With retailers as their primary customers, what customer competitive imperatives could be affected by Rollerblade’s inventory problems
With retailers as their primary customers, what customer competitive imperatives could be affected by Rollerblade’s inventory problems
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General
Management
Note: Solve any 4
Case Studies
Case I: PANDIT TO AFAUZI
The case is based on an actual incident which took place in an Army unit
operationally deployed in a field area just a few months before the 1971
showdown with Pakistan. The opposing forces of India and Pakistan were taking
their respective positions in a pre-war scenario. The clouds of showdown were
looming large over the horizons of both the countries. The rumbling of own
tanks and guns, the reconnaissance, leaders of different arms and services
establishing liaison with one another in the
process of formulating plans for both defence and attack, digging of main and
contingency positions was in progress, complete war machinery
was being mobilized, camouflaged, and concealed. Ammunition and other
explosives were being unloaded and dug down. Junior leaders were
being briefed and rebriefed, communications were being checked, and troops were
being motivated and looked after as most of them were green because of their
sudden induction in the Army in post war days of 1965. Such was the scene which
convinced all and sundry that war was imminent. Most of the troops
looked forward to a showdown mainly because they wanted to get rid of the heavy
ammunition as also for the mere thrill of it. Those who had not seen a battle,
seemed excited over the prospects of a war and those who had seen the war, took
everything in their stride, displaying a perfect
cool, calm and confident countenance.
One Ram Bali Mishra (RBM) was a raw and green jawan of about 20 years of
age and two years' service and naturally had not seen a war. He was relatively
tall, well built with fair complexion. He had pleasant manners, turned himself
out well and spoke well. He was a complete teetotaler, non-smoker, and a
vegetarian. He was well educated and well versed in religious affairs,
particularly, of the religion to which most of the unit belonged.
In the absence of the religious teacher of the unit, he held religious
institute (dharamsthal) and gave religious discourses at the dharamsthal to all
officers, junior commissioned officers JCOs), non-commissioned officers (NCOs)
and jawans. During the pre-war days, he was performing the duties of a Sahayak
(assistant, formerly known as orderly) to Gun Position
Officer (GPO), a young officer, of the rank of a Second Lieutenant with one
year of service.
RBM's
charter of duties included:
(a) Attending
all the training activities of his trade (telephone operator) which were being
organized in the sub-unit;
(b) Making
arrangements to get the food from the officers' mess and water from the tube-
well for the office; and
(c) Attending
the telephone and noting down all the messages for the office.
By virtue of the nature and timings of these duties, RBM was excused
physical training in the morning and games in the evening which all other
jawans of the sub-unit attended. He was generally happy with these duties and
working with the officer: After a short span of a week or so, the
officer noticed some changes in the behavior of RBM. He also looked pale and
worried. He was less talkative,
less lively and his interaction with other jawans decreased. He
started keeping aloof except where his duties warranted interaction with
others. The officer tried to find the reasons from RBM but nothing emerged except
a shy and coy smile and “aisi to koi baat Nai, Sahib".
The officer tried to probe further to find out if some guilt conscience was
bothering him because of some bad habit which young
man of his age is likely to fall prey to, in the absence, of even
visual contact of civil life and members of the opposite sex.
This was denied vehemently. After another week
or so, it was noticed that RBM had developed
constipation, ate very little, felt tired after walking even
a few hundred yards and had become weak. He was interviewed
by the officer but nothing emerged once again. He was sent to the Regimental
Medical Officer (RMO). The RMO inspected him and gave some medicines.
On being contacted by the officer, the RMO mentioned that there was
nothing wrong medically with RBM except that he was scared of the prospects of
war. He even disclosed that after having been medically examined, RBM even
started giving a discourse to the RMO on the bad effects of a war on
environment, economy, costs, etc. He stated that people would be loaded with
sufferings; killed, injured, maimed, and would become homeless. The children
would become orphans, women widowed, and the humanity would suffer. He
vehemently advised the RMO to make all attempts to stop
the war and if he could, at least oppose it. After a brief conversation, the
RMO was convinced that all the symptoms pointed to a fear psychosis of war. He
gave some medicines to RBM and sent him to the sub-unit.
The RMO told the GPO that because of the worry about the war, RBM had developed
problems of digestion and hence, ate less, became inactive and felt tired
quickly. He had earlier been feeling shy of expressing his apprehensions about
the war to others, lest they consider him a coward. The GPO gave a thought to
the whole problem and interviewed RBM, advising him to attend· all
physical activities, including physical training, weapon training, games, etc.
thence on. The officer also planned to keep RBM among
the persons of his trade, specially in the command post which controlled the
firing of the guns, where from the officer himself was expected to control the' fire in
case of breakout of war.
A small cadre (class) was organized for all ranks of the sub-unit to
apprise them of the organization of all arms and services in the army, starting
from the level of a sub-unit. They were explained the tactics in the
battlefields, the deployment patterns of different arms, the pattern and modes of
support by the Air Force, the capabilities of weapons held by them, the
comparative sizes of the countries, India versus Pakistan, and the level of
forces held by them. They were also explained the cause for which they were
there. They were there to make their contribution towards the liberation of
Bangladesh (then East Pakistan), wherefrom about a crore refugees had entered
India because of the repression by Pakistan forces. These refugees had become a
burden on the Indian economy and social structure which India could not afford.
Thus, India, the foremost leader of peace loving nations, had to prepare for
war to ensure return of these refugees to liberated Bangladesh. At times, to
maintain peace, it becomes necessary to resort to war.
The participants were also told about the strength of their Army and
deployment in that area, of course, within the constraints of security
requirements. They were also told that none of them would remain alone even
during the war and that their sub-unit and the unit would always fight
together. They would always have their weapons and ammunitions with them, which
they were very good at firing. The process of medical care, the claim of
evacuation in case of serious injuries and
the enhanced benefits and compensation to families in
case of death of a soldier, then announced by the government, were also
communicated to them. The reliability of India's friends on the
international scene was also intimated. The
tactics, capabilities of aircrafts and weapons,
and reliability of Pakistan's friends were also brought out. The
disadvantages and difficulties of supply to the then East Pakistan were
explained to the participants. The geographical location of East Pakistan in
relation to our country was also described. Everybody was convinced of the great
advantages and superiority we had vis-a-vis Pakistan.
Thence on, RBM was a totally changed man. He was noticed to be more active,
intermingling with others at the slightest pretext and opportunity, giving
discourses about loyalty to the country and martyrdom. He took keen interest in
all the training activities, including the digging of a number of contingency gun
positions. He volunteered to go with night
patrols too, which operated to shoot bursts of rounds with light machine guns
in trees and groves close-by, whenever the guns were deployed at a new place.
He volunteered to venture out with the
line party which was earmarked to lay telephone lines over long distances
through sugarcane fields. He started watching the slaughtering of goats
in the unit. Above all, he started eating eggs, though he
did not touch meat.
This transformation in RBM was a welcome sight and appreciated by all.
Everyone heaved a sigh of relief on seeing RBM becoming a brave
"Fauzi" from a timid "Pandit". The RMO
was informed of this transformation. He too felt happy. His
contribution had been no less in diagnosing the cause of sickness correctly.
The cadre was conducted for the whole sub-unit with a view to eradicate any
apprehensions from the minds of others too, in case there were any, and to
educate all. The cadre proved to be a great success. It
motivated the whole lot, made them more confident and ready to
face the challenge bravely. This was subsequently apparent when the
hostilities started.
Questions:
1.
What was the cause of fear in RBM?
2.
What were the symptoms of fear displayed by
RBM?
3.
How did the RMO come to know of the war
phobia of RBM?
4.
What actions should be taken to avoid
building up of fear among the troops? Which of these steps were taken by the
officer?
CASE
II: COMPETITION AHEAD: VSNL
AT CROSS ROADS
The telecom
sector had been functioning as a typical government department right from its
inception. With the Department of Telephones (DoT) being under the exclusive
control of the Ministry of Communications, Government of India (GO!), the
system functioned more as a monopoly., With
the advent of the LPG process (liberalization, privatization and globalization)
in the early nineties, the telecom department went through a phase of
modernization. A number of new and sophisticated electronic exchanges were
installed which enhanced the capacity and lead to the disappearance of waiting
list for telephone connections. In a landmark decision in 1995-96, the Government of India threw
open its gates for private players in the area of cellular services. LCG and
ACG were the two major players to enter this area in Karnataka region, while
DoT decided to remain as an observer and continued as a provider of basic
services only. Subsequently the Internet, ISD
and other services were also opened to private participation.
The year 1998 saw the entry of Vikas
Telenet (VTNL) as a basic service provider in the state of Karnataka. It launched its basic
services in Bangalore district, the commercial capital of the state, in January
1998. The impact of this entry was felt by DoT as it resulted in a mass
customer churning, challenging the market leadership of DoT in basic services.
This growing challenge from VTNL made General Manager DoT Indore, R.L. Rawat
realized the need for a comprehensive review of the competitive scenario. The
situation faced by the Bangalore district was one of its kind. It was the only
city where four companies were providing telephone services. LCG and ACG were
providing cellular services while VTNL and DoT were providing basic services. To attract the customers all
the providers had attractive tariff plans. DoT's market share was not affected
by the entry of LCG and ACG as - they
operated only as cellular service providers and their services carried a
premium price.
But the entry of
VTNL as a basic service provider with attractive tariff plans showed a marked
shift in customer base from DoT to VTNL specially in case of heavy users make
it necessary for DoT to come up with similar competitive tariff plans.
General Manager
Operations DoT Bangalore, S.N. Dutt, felt that improved services, customer care and proper pricing would
help in winning back the heavy users who accounted for almost 60 to 65% of the
total revenue. Keeping this in mind, a review of VTNL's tariff plans was done
(Annexure I). The review revealed that the customers were getting a distinct price advantage in the rentals and free calls
given by VTNL.
Along with this, a discount ranging from 2.5
to 16% was also announced by VTNL. S.N. Dutt
formulated a comprehensive plan to guard DoT's market share. Officers were appointed as
account holders and were responsible for rendering personalized customer care to commercially
important customers hoping to retain them with better services. He also formulated a proposal
of discounts which was forwarded to the Circle Head Office (Annexure-II) and a
presentation was made by DGM - Marketing K.K. Sen, highlighting the rate at
which customer churning was taking place and the need for implementation of new
tariff plan. He pleaded with the senior officers that DoT needed to be at least
reactive if not proactive, to sustain itself in the market. The proposal was well
received and forwarded to the Ministry of Communications for approval.
Responding to the need of the hour, the Ministry decided to offer a
comprehensive discount of 2.5 to 16% for its heavy users. The scheme was introduced in
Bangalore, which was extended first to the state of Karnataka and later on to
the entire nation.
VTNL, which had
so far been concentrating
only on the heavy users, decided
to now expand its network to get a wider customer base. With this view in mind,
a number of promotional schemes were introduced e.g., web phone, a facility for
internet usage where access to the net was provided at a cost of 60 paise per
call only. It also announced free Internet facility for a year on every new connection. Besides this, VTNL went in for heavy promotion of its
schemes. The careful wording of the schemes and enhancement of the number of
free calls made the customers feel that they were gainers as far as rentals
were concerned. These schemes when launched created very difficult times for
VTNL during May -August 2001. By then,
DoT had been Corporatised (October 1, 2000) and came to be known as VSNL. The
Bangalore office was extremely hopeful that the corporatisation would facilitate. the implementation of new
innovative schemes. For drafting a
proposal of innovative schemes, VSNL first conducted a market research where in -the database of surrendered
connections was used as sample and effort were made to identify the cause of
disconnections. The survey revealed that of the total number of disconnections
30% were due to economic recession while 40% were due to customer turning in
favor of VTNL while the remaining were due to a multitude of factors
interplaying with one another.
To redeem the
situation, VSNL, Bangalore prepared an innovative plan known as Business
Special Plan - Plan 600-800, which offered 800 free calls on a monthly rental
of Rs.600 only. The plan was put forward to Chief General Manager at Bangalore
for approval. The persistent efforts of K.K. Sen bore fruits and the proposal
was approved at the Circle
level.
However, at the
time of launch K. K. Sen realized that they needed TRAI's (Telecom Regulatory
Authority of India) approval for going ahead. To ensure the unhindered approval
of TRAI, modified tariff plans called 500-700 and an economy plan were
suggested and sent for approval. While formulating these plans, an attempt was
made to segment the market with an intention to target each segment with a customized/specific set of services.
Plan 500-700 was targeted at high end users. Here, 700 calls were offered free
on a monthly rental of Rs. 500 only. The economy plan carried a rental of just Rs.160
per month with a rate of Rs.l.20 per call. This plan was specially targeted at
customers who had more of incoming calls and needed a facility for meeting
their specific requirements. The rolling out of these schemes had an immediate
impact with nearly 8,000 customers coming over to VSNL Bangalore. Along with
these new tariff proposals a number of innovative strategies were introduced by
VSNL, Bangalore.
·
The initial registration amount was reduced and new subscribers
were offered the facility of paying the amount in installments.
·
Call centre functioning since February 2001 to deal with customer
grievances was made proactive to ensure better customer care.
·
Training was given to the front-end-people for updating their
skills and changing the mindsets.
·
Tele-shopping service was started which provided a one stop shopping
facility, giving the customers the option to
choose their telephone numbers, instrument and service.. Installation was assured
within 48 hours.
·
Phone-on-Phone facility was started wherein customers could obtain
a connection installed by simply ringing up for it.
·
A bill collecting facility was also introduced to further assist
the customers.
·
VCC Le., prepaid cards were introduced and even delivered at the
doorsteps of the customers.
·
Bill collection in the rural areas by mobile vans was introduced.
·
Linemen were given pagers to facilitate prompt servicing of faulty
telephone lines.
·
Regular meetings between call centre members and maintenance staff
were held to exchange information and solve grievances.
·
For motivating and facilitating their employees, free telephone
service was provided to all the employees.
·
An advertising budget of Rs.30,00,000 (0.2% of the total sales
revenue) was outlined for launching a comprehensive promotion programme using
both indoor and outdoor media ensuring a good coverage of the market.
VSNL – Tariff Structure
Scheme
|
Rental (Rs.)
|
Free Colis
|
Facilities
|
Business Plan - 500-700*
|
500 (Monthly)
|
700
|
Without STD
|
Economy Plan **
|
160 (Monthly)
|
Nil
|
With STD
|
Standard Plan*
|
500 (Bimonthly)
|
150
|
With STD
|
* 0.80 Per Call
|
** Rs.1 .20 Per Call
|
|
|
VTNL – Tariff Structure
Scheme
|
Rental (Rs.)
|
Free Calls
|
Silver 300
|
349 (Monthly)
|
300
|
Golden – 500
|
499 (Monthly)
|
500
|
~
 |
| With retailers as their primary customers, what customer competitive imperatives could be affected by Rollerblade’s inventory problems |
Questions:
1. What were the strengths and weaknesses of
VSNL?
2. Do you think that VSNL should have
changed its thrust from basic telephony to cellular services?
3. If you were the Deputy General Manager,
what strategies would you have undertaken to deal with the competition?
Case III: DISNEY’S DESIGN
The Walt Disney Company is
heralded as the world’s largest entertainment company. It has earned this astounding reputation
through tight control over the entire operation : control over the open – ended
brainstorming that takes place 24 hours a day ; control over the engineers who
construct the fabulous theme – park rides; control over the animators who
create and design beloved characters and adventurous scenarios ; and control
over the talent that brings the many concepts and characters to life. Although control pervades the company, it is
not too strong a grip. Employees in each
department are well aware of their objectives and the parameters established to
meet those objectives. But in
conjunction with the pre-determined responsibilities, managers at Disney
encourage independent and innovative thinking.
People
at the company have adopted the phrase “Dream as a Team” as a reminder that
whimsical thoughts, adventurous ideas, and all – out dreaming are at the core
of the company philosophy. The over all
control over each department is tempered by this concept. Disney managers strive to empower their
employees by leaving room for their creative juices to flow. In fact, managers at Disney do more than
encourage innovation. They demand
it. Projects assigned to the staff “
imaginers” seem impossible at first glance.
At Disney, doing the seemingly impossible is part of what innovation means. Teams of imaginers gather together in a
brainstorming session known as the “Blue Sky” phase. Under the “Blue Sky”, an uninhibited exchange
of wild, ludicrous, outrageous ideas, both “ good” and “ bad”, continues until
solutions are found and the impossible is done.
By demanding so much of their employees, Disney managers effectively
drive their employees to be creative.
Current
Disney leader Michael Eisner has established the “Dream as a Team”
concept. Eisner realized that managers
at Disney needed to let their employees brainstorm and create with support. As Disney president Frank Weds says, “If a
good idea is there, you know it, you feel it, you do it, no matter where it
comes from.”
Questions:
1. What environmental factors influenced
management style at Disney?
2. What kind(s) of organizational structure
seem to be consistent with “Dream as a Team”?
3. How and where might the informal organization
be a real asset at Disney?
Case IV: “THAT’S NOT MY JOB” – LEARNING
DELEGATION AT CIN-MADE
When Robert Frey purchased
Cin – Made in 1984, the company was near ruin.
The Cincinnati, Ohi-based manufacturer of paper packaging had not
altered its product line in 20 years.
Labor costs had hit the ceiling, while profits were falling through the
floor. A solid quarter of the company’s
shipments were late and absenteeism was high.
Management and workers were at each other’s throats.
Ten years later, Cin – Made
is producing a new assortment of highly differentiated composite cans, and
pre-tax profits have increased more than five times. The Cin – Made workforce is both flexible and
deeply committed to the success of the company.
On-time delivery of products has reached 98 percent, and absenteeism has
virtually disappeared. There are even
plans to form two spin – off companies to be owned and operated by Cin-Made
employees. In fact, at the one day
“Future of the American Workforce” conference held in July 1993, Cin-Made was
recognized by President Clinton as one of the best – run companies in the
United States.
“How did we achieve this
startling turnaround ?” mused Frey. “Employee empowerment is one part of the
answer. Profit sharing is another.”
In the late spring of 1986,
relations between management and labor had reached rock bottom. Having recently suffered a pay cut, employees
at Cin- Made came to work each day, performed the duties required of their particular
positions, and returned home-nothing more.
Frey could see that his company was suffering. “To survive we needed to stop being worthy
adversaries and start being worthy partners,” he realized. Toward this end, Frey decided to call a
meeting with the union. He offered to
restore worker pay to its previous level by the end of the year. On top of that, he offered something no one expected : a 15 percent
share of Cin-Made’s pre-tax profits. “ I do not choose to own a company that
has an adversarial relationship with its employees.” Frey proclaimed at the
meeting. He therefore proposed a new
arrangement that would encourage a collaborative employee-management
relationship “Employee participation
will play an essential role in management.”
Managers within the company
were among the first people to oppose Frey’s new idea of employee
involvement. “My three managers felt
they were paid to be worthy adversaries of the unions.” Frey recalled. It’s what they’d been trained for. It’s what made them good managers. Moreover, they were not used to participation
in any form, certainly not in decision making.”
The workers also resisted the idea of extending themselves beyond the
written requirements of their jobs. “
(Employees) wanted generous wages and benefits, of course, but they did not want
to take responsibility for anything more than doing their own jobs the way they
had always done them,” Frey noted.
Employees were therefore skeptical of Frey’s overtures toward “employee
participation.” “We thought he was
trying to rip us off and shaft us,” explained Ocelia Williams, one of many
Cin-Made employees who distrusted Frey’s plans.
Frey, however, did not give
up, and he eventually convinced the union to agree to his terms. “I wouldn’t take no for an answer,” he
asserted. “Once I had made my two grand
pronouncements, I was determined to press ahead and make them come true.” But still ahead lay the considerable
challenge of convincing employees to take charge:
I
made people meet with me, then instead
Of
telling them what to do, I asked them.
They
resisted.
“How
can we cut the waste on his run?” I’d
Say,
or “How are we going to allocate the
Overtime
on this order?”
“That’s
not my job,” they’d say.
“But
I need your input,” I’d say. “How in the
World
can we have participative management
If
you won’t participate?
“I
don’t know,” they’d say. “Because that’s
Not
my job either. That’s your job?”
Gradually,
Frey made progress. Managers began
sharing more information with employees.
Frey was able slowly to expand the responsibilities workers would carry. Managers who were unable to work with
employees left, and union relations began to improve. Empowerment began to happen. By 1993, Cin Made employees were taking
responsibility for numerous tasks.
Williams, for example, used to operate a tin-slitting machine on the company’s
factory floor. She still runs that same
machine, but now is also responsible for ordering almost $ 100,000 in supplies.
Williams
is just one example of how job roles and duties have been redefined throughout
Cin-Made. Joyce Bell, president of the
local union, still runs the punch press she always has, but now also serves as
Cin- Made’s corporate safety director.
The company’s scheduling team, composed of one manager and five lead
workers from various plant areas, is charged with setting hours, designating
layoffs, and deciding when temporary help is needed. The hiring review team, staffed by three
hourly employees and two managers, is responsible for interviewing applicants
and deciding whom to hire. An employee
committee performs both short – and long – term planning of labor, materials,
equipment, production runs, packing, and delivery. Employees even meet daily in order to set
their own production schedules. “We
empower employees to make decisions, not just have input,” Frey remarked. “I just
coach.”
Under
Frey’s new management regime, company secrets have virtually disappeared. All Cin-Made employees, from entry-level
employees all the way to the top, take part in running the company. In fact, Frey has delegated so much of the company’s
operations to its workers that he now feels little in the dark. “I now know
very little about what’s going on, on a day-to-day basis,” he confessed.
At
Cin-Made, empowerment and delegation are more than mere buzzwords; they are the
way of doing business – good business. “We, as workers, have a lot of
opportunities,” said Williams. “If we want to take leadership, it’s offered to
us.”
Questions:
1. How were principles of delegation and
decentralization incorporated into Cine – Made operations?
2. What are the sources and uses of power at
Cin – Made?
3. What were some of the barriers to
delegation and empowerment at Cin –Made?
4. What lessons about management in a
rapidly changing marketplace can be learned from the experience of Cin –
Made?
Case V: HIGH-TECH ANSWERS TO DISTRIBUTION
PROBLEMS AT ROLLERBLADE
When
a manger finds that demand exceeds inventory, the answer lies in making more
goods. When a manager finds that inventory exceeds demand, the answer lies in
making fewer goods. But what if a
company management finds that they just do not know which situation applies?
This
is the situation that recently confronted management at Rollerblade, the
popular skate manufacturer based in Minnetonka, Minnesota. Rollerblade has been
one of the leading firms in the fast growing high performance roller skate
marketplace, it matters a great deal for Rollerblade managers whether demand
and inventory are in balance, or not.
Rollerblade
was in a bind. The product literally
could not be shipped out the door. The
managers found that workers were not able to ship products because, as a result
of poor storage structures, they could not find the products. Once they were found, overcrowded aisles, in
addition to other space constraints, still prevented efficient shipping because
the workers could barely manage to get the products out the door. “We were out of control because we didn’t
know how to use space and didn’t have enough of it,” said Ian Ellis, director
for facilities and safety. “Basically,
there was no more useable space left in the warehouse, a severe backlog of
customer orders, and picking errors were clearly in the unacceptable range,”
added Ram Krishnan, Principal of NRM Systems, based in St. Paul, Minnesota.
The
answer for Rollerblade was found in technology.
High-tech companies have introduced a collection of computer simulations,
ranging in cost roughly from $10,000 to $30,000, that assist managers in
generating effective facility designs.
With the help of layout Master IV simulation software, developed by NRM,
Rollerblade Management was able to implement a new distribution design. As a result of the distribution improvement,
Rollerblade was able to increase the number of customer orders processed daily
from140 to 410 and eliminate order backlog.
“Now we have a different business,” says Ellis. “The new layout has taken
us from being in a crunch, to being able to plan.
Questions:
1. With retailers as their primary
customers, what customer competitive imperatives could be affected by
Rollerblade’s inventory problems?
2. How appropriate might a just – in – time
inventory system be for a product such as roller skates?”
3. What opportunities are therefore
Rollerblade managers to see FOR themselves as selling services, instead of
simply roller skates?
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