CASE ANALYSIS #2:
"Stone Finch, Inc.: Young Division, Old Division" (HBS)
The January 22, 2010 Harvard article entitled, “Stone Finch, Inc.: Young Division, Old Division” describes the obstacles that Jim Billings, president and CEO of Stone Finch, Inc. is currently facing. The current status of the company was examined in detail and a number of problems were discovered. This paper is based on the information provided and is divided into two sections. The first section discusses the challenges, root causes and sources of misalignment currently confronting Stone Finch, Inc. The second section offers suggestions that would allow Jim Billings and Stone Finch, Inc. to address the difficulties they currently face.
Challenges, Root Causes and Sources of Misalignment
Over time as organizations evolve from smaller, simpler entities into larger, more complex entities, structural inaction can lead to sizeable problems. In these shifting environments, as in the one confronting Stone Finch, Inc., this misalignment creates significant difficulties. The myriad of growing issues began with a dramatic shift in the strategic direction under which the company operated for many years. Stone Finch, Inc.’s past success was powered by superior product standards and service levels through little innovation. The formation of the Subsidiary Divisions in 2004 created shortcomings in the company’s configuration as it evolved into a much more complex organization than the one run previously by the Stone Family. This shift by Billing’s to increased innovation and the addition of the Subsidiary Division is causing significant challenges.
The increased focus on innovation is causing an extreme segregation within Stone Finch, Inc. and Billing’s lack of acti...
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...im Billing’s role as CEO is the biggest key to changing Stone Finch, Inc. A new context combined with a changed structure and a changed culture will require a different leader than Billing’s has been. A vital step in building this visionary company is not only action, but also a shift in perspective. Billing’s needs to change his perspective from being a “falcon” to being a “leader.” Jim Billings’ needs to acknowledge there are problems with the company. An unchanged Billings’ will reinforce nothing and will in fact be an obstacle to the improvements needed. A changed organizational structure and a changed Billings’ as a dynamic and effective leader of the changed Stone Finch, Inc. will develop a vision that captures Stone Finch, Inc.’s past while guiding it into the future; away from the successful past, the current chaos, and on to an even more successful future.
When Jim Kilts showed up at Gillette in 2001, the first outsider to run the Boston-based company in more than 70 years, he found a business with great brands losing market share. Its acquisitions of Duracell and Braun were not delivering. Sales and earnings were flat, the company had missed its earnings estimates for 15 straight quarters, the stock had plummeted, and Wall Street had lost patience. Yet two-thirds of the top managers were getting top ratings. People were being rewarded for effort; performance, under Mr. Kilts regime, became the new measure.
After conducting a basic 10 year financial analysis of the company, it has become evident that even with a highly competitive market structure they are able to improve on their performance. Ranging from 2004 to 2013 financial information, the company has shown a significant increase in their sales revenue roughly $3865 million sales in 2004 to almost four time that valuing $12970 million in 2013, which was an “increase of 10.4% over the 53 week prior year” The company’s growth strategy has been to diversify its product market and make them...
In the third chapter, “Attack by Stratagem,” businesses learned that the source of strength is not the size of the business, but unity, along with the five fundamental factors. In American busine...
The protection enhances the ability of sustaining a business in a competitive marketplace for the long run. A firm should also undergo the DYB strategy to get rid of business units and other resources that do not add value to the company 's performance. It should adopt the GYB strategy, in which it would utilize the business opportunities lying at its disposal to its advantage. As a direct result of these two strategies, the company would gain a substantial competitive edge against rivals, as well as boost its profitability in the long run (Grimm, Lee & Smith, 2010). Knowing that today 's business environment is characterized by heightened competition that has led to extensive gaps between industry leaders and laggards, and that there are greater churns among the industry rivals, the GYB and DYB strategies are essential for any modern company. More importantly, the GYB strategy should be focused towards the increase of
Corning is a decentralized company currently being plagued by both external and internal threats, such as market uncertainty and poor communication and planning systems. The company has just recently started to recover from a large layoff in 1975, which reduced worker job confidence. The Houghton family has a preference for an informal workplace with an ambiguous leadership style that contradicts the formal and strict resource allocation system designed for their international strategy. The current strategy being employed differs with the owner’s philosophy, which is important, since the President must buy into the plan to understand and communicate it effectively. This miscommunication creates goal incongruence, which is exemplified by the confusion of corporate divisions about whether they should be focusing on reducing cost or being an innovator. Also, each officer has been described as having work that overlaps, showing no focus and a lack of efficiency. The fact that each of the over 150 businesses groups have to write up a resource allocation request and business strategy creates the issue of finding time to read each report.
Harvard Business School case 274-116. Cooper Industries, Inc. Retrieved on August 31, 2008, from University of Phoenix, Resource, FIN/545 web site: https://mycampus.phoenix.edu/secure/resource/resource
Jim Collins and his research team have done a wonderful job identifying what it takes for a company to go from good to great. I found this book to be extremely interesting and would like to share several of my thoughts.
Contemporary Business 15th Edition 2013 Update, Louis E. Boone (University of South Alabama), David L. Kurtz (Univ. of Arkansas), November 2011, ©2012
The Sylvan case study illustrates the challenges of building value and improving business performance through an acquisition and diversification strategy that did not coincide with the capabilities and competencies that originally built the Sylvan brand. Sylvan was founded by W. Berry Fowler in 1979 and during his six year tenure, Berry developed the franchise business model, training and educational programs, and teaching methodology that provided Sylvan with a competitive advantage in the education industry.1 Berry Fowler built his business strategy through an intimate understanding of customers needs and developed Sylvan’s core competencies around providing supplemental education designed to fill the educational gaps experienced by students. 1 Upon Berry’s departure, Sylvan’s new CEO, Douglas Becker, embarked on a corporate-level strategy of related diversification. However, this strategy did not successfully translate into financial economies between businesses nor did it obtain significant market power through these additional levels of educational diversification.2 To that end, this case study will look more closely at Sylvan’s process of diversification and acquisition strategy, management’s leadership as Sylvan transitioned from their founder and the new course the organization charted to address additional challenges for the new millennium.
Companies all over the world varies but yet shares a common challenge, that is to solve problem not only effectively and efficiently but also creatively. The P-O-L-C framework which stands for Planning, Organising, Leading and Controlling plays a major role in both the company’s survivability and success. The SWOT analysis looks at both internal and external factors that can affect the Starbucks’s performance. The purpose of this report is to define and analyse how Starbucks respond and should have respond to the change of its external environment on the cofee market,This report will also identify and disscuss how The P-O-L-C framework and can help starbucks to compete and reduce the loss of their failing peformance in the Australian market and how SWOT analysis helps to define some externalities that can be a threat to Starbucks.
The article raises the issue of revenue growth stalls that affect even the most successful companies. The article focuses on four major causes of the crisis. The first cause is the premium-position captivity that is”the inability of a firm to respond effectively to new, low-cost competitive challenge or to a significant shift in customer valuation of product features” (p.54). The second reason is the innovation management breakdown that is”some chronic problem in managing the internal business process for updating existing product and services and creating new one” (p.56). Third reason is the premature core abandonment that means “the failure to fully exploit growth opportunities in the existing core business” and “acquisitions of growth initiatives in areas relatively distant from existing customers, products, and channels”(p.56). Finally, the fourth cause is the talent bench shortfall that is “a lack of leaders and staff with the skills and capabilities required for strategy execution” (p.58). Authors emphasize that these causes are mainly within management control since they result from “a choice about strategy or organizational design” (p.54).
For instance, Harley Davidson may be forced to change their marketing strategy due to the entrance of a new competitor into the market. Second, Harley Davidson has to learn new skills and technologies quickly. For example, technologies are changing rapidly, so it is crucial for Harley Davidson’s business plan to change or alter in order to keep up with innovation. Third, this organization has to effectively leverage its core competencies while competing with its competitors. This is, Flexibility is required for Harley Davidson to learn how to use primary value-chain activities and support functions in the way that allow the organization to produce their products at a lower cost with differentiated features compare to their competitors in the market
David Fletcher is a portfolio manager with many years of experience and success under his belt. He currently is a limited partner managing an Emerging Growth Fund for Jenkins Fletcher Partnership or JFP. The company was small when David started and consisted of a CEO, Paul Jenkins, CFO, 2 financial assistance, 4 research analyses, 1 research assistant and a receptionist. David first started with JFP he hired an Administrative Assistance, Whitney to help organize his calendar, contact companies and take messages, etc. Whitney proved to be capable and eager to learn. Under David’s guidance she received her MBA and was promoted to a Portfolio Manager in training. One of her primary areas was Healthcare but she also had retail and environment. In addition, Whitney developed a solid network of contacts and was very good at annualizing the financial statements of potential business. However, David was still holding her hand and had not allowed her to invest completely without his input. Also, she was just starting to attend conferences solo. Although Whitney was helpful, David felt he needed to form a team to help with the labor intensive job of processing all the information for managing the fund. His typically day was consumed by meetings, phone calls and conferences and he could not keep this pace for the long haul. Therefore, he discussed the possible of forming a team with Paul Jenkins and several of investment firms before proceeding with the concept of a team at JFP.
Kelley,T. (2005, Oct.). The 10 faces of innovation. Fast Company, 74-77. Retrieved 6th March’ 2014 from http://web.ebscohost.com/ehost/detail?vid=9&sid=1d6a17b7-c5f7-4f00-bea4 db1d84cbef55%40sessionmgr10&hid=28&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#db=bth&AN=18386009
Organisational change can arise due to a change in strategy and this begins with examining capabilities and the internal environment. This is portrayed in the Strategy diamond. Firstly through arenas the organisation can plan where they will be active in and which part to place most emphasis on for example technologies or value creation strategies. Only after determining this can they implement a positive change, leading to the next element, vehicles to get them where they need to be such as alliances. This can lead to change in management along with strategic partnerships, and the way managers transition to this change will determine if the strategy impacts on the overall organisation in a way that reinforces its purpose and goals. Partnerships indicate how an organisation can strengthen its capabilities by merging with businesses who possess the skills they lack. (Carpenter et al. 2010)