Case Study1: Southwest Airlines Competitive Advantages For most of the last fifteen years, the U.S.

airline industry has been one of the least attractive to be in. Following the 1978 deregulation of the industry, twenty-nine new airlines entered the industry between 1978 and 1993- This rapid increase in airline carrying capacity led to a situation of overcapacity. As more and more airlines chased passengers, fares were driven down to levels barely sufficient to maintain the profitability of U.S. airlines. Indeed, twice since 1978 the industry has been engulfed in an intense price warfirst in the1981-1983 period and then again in the 1990-1993 period. So intense did the competition become during these two periods that in 1982 the whole industry lost $700 million, while in the 1990-1992 period the industry lost a staggering $7.1 billion, more than had been made during the previous fifty-year history of the industry. Despite the obviously hostile nature of this industry, one company, Southwest Airlines, has not only been consistently profitable but also has been its performance improve during years when its competitors were wallowing in red ink. Southwest is a regional airline with a major presence in Texas. In 1992, when every major U.S. airline except Southwest lost money, Southwest actually reported a sharp jump in its net profit to $105.5 million on revenues of $1.68 billion, up from $26.9 million on revenues of $1.31 billion in 1991. Southwest is profitable because of two factors: its low costs and the loyalty of its customers. Its low costs come from a number of sources. Southwest offers a no-frills approach to customer service. No meals are served on board, and there are no first-class seats. Southwest does not subscribe to the big reservation computers used by travel agents because it deems the booking fees too costly. The airline flies only one type of aircraft, the fuel-efficient Boeing 737, which keeps training and maintenance costs down. Last but not least, the airline has a very productive work force. Southwest employees say that they are wining to work hard because they feel appreciated by the top management. The CEO, Herb Kelleher, has been known to help flight attendants serve drinks and help maintenance engineers service planes. As one flight attendant put it, the airlines employees work hard because you dont want to let Herb down. In addition, Southwest operates a generous stock option plan that extends to all employees. As a result about 10 percent of the airlines stock is owned by its employees, which gives them an additional incentive to work hard. Southwests customer loyalty also comes from a number of sources. Due to its low cost structure, Southwest can offer its customers low prices, which builds loyalty. Southwest also has a reputation for being the most reliable carrier in the industry. It has the quickest turnaround time in the industry (it takes a Southwest ground crew just fifteen minutes to turn around an incoming a craft and prepare it for departure), which helps keep flights on time. The company also has a well-earned reputation for listening to its customers. For example, when five Texas medical students who commuted weekly to out-of-state medical school complained that the flight them to class fifteen minutes late, Southwest moved the departure time up fifteen minutes. In addition, South wests focused route structure (it serves just fifteen states, mostly in the South) has helped it build a substantial regional presence and avoid some of the cutthroat competition that the nationwide airlines have to grapple with. Case Discussion Questions 1. What does the success of Southwest Airlines tell you about the relative importance of industry company-specific factors in explaining a companys performance? 2. What is the basis of Southwests competitive advantage? How might it lose that advantage? 3. Explain the strategies followed by Southwest airlines and Suggest further strategic moves.

CASE STUDY 2- Narayana Murthy and Infosys'- strategic leadership and corporate culture The case study Narayana Murthy and Infosys' describes how Narayana Murthy, set up India's leading software company - Infosys. Narayana Murthy turned a small software development venture that he had set up with his friends in 1981, into one of the leading companies of the country. Infosys grew rapidly throughout the 1990s Narayana Murthy distributed the company's profits among the employees through a stock-option program, and adopted the best corporate governance practices. All this earned him praise and respect. In 1999, the company became the first Indian firm to be listed on the Nasdaq Stock Market. In 2000, Infosys was poised to become a true global company.By 2000, Infosys' market capitalization reached Rs.11 billion and by 2001, Infosys was one of the biggest exporters of software from India. Narayana Murthy had built an organization that was respected across the country, with very strong systems, high ethical values and a nurturing working atmosphere.In February 2001, Infosys Technologies Ltd. (Infosys) was voted as the Best Managed Company in Asia in the Information Technology sector, in leading financial magazine Euromoney's Fifth Annual Survey of Best Managed Companies in Asia. KEY SUCCESS FACTORS With his sound management skills, Narayana Murthy seemed to have taken Infosys to the pinnacle of success with the following key success factors : 1. Leadership team : The leadership team needs to balance vision with practical experience. In most cases, a technology start-up will have a visionary and/or a technical genius (most often, these are the founders) in place from day one. However, all to often, the leadership team is not rounded out by people who actually know how to run a business and how to drive sales. Building a strong balanced team can be one of the trickier aspects of creating a successful start-up because it necessarily requires the visionary and the technical genius (founders) to admit their practical shortcomings and give up some of the control of the business. The idea behind a start-up is often somebody's "baby" and, quite naturally, they want to control every aspect of its development. Once you move these people away from micromanaging the business, the start-up begins to have a chance. 2. Well-conceived business plan : This is an area where the practical experience of a wellrounded leadership team gives the start-up a leg up. The business plan needs to be practical and detailed. The business plan provides the blueprint for the growth of the company. Perhaps more importantly, the business plan is how you demonstrate the viability of the business to third party investors. 3. A strong product : It is a given that the product needs to be special something that will differentiate itself from the universe of competing products - but there are other important factors. Ideally, the product will be one that can be protected by patent. If the products cannot be protected by a patent, then the start-up has to be positioned to capitalize on being the first to market. Absent patent protection, being the first to market and capturing as much market share as you can before the copy-cats arrive is the next best thing. The product needs to have a ready market meaning that there is a market for it and that either there is no real competition or that the product allows the company to differentiate itself from the competition. 4. Scalability : The scalability of the business may not be critical to the success of every business, but it is critical to drive a start-up to a large scale business. In other words, if the goal is to become a large, valuable company, scalability is key. However, if the goal is a little less lofty, then scalability is a little less important. 5. Adequate capital :. Without adequate capital, the business will struggle. Perhaps the business will have phenomenal sales, but be unable to deliver the product. Or, the business may build the product, but lack the cash to adequately market it. Or the business will be unable to attract the leadership team it needs and the team it has is diluted to ineffectiveness. Or, the business is unable to capitalize on its "first-to-market" status. While it is true that the management team for a start-up

has to be versatile and willing to wear different hats, a capital-starved start-up can force the dilution of the management team to the point of everything being done poorly. Quite obviously, in many cases, the luxury of having adequate capital does not exist from day one. Finding the capital in a timely way can be very difficult. The more that can be done to address the other four points, the easier it will be to find capital.

Launch of Infosys Narayana Murthy obtained his Bachelor's degree in Electrical Engineering from University of Mysore in 1967 and his Master's degree in Technology from Indian Institute of Technology, Kanpur in 1969. He started his career as head of the computer centre at IIM, Ahmedabad.In 1972, he went to Paris where he was part of the team that designed a 400-terminal, real-time operating system for handling air cargo for Charles De Gaulle airport. Narayana Murthy was a left-wing activist and mingled with French communists during his stay in Paris but his outlook changed while traveling around Europe. He believed that the only way to pull India out of poverty was to create more jobs, by setting up new companies.In 1975, he returned to India and joined Systems Research Institute, Pune,(Maharashtra). He then headed Patni Computer Systems Pvt. Ltd., Mumbai, (Maharashtra) before founding Infosys in 1981, along with six other professionals. The Strategist From the beginning, Narayana Murthy focused on the world's most challenging market - the US. He had two reasons for this. First, there was no market for software in India at the time. He believed that Indian software companies should export products in which they had a competitive advantage.In 1987, Infosys entered into a joint venture with Kurt Salmon Associates (KSA), a leading global management consultancy firm. KSA-Infosys was the first Indo-American joint venture in the US. People Management Analysts felt that one factor which helped Infosys to grow at a faster pace than others was the low employee turnover.The turnover rate at Infosys was around 11% as opposed to industry average for software companies' of over 25% during the 1990s.Infosys' retention capability was a function both of its rigorous selection procedures as well as proactive HRD practices. About 80% of the middle and senior level executives were promoted from within the organization... Corporate Governance and Infosys Analysts felt that Infosys became one of the most respected companies in India, through its corporate governance practices, which were better than those of many other companies in India. Narayana Murthy's move to adhere to the best global practices was driven by his vision to become a global player. Infosys adopted the stringent US Generally Accepted Accounting Practices (GAAP) many years before other companies in India did.. Leaders in the Making Narayana Murthy set up a Leadership Institute in Mysore, India, to manage the future growth of Infosys. The institute aimed at preparing Infosys employees to face the complexities of a rapidly changing marketplace and to bring about a change in work culture by instilling leadership qualities. Sri Narayana Murthy said, It is our vision at Infosys, to create world-class leaders who will be at the forefront of business and technology in today's competitive marketplace... Q1. Explain the concept of Strategic Leadership and corporate culture Q2. How is strategic leadership applicable in the given case? Q3. Explain the role of Narayan Murthy as a strategist and elaborate on his vision for Infosys. How far this vision has been accomplished by the company?

Case Study 3- DEYS LAB STRATEGIC VIEW OF Dr. SUKUMAR Read the following case and answer the questions at the end: Dr. Sukumar inherited his fathers Deys Lab in Delhi in 1995. Till 2002, he owned 4 labs in the National Capital Region (NCR). His ambition was to turn it into a National chain. The number increased to 7 in 2003 across the country, including the acquisition of Platinum lab in Mumbai. The number is likely to go to 50 within 2-3 years from 21 at present. Infusion of Rs. 28 crores for a 26% stake by Pharma Capital has its growth strategy. The lab with a revenue of Rs. 75 crores is among top three Pathological labs in India with Atlantic (Rs. 77 crores) and Pacific (Rs. 55 crores). Yet its market share is only 2% of Rs. 3,500 crores market. The top 3 firms command only 6% as against 40-45% by their counterparts in the USA. There are about 20,000 to 1,00,000 stand alone labs engaged in routine pathological business in India, with no system of mandatory licensing and registration. That is why Dr. Sukumar has not gone for acquisition or joint ventures. He does not find many existing laboratories meeting quality standards. His six labs have been accredited nationally whereon many large hospitals have not thought of accreditation; The College of American pathologists accreditation of Deys lab would help it to reach clients outside India. In Deys Lab, the bio-chemistry and blood testing equipments are sanitised every day. The bar coding and automated registration of patients do not allow any identity mix-ups. Even routine tests are conducted with highly sophisticated systems. Technical expertise enables them to carry out 1650 variety of tests. Same day reports are available for samples reaching by 3 p.m. and by 7 a.m. next day for samples from 500 collection centres located across the country. Their technicians work round the clock, unlike competitors. Home services for collection and reporting is also available There is a huge unutilised capacity. Now it is trying to top other segments. 20% of its total business comes through its main laboratory which acts as a reference lab for many leading hospitals. New mega labs are being built to encash preclinical and multi-centre clinical trials within India and provide postgraduate training to the pathologists. Questions (i) What do you understand by the term Vision? What is the difference between Vision and Mission? What vision Dr. Sukumar had at the time of inheritance of Deys Lab? Has it been achieved? (ii) Elaborate on business strategy adopted by Dr. Sukumar for growth? (iii) What is the marketing strategy of Dr. Sukumar to overtake its competitors? (iii) In your opinion what could be the biggest weakness in Dr. Sukumars business strategy? Suggest strategic moves.

CASE STUDY 4- WALMART- STRATEGY AT ITS BEST Wal-Marts competitive strategy is to dominate every sector where it does business. It measures success in terms of sales and dominance over competitors. Its strategy is to sell goods at low process, outsell competitors, and to expand. Generally, Wal-Mart does everything it can to win over competitors. A typical Wal-Mart model is to build more stores, make existing stores bigger, and to expand into other sectors of retail. Every step of the way, it strives to make money and dominate its competitors, to the point of putting some of them out of business. The corporate mission of Wal-Mart can be stated as follows: As Wal-Mart continues to grow into new areas and new mediums, our success will always be attributed to our culture. Whether you walk into a Wal-Mart store in your hometown or one across the country while youre on vacation, you can always be assured youre getting low prices and that genuine customer service youve come to expect from us. Youll feel at home in any department of any storethats our culture. The company has three Basic Beliefs or core philosophies Sam Walton built the company on. Those beliefs are: (1) Respect for the Individual, (2) Service to Our Customers, and (3) to Strive for Excellence. Respecting the individual is a call for treating their employees well and pushing them to excel in what they do. The commitment to their customers is a goal whereby the stores respect a pricing philosophy to always sell items as low as they can while providing excellent customer service. The third belief is to strive for excellence, that is, to expand the store, innovate or reach further in to new markets and to grow. Other beliefs include, exceeding customer expectations with aggressive hospitality such as using door greeters. The store also features patriotic display and themes in its US stores. Another goal for the company is to support efforts in the local community via charitable contributions. Wal-Mart identifies several affiliations with charities such as the United Way and the Childrens Miracle Network. During the 1970s, the retail industry became highly competitive, but, at the same time the economy became weak due to inflation. Sears was the leading retailer in the nation, during the 1970s, however, the recession of 1974 1975 and inflation affected Sears adversely. Sears targeted middle class families and expanded its overhead. Wal-Marts strategy was to compete with its rivals and lower overhead expenses. Compared with Sears, which consisted of more than 6,000 distribution centers, Wal-Mart had only 2,500 comparable units. Wal-Mart centered on small-towns first then tried to move to large cities. This happened while other retailers centered on larger urban centers. However, as the economy faced a downturn, people wanted low price stores. Furthermore, as people became mobile, they moved to small towns and suburbs and were willing to travel further to buy low price products. During the 1980s, local chambers of commerce supported Wal-Mart because they believed that the company helps a local economy by providing good quality products at low prices. Unfortunately, critics contend that the success of Wal-Mart hurts the existing local independent merchants. Despite the criticism that Wal-Mart destroys small-town competitors, the local chambers of commerce endorsed Wal-Mart. In addition, the chambers of commerce account that the arrival of Wal-Mart provided jobs for people and a more diverse opportunity for local merchants by adapting to the new business environment. When Wal-Mart first arrived on the scene with their low prices, K-Mart stores was unable to discount brand-name products. Customers wanted to buy good quality brand-name products. K-Mart provides non-name brand goods cheaply; however, it could not maintain constant low prices with its name-

brand products. K-Mart and Sear could not beat Wal-Mart due to several reasons: First, Sears prices are higher than Wal-Marts because the Sears infrastructure gives it higher overhead costs. K -Mart declined in customer appeal because it neglected its store environment and could not provide satisfactory levels of service for its customers. Widespread complaints of poor customer service at KMart began to surface while Wal-Mart placed emphasis on customer satisfaction and neat store environments. Wal-Mart is also on top of their game because of the management strategies they employ. The management strategies of Wal-Mart emphasize its workforce and its corporate culture; that being a morally conservative, religious, and family-oriented business. Wal-Mart emphasizes how it listens to the needs of its workforce so that each employee is able to suggest improvements to company policy and practice. At Wal-Mart, store employees are called associates. The company offers generous financial rewards for employees by means of profit-sharing plans such as stock-purchase options. Furthermore, the company provides comprehensive training programs for all employees. Wal-Marts Control System Each store constituted an investment center and was evaluated on its profits relative to its inventory investments. Data from over 5,300 stores on its such as sales, expenses, and profit and loss were collected, analyzed, and transmitted electronically on a real-time basis, rapidly revealing how a particular region, district, store, department within a store, or item within a department is performing. Information enables the company to reduce the likelihood of stock-outs and the need for markdowns on slow moving stock, and to maximize inventory turnover. To reduce the costs of shoplifting and pilferage, Wal-Mart addressed this issue by instituting a policy that shared 50% of the savings from decreases in a store pilferage in a particular store, as compared to the industry standard, among that stores employees through sore incentive plans. The Sundown Rule is a corporate directive whereby all Wal-Mart employees, be they store associates, management, or corporate staff, must reasonably answer a customers or supplier request or question within 24 hours. The Ten Foot Rule states that store employees must greet, smile, and attend to a customer in a store when within 10 feet of them. Its a type of aggressive hospitality policy. Wal-Mart also compels its staff to engage in morning cheers where they recite company sayings. A final, yet important rule, which is a strong part of the corporate cu lture is Sam Waltons Pricing Philosophy which underlines the company strategy of selling items for less than their competitors, always. Wal-Mart pushed the retail industry to establish the universal bar code, which forced manufacturers to adopt common labeling. The bar allowed retailers to generate all kinds of information creating a subtle shift of power from manufacturers to retailers. Wal-Mart became especially good at exploiting the information behind the bar code and is considered a pioneer in developing sophisticated technology to track its inventory and cut the fat out of its supply chain. Wal-Mart became the first major retailer to demand manufacturers use Radio Frequency Identification Technology (RFID). The technology uses radio frequencies to transmit data stored on small tags attached to pallets or individual products. RFID tags hold significantly more data than bar codes. During the first eight months of 2005, Wal-Mart experienced a 16 percent drop in out-of-stock merchandise at its RFID-equipped stores. Though Wal-Mart may have been the top customer for consumer product manufacturer, it deliberately ensured it did not become too dependent on any one supplier; no single vendor constituted more than 4% of its overall purchase volume. In order to drive up supply chain efficiencies, Wal-Mart had also persuaded its suppliers to have electronic hook-ups with its stores and adapt to its latest supply chain technologies like RFID which could increase monitoring and management of the inventory.

Wal-Mart used a saturation strategy for store expansion. The standard was to be able to drive from a distribution center to a store within a day. A distribution center was strategically placed so that it could eventually serve 150-200 Wal-Mart stores within a day. Stores were built as far away as possible but still within a days drive of the distribution center; the area then was filled back (or saturated back) to the distribution center. Each distribution center operated 24 hours a day using laser-guided conveyer belts and cross-docking techniques that received goods on one side while simultaneously filling orders on the other. The company owned a fleet of more than 3,000 trucks and 12,000 trailers. (Most competitors outsourced trucking.) Wal-Mart had implemented a satellite network system that allowed information to be shared between the companys wide network of stores, distribution centers, and suppliers. The system consolidated orders for goods, enabling the company to buy full truckload quantities without incurring the inventory costs. Q1. Explain the strategic management process undertaken by Walmart Q2. What are the various strategic alternatives available to Walmart and on what basis these alternatives were screened and adopted? Explain all the strategies adopted by the companies Q3. How far walmart is successful with its strategies? Suggest further strategic moves to Walmart.