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The Electrode Gamble (A, B)*

ET Cases - GSMC, 6 Pages
AUTHOR(S) : Dr. Mikhail V. Plotnikov

Case Preview

The Electrode Gamble (A, B)


The Electrode Gamble (À)

‘You are fired!’ – the executives’ meeting on May 7th 2007 ended up on an almost hysterical note as the CEO of Kislorod Group struck his hand on the table expressing his rage towards a 34-year-old executive of a subsidiary company Kislorod Plus. This man’s unprofessional actions led the company into a dramatic crisis and he had just given an account of his failure. There was much despair in the CEO’s voice for the greatest strategic initiative of the year had been utterly ruined despite the profound investment and a splendid market opportunity. To make matters worse, only an hour was left before a scheduled Board meeting and the CEO had no idea what to say to the people who need neither excuses nor explanations but wait for proofs and action plans.

Kislorod Group

Founded in 1999 Kislorod Group is a local holding company situated in Nizhniy Novgorod. It consists of nine legal entities including the Proprietary Company and the Management Company that owned seven subsidiary business units (Exhibit I).

The group had been formed recently as the result of the restructuring of a single limited liability company. The change started in November 2006 as a part of a broad-scale strategy that presumed aggressive diversified growth in all the major activities of the holding company and was supposed to provide the necessary level of decentralization together with clear budgeting and managerial control.........................


Exhibit I: The Kislorod Group

Exhibit II (a): The Average Monthly Financial Figures of Kislorod Group

Exhibit II (b): Kislorod Plus Records at the Beginning of April 2007

Exhibit III: The Dealing Policy of the Electrode Supplier

Exhibit IV: Estimated Electrode Market Volume in Nizhniy Novgorod Region (2007)

Exhibit V: The Main Players of Electrode Market in Nizhniy Novgorod Region (2007)

Exhibit VI: Kislorod Plus Records at the Beginning of May 2007

Teaching Note Preview

The Electrode Gamble (A, B)



The case study covers various aspects of strategy development and performance. It highlights the importance of entrepreneurship and finance as the basis of  both crisis management and sustainable growth. It also helps to understand the key aspects of a business model.

Case Positioning and Setting

The case study can be used for an opening class of study courses such as Business Strategy, Crisis Management, or Entrepreneurial Finance.

Prerequisite Conceptual Understanding

The case study presupposes an understanding of business strategy development and its alignment to the overall business goals. Crisis management and its implementation for sustainable growth

Assignment Questions

  • I. What were the crucial mistakes made initially by the company’s executives? What did this lead to?
  • II. What opportunities for the company do you see to create business success?
  • III. What should be the business model to pursue the opportunities?
  • .....................................
  • ......................................

Rs 0
Product code: STG-2-0013, STG-2-0013A


The case study addresses the problems of managing strategic change in a small business company Kislorod Plus (Niznhny Novgorod, Russia) – a local trader of  welding equipment. The story starts with firing the company’s executive, who made a number of dramatic mistakes, and thus failed implementing various corporate strategies, ruined the economy of the firm, and created a significant threat of bankruptcy. Notwithstanding all the problems of the heavy crisis, the company and the  situation still have a number of opportunities that are to be recognized and pursued in order to save the business and lead the company to prosperity. The case study tackles multiple issues: recognizing entrepreneurial opportunities within an aggressive and messy business environment, establishing productive relations with  counteragents (i.e. banks, suppliers, distributors), revising the financial model of the business, allocating and managing budgets, controlling cash flows, understanding the options of competition, creating a successful value proposition, foreseeing competitors’ actions and developing thought-through action plans. It can be used for the classes of General Management, Strategic Management, Entrepreneurship, Finance, and Marketing.

Pedagogical Objectives

  • To recognize entrepreneurial opportunities
  • To analyze the management mistakes
  • To analyze the key aspects of a business model
  • To understand the role of finance within a business strategy
  • To develop an anti-crisis strategy

Case Positioning and Setting

The case study can be used in MBA and Executive MBA for the following courses:
Business Strategy - Crisis Management - Entrepreneurial Finance

* GSMC 2014, IIM Raipur

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

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