Three Entrepreneurial Clans in Asia Case Study by Crissy Cruz
The Case Study of the Three Entrepreneurial Clans in Asia featured 3 Family conglomerates from different Southeast Asian countries.
First there was the Raiva Siblings and Spouses of Thailand who had a restaurant and bakery empire. The Raiva's S&P mainly focused on food related enterprises that would support their core business of managing their restaurants and bakeries. For example they ventured into developing the technology of making and distributing frozen food products in order to reduce wastage and extend the shelf life of their food products. S&P had a They also partnered and operated with well-known international food chains and brands such as Pizza Hut, Swensen's in Thailand and Haage-Dazs Ice Cream.
The Second Family featured is Tunku Abdullah and his Royal Brood from Malaysia. Tunku Abdullah enjoyed the advantages of being a royal and had lots of connections that enabled his family to establish Melewar Corporation as one of the biggest conglomerates in Malaysia. Melewar Corporation has diverse interests that range from property development and construction, tourism, transportation, advertising, marketing and public relations, and TV broadcasting.
Finally, the Third family is Indonesia's Ibu Mutiara Djokosoetono and the rest of his clan. Ibu Mutiara Djokosoetono established the Blue Bird group which initially featured transportation services and later expanded to non-transport services like manufacturing of engines and spare parts of their fleet vehicles in order to stretch their supply chain and resorts that are considered as passenger destinations therefore boosting their transport services business.
The Case Study rationalized the actions of these three conglomerates and discussed them according to theories of Multiplication, Subtraction and Division process in managing their businesses.
All conglomerates practiced addition and multiplying their business ventures in various manners. The Raivas have done it in a more focused and concentrated manner that supports their core business of restaurant and bakery operations. The Melewar group had a "shotgun approach" and grabbed every opportunity that seems viable. They classified their businesses into industry groups, Travel and Tourism, Insurance, Manufacturing, Shipping, Security, Property Development, and TV broadcasting. For the Blue Bird group of Ibu Mutiara Djokosoetono, it can be noted that their businesses don't really have market focus but instead just a common denominator. All enterprises are related to various modes of transportation and anything that supports its operations and possible expansion.
Out of the three conglomerates, the S&P group didn't had to prune much of their collection of enterprises since they have been very conservative in their expansion activities and only choosing to add companies that would be beneficial to their original core business. However, the Melewar group's shotgun approach had le them to encounter some failed ventures in computer manufacturing and agriculture. These two businesses required heavy R&D and complicated production process, In order to recover losses the Melewar group decided to let go of these businesses and further sell their TV broadcasting company. The Blue Bird group also weeded out their agribusiness which is a far-fetched business concept from their transportation related businesses. This only goes to show the importance of venturing into enterprises that are outside of the organization's core competencies and other strengths.
As a conglomerate ran by families, the different companies had their own styles of management that involved immediate family members. Expanding the business was done not only to ensure further income and growth for the company but also to make sure there is enough to divide among family members. It provides opportunities for everyone to participate, pass on the legacy and perform specific areas of responsibility.
With all these in mind, which among the three families has exercised the best strategies in expanding their businesses. I admire the Raiva's S&P group in sticking to what they do best and building the foundation of their business empire based on the requirements or what compliments their bakery and restaurant business. This shows an example of good personal mastery. The Melewar and the Blue Bird group took a different route and expanded their business with investments in fields not part of the same market. Not all the risks they took paid off and some enterprises had to be cut. Those failures do not merit a conclusion that Raiva's S&P group made better management decisions. I believe that entrepreneurship is about taking risks. Melewar and the Blue Bird Group grabbed opportunities and made the most out of them. The failures that they encountered were just bumps on the road and what's important was they knew how to let go of the things that operated below their expectations. Again, this is another example of self-mastery. We learn by knowing ourselves and by the mistakes that we have done.
In the Philippines, it is evident among the big conglomerates made up by the Sy's, Gokongwei's and the Tan's that their interests are all diverse but in a way related to one another. It is not imperative for conglomerate to just stick to one core business as long as they are able to manage well their enterprises and are adding to the over all profitability of the group. Diversification can also protect the company in losing a lot of resources once one of the industries collapses. A diversified conglomerate would give them power and control over more markets. In return, these interests will pay off by opening new doors and opportunities for them to grown as a conglomerate and be one step ahead of competition.
