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.

Kevin and JP did well as Victoria Court Gurus

 Entrep Class, AGSB, H de la Costa Campus | February 19, 2012

Kevin and JP were assigned as as the panelists to lead the class in Victoria Case Analysis.  They seemed to have prepared well for this as they touched on the key relevant points of the case.  I always noticed that the class were more open to discussion if classmates were the case facilitator.

The key points mentioned were:  rebranding, repositioning, brand equity, feasibility of other alternatives, PTM.

Joseph noted that the change would have been complete if there were total overhaul of the structures.  Evan noted that a brand equity can not be abandoned because there was money and value in it.

It was a very satisfactory and very much improved case analysis.

I told the panelists earlier in the class that they must train to be future  GSB professors to which I think they positively responded.  (JP even wore an expensive suit)

The Case for Case Analysis

H de la Costa Campus, Salcedo, Makati City PHL  |  February 12, 2013

We had the second oral, individual only case analysis (not case discussion -  it could not be a narration).  Before, I disregarded case analysis in the entrep class;  it is a heavy stuff.  It calls for heavy listening, alertness, thinking and preparation.  As the facilitator, you think as hard as your student and you must be able to keep track of the thread of the analysis to clarify issues.

All the while, I thought that students who enroll in Entrepreneurship, after having undergone various functional areas training should be able to breeze a case analysis.


Some notes:

l.  It is not a narration or recitation of facts.  The student must take a point of view, a hypotheses and gather only or recite only the relevant facts.

2.  Focus on the situation and hypothesize a problem;  test whether that is really a problem;  go to the alternative and solution.  Mentally test the solution  -  is it realistic, is it good for everyone concerned.?  Is it the best under the situation -  the time constraints.  The problem should be tested  against objectives  - sales income, financial (ROI, efficiency, turn over etc)

3.  So it is always SPADA:   situation, problem analysis, alternative and decision (the solution)

4.  Focus on the big picture:  do not focus on the trunk, the legs or the ear of the elephant.  Look at the entire elephant.  Be systems oriented (what are the parts of the system? Read Breakthrough Thinking by Hibino and Nadler)  Your long training on marketing, finance, or HR can make you myopic.   Or focus on the bottom line (what is the bottom line)

5.  Debate and contrasts (from other students analysis) enables the student to compare his thinking and his ability vs. his classmates.

6.  Insights come out during the analysis. Therefore, when students raise their hands and are eager to recite and talk there are Eurekas and moments of insights lighting a hundred lightbulbs in their brains

This is a step further in becoming a master...MBA, a guru

Our case analysis last night at Sentrep

Room 402, AGSB Salcedo, H de la Costa St., Makati City Philippines | January 29, 2013

We had the first individual oral case analysis last night.  I would consider that the performance of the student in critical thinking, grasping the facts cogently, is the acid test of whether an MBA student can really be called a master.  I had to explain again the critical thinking process from the slideshare lecture on Personal Mastery.

I had to explain the SPADA process (which many still are stranger to and PPA - Potential Problem Analysis)

The typical case analyses are that these a are functional problems:   marketing - that the owner should market the abattoir;   that the entrepreneur should market his lechon burger.   Financial -  that he could not borrow because of previous problem with the bank.

Others pointed out that this a case of which of the business is most profitable.

One suggested that this is really a strategic problem (which was good observation) however fell of the cliff when asked what is the right choice.  She said that it is the buying and selling part.  But how much is the margin?  What is the downside.

Other suggested that the protagonist is confused and does not know his direction for having so many businesses.

The class sec said that is about value chain.  The owner collects/connects business units in support of the ultimate value chain.

Which side are you on?

Pranav Case: Abi Lacuesta

Hi Sir,

I'm not sure if you were getting my emails but here is my pranav case analysis.

Thank you!
Abi

<there is none>

Some notes on last Oct 1 2012 session

The following are some important notes I made on last session last Monday:

l.  On MVP's withdrawal of support from Ateneo.  There were very few attendees yet at the time this was discussed and Ms. Lei Pichay was grilled on this.  The idea being emphasized was that MVP could not buy principles.  Businessmen and the clergy have their role to perform in the society;  therefore they are poles apart.   Businessmen are driven by expediency and efficiency.  The clergy is driven by what is right, entrepreneurship, what is good for all. The Jesuits, under Fr. Magadia did not say anything new at all.  He was not arguing with MVP.

2.  On SR.  The social entrepreneurship and CSV were particularly interesting special reports.  Elena must have done a great deal of effort and time to understand the CSV.  CSV is capitalism reinvented.

On Social entrepreneurship  -  the profit motive is used to sustain the social enterprise.  There is less of cash burn.

3.  Case analysis.  This is on Mico, which is about input-throughput- output.   This is an elaboration of  the PDQ group creative activity.  However, the driving force that dictates the ITO stream is the primary target market.  Different folks (PTM) different strokes (ITO).  The fun part of the case analysis is the drawing of the profile of the PTM:   how does she look like, is she old or young?  Is she fat or thin?  Marty and Lloyd did the honors of drawing the PTM.

Marty said that what he drew are the mother and daughter from school going to MICO shop.

It is emphasized that the long form of the enterprise delivery system as well as the dashboard should be incorporated in the business plan.

4.  Business plan -  The professor again drew on the board the parts of the business plan and emphasized the deficiency of the past classes on business plan parts.  He reminded the students to regularly submit parts of the business plan and/or submit a group business plan on the PDQ they worked on.

5.  Other requirements -The rest of the class who have not submitted their NU 12, inspirational video, factors paper, pictures for their class cards, learning agreement to do so at the earliest possible time.  Cramming at the last hour usually results in the students not being able to submit anything at all.

Revisiting the syllabus is advised.

Pranav Case Analysis by Rhea Jardin

   

The problem of the Pranav case is mainly strategical. The entrepreneurs, I believe, failed to have an intense and close study on the demographics and location of the store before pursuing with the project. They accepted the store location that Robinson's provided them without taking into consideration first the behavior of the customers in the area, the West wing, particularly the male customers who are their primary target market. They already found out later that the concentration of the male customers is on the East wing of the mall, opposite Pranav, which they should have known prior to continuing the project. The case problem is also functional in the aspect of its operations. As noted by one of their AIM professors, their customers should be attended preferably by male staff. I've also seen a barber and salon shop in Robinson's Place Manila and I noticed that their attendants are male, and the female staffs are assigned in the cashier and reception area. I think the male customers are more at ease if attended to by male staff with regards to their salon services. This could possibly because of the mentality of the men that females are more associated with the spa and massage services as seen in most massage establishments.  

In my opinion, the entrepreneurs should concentrate more on the salon services since hair cutting, nail services, shaving and any other salon services are frequently availed by the customers whereas the spa is availed more on occasional basis.

Pranav Case - Hannah Abellera

Hannah Rhuelle B. Abellera

S10-ENTREP

Pranav Case:

1.    1. Since what Mark and Karlo missed before putting up Pranav New York was to study the pros and cons of the location they have chosen in a detailed manner, the problem of the case is strategic. They felt the need to start up the business so they decided to do further location study, simultaneously. Later, in their study, foot traffic is distributed on its key entrances was a good number. Sadly, the location of Pranav New York was not an area where an incidental traffic, especially for male, would occur. Body Senses section inside the mall must be passed by first before Pranav can be accessed by mall-goers. A customer must intend to reach the place, located on the 3^rd floor of Robinsons Galleria. Still, they looked at the situation wherein there would be possibility that Pranav would be noticed if a mall-goer would enter the Body Senses section. Generally, the mall has a larger percentage of female mall-goers, about 60%. This demographic should have been considered before, since their target market were males, and men seldom go to 3^rd floor just to get a haircut. The professors were correct in stating the fact that men would preferably go to a more accessible area, like the ground floor for a fast service like haircut. Having weak sales, to sustain the operations and gain profit became the result of the non-strategic location of Pranav, because of its poor accessibility. Chairs that were not fit for the customers and spas with a condition that was not preferable for men, contributed to its failure also. If Pranav is building a male image, they should have hired skilled and artistic straight men to facilitate some service, especially hair cutting, so as men would be comfortable in going to Pranav. They should have also stood by the promotion of "macho" image for the establishment.

2.  2.   It was determined that in the analysis of Mark and Karlo of unprofitability of Pranav New York, the spa section had a big contribution. Discontinuing of the spa service was practical, because it would only incur further cost to the business. By this action, they could facilitate and concentrate in the salon wherein they were gaining money like in haircut, hot oil and hair color services. These services were acquired more by men rather than the spa. Probably, they could sell the equipment and unused materials of the spa to recover from losing money.

Marta Freitheim's Pranav case analysis

Pranav New York

Strategic or functional?

The main problem of Pranav is that they are not aggregating enough customers, not even to cover the minimum costs. Though an increasing number of males went to the salon for contemporary hair styling services the mall had mostly females. As well as the location inside the mall did not have enough foot traffic. The mall has more than 60% females and they spend more money in the salons. Targeting both genders is a strategic decision. The question about discontinuing the Spa is also a strategic decision as it affects the target market. I will discuss this further below.

This being said, I also think there are operational actions to be made. Like getting barber chairs in order to increase efficiency (research shows that the price leaders in Robinson`s are also the ones with the highest market shares). And changing the cost structure to a commission based salary in order to constrain fewer resources and motivate the staff to sell more of their products.

Split salon and spa?

Pranav NY is experiencing losses and is struggling to make ends meet. They are out of cash and in a hurry to gain profit for their graduation. The Spa is tying up a lot of capital and has the highest negative variance with 241 customers compared to the minimum monthly break even of 308. According to the research done post-opening, the Spa users are also the ones getting the classic cut. They do not see the need to spend additional money for the styling services. But spend money on basic grooming and wellness needs for men. So they do not leave much money in the salon and compromise a significantly smaller percentage of Pranav NY`s customers. Since they are lacking time and the Spa service is costing more than it is earning as well as there is a lack of critical mass, I would advise them to discontinue their Spa service and reduce their lease. This way they can focus on their salon services in order to post positive returns.

by Marta Fretheim

On the case analysis of Jose Lontoc

Here are my comments on Jose Lontoc case analysis:

l.  Lei Pichay and Daniel Berroya recited well on the case analysis last night;

2.  The case analysis should be like a thread on comments portion of website;  we pick up from the comments of others:   agree or disagree;

3.  Go direct to the facts;  the relevant facts

4.  Have a hypothesis and define the problem;

5.  Support your allegations with facts;   therefore read the case at least 5 times;  do no come unprepared for the case analysis;

6.   Be SMART;  be clear and specific on your statements as "the piggery is losing"  What of the piggery business is losing money?  Why are they losing money?  Be sure the case facts bear this out

7.  Do not go out of the case.  Avoid injecting facts/allegations in the case from the web, your or similar experiences.

8.  Remember relevance;  relations, conclusions, relevant facts.