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Sherazi Automation, Australia: Strategic B2B Relationship for Survival and Growth

CASELET, MARKETING MANAGEMENT
ET Cases - FLAME, 7 Pages
AUTHOR(S) : Gitesh Chavan- Doctoral Scholar, Dr. Ranjan Chaudhuri- Fulbright Fellow (2012), Associate Professor - NITE, Mumbai

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Sherazi Automation, Australia: Strategic B2B Relationship for Survival and Growth

 

Sherazi Automation, a leading System Integrator company in Australia, the company provides Automation services to its end users who mainly deal in industry verticals like Oil & Gas (O&G), Metals & Mining(M&M), Food & Beverage (F&B), etc. The newly appointed CEO David Sherazi was closely monitoring the business growth every quarter. In 2014 the new Australian Government came into power, which resulted into an unstable business market scenario because the new Government levied heavy taxes on the industry verticals such as O&G, M&M and F&B.

Buying behaviour and consumption pattern of consumers were affected by the change in taxes. In order to deal with this decline in demand of automation services, David Sherazi planned to restructure Sherazi Automation’s pricing strategy.

Buying behaviour and consumption pattern of consumers were affected by the change is taxes. This change percolated and affected the B2B business customers. As a result, the business demand of Automation service integrators like Sherazi Automation in Australia was highly skewed.

To cater to this uncertain recession and grab the very few floating business opportunities, David Sherazi planned to restructure Sherazi Automation’s pricing policy to have consistent business and regular cash flow for the coming quarters.................

Sherazi Automation, Australia

CEO David Sherazi was very satisfied after he had evaluated the financial results of his company Sherazi Automation a leading System Integrator, located in Australia. In 2013 the company had a net income of 28 million AUD, this was the highest in the company’s history (Exhibit I).

Sherazi Automation was founded by Troy Sherazi in 1985. In three decades, the company had done substantial business and was one of the leading and reputed System Integrators in Australia.............

Australian Automation Business Situation in 2013

Following the change of Australian government and rise in taxes in 2013, Sherazi Automation started to feel the heat of its fiercely competitive system integrators. These system integrators where mostly unorganised players who shook hands and came together seeking a symbiotic mindset to survive the business draught which the external environmental and political conditions had to offer. This opportunistic hand shake strategy of small unorganised system integrators allowed them to bid and offer the best competitive prices and win projects from their customers. The Australian business market had become very cost sensitive...........

Global Partnership?

Earlier David thought that his business relationships build over the years would help him seek business and engineering projects; however, he soon got a hint from his customers that the order will go to the customer with the least price.

Observing this situation and thinking about the next step forward, reminded David about his travel to a Automation fair conducted in USA. Amongst the various people whom David met, he could distinctly remember his meeting with Agnello Raymond, the CEO of AutoIndustrial Technologies (India) and had rendered an interesting presentation about the Global Business Delivery Model through which AutoIndustrial Technologies partnered with System Integrators across the world. The presentation gave insights about the various services which AutoIndustrial Technologies offered and the important insights about how they successfully partnered and executed on site and off site business worldwide (Exhibit II)..........

Closing Section – The Dilemma

On one side there was an opportunity to earn huge profit by partnering with a Reliable & Dependable Outsourcing & Engineering partner, who had domain experience in similar industry verticals and had a well proven Global Business Delivery Model (Exhibit VI)............

Exhibits

Exhibit I: “Sherazi Automation, Australia, EPC Sector estimate, 2017

Exhibit II: Sherazi Automation, Australia, Global Network of AutoIndustrial Technologies

Exhibit III: Sherazi Automation, Australia, EPC Sector estimate

Exhibit IV: Sherazi Automation, Australia, Operational Excellence in AutoIndustrial Technologies

Exhibit V: Sherazi Automation, Australia, Auto Industrial Technologies Business Model

Exhibit VI: Sherazi Automation, Australia, Business Model

Teaching Note Preview

Sherazi Automation, Australia: Strategic B2B Relationship for Survival and Growth

 

Synopsis

This case study outlines the strategic, B2B marketing, and Organizational Buying or Industrial Buying issues which were faced by David Sherazi and his company Sherazi Automation, a leading system integrator in Australia.


Sherazi Automation and its competitors faced an uncertain and volatile market condition due to heavy taxes levied by the new government. The local unorganised competitors of Sherazi Automation joined hands to integrate their best expertise and bid the lowest price to win the few projects which surfaced in Australian market.


Sherazi Automation was thus considering to tie up a business partnership with Auto Industrial Technologies, India to gain cost advantage and generate more profits. Instructors can use the case to discuss strategies to face and mitigate risk and tools to mitigate risk. Readers must think strategically about associations with other service providers in Global market to seek cost advantage. This case also challenges the readers to think about Business Ethics and company values while doing Business.........

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Abstract

Sherazi Automation, one of Australia’s largest automation system integrators, was founded by Troy Sherazi in 1985. It provided Automation services to its end users who mainly catered to industry verticals like Oil & Gas (O&G), Metals & Mining (M&M), Food & Beverage (F&B), etc.


In 2013, David Sherazi become the CEO of the Sherazi Automation. He played a significant role in continuing the vision of the founder, Troy Sherazi.


Over a period of three decades the company became one of the leading System Integrators company in Australia. In 2013 the company had a net income of 28 million AUD, the highest in the company’s history. However, as the economics recession affected Australia, the new government levied heavy taxes on various industry verticals which Sherazi Automation served, resulting an overall decline in the business and a hold was kept on new projects. The unorganised players in Australia decided to collaborate and make joint efforts to survive during this period.


Auto Industrial Technologies was an Indian Automation service provider that partnered with abroad customers like Sherazi Automation. Auto Industrial Technologies assisted its abroad customers in integrating, programming and commissioning field instruments and subsystem components of various Automation companies. Sherazi Automation was at cross-roads to decide how to deal with the market situation and whether it should partner with an Indian Automation service provider or not.


How should Sherazi Automation sustain in the prevalent market situation and compete with local unorganised players was a question. Secondly should the company join hands with Auto Technologies and explore cost benefits in business at the cost of business ethics. These were the two major concerns of the new CEO David Sherazi.


The case also adds value about decisions related to Business Ethics vs Business Survival. It includes information about Global Business & Services, International Marketing, Strategic Allianz and Price based solutions.


Pedagogical Objectives

  • To understand the Global Business Model of System Integrators and their service providers in the automation service industry
  • To understand prevalent market situations pertaining to international strategic partnership decisions with local and global unorganised players

Case Positioning and Setting
The case can be used for Business to Business (B2B) Marketing course besides International Business and Strategic Management course to MBA students and/or for Management Development Programmes.




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