Case analysis on 3 Entrep Clans of Asia by Grace Agustin MM at Spentrep class

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From: Gracey <la_mgya@yahoo.com>
Date: Tue, Apr 15, 2014 at 1:31 AM
Subject: case analysis on entrep clans, Grace Agustin
To: Jorge Saguinsin <profjorge.entrep@gmail.com>

Case Analysis On:

THREE   ENTREPRENEURIAL   CLANS   IN   ASIA

S&P

Case Facts:

Ø  Started as a small ice cream parlor in Bangkok.

Ø  Served a limited menu of ice cream, sandwiches and light snacks.

Ø  Hired a pizza chef that later turned out to be a baker, introduced the bakery products.

Ø  S&P's restaurant and bakery chain spread all over Thailand, known for its premium services, clean premises, tasteful décor and delicious food with a long offering of Thai, Japanese and Western fare.

Ø  In 1996, it had 40 full service branches, 50 smaller bakery shops, 6 fine dining restaurants, and expanded in Bangkok, London, Singapore and Taiwan.

Ø  S&P hired professional middle managers and developed risen-from-the-ranks and middle line managers, but top management was "all in the family".

Analysis:

                The S&P owners seem to have a focused in adding business units and expanding their business coverage.  Basically their line of business revolved with the restaurant and bakery.  They were able to identify their primary target market which is the middle and upper middle income classes.  The S&P is fully integrated, from the product lines of the restaurants, food processing, and central kitchen operations to distribution and franchising.  They expand in a more concentrated manner, focusing on their core restaurant and bakery operations. Since it's concentrated and more focused, it's hard to eliminate business units.  What they did was rationalized the organization to ensure effectiveness, efficiency, and economical running of the business. 

                One major problem that I can see is the lack of interest of at least one of the three sons in the S&P business.  Each of the three sons pursue a career different or outside their parent's business. With this known fact, the founders should be eyeing, training, and molding  successor/s to continue the business if the sons will not join the company later on.  The Raivas (owner of the S&P) will not forever be there to manage the company, so they should be training partners and disciples (per my report on Business and the Bible) that share same vision and passion with them to takeover on the company when the time comes.

Tunku Abdullah and His Royal Brood

Case Facts:

Ø  In 1963, Tunku (Prince) Abdullah established the Binaan Nasional Sdn. Bhd (BINA), one of Malaysia's leading Construction Company at that time.

Ø  Set-up a company engaged in blending and bottling beverages for the lower end market.

Ø  Abdullah got involved in the selling of defense equipment.

Ø  In 1970, invested in the travel industry.  Organized a tour and travel agency.

Ø  Established the Melewar Corporation, a family holding company to unify, enhance, and strengthen the many and varied virtues of the different business groups and companies within the  Melewar Corporation.

Ø  Created a general trading company involved in selling of arms, computers and other products.

Ø  In 1974, entered the leasing and insurance industry.

Ø  In 1975, entered the transport business, the company had a fleet of trucks and low-loader equipment for oil and other general cargo.

Ø  In 1976, formed a partnership to venture into the advertising, marketing, and communication business.

Ø  In 1981, formed the investment holding company.

Ø  In 1982, entered the computers industry, then in 1985, decided to put up its own manufacturing company of personal computers.

Ø  In the 80's, ventured into Communications industry and involved in the growing and marketing of fruits and vegetables for the local market as well as for export.

Ø  In 1987, established a school specializing in management education.

Ø  In the same year, put up a company that manufactured and marketed wooden household wares, knock-down furniture, gifts and toys.

Ø  Also in 1987, involved in the quarrying, processing and marketing of granite.

Ø  In 1993, got a licensed in television broadcasting company.

Ø  Tunku Abdullah dreamed of linkaging yacht clubs that would set as naval modes of a seafaring route from Indochina to Indonesia.

Analysis:

                Tunku Abdullah's group of company adds businesses using a shotgun approach, whereby opportunities were seized as they came.  Some started as business propositions from foreign firms, while others were home-grown ideas coming from members of the family and from their corporate executives.  The Melewar entered into diversified into different industries but when the various enterprises were lumped into industry groupings under separate siblings, each of the groupings expanded their respective group through acquisitions and natural growth.  Because of Abdullah's aggressiveness in entering one business to another, it resulted to some failed projects that forced in selling and closing down some of his enterprises.  He succeeded in the construction and the service industries where his organizational and deal-making capabilities as a mobilizer and politician became very useful.  He excelled in putting people together and motivating them to sell and supervise projects without the need for high technology. 

Three Generations of Entrepreneurs: From Ibu Mutiara to her Grandchildren

Case Facts:

Ø  Ibu Mutiara Djokosoetono established Blue Bird in 1972, with an initial fleet of 25 taxis.  Renting out her cars in Jakarta's hotels.

Ø  Blue Bird expanded its taxi operation to 4,000 units, added an executive cars and chauffeur-driven luxury sedans.

Ø  Invested I Big Bird, a wide range of service buses for tour groups, office workers and prime movers.

Ø  Organized a bus manufacturing company and fire truck assembly plant.

Ø  Produced efficient, clean-burning CNG (natural gas fuel) to service its cars, trucks and buses.

Ø  Opened a network of petroleum and CNG pumping stations.

Ø  Blue Bird invested in Holiday Inn Resort Lombok, a prime tourist destination.

Ø  Ventured in cargo forwarding, warehousing, container depot, repair and service center.

Ø  Manufactured clutch and brake assemblies and spare parts of her transport business.

Ø  Envisioned of entering the airplane/airlines industry.

Analysis:

                Blue Bird claimed that its focus is on taxi business, it actually has gone into all sorts of land transport businesses ranging from taxis, buses to trucks.  It has also added resorts as its passenger destinations. It also added spare parts to supply for their transport needs.  Blue Bird strategy is finding the common denominator…transport and whatever gets attached to it, increasing their supply chain in the process. 

CASE's TAKEAWAY

                Do not venture in a business that goes beyond the competency, strength and leadership of its leaders/founders/owners.  In seeking new opportunities for the business, make sure that the partners can handle it properly.  Contingency plan (exit plan) is very important in putting up a business, learn when to cut losses to be able for other business units to survive and energize.  Owners and founders will not be forever in the business handle and take control of; it's wise to train successors that share same vision of that of the founder.  Lastly for the business to be sustainable,  next-in-line generation should be well equipped in handling the business, proper education and professional independence is very important for the company to be sustainable amidst new ideas and technology of the future.

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