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Lack of Oxygen*

CASELET, STRATEGIC MANAGEMENT
ET Cases - GSMC, 8 Pages

Case Preview

Lack of Oxygen

 

January 25th 2007, Nizhny Novgorod, Russia:

It was high time to finish the Board meeting, yet its members couldn’t agree which way to lead Kislorod Group. Supposed to dot the i’s and cross the t’s, the voting actually split the Board into two equal uncompromising parties. The first party insisted on the profound development of production capacity and putting special attention to the increase of quality and cost reduction as the only viable way to obtain sustainable competitive advantage. The second voted for total withdrawal from production business and focus on the development of a highly efficient retail chain. Both parties were confident and persuasive, both scenarios had significant risks as well as great opportunities. By 6 p.m. the discussion had exhausted itself, and now the Chairman, who was also the major shareholder, had to exercise his ultimate authority and make a hard decision: whether to support one of the parties or to suggest a radically different strategy..............

Teaching Note Preview

Lack of Oxygen

 

Synopsis

The case focuses at the challenge of business modelling within a hazardous and ambiguous environment. The students are offered to reveal and evaluate the factors that affect business model and corporate strategy and on this basis to develop a grounded vision statement.

The two strategies concerned are: focusing on production versus growing a multi-brand retail chain. The company operates in three businesses at a time, which makes the choice controversial and ambiguous. Balancing between ambition, changing market conditions, the threat of rivalry with a global competitor, and not evident opportunities, the students need to take the right decision.

Pedagogical Objectives

  • • To reveal and evaluate the factors that affect business model and corporate strategy
  • • To develop a grounded vision statement

 

Assignment questions

  • I. What were the major challenges for the business? What threats and opportunities did they create? How can the threats be compensated and neutralized?
  • II. What are the company’s strong and weak sides?
  • III. What strategy (production or retail) would you chose? Why? Evaluate the merits and the drawbacks of each strategy.
  • IV. What should the vision statement for the company contain?

 

Teaching Plan

The classroom analysis/discussion can be carried out according to the Teaching Plan [Exhibit (TN)-I]............


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Abstract

A growing and diversified business is at the crossroads. The Board Chairman is to choose one of the two suggested perspectives: either to focus on production or to develop a multi-product trade chain. Both have certain evident merits and drawbacks. The company, as never before, needed a clear vision, an elaborate strategy and strong leadership in order to stand against the profound threats and deal with the challenges.

The case focuses at the challenges of business modelling within a hazardous and ambiguous environment. The students are offered to reveal and evaluate the factors that affect business model and corporate strategy and on this basis to develop a grounded vision statement.



Pedagogical objectives

  • To reveal and evaluate the factors that affect business model and corporate strategy
  • To develop a grounded vision statement

Case Positioning and Setting
The case can be used in MBA/PGDBM, Executive MBA, Management Development Programs and Executive Workshops in the area of Strategic management and Entrepreneurship.


* GSMC 2016, IIM Raipur

This Case Pack Includes:
- Abstract
- Caselet
- Teaching Note (**ONLY for Academicians)
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