS Wipro NIIT Pentafour Infosys
1997-98 TCS Wipro Tata Infotech Pentafour Infosys Satyam Tata IBM CMC
1999-00 TCS Wipro Infosys HCL Satyam NIIT
2000-01 TCS Infosys Wipro Satyam HCL Patni

Across Industries: Turnover
120
100
80
60
40
20
0
TCS (IT) Ranbaxy Gokaldas Bharat Forge Rajesh Exports
(Pharma) (Apparel) (Auto) (Jewellery)

Across Industries: Net Profit
120
100
80
60
40
20
0
TCS (IT) Ranbaxy Gokaldas Bharat Forge Rajesh
(Pharma) (Apparel) (Auto) Exports
(Jewellery)
Thank You!!

PGP 2011-12 SMII Slides Third Set PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PGP 2011-12 SMII Slides Third Set PDF

Uploaded by

Copyright:

Available Formats

Xerox and Fuji Xerox

1. Why was Fuji Xerox incubated? How has the

Xerox: 914 and operating model

Forms Rank Xerox

Fuji Photo Film the only non-electronics suitor

51:49 JV between NHPC and OHPC

Srinivas Gunta PGP 2011-12 Strategic Management II

What do you think of the codestiny task force?

Srinivas Gunta PGP 2011-12 Strategic Management II

1. Kobayashi believes that goals of Xerox & Fuji Xerox

3. In Exhibit 11, under Marketing options, what

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

What should Praja Rajyam have done?

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

Any issues with the above framework

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

PSB Strategic group 4

PSB Pooling strategic block

Within each block, the relations can be

Srinivas Gunta PGP 2011-12 Strategic Management II

Unilateral Alliances M&A

High Technology Familiarity Low

Srinivas Gunta PGP 2011-12 Strategic Management II Research by Ashwin, IIM B

High Transaction Costs Low

Srinivas Gunta PGP 2011-12 Strategic Management II Research by Ashwin, IIM B

High Technology Familiarity Low

High Transaction Costs Low

Srinivas Gunta PGP 2011-12 Strategic Management II Research by Ashwin, IIM B

High M&A Internal R&D

Srinivas Gunta PGP 2011-12 Strategic Management II Research by Ashwin, IIM B

Bartlett, Ghoshal & Birkinshaw, 2003. Developing Coordination and Control:

Srinivas Gunta PGP 2011-12 Strategic Management II

Strategic approach to managing businesses

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

Anatomy Physiology Psychology

Psychology Physiology Anatomy

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

Does the Tata group contribute positively in

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

Srinivas Gunta PGP 2011-12 Strategic Management II

Companies Net Total Total Net Income

Tata Steel 32.30% 31.19% 29.87% 8%

Tata Tea 39.96% 17.31% 19.2% 30.56%

Indian Hotels 67.52% 11.59% 9.91% 35.58%

Srinivas Gunta PGP 2011-12 Strategic Management II

Buy 30% of EBI; sell it the next year

Srinivas Gunta PGP 2011-12 Strategic Management II

Huge differences in growth strategies

Tata Nano to Pixel

Srinivas Gunta PGP 2011-12 Strategic Management II