Section B case studies

Case studies

HideShow resource information
Preview of Section B case studies

First 449 words of the document:

Sony (problems from the economy):
Sony has been suffering because of the strength of the Yen, making its products more
expansive internationally.
Disruption caused by natural disasters.
Firm has been too bureaucratic in the face of technological change from Apple and
Sony has diversified in many industries and products. TV division has made a loss for the
last 8 years.
"Sony has over extended its reach into non-core businesses."
Share price was below 1000Yen for the first time in 31 years.
Employed new CEO Kazuo Hirai; with the objective of returning the firm to profit this year
after 4 years of loss.
10,000 jobs (6%) will be cut over the next 12 months.
Will cut non-profitable sections of the business.
TV will be kept, but fixed costs will be cut by 60% and operating costs by 30%.
Will now focus on games, cameras, smartphones and tablets.
Nokia (not competitive):
Nokia was the leading mobile phone company.
Rivals have entered the market with high end smartphones.
Launch on the iPhone in 2007 has cut Nokia's market value by $88bn.
Unable to keep up with iOS and Android.
CEO did not keep up with the changing market.
Caused by cultural problems:
Managers have worked for the business their whole lives.
Masculine culture with high ego - deals have been known to frequently be brokered in
steam rooms!
Lack of innovations and lengthy product development times.
Lack of focus - too many products.
Nokia was too long-sighted, and failed to see change in the market.
Appointed new CEO Stephen Elop.
Identified the need to build an `ecosystem' e.g. apple with all its products focused around
the app store, Android an android market place.
He has experience in software and web design - a key area of weakness for Nokia.
Have closed their undesirable Symbian software and sought a 3rd party one.
Have joined with Microsoft to make a smartphone that targets affluent US and UK
customers who traded their mobiles for Blackberry's and iPhones.
Historically been weak in the US, relied on the strength of the rest of the world - for this
reason slow noticing demand for smartphones there.
Developed the Lumina smartphone - sold 1 million in first quarter of 2011 compared with
Apple selling 1 million iPhone 4S the day after release. Proves there is a problem of
Still made $1.2bn loss in Q1 2012.
15,000 job cuts to be made this year.
Thomas Cook (change in consumer demand):

Other pages in this set

Page 2

Preview of page 2

Here's a taster:

Change in demand - holiday makers now want more personalization in holidays which has
become much more easy with the internet.
Previous strategy of cost leadership with low operating costs, high asset turnover and
control over the supply chain no longer effective - need to differentiate.
They were suffereing a huge cash flow problem, and sales dropped 30% once this was
made public - GBP1bn debt.
Closing 200 of 1350 stores and cutting 1000 jobs.
Share prices had fallen from 300p to 15p in 2011.…read more

Page 3

Preview of page 3

Here's a taster:

Cooperative group (method of differentiation):
Credit crunch caused consumers to question the capitalist model - recession provides
Co-op to grow by trading on ethical conditions.
Struggling to compete with the big supermarkets, needed to change.
Works on the strategy of having members who invest into the business - not a PLC.
Goal of being the most sustainable business in the UK.
Local stores will the the focus for 10,000 community projects per year.
GBP5m for community projects.
High fair-trade availability in shops.…read more

Page 4

Preview of page 4

Here's a taster:

Starbucks have set up farmer support centers in Ethiopia, Rwanda, Tanzania, China and
Costa Rica.
Provides support to coffee farms, helping them to increase the quality of their coffee and
their profitability.
Support farmers financially when they have no revenue due to the seasonality of harvest.
Help communities sustainably thrive from coffee farming.
$14m provided so far.…read more

Page 5

Preview of page 5

Here's a taster:

Technological Change
Nokia (failed to notice change in the market - complacent on success):
Nokia was the leading mobile phone company.
Rivals have entered the market with high end smartphones.
Launch on the iPhone in 2007 has cut Nokia's market value by $88bn.
Unable to keep up with iOS and Android.
Identified the need to build an `ecosystem' e.g. apple with all its products focused around
the app store, Android an android market place.…read more

Page 6

Preview of page 6

Here's a taster:

Emerging markets:
Dyson (lower fixed costs):
Moved to Malaysia - cut 800 jobs.
Suppliers are based in the far east.
Products do well in Australia and NZ and Japan, plan to target other Far East countries
R&D will remain in the UK - with at least 1000 employees.
UK workers cost GBP9 per hour whereas Malaysians cost GBP3.
UK office space is also 3 times more expensive.…read more

Page 7

Preview of page 7

Here's a taster:

Kazuo Hirai - Sony:
Employed as CEO to initiate a retrenchment strategy and recover the company from loss.
8 years consecutive loss in TVs.
Has to cut divisions that are not profitable.
Focus on core products.
Stephen Elop - Nokia:
Hopes to turn around Nokia.
Canadian - hopefully more in touch with the US market which they are doing poorly in.
Links with Microsoft has resulted in the joint venture with Windows 7 software on their
phones.…read more

Page 8

Preview of page 8

Here's a taster:

Organizational Culture
Google (innovation):
Larry Page encourages employees to move away from bureaucracy.
Not afraid to invest in crazy ideas - wants people to understand that you don't get
anywhere unless you start investing resources into research.
Sometimes you can't know exactly where you're going.
E.g. Google adsence was developed through research into artificial intelligence.
Created one of the most innovative companies in the world.…read more

Page 9

Preview of page 9

Here's a taster:

Interest rates - 0.5%
Consumer price index fell from 3.5% to 3% between March and April.
Unemployment has fallen by 45,000 to 2.63m from Jan to march.
UK has returned to recession after contracting 0.2% for the last 2 quarters.
GBP has fallen against the USD from around 1.63 to 1.54 last month, now climbing again
(1.57).…read more


chelsie croucher

Thank you so much for this ! 

Similar Business Studies resources:

See all Business Studies resources »See all resources »