Boeing 777 Revolutionizes Global Aviation

The Making of BOEING 777
The Making of BOEING 777
Innovation Type: Product and Process Innovation
Background: When Boeing announced the development of a new airplane model -

Boeing 777 - in the late 1980s, many aviation experts wondered about the rationale
behind the decision. They questioned the need for a new model since Boeing’s highly
successful 747 model had been flying successfully for over 30 years.
Goals: To make the 777 model technically superior as compared to other competing
models during the time of its launch.
Actions (Actual Ideas):

 The 777 was designed and developed in close collaboration and involvement
of Boeing’s customers, fellow aircraft manufacturers, airline users, engineers,
finance experts, technicians and computer experts.
 Various computer based technologies like CAD, CAM and CATIA were used
in designing the 777.
Teams: Boeing and Boeing’s customers, fellow aircraft manufacturers, airline users,
engineers, finance experts, technicians and computer experts
Results (Benefits):
 The 777 has a distinction of the first paperless designed aircraft in the
aeronautical history.
 The Boeing 777 family came to be known as the builders of the most
technologically advanced aeroplanes.
 The 777 design, innovative features and approach to manufacturing
established a benchmark for development of aircraft in future.
 The management and technical approach used to develop the 777 were applied
to a number of projects including the International Space Station.
URL: http://icmr.icfai.org/casestudies/catalogue/Operations/OPER044.htm
1
Revolution in the Global Aviation Industry
Revolution in the Global Aviation Industry
Innovation Type: Product and Service Innovation
Background: The aviation industry experienced a downturn in the early-1990s

because of the worldwide recession and the Gulf War. Capacity overload became a
common problem in most companies. Many airlines started focusing on cutting costs,
reducing capacity growth, and increasing load factors. However, customers began to
demand better services, which made the costs rise again.
Goals: To attract and retain customers, and make air travel facilitates economic
growth, world trade, international investment and tourism.

 Electronic booking of tickets services were launched.
 Entertainment systems, advanced designing of seats and aircraft interiors were
introduced.
Team: All airlines
Results (Benefits):
 By the beginning of the 21st century, air travel had emerged as one of the
largest industries in the world.
 The industry was seen by many nations as one of the key industries supporting
their economic activities.
URL: http://icmr.icfai.org/casestudies/catalogue/Innovation/BREP015.htm
2
Six Sigma at Motorola
Six-Sigma1 at Motorola
Innovation Type: Product and Service Innovation
Background: The US based Motorola Inc. lost business to its Japanese competitors
in1981.
Goals: To achieve a ten-fold improvement in the quality of its products and services.

 An ambitious and innovative quality drive --- Six-Sigma, was launched in
1981.
Teams: Bill Smith (Smith), a Motorola engineer, was responsible for linking the term
of Six-Sigma with the company’s quality initiatives.
Results (Benefits):
 Motorola’s Six-Sigma quality target achieved not more than 3.4 defects per
million products.
 It also achieved customer satisfaction by providing the best quality products
and services, and significantly increased in company’s sales.
 Motorola acquired the reputation of being the quality leader, not just in
manufacturing but in every process including customer relations.
 Between 1986 and 1988 alone, Motorola received 50 quality awards, and
became the only company in the world to have received the Malcolm Baldrige
National Quality Award twice
1
The term ‘Six Sigma’ comes from the field of Statistics. Its origin as a measurement standard can be
traced back to Carl Frederick Gauss (1777-1855) who introduced the concept of the normal curve. Six
Sigma as a measurement standard in product variation could be traced back to the 1920s. Bill Smith
(Smith), a Motorola engineer, was responsible for linking the term with the company's quality
initiatives
3
DHL’s Business Strategy in China
DHL's Business Strategy in China
Innovation Type: Strategy Innovation
Background: The rapidly improving business environment in China and its entry into
the World Trade Organisation in 2001 attracted many multi-nationals to the country.
DHL was among those who recognised the potential for growth in the country's
express logistics industry.
Goals: To become an integrated “one-stop” supply chain solutions provider, offering

services in express, air & ocean freight and overland transport.

 A massive expansion program was initiated.
 “China Domestic”, an international express service was launched, as a part of
the duo’s strategy to respond to the fast-changing customer requirements.
 A door-to-door delivery service particularly targeting parcels and freight items
was offered.
 “Track-and-Trace” technology was implemented
Team:
Results (Benefits):
 DHL was able to offer shorter delivery and pick-up times, besides better
customer service and shipment visibility.
 DHL emerged as the world’s leading express and logistics company.
URL: http://icmr.icfai.org/casestudies/catalogue/Business
%20Strategy2/BSTR138.htm
4
BMW’s Innovation Strategies
BMW's Innovation Strategies
Background: The Munich based Bayerische Motoren Werke AG (BMW) automobile

company grew into one of the leading automobile producers in the world by the
1990s, and radically changed the way BMW was handling “innovation process
management” at its automobile division.
Goals: To develop and demonstrate exceptional skills in constantly creating and

capturing value, through its innovations and development of new products.

 The new innovation management system was developed and implemented in
the 1990s.
 Let innovation be the driving force for its product development process
throughout the late 1990s.
Teams:
Results (Benefits):
 BMW was able to exploit various path breaking technological innovations,
right from the idea generation stage to the market introduction stage.
 The company was able to develop continuous stream of new products and
brands.
 BMW successfully withstood competitive pressures and held on to its market
position, and established itself as one of the leading players in the premium
segment of the global automobile market.
 BMW was awarded the Outstanding Corporate Innovator (OCI) title for 2002
by the Product Development & Management Association (PDMA).
5
Marriott's Customer - Focused E-Business Strategy
Marriott's Customer - Focused E-Business Strategy
Innovation Type: Strategy and Process Innovation
Background: In 1982, Marriott acquired Host International, a leading hospitality

services provider in the US, becoming the largest operator of airport terminal food,
beverage and merchandise facilities in the US.
Goals: To provide better customer service by using IT proactively and through the
facilities on offer through its website.

 Several innovative technologies had been introduced and implemented before
the competitors did. For instance, Marriott Automated Reservation System for
Hotel Accommodation (MARSHA) was launched in the 1980’s, which was a
totally new concept of hotel reservation in the hospitality industry at that time.
 $70 million was invested by the company over a two-year period to implement
a variety of IT applications in diverse functional disciplines such as sales,
accounting and personnel.
 Continuous improvements in its business processes were made.
 An e-business strategy was adopted in 1998.
Teams:
Results (Benefits):
 The company was switched over from a decentralised property-orientation to a
centralised customer-orientation in its services.
 Clients are given access to the services offered by the entire Marriott chain of
hotels and resorts through the company’s website.
 The company’s ability to serve its clients was boosted, and its financial
performance was strengthened.
 Marriott International became the first hospitality company to win the CIO -
100 awards from CIO magazine for four consecutive years (2000-03).
URL: http://icmr.icfai.org/casestudies/catalogue/IT%20and
%20Systems/ITSY035.htm
6
Fannie Mae's Human Resource Management Policies
Fannie Mae's Human Resource Management Policies
Innovation Type: Culture Innovation
Background: Federal National Mortgage Association (known popularly as Fannie

Mae), achieved recognition not only for its financial performance but also for its
progressive human resource (HR) policies.
Goals: To recognise and retain talent, irrespective of class/gender/nationality.

 New HR policies were developed and implemented to offer a wide variety of
financial, health and career benefits, some of which were “healthy living” day
off, paid child adoption leave, elder care and child care programs, flexible
work options, Assistance for Collegiate Education (ACE) Program, Corporate
Mentor Program, mandatory diversity training, 10 hours of paid-off each
month for volunteer activities, and Employer-Assisted Housing (EAH).
 The Office of Diversity was created in 1992 to promote diversity at the
organisation.
Teams:
Benefits:
 The company earned the reputation of being one of the best companies to
work for.
 The company had been included in Fortune’s Best Companies for Minorities
list every year since 1998.
URL: http://icmr.icfai.org/casestudies/catalogue/Human%20Resource%20and
%20Organization%20Behavior/HROB038.htm
7
The Ford Production System
Innovation Type: Process Innovation
Background: Ever since it began operations in 1903, Ford Motor Company (Ford)
has been recognised as a manufacturing process innovator in the automobile industry.
Goals: To induce more flexibility and enhance the efficiency of its automobile
production systems.

 A reengineering effort known as Ford Production System (FPS) was
developed and implemented in its plants across the world.
 Techniques used in lean manufacturing were implemented at all of its
manufacturing operations.
 The human aspects were emphasised in the effort of reducing wastes apart
from using advanced technologies.
Benefits:
 FPS enabled Ford to develop and apply the best practices in automobile
manufacturing.
 The company realised improved productivity levels and financial performance.
 Three plants of Ford found a place in the list of the 17 manufacturing plants
across the world who received the Shingo Price for Excellence in
Manufacturing, termed by Business Week as the Nobel Prize of
Manufacturing.
8
PayPal.com's Business Model
PayPal.com's Business Model
Innovation Type: Technology and Service Innovation
Background: When the PayPal service was launched in 1999 to enable people to
settle small debts via the Internet, several analysts expressed doubts over its future.
Goals: To achieve the market leader in e-payment services, and bring a complete
transformation in the way people made online payments.

 A very competitive business model was adopted.
 Appropriate security systems were in place to check frauds.
 New services were consistently offered.
 The network was expanded continuously.
Teams:
Results (Benefits)
 PayPal.com has won the trust of millions of customers, and it grew from
10,000 customers in 1999 to 45 million customers in 2004.
 PayPal became the most trusted payment system over the Internet, revealed by
a survey conducted by Gartner in 2002.
9
Volvo’s Product Development Practices - Focus on Safety
Volvo’s Product Development Practices - Focus on Safety
Innovation Type: Product Innovation
Background: Maryann Keller, an automobile industry analyst noted, “Since the

introduction of airbags in the late 1980s, the industry has understood that safety sells.
A customer who buys a Volvo may find that incremental value is worth the cost
simply because (he or she) already places a higher than normal value on safety.”
Goals: To manufacture the safest cars in the world.

 Conducting R & D for safety technologies has been constantly emphasised at
the company.
 The Volvo Safety Centre, one of the most advanced safety engineering
facilities in the world, was inaugurated in 2000.
 All Volvo vehicles and their components were subjected to safety tests
including computer simulation, component testing and crash testing.
Teams: The Volvo Safety Centre
Results (Benefits):
 Several path breaking safety technologies were introduced by Volvo, which
were way ahead of the times.
 The state-of-the-art safety technologies reaffirmed Volvo’s top position in the
field of automobile safety and contributed towards better accident prevention
in Volvo cars.
 The company enhanced its brand image to such an extent that the name Volvo
became a synonym for safety.
10
Xerox PARC: Innovation without Profit?
Xerox PARC: Innovation without Profit?
Background: In the late 1990s and the early 2000s, Xerox experienced a meltdown
due to several corporate crises.
Goals: To streamline its operations and restore a semblance of stability. One of the
areas for cost savings identified by the company was the $70 million a year that it
spent on the maintenance of the Palo Alto Research Centre (PARC) which was set up
in 1970 as the research arm of the company.

 In late 2001 it was announced that PARC would be incorporated as a wholly
owned subsidiary of Xerox.
Teams:
Results (Benefits):
 The cost of maintaining PARC was saved.
 The parent company would have access to all the technologies developed at
the centre. However, PARC would also be able to license its technologies to
other companies.
Lessons Learned from PARC’s Failure for Profit:

The Palo Alto Research Centre (PARC) was set up in 1970 as the research arm of
Xerox Corp, to invent the technology of the future. In a little over 30 years since it
was set up, PARC invented a number of products which revolutionised the computer
industry. However, despite its scientific excellence, Xerox failed to capitalise on the
commercial potential of most of these innovations. Analysts believed the main
reasons are:
 Poor goal definition: the casual and flexible culture that prevailed at PARC,
allowed people to pursue projects of their interest with no concern for
commercial value.
 Poor alignment of actions to goals: there was a basic mismatch between the
objectives and working methods of PARC scientists and the people at the
corporate office.
 Poor management of actions: the distance of PARC from the corporate
headquarters cut off from the competition of the corporate world.
11
Merrill Lynch’s IT Initiatives
Merrill Lynch’s IT Initiatives
Innovation Type: Technology Innovation
Background: Known for its conservative approach towards client servicing and
having its focus on offering personalised services, the US-based Merrill Lynch &
Company (ML), a leading global financial services firm, had always been in the
forefront in the adoption of IT for serving clients better.
Goals: To offer high quality content and analytical tools to enable ML’s financial
advisors create, use and track financial plans for their clients.

 The Trusted Global Advisor (TGA) platform was launched in the late 1990s.
 After the TGA became obsolete with new customer-serving technologies
introduced in the early 2000’s, a new information technology (IT) platform
called Wealth Management Workstation (WMW) was developed and launched
in collaboration with Thomson Financial in 2002.
Teams:
Results (Benefits)
 The way in which client services were delivered in the financial services
industry was significantly changed after TGA was launched.
12
Knowledge Management Initiatives at British Petroleum
Knowledge Management Initiatives at British Petroleum
Background: The UK- based oil and gas exploration major British Petroleum Plc
(BP) became one of the first few companies to treat KM as a separate discipline when
it established the Knowledge Management Team (KMT).
Goals: To use the application of KM tools for reducing the emission of harmful gases
like carbon dioxide and methane.

 The Virtual Teamwork Project (VTP), its first major knowledge management
(KM) initiative was launched in 1994.
 Various KM tools such as Peer Assist, After Action Review, BP Connect,
Retrospect and Human portal, were launched soon after the success of VTP.
 A Knowledge Management Team (KMT) was established in 1997.
 The Emission Trading System (ETS) was implemented in all units of the
company.
Teams:
Results (Benefits):
 Excellent financial results for its business operations were reported after the
implementation of the KM initiatives.
 By March 2002, due to ETS, BP could reduce the quantum of emissions from
all its business units by 10%.
 Costs were reduced and the productivity and efficiency were enhanced of its
business operations due to the successful use of KM tools.
13
Charles Schwab – Expanding Online Trading Applications
Charles Schwab – Expanding Online Trading Applications
Background: The US stock market crash in October 1987 had a severe impact on the
brokerage industry. Trading volumes fell, commissions came down. Since Charles
Schwab & Co. Inc. (Schwab) depended heavily on discount brokerage commissions,
it was forced to explore the possibilities of expanding the range of services it offered.
The company soon realised the business opportunities offered by the World Wide
Web.
Goals: To provided high volume trading and customised, timely financial services for
NASDAQ securities and brokerage-dealers and institutional customers through over
310 branches

 The company’s website was launched in 1995, and online trading commenced
in 1996, which allowed customers to get real time stock quotations, enter trade
orders, create a personalized asset allocation model, and access research
information.
 New features were constantly added to enhance the performance of its
website.
 The existing infrastructure was replaced by the late 1990s by a new enterprise
infrastructure, which could easily accommodate higher traffic, provide greater
flexibility and economy and render superior customer service.
Teams:
Results (Benefits):
 Schwab became the market leader in the global online broking and financial
services industry had a 30% market share of the industry in 2001.
 It also accounted for one-third of overall global Internet trading businesses.
 By integrating the online and offline worlds, Schwab has become the
benchmark for others going online
 Customers significantly benefited from the wide variety of investing services
and pricing options provided by the Personal Choice program.
14
Knowledge Sharing Initiatives at the World Bank - Creating a Knowledge Bank
Knowledge Sharing Initiatives at the World Bank - Creating a Knowledge Bank
Background: In 1996, the World Bank realised that the distance from its
headquarters to operational regions had become a major obstacle in objective
achievement. In October 1996, when the World Bank, announced that the
organisation would transform itself into a knowledge bank, there were mixed
reactions. Some were excited about knowledge management and its potential in
helping the World Bank achieve its objectives. Others considered it a waste of time
and resources and felt the Bank should stick to its original mission of eliminating
poverty.
Goals: To transform itself into a knowledge bank.

 A global knowledge community was created using web-based tools, by
harnessing the vast amount of knowledge present across the organisation and
making it readily available to all employees and clients.
Teams:
Results (Benefits):
 Knowledge moved seamlessly across the world to make the work involved in
poverty elimination and economic development (the Bank's primary
objectives) faster and more effective.
 In early 2000, the World Bank was recognized as one of the five top
knowledge management organizations in the US by the American Productivity
and Quality Centre (APQC).
 In June 2000, the Bank featured in the list of the 10 top Most Admired
Knowledge Enterprises (MAKE) in a survey conducted by the KNOW
Network.
15
Mercedes Benz’s e-Biz Solution: The Factory Delivery Reservation System
Mercedes Benz’s e-Biz Solution: The Factory Delivery Reservation System
Background: By the end of 1997, Mercedes Benz United States International

(MBUSI) started producing at full capacity. By 2000, the factory was rolling out
around 380 vehicles per day. Mass customisation required that each vehicle be treated
as a separate project, with its own Bill of Material.
Goals: To established itself as a company that delivered superior customer services,

besides a builder of the high-quality M-Class sports utility vehicle (SUV)

 The Factory Delivery Reservation System (FDRS), an enterprise wide
Information Technology (IT) system, was designed and implemented.
Teams: IBM Global Services consultants
Results (Benefits):
 MBUSI was able to create and validate 1800 orders per hour.
 Material requirements and Bills of Material for 35,000 vehicles were
generated automatically by FDRS per hour.
 MBUSI not only managed to improve its customer relations by providing the
best service, but also demonstrated its commitment to customers by making
them an integral part of the process, with its innovative use of the FDRS.
16
Executing E-Business Strategies - The GE Way
Executing E-Business Strategies - The GE Way
Background: Once upon a time, GE had “almost missed the e-business boat”.
Goals: To transform from a Brick & Mortar company into a Click & Mortar
company.

 The Internet was adopted as an enabler of all business functions in the value
chain.
 The Internet was used to re-engineer its business processes by removing
obsolete and redundant activities.
 A transactional website was launched in 1997 by one of the company’s
business units, GE Plastics (GEP), to eliminate the waste of time, labour and
money caused by the visits and phone calls between the concerned parties.
 An artificial intelligence system to help field engineers attend to customers’
requests for site visits was developed in 1998 by the Industrial Systems unit of
GE.
Teams:
Results (Benefits):
 Costs were dramatically cut, the cycle time was reduced, and the quality of its
services was improved through the BPR activities.
 In June 2000, Internet Week (a leading IT publication in the US) recognised
GE as the E-Business of The Year.
17
Operations at Whirlpool
Operations at Whirlpool
Background: At Whirlpool Corporation (Whirlpool), logistics did not start with the
distribution of a finished product but was a true supply chain strategy, which
encompassed materials flow into and through the manufacturing process.
Goals: To get the right product to the customer when they expect it.

 Several cross-functional teams for key product areas were set up.
 Several agreements with its suppliers were reached based on their reliability
and their ability to assist in product design.
 Electronic Data Interchange (EDI) was adopted by 1999 to communicate with
its suppliers as a part of its supply chain initiative, in order to cut down on
expenses.
 Almost all the Whirlpool stores around the world were linked with e-business
software, which linked each of its factories and sales operations with suppliers
and key-retail partners.
 An online sales program called e-Partner was launched in September 2002.
Teams:
Results (Benefits):
 By the early 2000s, Whirlpool had product availability in the range of 90 to 95
per cent.
 Inventories were reduced by 15 to 20 per cent and lead times became as low as
five days.
18
Nokia - Fostering Innovation
Nokia - Fostering Innovation
Innovation Type: Process and Culture Innovation
Background: According to analysts, Nokia served as the industry model for

aggressively and effectively segmenting the mobile phone market and developing a
number of products for segments.
Goals: To create an inclusive environment, i.e. a culture which seeks to uphold and
benefit from diversity.

 A lot of importance to innovation and creativity was given.
 A conscious effort to create and maintain a culture, which focused on diversity
and the benefits that accrued from it, was made.
 The R&D system was an open one where any idea, no matter how absurd it
sounded initially, was given due consideration.
Teams:
Results (Benefits):
 A number of such absurd sounding ideas later emerged as star products or
features in the Nokia line-up.
 By 2002, Nokia had emerged as the strongest brand in the mobile handset
industry.
 By 2002, Nokia had a market share of about 36%, which was much larger than
that of its competitors.
19
Ericsson in the New Millennium
Ericsson in the New Millennium
Background: Ericsson, the Swedish telecom giant, enjoyed immense success until
the 1990s. However, it failed to adapt its mobile handsets to consumer tastes, and this
led to a fall in sales of its handsets. Its competitors meanwhile took over Ericsson’s
space in the market. As sales fell, Ericsson’s other businesses were also affected.
Goals: To restrict the downslide in its sales.

 Ericsson marked out its core competencies and then focused on them.
 A joint venture to form Sony Ericsson- a company that would combine
Ericsson’s technology with Sony’s understanding of the consumer market was
started.
 Free from the handset business, Ericsson concentrated on its core businesses-
the 3G technology and wireless telephone networking
Teams:
Results (Benefits):
 By 2003, Sony Ericsson broke even and was firmly on the path to profit-
making.
 Ericsson managed to establish its supremacy in the 3G technology although
the market was still relatively small.
 Ericsson has reinvented itself as a lean, modern, advanced, cost-conscious and
competitive organisation.
20
Sears’ Logistics Management Practices
Sears’ Logistics Management Practices
Background: The US retailing giant - Sears, Roebuck & Company (Sears) was in
deep trouble during the early 1990s. In the course of fiscal 1992, Sears hired an
outsider - Arthur Martinez (Martinez) to head its merchandise division.
Goals: To make Sears’ logistics management system more efficient.

 Martinez focused on streamlining the logistics management practices by
consolidating distribution centres, increasing warehouse automation, and
reducing transportation costs.
 Wireless Mobile Systems were installed in the Retail Replenishment Centres
(RRCs) in 2001.
Teams: Arthur Martinez, head of the merchandise division and William Gus Pagonis,
Executive Vice-President.
Results (Benefits):
 The merchandise division was able to make a profit in the next year of
Martinez’s drastic changes in the division.
 Sears became one of the few retailing companies which applied military
logistics strategies in practice.
 Sears had always been among the first movers to adopt modern IT tools and
Internet-enabled technologies in logistics management.
21
Gateway - Implementing Innovative Strategies in the IT Industry
Gateway - Implementing Innovative Strategies in the IT Industry
Innovation Type: Service Innovation
Background: During the initial years of the new millennium, due to the slowdown in
the IT industry, the leading computer retailer US based Gateway Inc (Gateway)’s PC
business performed badly. The company also faced stiff competition in the various
services it had newly introduced.
Goals: To revival the business after the fall partly caused by the stagnation in the IT
industry

 A new strategy was launched in October 2002, which involved a change in its
logo and retailing of many new consumer electronic products through its own
stores.
Teams:
Results (Benefits):
 In spite of the stagnation in the IT industry, Gateway reported reduced losses
of $297 million for the fiscal 2002 due to the measures it had taken.
22
Intel's Centrino
Intel's Centrino
Background: In developing the Pentium M, at its labs in Israel, Intel had solved one
of the historical problems with Pentium notebooks, power consumption. Despite new
chip technologies and industry wide efforts in the 1990s to increase overall notebook
energy efficiency, growing screen sizes and faster chips wiped out many of the gains.
Goals: To develop a new range of Central Process Unit (CPU) ideally suited for a
range of thinner, lighter notebooks that deliver the levels of performance needed in
mobile computing.

 Rather than retrofit the Pentium, Intel’s Israeli team decided to start from
scratch.
 The latest generation of enhanced Intel SpeedStep technology was adopted in
Centrino.
 The Micro Ops Fusion program combined routine instructions and tasks.
 The Advanced Branch Prediction program let the processor better schedule
tasks.
 Different parts of the chip were designed to shut down when not in use.
Teams: Intel’s Israeli R&D team.
Results (Benefits):
 Centrino enabled extended battery life, and sleek, easy-to-carry notebook
computers.
 Centrino delivered a significantly enhanced performance in wireless
connectivity.
%20Strategy3/BSTA082.htm
23
Microsoft in 2004: Shaping a New Image
Microsoft in 2004: Shaping a New Image
Background: By the early 2000s, Microsoft had become large and unwieldy. The
company’s days of rapid growth appeared to be over. The effort of exploring other
product segments had not yet yielded profits. Microsoft realised that in the aftermath
of the antitrust case, it needed to project a new image befitting a large company as
opposed to a start up.
Goals: To adjust the company’s culture to its status of industry leader.

 The lower level employees have been empowered while the attitude of
winning at any cost was abandoned.
 Employees were asked to be open and respectful, less secretive, less
mysterious and more communicative, towards people and organisations
outside.
Teams: Microsoft’s new CEO Steve Ballmer appointed in early 2000.
Results (Benefits):
 The company’s ability to innovate and compete effectively in the emerging
business environment was improved.
24
Wal-Mart in 2004: Creating a New Image
Wal-Mart in 2004: Creating a New Image
Background: During the time when Wal-Mart had been relatively small, the public
relations department's main function was to keep Wal-Mart out of the news. However,
the more Wal-Mart grew and the more financial success it had, the more the media
paid attention to it. The negative publicity resulting from a series of incidents in 1992
made Wal-Mart realise that the company had become visible, exposed and vulnerable
to media attention.
Goals: To shape its public relations strategy to create a new image.

 A proactive approach was adopted to manage relations with external
stakeholders and the media.
 Wal-Mart has set up a government relations department in Washington.
 Employees are being encouraged to participate actively in local community
affairs.
Teams: Wal-Mart’s Public Relations department
Results (Benefits):
 Wal-Mart’s Public Relations department has become more proactive, media
friendly, and has attempted to portray the company as a leading retailer, good
employer, and responsible corporate citizen.
25
Business Model Innovation at Dell
Business Model Innovation at Dell
Background: Many players in the PC industry have attempted to replicate Dell’s

business model but failed. It is Dell’s disciplined execution that has driven Dell’s
success.
Goals: To become the leading players in the PC industry.

 Dell has created a direct selling model and build-to-order format.
 The company had concentrated on activities where it could add most value and
on market segments where profits were highest.
 Dell had taken care to ensure that customer service was not diluted in the
process of cutting costs.
 In addition to the www.dell.com site which offered various services to
customers, Dell offered customer-specific sites called Premier Pages, which
provided facilities such as paperless purchase orders, real-time order tracking
and purchase history.
Teams:
Results (Benefits):
 The company maintained momentum in a rapidly commoditising industry,
where most other players were struggling.
 During the period 1997-2002, Dell's global market share of PCs went up from
5% to 15%.
 In many product categories, Dell set the standard for customer service.
 Dell has also demonstrated that it is not R&D spending alone which
determines a company's success.
26
FedEx: Competitive Advantage through Information Technology
FedEx: Competitive Advantage through Information Technology
Innovation Type: Strategy and Technology Innovation
Background: Began as an express air delivery company in the early 1970s, FedEx
has successfully transformed itself into an integrated transportation and logistics
service provider. A major part of FedEx’s success is directly attributed to its
committed use of information technology (IT).
Goals: To transform into an integrated transportation and logistics service provider.

 FedEx was the first who give away more than 100,000 PCs loaded with FedEx
software, which was designed to link and log customers into FedEx’s ordering
and tracking systems.
 FedEx was also the first to issue hand held scanners to its drivers that alerted
customers when packages were picked up or delivered.
 FedEx also offered a number of IT related solutions that supported its clients
in areas like warehousing, inventory management, billing and invoicing, and
distribution.
Teams:
Results (Benefits):
 Clients were provided with seamless logistic and supply chain solutions.
 FedEx has successfully transformed itself into an integrated transportation and
logistics service provider.
27
IKEA: Managing Global Expansion
IKEA: Managing Global Expansion
Background: Most of the time, beautifully designed home furnishings are created for
a small part of the population - the few who can afford them. From the beginning,
IKEA has taken a different path. They have decided to side with the many.
Goals: To offer a wide range of home furnishings with good design and function at
prices so low that as many people as possible will be able to afford them, and still
have money left!

 High-quality and Scandinavian design.
 No delays in delivery.
 Global sourcing of components.
 Knock-down furniture kits that customers transported and assembled
themselves.
Teams:
Results (Benefits):
 IKEA’s cost leadership strategy had enabled it to pass on to customers lower
prices, anywhere from 25% to 50% below those of its competitors.
 IKEA’s business model had gradually revolutionised the conservative national
furniture markets first in Europe and then in other parts of the world.
28
Procter & Gamble in 2004: Managing Product Innovation
Procter & Gamble in 2004: Managing Product Innovation
Innovation Type: Strategy and Culture Innovation
Background: By the summer of 2000, things were not looking good for the US based
Procter & Gamble (P&G), one of the most well known consumer goods marketing
companies in the world. Costs had gone up, volumes stagnated and profit margins had
shrunk on P&G’s biggest brands like Pampers, Tide, and Crest.
Goals: To turnover its declined business.

 The company had focused on building the core brands.
 Many products’ prices were cut.
 Lafley had attempted to introduce more creativity into P&G’s innovation
process.
Teams: CEO of P&G Alan Lafley appointed in the summer of 2000
Results (Benefits):
 Many new products were launched.
 Over the past three years, core volume (units sold in P&G’s existing
businesses) rose on an average by 7% annually.
 Since 2002, P&G has improved its new-product hit rate (the percentage of
new entries that deliver a return above the cost of capital) from 70% to 90%.
 In the first quarter of 2004, 19 of P&G’s 20 largest brands improved their
market shares.
29
Toyota in 2004: Managing Innovation in the new millennium
Toyota in 2004: Managing Innovation in the new millennium
Background: Despite its pioneering efforts in Just-in-Time, one of the challenges

which Toyota faced was in moving towards a Build-to-Order system, especially
outside Japan. Build-to-Order demanded flexible manufacturing systems that allowed
switching from one model to another with ease.
Goals: To build greater flexibility and facilitate mass customisation.

 Toyota had been revamping its ordering, manufacturing and distribution to
make it easier for dealers and customers to make changes right before
production.
 Toyota spent four years developing software that connected dealers to
factories and factories to suppliers.
 Toyota also streamlined the logistics process, according to which finished
vehicles were sent to sorting docks where they could be grouped by region.
Teams:
Results (Benefits):
 The new ordering, manufacturing and distribution system not only improved
customer satisfaction but also cut dealer inventory costs and the need for
Toyota to offer rebates for slow-selling vehicles.
 The new logistics process cut delivery by two days.
30
Restructuring Philips
Restructuring Philips
Innovation Type: Strategy and Culture Innovation
Background: Philips was on the verge of bankruptcy in May 1990 when the
company posted losses of $2.6 billion.
Goals: To turn the company around, foster greater cooperation among its various
divisions, get rid of the bureaucratic work culture prevailing in the company and
promote teamwork.

 Philips initiated job cuts, sold unprofitable businesses and closed down many
manufacturing facilities worldwide throughout the 1990s.
 In late 1999, Philips embarked on a worldwide marketing campaign for the
first time in its history.
 In 2001, the Towards One Philips (TOP) restructuring program was launched.
Teams:
Results (Benefits):
 The restructuring efforts in the 1990s helped improve the financial health of
the company but were not able to address concerns like the bureaucratic work
culture and the company’s poor marketing of its products.
 The company made a clean break from its past image as a technology-oriented
company to one that was market-oriented through the marketing campaign.
 The TOP program has achieved cut cost, develop innovative products and
technologies, and improve relationship with customers.
URL: http://icmr.icfai.org/casestudies/catalogue/Business%20Strategy/BSTR170.htm
31
The McDonald’s Turnaround Story
The McDonald’s Turnaround Story
Background: By the late 1990s, after years of declining earnings and poor customer
ratings, McDonald’s Corp. (McDonalds), the largest fast food chain in the world,
seemed to have lost its claim to providing the Great American Meal.
Goals: To turnaround the company from declining.

 McDonald’s adopted the “Plan to Win” turnaround program in early 2003.
 The company introduced substantial system-wide changes that overhauled the
company’s products, operations and marketing.
 The company moved quickly to tailor its operations to the changing trends in
the fast food industry
Teams: Jim Cantalupo who was made CEO in early 2003, and Charlie Bell the
president and COO were the leaders.
Results (Benefits):
 The new plan eliminated the negative elements in the system, while retaining
and building on the positive aspects.
 Critics who had been sceptical about the company’s ability to revive were
confounded.
 In the quarter ended July 2004, the company announced a 25 percent increase
in profits over the corresponding quarter of the previous year, and sales
reached a 17-year high.
32
IBM’s Turnaround and its New Business Model
IBM’s Turnaround and its New Business Model
Background: In 1993, International Business Machines (IBM), a global leader in the

IT industry was in deep financial trouble. The company had reported a net loss of $8.1
billion, the largest ever in the history of IT industry.
Goals: To revive the company’s business.

 IBM was transformed from a company that primarily manufactured
mainframes to a company that offered complete IT solutions.
 The company changed its focus from being product centric to being customer-
centric.
 IBM launched new services-heavy business model.
Teams: Louis V. Gerstner was the leader.
Results (Benefits):
 IBM has made the most remarkable turnaround of any company ever --- in the
fiscal 2003, IBM reported a net income of $7.58 billion on revenues of $89.13
billion.
 During the period 1994-2003, the share price of IBM shot up by nearly 700%.
 IBM not only turned around but, was able to significantly boost its financial
performance.
33
Reengineering & Restructuring at Canon
Reengineering & Restructuring at Canon
Background: In the mid-1990s, Japan’s leading photocopier and camera

manufacturer, Canon Inc (Canon), embarked upon turning itself into a truly global
corporation.
Goals: To turn itself into a truly global corporation.

 The company embarked upon a massive reengineering program, Excellent
Global Corporation Phase I and II in 1996.
 Many changes were introduced in the company’s manufacturing and
management processes.
Teams: The management team lead by Fujio Mitarai.
Results (Benefits):
 Canon was able to revive itself without adopting painful strategies.
 In 2002, Canon’s total sales were ¥2,940,128 million, an increase of ¥381,901
million from 1996. Its net income increased from ¥94,177 million to ¥190,737
million during the same period.
34
PepsiCo’s Distribution and Logistics Operations
PepsiCo’s Distribution and Logistics Operations
Background: Headquartered in New York, the US-based PepsiCo is one of the

world’s leading beverage and snacks food companies. Analysts felt that one of the
main reasons for the company’s success was its efficient distribution and logistics
management operations.
Goals: To set up highly advanced distribution system.

 PepsiCo upgraded its technical capabilities consistently in order to strengthen
its logistics management activities.
 PepsiCo developed various standard distribution methods, such as the Direct
Store Delivery (DSD) system, the broker warehouse system, the vending and
food service system and the pre-sell method.
 Depending on the product involved, PepsiCo chose between the distribution
methods.
 PepsiCo also adapted these systems to the local conditions of the various
countries in which it operated.
Teams:
Results (Benefits):
 This efficient distribution and logistics management system has successfully
reduced costs and created value for customers
 PepsiCo has gained massive growth and acquired the leadership status in
almost all its business segments.
35
Coca-Cola’s Re-Entry and Growth Strategies in China
Coca-Cola’s Re-Entry and Growth Strategies in China
Innovation Type: Strategy and Process Innovation
Background: The Coca-Cola Company (Coke) re-entered China in 1979. Today it is

recognised as one of China’s most trusted brands according to Interbrand. Coke’s top
managers and industry observers too believe that it is the company's winning
approach of “Think Local, Act Local” that has enabled it to capture markets outside of
the United States.
Goals: To localise the entire Coca-Cola system to the Chinese market.

 Coke encourages local managers to develop strategies that are best suited for
their areas, and regional offices have the freedom to approve local initiatives.
 Coke worked closely with Chinese state-owned enterprise, formed joint
ventures with state-owned enterprises to set up more bottling plants.
 Coke developed its own infrastructure for distribution but gradually came to
mainly rely upon state-owned distribution companies and local Chinese
distribution companies.
Teams:
Results (Benefits):
 Since 1990 it has been making profits in China and according to AC Nielsen it
had a market share of over 50 percent share of the Chinese beverages market
in 2002.
36
The eCitizen Portal - Integrating Government Services Online in Singapore
The eCitizen Portal - Integrating Government Services Online in Singapore
Innovation Type: Service Innovation
Background: In October 2002, Singapore’s eCitizen portal was declared the winner
of the prestigious Stockholm Challenge Award in the e-government category. The
competing e-government projects were evaluated on the basis of four criteria, namely,
Innovation, User needs, Transferability and Accessibility.
Goals: To improve the government’s service delivery and interaction with citizens.

 The concept of Many Agencies One Government was embodied in the
eCitizen portal.
 The eCitizen portal integrated public services across government agencies, so
that public services were delivered with one-stop convenience.
Teams:
Results (Benefits):
 The portal eliminated the need to log onto several websites to access the
services of different government departments.
 It revolutionised the manner in which government-to-citizen (G2C) and
government-to-business (G2B) interaction took place.
37
IKEA’s Innovative Human Resource Management Practices and Work Culture
IKEA’s Innovative Human Resource Management Practices and Work Culture
Background: The retail sector, especially in the United States, was not known for
being employee-friendly. Many large retailers paid low salaries and offered negligible
benefits while expecting employees to work long hours. Consequently, it suffered
from high human resource (HR) costs, as companies had to recruit and train
replacements at frequent intervals. In this context, IKEA stood out for its employee-
friendly policies and generous benefits, which made it the preferred employer in the
retail sector.
Goals: To promote life balance and diversity in the company.

 Several human resource management practices were adopted, including
flexible work design, comprehensive benefits, quality of work life, and
employee training and development.
 The company also created unique work culture that supported co-workers (as
employees were called at IKEA) and encouraged creativity and diversity.
Teams:
Results (Benefits):
 IKEA’s committed workforce has become one of the sources of the company’s
innovative concepts.
 IKEA North America (IKEA) was in the annual list of the Fortune “100 Best
Companies to Work For”.
38
AIG’s E-Business Risk Insurance Solutions
AIG’s E-Business Risk Insurance Solutions
Background: Since the late 1990s, the Internet has been widely used as a channel for
communication and e-commerce by individuals and businesses. The use of Internet
involves several cyber risks such as hacking, systems getting infected by viruses and
worms, identity and credit card frauds and breach of network security. However, these
cyber risks were not covered by regular insurance policies. The US-based American
International Group launched AIG eBusiness Risk Solutions (AIG eBRS) in 2000
exclusively to address these cyber risks.
Goals: To address the risks caused in e-Business.

 AIG has broadened the portfolio of its insurance product offerings by
introducing a series of comprehensive liability coverage for companies
conducting business on the Internet.
 AIG covered claims arising from the errors or deficiency in service provided
by the insured company due to security problems and fraud
 Insurance cover was also provided against unknown viruses, unauthorised use
or access of systems, allegations of infringement of copy rights and
trademarks, libel or slander resulting from media services such as website
design or hosting.
Teams:
Results (Benefits):
 AIG has emerged as the largest provider of e-business risk insurance
worldwide with over 70 per cent market share.
URL: http://icmr.icfai.org/casestudies/catalogue/Insurance/INS053.htm
39
Turnaround of J C Penney
Background: J C Penney Company, Inc. (JCP), a leading retailer in the US with a

century of history, found itself unable to keep pace with the changes taking place in
the retail environment in the late 1990s. The growth strategy, which had made the
company successful, became a barrier for its effective functioning in the late 1990s.
Goals: To turnaround the company.

 The company centralised its buying process consequently moved from a
decentralised merchandising system to a centralised merchandising system.
 It sold off its drugstore Eckerd in order to focus on its core business.
 It revamped its human resource practices by aligning the HR practices with the
business goals.
 The company repositioned itself as a trendy, yet value offering retailer.
Teams:
Results (Benefits):
 These restructuring initiatives resulted in increased revenues for the company
and improved stock values from $10 in 2000 to almost $50 in 2005.
URL: http://icmr.icfai.org/casestudies/catalogue/Business%20Strategy/BSTR160.htm
40

Boeing 777 Revolutionizes Global Aviation

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Boeing 777 Revolutionizes Global Aviation

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The Making of BOEING 777

The Making of BOEING 777

Innovation Type: Product and Process Innovation

Background: When Boeing announced the development of a new airplane model -

Actions (Actual Ideas):

Revolution in the Global Aviation Industry

Innovation Type: Product and Service Innovation

Background: The aviation industry experienced a downturn in the early-1990s

Actions (Actual Ideas):

Team: All airlines

Innovation Type: Product and Service Innovation

Actions (Actual Ideas):

DHL's Business Strategy in China

Innovation Type: Strategy Innovation

Goals: To become an integrated “one-stop” supply chain solutions provider, offering

Actions (Actual Ideas):

BMW's Innovation Strategies

Innovation Type: Strategy Innovation

Background: The Munich based Bayerische Motoren Werke AG (BMW) automobile

Goals: To develop and demonstrate exceptional skills in constantly creating and

Actions (Actual Ideas):

Marriott's Customer - Focused E-Business Strategy

Innovation Type: Strategy and Process Innovation

Background: In 1982, Marriott acquired Host International, a leading hospitality

Actions (Actual Ideas):

Fannie Mae's Human Resource Management Policies

Innovation Type: Culture Innovation

Background: Federal National Mortgage Association (known popularly as Fannie

Goals: To recognise and retain talent, irrespective of class/gender/nationality.

Actions (Actual Ideas):

Innovation Type: Process Innovation

Actions (Actual Ideas):

PayPal.com's Business Model

Innovation Type: Technology and Service Innovation

Actions (Actual Ideas):

Volvo’s Product Development Practices - Focus on Safety

Innovation Type: Product Innovation

Background: Maryann Keller, an automobile industry analyst noted, “Since the

Goals: To manufacture the safest cars in the world.

Actions (Actual Ideas):

Teams: The Volvo Safety Centre

Xerox PARC: Innovation without Profit?

Innovation Type: Strategy Innovation

Actions (Actual Ideas):

Lessons Learned from PARC’s Failure for Profit:

Merrill Lynch’s IT Initiatives

Innovation Type: Technology Innovation

Actions (Actual Ideas):

Knowledge Management Initiatives at British Petroleum

Innovation Type: Technology Innovation

Actions (Actual Ideas):

Charles Schwab – Expanding Online Trading Applications

Innovation Type: Technology and Service Innovation

Actions (Actual Ideas):

Knowledge Sharing Initiatives at the World Bank - Creating a Knowledge Bank

Innovation Type: Technology Innovation

Goals: To transform itself into a knowledge bank.

Actions (Actual Ideas):

Mercedes Benz’s e-Biz Solution: The Factory Delivery Reservation System

Innovation Type: Technology Innovation

Background: By the end of 1997, Mercedes Benz United States International

Goals: To established itself as a company that delivered superior customer services,