Situation Analysis
The case
described three prominent families in the Southeast Asian region – two matriarchs
from Thailand and Indonesia and a patriarch from Malaysia. The case started at
the founding times of the conglomerates and showed its roller coaster-like ride
throughout the years.
First is the matriarch
food business giant S&P. It started as a hobby of the Raiva sisters. The Thai
market proved to be a fertile ground for their business. They reaped
exponential returns and used it to expand their business. Their strategy was to
expand vertically – expand throughout their supply chain. It gave them more focus,
control and dominance in their market.
The second
family discussed in the case was the Royal patriarchal family of Tunku Abdullah.
Although blessed to have been born with a royal blood, he still tried to make a
name of his own. He entered business and
politics. Later on he quit politics and focused more on building his business
empire. He invested and founded a diverse range of businesses. He journeyed to
many business endeavors - the travel industry to the high-tech computers
manufacturing industry and almost everything else in between.
The last
family featured was the matriarch family of Ibu Mutiara. Their businesses were
related to transportation. They started out as a taxi operator then ventured to
other related and non-related businesses.
All the
families seemed to have close family ties considering their high-profile status
in life. They were able avoid serious feuds within their family who are also
the top management in their respective companies. All of the succeeding
generations were highly educated thus continuity of their businesses was no
longer a problem.
Problem Analysis
With conglomerates
as big as theirs, strategic decisions are very important. They might have all
the resources they need to start any business they want but they need to also
consider their current roster of companies to have a more synergic effect. A
lack in the strategic planning and placement of their businesses often result
in “subtraction” or liquidation like what happened to the Malaysian family who
ventured in very diverse and risky businesses. The Indonesian family also
experienced this problem when they ventured into agriculture when they were
best at managing their transportation-related business. The Thai family showed
a good example of how to strategically establish complementing businesses. Lack
of market study and knowledge of the technicalities of the business also played
a big role. With unlimited resources at your finger tips, it’s very tempting to
invest it in any possible business or to anyone with a good proposal.
Alternatives Generation
Here are the
alternatives I have thought of:
1.)
Always conduct heavy market research especially
when the business is beyond your core competency. With businesses as large as
those, growth within your current market is limited. You’re already a dominant
player and expanding in your current market might not reap you exponential returns.
Having said those, it’s really hard to limit the entrepreneurial spirit of
those families especially if they have the drive to expand their money-making empires.
2.)
We see tycoons venture in unknown business
territories. It’s what differentiates a tycoon from a regular businessman; you
cannot just stop a tycoon or entrepreneur from exploring new ideas and business concepts.
To provide them with more confident analysis of their new business idea, they
should either conduct heavy market research, as mentioned above, and hire
consultant and industry experts or partner with current industry players.
Exploring in an unfamiliar territory is tricky and you need help from industry
experts and players to get you moving. With their extreme wealth they can
definitely afford to hire consultants and invite industry partners easily.
3.)
Do not move into industries they are
not familiar with. To save them from unfamiliarity which often leads to high
losses, only operate in a market you know very well.
Decision and Action Analysis (Deciding on best
alternatives)
It is not impossible to thrive in different industries
and markets. In fact, we’ve seen many tycoons become market leaders across
diverse industries. John Gokongwei, for instance, has successfully established
and managed a leading airline (Cebu Pacific), consumer foods manufacturing
company (URC), telecommunications company (Sun Celluar, before it was acquired
by Smart) and property development (Robinsons mall and residences) among others.
It is possible to operate in industries as diverse as that and still become one
of the main drivers and players in each industry. All you need to do is find the
right people to help you understand and jumpstart your idea and business.
Options one and two above are what I think the three families need to further
expand their conglomerates. It’s not wrong to start a company totally unrelated
to your previous one. You just have to know the relevant information, technical
know-how or just have consultants and industry experts guide you. Stopping at
where you are and what industry you play in is not what an entrepreneur aims to
achieve. The unending learning and exploring of possibilities will ultimately
fulfill a real entrepreneur’s heart; being scared of the unknown is not a
characteristic of an entrepreneur. They just have to be cautious in making
tough decisions especially when big investments are involved.
I admire how the matriarchs and patriarch of the
featured families brought up their children and grandchild. They were able to
instill discipline and rapport within their family members. Having weak family
bonds and lacking knowledge and education of the succeeding generations will
cause their conglomerates to collapse eventually. Good thing they groomed the
next generation to become tomorrow’s best tycoons.
Submitted by: The Great White
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