Case Analysis for 3 Entrep Clans by Rocky Gabatin Spentrep

Rocky Gabatin
SPENTREP – S09

Case analysis: Three Entrepreneurial Clans in Asia

THE ADDITION PROCESS

Raiva Siblings and Spouses

     Adding significant complementary businesses to the core business entails maximization or monopolization of the supply chain. Using the by-product (egg yolk) of the bakery business, for example, Raiva siblings and spouses were able to come up with another product line for their business as they are able to produce Thai desserts. What seemingly is a “waste” of another business function becomes a profitable venture for the company. Furthermore, the group was also able to implement forward integration by distributing finished goods as well as raw materials to other businesses. This approach enabled the Raivas to expand and grow very rapidly because they are able to exercise more control over the supply and value chain. They have better command of the prices because the raw materials are also within their control. As a result, this allows the company to be more cost-effective by eliminating excessive markups generated by resellers or suppliers. Eliminating the “middle-man” entails huge cost savings. More importantly, the company is able to generate profits from each point in the supply chain—upstream, core business, and downstream. The Raivas, in effect, expand its core competency.

Melawar Group

     Melawar Group’s strategy revolves around acquiring as many businesses as possible. It adds businesses regardless of the industry—making the group as diverse as possible. Diversity is an important component in risk management, so the more companies it acquires and the broader the range of industries, Melawar Group effectively reduces risks from unexpected events, economic downturns, and even the losses from bankruptcies. Adding different companies from different industries to the mix also allows Melawar Group to flex its muscle in terms of sheer size. Economies of scale reduces the cost of production by adopting a larger scale of production. Melawar Group now has the capability to develop the added companies in order to maximize their profitability.

Blue Bird

     Blue Bird implements both the supply chain integration of the Raivas and the establishment of a business different from the core business. The Holiday Inn nicely complements the taxi business of Blue Bird because it ensures a steady stream of customers. That is, taxis can drive people to the hotel, for example, from an airport. Meanwhile, adding brake and clutch assembly manufacturing to the business allows Blue Bird to reap the benefits of cost-effectiveness because it takes care of the maintenance of the taxis.

THE MULTIPLICATION PROCESS

Raiva Siblings and Spouses

     Since the Raivas were able to vertically integrate their supply chain, they have the capabilities to multiply their numbers in terms of branches and bakery shops. This entails broader geographical reach, and thus would improve overall profitability of the business by establishing its presence on a much wider scale. This multiplication process can result to penetrating new markets and even acquiring customers from competitors.

Melawar Group

     Melawar Group’s multiplication process came into play when it clustered similar industries into groups. This way, each industry can grow substantially through economies of scale, but more importantly, through synergy. The businesses can enjoy natural growth by combining best practices of each “company.” It is also effective in acquiring a larger market share because the customers of the each company are consolidated under Melawar Group.

Blue Bird

     There is one key element for Blue Bird in implementing the multiplication process—achieve economies of scale. Multiplying the number of taxis would ensure that the business will generate more income, and thus, allow them to purchase more vehicles. More importantly, this has a dramatic effect on the bargaining power of Blue Bird because it can negotiate for lower prices for raw materials, and this is particularly beneficial for the clutch and brake assembly line of the business: It can further reduce cost on maintenance of the vehicles and maximize both profit and market share.

THE SUBTRACTION PROCESS

Raiva Siblings and Spouses

     Holding back on the idea of franchising the business maintains the quality of operations. This means that the Raivas remains in control of the entire business. Furthermore, rather than adding potential outside ownerships through public offerings, the S&P Group effectively avoids “contamination” of the business when “new blood” comes into the mix. The sheer success of its addition and multiplication strategies, there is no pressure on the business to remove anything.

Melawar Group

     The aggressiveness of the Melawar Group in acquiring companies will eventually result to failed businesses. These failed projects had to be subtracted from the entire conglomerate. However, subtraction does not necessarily mean a disadvantage because selling the business can also yield profits, just as when Melawar sold the TV broadcasting company.

Blue Bird

     Similar to Melawar, the subtraction process made by Blue Bird entails removing businesses that do not complement its core competency. The agribusiness venture did not last long because it does not seem to be relevant to the taxi business of the family. Divesting this venture is important in mitigating losses for the entire business before it can damage it further.

THE DIVISION PROCESS

     This process is virtually the same for the three family conglomerates. The theme revolves around prevention of conflict among the family members in the future.

Raiva Siblings and Spouses

     It becomes an important element in business to place executives or managers where they can exercise their core strengths or capabilities. It can be in a form of a skill, a geographical location, or even a specific product line. The Raivas implemented this very well, so there is very little room for organizational conflict among the family members—because they are where they belong.

Melawar Group

     In this case, the division approach is necessary for the Melawar Group to be able to multiply. It divided the entire company into industry groupings, a move which also complements the fact that the members of the family are coming from different marriages. This division also acts as a precaution if any family dispute arise in the future: The company can be split simply among the siblings.  

Blue Bird

     Ibu Mutiara is working towards being able to provide her children and grandchildren with a “fair piece of the pie.” This ensures that there will be no conflict that will arise from each member of the family.   3

Pranav case analysis by Roman Cruz AGSB Clark Entrep

Good evening Sir!

Sending you my case analysis on the PRANAV CASE

ROMS

PRANAV CASE STUDY

by: Roman M. Cruz

SITUATION

Pranav New York was envisioned as the first male spa in the Philippines and the fulfillment of the need of the Filipino market for an integrated grooming and wellness services for men. It is situated at the third level, west wing of Robinsons Galleria. Something that is uniquely different from its direct competitor, Roberto’s barbershop who is located at the ground floor of the mall.

The business was a product of Mark Orbos and Karlo Nisce inspiration of their own experiences as patrons of barber shops, salons and spas, to which they are convinced that there should be one stop shop that will cater all these needs of the male population for grooming and wellness services. In starting the business concept, they had made their homework in conducting different market study to test the potentiality and success rate of their new venture. However, some data gathered were left unstudied and or unfinished, even their professor has noted disparaging comments on  their ventured idea. In effect, after the third month of operation, the business is losing money.

PROBLEMS AND ANALYSIS

Identifying these data that were left unstudied by the two budding entrepreneurs are the following:

1.     Demographics- though their conviction ofestablishing the first all male one stop shop that provides grooming services and wellness to the male populace is good, it has been noted that for theirselected location, the Robinsons Galleria, the foot traffic are skewed towards female segment which comprised about 60% of the mall goers. More so, this was further highlighted when they had found out thru the gender composition andmarket share, there was a dominant incidence of the female market in Robinson’s unisex salon, while only an average of 13.28 % of females was observed at Pranav. This should had been greatly considered during the initial stages of the business concept to which the wrong market reading as created a spiral effect on the output and structure of the business. In essence, there is lack of critical mass ( male segments ) that will be crucial in sustaining the business in which taking into consideration their Mission and Vision which is concentrated as the first all male one stop shop in the Philippines.

2.     Location- the selection of the location of Pranav was a result of eagerness and without proper planning and study. Initially, Robinsons Galleria itself has a great potential in terms of having a big chunk on the catchment rate considering its high foot traffic characteristic. But locating Pranav at the 3^rd level of the west wing of the mall is totally slashing its business potential because from the study itself by the leasing department, most male traffic are coming in from the east wing and on the center floor of the mall. Infact, its main competitor, Roberto’s barbershop is located at the ground level. Male segments will not exert a lot of effort on going in the third level only for Pranav especially if they are with their female partners, wives or girlfriends.

3.     Price sensitivity- basing on the results of their further study, it has been revealed the leaders in the industry are those with a fairly affordable and competitive pricing. On the other hand, those high-end position brands are lagging behind. Pranav pricing is categorized in this set of high-end positioned brand.

4.     Dominance of the female segment and higher spending level- on their study, female spent on the average, 91% more than the males. Thus females were certainly a market that was too profitable to exclude and overlook in the micro market of Robinson’s Galleria. Consequently, these female markets are often seen on unisex salons.

5.     Structure and processes failure- as noted by their professors, there are all female crew that were to attend and appeal to the “macho” psychographic target customer of Pranav. Training was also an issue. Example of which is that the owners had failed to realize that these all female crew were not taught on shaving men. The choice of chairs were confined on immovable black lounge chairs rather than a barber’s chair which limits the potentiality to offer other services to its clients because, customers would always feel uncomfortable on hopping in to different chairs/area while availing of the services. The spaces between chairs are too narrow. The Spa was too cold. Air conditioning units could not be adjusted to a higher temperature. The office space block some of the frontal window which can contribute a negatively in the store visibility.

RECCOMENDATIONS AND ACTION PLANS

After identifying the problems, it has highlighted that the problem of the business was largely concentrated on the failure of proper strategic study before conducting the business.In effect, a weaker top line has been achieved that has causing the bleeding in the bottom line of the business PnL. The thought of being the first in the country in their offerings overshadowed the science of market study and interpretation, which is so much critical in putting up a business. However, in order to solve the problem and trouble shoot Pranav and realign it to make it a profitable business, here are the following recommendations:

1.     Revision of its business objectives and realigning it to accommodate the female market in which it has a promising great potential for sales and market share growth just like of the industryleaders, which are commonly unisex salons.

2.     Rationalize service offerings by removing services that are not contributing much but covers a bigger space in the salon. Instead, focus on its core services that are driving sales and attracting customers.

3.     In relation to the rationalizing of service offerings, realigning of the structure of the salon is needed to accommodate the entry of the new market segment, which are female. This means also leveraging on their strength of having a large floor area that could handlelarge capacity or volume of customers in a given period of time.

4.     Relocate the business into high traffic areas if its possible catering to both male and female market.

Victoria Court Case Analysis and the 2Ms

Rizal  Philippines  |  April 8, 2014

One week after the case analysis of Victoria Court did I learn that the panelist who were assigned:  Marlon Pizarro and Michael Tan were owners of motel properties.  Marlon's family owns a motel in Silang Cavite, and Michael's company owns property where a motel is located.  It is serendipitous that it happened that way.  No wonder they were such good partners in the case analysis and did well.

Victoria Court Panelists at Spentrep and Regis AGSB Clark

Rizal, Philippines  | March 31, 2014

                           Carlo and Francis (Pope) lead the Spentrep case analysis at Spentrep

We had Victoria Court Case analysis at AGSB Clark, and tonight at Spentrep in H de la Costa.  I like this case because of the chuckles and laughter hat goes with the case, plus the personal biases/opinion.  They are the stuff that prevent clear and critical thinking.  The situation is deceptive.  And sometimes, you notice that ladies are more knowledgeable than males on the subject matter.

The panelists for Spentrep were Francis Butiong and Carlo Senica

When you mention that is about positioning (laughter)

It is what you do inside not outside  (laughter)

Penetrating the market. (more laughter)

When you search Google, the name of the Professor is often associated with Victoria Court (as if I am the expert of founder)

 Kristhel, a brand manager of a premium rhum had the class experience their product. It 40 proof wine

For Clark AGSB, the panelists were Michael Tan and Marlon Pizarro.

                                    Carlo with Apple and Premium Rhum

                              Kristhel was all smiles and gave cogent comments on positioning

             Time for rhum tasting;  it is a premium rhum, costs $36.00 and Kristhel is the brand manager

                               It is cheaper to stay in hotel and more family oriented

                                The panelists are calling the class and asking them to recite

                                    The Victoria Court website

Group 1 and 2 had a tie for the MC2 case

Rizal  Philippines   | March 2, 2014

                                         ... and the winner is.....Group 2

Group 2 was initially declared as the winner MC2 paramihan contest;  they had 16 opportunities.  They were systematic in analyzing what the opportunities were.    Thus I initially awarded the snickers bar to them.  However, a rechecking showed that Group 1 had listed down 16 opportunities.  They could have more but they were vague and irrelevant.

So they pretended to receive the strawberries as the award.  Since it more expensive than Snickers according to Christine (It is)  The class is very competitive and wants to have fun as they learn more.

Prof Joevic Passi led the Victoria Court Case analysis

Iloilo City |  February 8, 2014

                                         Our professor for today for Victoria Court, Prof Joevic

Mr Joevic Passi was assigned to be the lead discussant for the case analysis today -  Victoria Court.  Assigning a student to be leader in case analysis forces the student to study the case very well, and imitate the professor, and practice critical thinking. 

I like the Victoria court because it is a fun case.  It is distractive and can lead the student away from clear appreciation of the  fact and clear thinking.  He may think forward, laugh and disregard the data and relate the case to naughty things, and end up with wrong conclusion. 

Today, we agreed that the the main protagonist failed in his bid to reposition the motel into a wholesome family oriented/hotel/motel.  There were 3 important things that the management failed ot change,and thus failed to change the position completely.  At the end of the day, it is about business entrepreneurship and brand equity, money and cash flow count.

                                Prof Joe interrogating his classmates;  critical thinking at work?

Case Analysis of Victoria Court last November 18, 2013

AGSB, H. de la Costa Campus, November 26, 2013

                                 Marc and Akeel led the class in Victoria Court case analysis

The Victoria court analysis continues to amaze and fascinate me.  The discussion last week November  18, 2013,  was led by Akeel Dalisay and Marc.  I constantly reminded them to ask their classmates for their analyses fo the case.

Victoria court is a case that tests the focus of the students.  Because this is related to some illicit affairs, the discussion is often colored by past and present experiences.  The critical thinking tends to be thrown off track or wayward, or sometimes the discussion veers towards the present and/or personal experience which is not in the case.  Case analyses must focus on the case.

Well, the case delves on brand equity, positioning, repositioning, and strategy.   The Velhagen move was also deceptive.  (Relate to Sun Tzu)

                                       Jaime reserving his comments for the last November 18, 2013

                                     EJ on his BM presentation

Our Spentrep Class last night November 11, at H de la Costa campus

                                    Emmanuel and his Business Model, BMI presentation

We held the semi penultimate entrep class last night at H de la Costa.  The most significant events were the Business Model and Business Model Innovation by Emmanuel.

I initially started the class with the review of Business Planning, a major class requirement.  I touched on the business concept, business model, and business objective (VMOKRAPI)  Well my review and the SR jived.  As for the assignment on food trip, they had to practice doing the business concept and MVP.

We had two case analyses last night:  Pranav and MICO .  The Pranav Case took almost two hours, for me to call everybody.  There was one who was absent.  He will get 0 for today.  Two were not prepared and that was too bad because this exercise is worth 10 points and there are just two cases remaining:  Entrep Families of Asia and Victoria Court.

Pranav was about the business concept and business objective.   Mico was about PTM and business processes being directed by PTM.  It is very interesting to note that case analyses dynamics differ in every class, and sometimes the class goes into a debate and dilemna.  Same facts are viewed differently by individuals, or some see the facts differently.  Common defects are:   students do not appreciate the situation and the limitation of the situation and argue disregarding the constraints presented by the case;  some are very disciplined and stick to the facts and one of them is Elmer.  Some are really strategic seeing the case in terms of the business concept, coming to grips with the business reality. Martin was sagacious last night

Reality, would you stick to your guns if the situation that you initially hypothesized is not there.

The importance of meticulous planning before the event here cannot be over emphasized.  The  proponents, according to the case discussants were rather foolhardy, doing the planning and data gathering when they started to experience losses

"Fail to plan and plan to fail" by Benjamin Franklin holds water here

We only managed to do the PTM drawing for MICO

                                         Jaimes PTM had funny hair

                                       Gio putting the final touch for his lady PTM

                                  Group 4s lady could qualify for Ms. PHL

                                   Group 4 trying to figure out how their PTM would look like

Our session yesterday, November 4, 2013 - Congrats again to Group 4

AGSB, H de la Costa Campus  |  November 4, 2013

           Isnt it boring that Group 4 always wins?  This time for MC2 case analysis. Congratulations

We had our 4th to the last session yesterday.  We had two main activities:  IV and SR presentations and two case analysis

Albert Abenidos presentation was both inspiring and humorous.  He presented himself as a lady (and he was gorgeous) and as a macho/alpha man in a TV show.  I think he must upload that presentation.  Then he made an SR on social entrepreneurship.  Martin made an SR on CSV.    Gio had an IV presentation.

Then we had two case analyses:   MC2 and Jose Lontoc.

For MC2,  Group 4 again came out the winner.  It looks so boring that they always win.  So no more contest.  While I kept on saying that opportunities should be money/wealth making opportunities, other groups still were vague on what the opportunities where or came out with business that were not related relevant to the expertise of MC2.  I kept repeating the SMART thing.

For Jose Lontoc, there were various points of view:   it was a finance case -  it is question of whether Lontoc can get the loan or not.  Some says he cant get the loan because (he had  bad record -  his other loan was foreclosed?) and that the externals were not clear (the case says that there were limited number of abbatoirs and the daily demand is about 7000 heads of livestock a day).  And that the business was failing? Others remarked that it was about innovation of Lontoc;  other students say it is about the various porftfolio of business

Then we went into risk, value creation/chain of the business and that Lontoc wanted to control the value chain.  The other aspect of value chain would not be making money or failing but as whole the most profitable, the highest value creator prospers.   Then we asked who is the man who sees the whole picture the whole value chain - and it took some coaching/coaxing to say that it is a strategist/visionary who does this.

It is sad to note that there were students:  who did not read the case or did not read well or were guessing. Those who were not here get a failing grade for the cases discussed. And so with those who did not prepare.  It is a 10 point game!

                                      The winner gets my kisses

                                        Group 4 got my kisses

                                  What are the opportunities?  Isip pa, isip pa

 

 Abet as the macho man in his IV presentation;  underneath though....(surprise!)

On Case Analysis

 


Please be guided by this post

Please read the portion on critical thinking of this slideshare presentation:

Personal mastery at Slideshare

                                
--

Prof Jorge Saguinsin

PROMOTING ENTREPRENEURALISM

Three Entrep Clans in Asia Case Analysis - Arlo Cristobal

Three Entrepreneurial Clans in Asia: The Addition, Multiplication, Subtraction and Division of Family Conglomerates

A case analysis by Arlo Cristobal

Situation Analysis

                The Ralva Siblings and Spouses, Tunku Abdullah and His Royal Brood, and the three generations of family from Ibu Mutiara are three clans in Asia that has proven to have successfully establish and grow their enterprises at an astonishing rate. All of them have kept their businesses in the hands of their family members, despite of their businesses' enormous size.

                The Ralva clan started an ice cream business to while away their time. This small project has then turned to a food business giant in Thailand and other countries. Tunku Abdullah, coming from a royal family, has established several business ventures from extremely diverse businesses. Lastly, Ibu Mutiara and her grandchildren have created a transportation empire under the Blue Bird Group umbrella.

                All three clans operated their businesses arithmetically. First, you have the addition processes where the clans add new business ventures to their conglomerate. The Ralva clan preferred to add businesses that are in line with their restaurant and bakery business, but bounded by their preferred target segment. You also have Tunku Adbullah's Melaware group using a "shotgun approach" in expanding to new industries. And finally, we have the Blue Bird Group going to the extremes of adding businesses that has something to do with land transportation.

               

                Second, there is the process of multiplication. The Blue Bird group leads this arithmetic strategy in terms of the volume of growing their existing businesses. Third is the process of subtraction. Unlike the Ralva clan, Tunku's aggressive approach in acquiring different businesses has resulted to several projects that had to be let go. Last is the process is division. Since their businesses had expanded to overwhelming sizes, the clans have to divide the ownership of responsibilities amongst the new generation.

Problem Analysis

All three clans have different approaches when it comes to the arithmetic processes that govern their family businesses. The Ralva clan has a more concentrated approach. Tunku can be considered the aggressive acquirer. Finally, Ibu Mutiara wants to have everything that has something to do with their core businesses.

Given the enormous success of each clan, it's hard to argue with the way any of them approaches business. Still, nothing is absolute and each also faced several challenges that could have been avoided. Similarly, some of their practices have proven to be very valuable to overlook. There are significant learning that can be acquired from the clans' experiences, both in terms of identifying flaws and putting emphasis on strategies that works.

Alternatives Generation

                The ideal alternative would be to gather the best practices of each clan in each arithmetic process, and then apply all of it at the same time. However, given the unique traits of each clan, and any other business organization, it can be very problematic and difficult to implement. There is no straight line when it comes to business expansion and it is also impossible to avoid bumps along the way.

                The Ralva clan's approach can be considered one of the alternatives. Their addition processes is focused on their restaurant and bakery business, resulting to minimal subtraction. This also translates to a conservative multiplication process. Their conservative approach also impacts the way the family members handle the business, with the youngest generation of family members no longer joining the company. Short term, the advantages of their approach is enormous. Their focus to the core business can translate to significant earnings from that business. However, looking at the long term, as the clan grows; their businesses are left only to a handful of interested parties.

                In contrast to the Ralva clan, the Melaware group is quick to jump in any business opportunity that comes in their way. Their approach can be too aggressive at times, but is effective in growing their conglomerate. The obvious problem in this alternative is in structuring a company that has pieces coming in from different fields. Synergy among businesses is very difficult, but they are ensured that they have enough to pass on to future generations.

                Lastly, we have the Blue Bird model. Everything they do is in line and supported by their core business, which is transportation. The addition process is aggressive, yet controlled. The multiplication process is very rapid. The subtraction process is very flexible because they tend to stay on the safe side. They don't cut-off businesses, but trim the volume down when needed. The division processes is also well planned; there are available opportunities for all and at the same time, the new generation are groomed to take on these roles.

Decision Analysis

                 In paper, the alternative that has the best outputs point out to the Blue Bird Group. They are aggressive, but are always in control of their expansion. They also take computed risks, enabling them to quickly adapt to demand changes.

                The problem with this alternative is their vulnerability to structural and technological change. Though this might be in the long-run, there is a threat of collapse since they are stuck in the transportation industry and everything depends on everything else. This is unlike that Ralva clan's venture, food, which has an inelastic demand. To counter this, they should always be on their toe when it comes to forecasting and innovation. Their strengths can immediately transform to vulnerability with drastic changes in the economy. It might take several decades or even centuries for anything drastic to happen in the realm of land transportation, but they should never be complacent.

Action Analysis

                There is no short-term way to measure success in this arena. Everything has to be based on historical strengths and stability. The only tool that can be used is forecasting, but even that is limited when talking about generations of clans taking over businesses. The key success factor for this case would be the longevity and overall growth of a clan's empire. 

Three Entrepreneurial Clans in Asia - Case Analysis by Jenny Liquete

Jenny Liquete

Three Entrepreneurial Clans in Asia:

The Addition, Multiplication, Subtraction and Division

 of Family Conglomerates

Situation Analysis

The three entrepreneurial clans, Raiva siblings and their spouses, Tunku Abdullah and his royal brood of Malaysia, and the three lineage of Indonesia’s Ibu Mutiara, have all undergone the arithmetic of family conglomerates. In each process, the clans had their own pros and cons.

Addition 

The Raiva clan has established several businesses on the food and baking industry. It is focused in consistent expansion that is within their area of expertise (ex. food, bakery products, food additives, and cooking classes). Their addition of consistent product lines and innovation in frozen dough distribution promotes cost efficiency.

Completely different from the Raiva clan, the Melewar group has multiple and incoherent industries – from construction and renting construction, blending and bottling beverages, defense,  computers, tour and travel, insurance, transport, investment, communications, fruits and vegetables, education, rattan and wood, granite to property and infrastructure development – highway and television broadcasting. This clan used a shotgun approach in seizing opportunities which damaged the company in terms of cost and loss of focus. Its expansion and diversification into multiple industries placed the company into confusion and lower profitability. The vision of the corporation can no longer be seen and the diversity and complexity of the businesses required immense capital. It foregoes the cost cutting strategy of economies of scale. For example, the computer manufacturing did not fit their business and it required a lot of R&D and capital. The corporation lost lots of money because of this.

The range and consistency of the industries of the Blue Bird clan are in the middle of the other two clans. It has taxi as its core business. Other services include service buses, non-passenger transport services, fire truck assembly plant, natural gas fuel (Gas Biru), petroleum and CNG pumping stations (Jass Alam), resorts, freight center, and clutch and brake manufacturer. Like the second clan, it went overboard on its expansion and disposed businesses that are not aligned to its business focus such as the fire truck assembly plant and agribusiness venture.

Multiplication 

                Similar in their approach to the addition process, the Raiva clan multiplied and expanded its service branches and bakery shops by heavily focusing on its core restaurant and bakery operations.

                The Melewar group started multiplying when the diverse businesses were classified into common industry groups under separate siblings. The first generation expanded its business by adding more new ventures while the second generation used acquisitions and had natural growth.

                Among the three clans, the Blue Bird clan multiplied the greatest. The two key factors of this expansion is its nature of requiring only one or two people for every vehicle acquired and the vehicle is a cash cow to acquire other vehicles.

Subtraction

                Because of the Raiva clan’s heavy focus on maintaining its main business (food and baking), there were only very minimal eliminations on the businesses. They eliminate to promote cost efficiency and effectiveness of the business. The matriarch is also very strict when it comes to expansion and limited public offerings for their business.                

                The Melewar group, on the other hand, had several failed businesses (computer manufacturing and agricultural products) that were eventually eliminated. They ventured into these businesses even if these are already outside their area of expertise and are difficult to manage.

                Similar to the Melewar group, the Blue Bird group ventured into agriculture business which is out of their expertise and was eliminated later on. The nature of Blue Bird group also required them to replace the old machines and equipment into new ones.

Division

                The Raiva clan divided its business among its family members according to function, product line, and geographic location. It has also opened itself to non-family members by hiring professionals to fill in the middle management positions.

                The Melewar group eventually divided its enterprises into industry groupings. This is advantageous for the clan because the siblings came from different marriages. The patriarch also designed the division in such a way that the children control 80% of their respective groups which will come handy when friction rises.

                 The Blue Bird group has been divided across all of its family members – from children to grandchildren. The children were also sent top MBA schools abroad to groom them to manage the different product lines.

Problem Analysis

The problem for the Raiva clan is that it is too conservative with its expansion and operations. It is very restricted by the matriarch which limits them to fully expand their business. They are also prevented from taking advantage of the opportunities available to them given their wide expertise in the food and baking industry. Also, it does not have an extensive overview and future plans for its succeeding generations unlike the Melewar group and Blue Bird group. Without a contingency plan, it risks its enterprise to be managed and eventually divided to non-family members.

The problem for the Melewar group is its shotgun approach. It ventures to all the opportunities offered to it even though it is already outside their expertise and difficult to manage. Because of this, it loses focus on its profitable enterprises such as those in construction and services. This shotgun approach is also costly for the group.

The Blue Bird group is balanced between the other two clans. It is not too conservative but it has slightly lost focus on its main business which is transportation.

Alternatives Generation

                Raiva clan can either continue with its conservative approach or expand its business related to food and baking. They can also allow outsiders to join the management team and risk the occurrence that someday, the enterprise will be handed over to an outsider or they can already limit the hiring of outsiders and focus on grooming its family members.

                Melewar clan can continue to pursue various opportunities even though it’s not related to their business because it can be the door to another big business or it can limit itself and focus its resources in its most profitable enterprises which are the construction and service industries.

                Blue Bird group can continue its current operations, venturing into various industries even those not relating to their current business or they can just focus on their main business and expertise which is transportation.

Decision Analysis

Riva clan should be less conservative because it has already established itself in the food and baking industry. It has already mastered these so they should be willing to try to create new products relating to food and baking. In terms of management, they should focus on grooming their family members. They have a lot of potential and these can be greatly taken advantage if they educate and groom their succeeding generations.

Melewar group should limit the use of shotgun approach especially if the business is hard to manage, risky, and out of their expertise because it is very costly for them and they will lose focus on their main business (construction and service). As indicated in the case, the strengths of the second clan are the life experiences and strong connections of Abdullah. He can use these to develop a large empire on the construction and service industry.

Blue Bird group should find other ways to develop its transportation business instead of venturing into unrelated industries. Transportation has a lot of opportunities especially since vehicles can be used as a cashcow. They can also try to venture outsourcing of trucks and other transportations.

Action Analysis

                The three clans should always evaluate if their businesses are aligned with their expertise. They should also evaluate if they prioritize keeping the business within their clan or if they are open to non-family members in driving the growth of their businesses.

Fwd: Three Entrepreneurial Clans in Asia Case Study by Crissy Cruz

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.