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Lazerick Russell MGMT602-625 Corning Case Study 5/13/2013 Corning Incorporated Executive Summary Background Corning Incorporated has

established a strong reputation in the specialty glass market. Corning Incorporated helped pioneer the initiative for businesses to incorporate research laboratories in their business operations; and has been a leader in technology-based research for some years. Cornings initial focus was on the U.S. market but it consistently makes strides to becoming a more international company. One of the major strides Corning has taken is transforming its traditional organizational structure to a matrix representing a network of alliances. The work environment present at Corning is very flexible and cooperative. Corning does not micromanage its businesses and relies on entrepreneurial spirit and ambitious goals. Corning invests in its employees and encourages its managers to be coaches and mentors to there team. Furthermore, Corning has established an operating strategy to bring more focus to its wide variety of businesses. Corning currently operates in four segments: consumer housewares, specialty materials, telecommunications, and laboratory sciences. Corning has established a company culture that links these four segments and guides there business. Cornings company culture has established priorities in technology, common value, and shared resources to develop world-class quality. In addition, Corning has instilled the pursuit of joint ventures into its company structure. Joint venture partnerships have increased the complexity of Cornings business sectors and have helped Corning become an evolving network of businesses. Corning has found difficulty in managing the financial and technical resources required to support the variety of its businesses. In addition, it foresees tremendous opportunities from its innovative technologies.

Corning believes that these opportunities can be applied to young, expanding markets and is faced with three proposals. The first proposal takes place in the laboratory sciences sector, in which Corning sells its share in one joint venture to purchase three laboratory-testing companies. The second proposal takes place in the communications sector and is composed of two parts. The first part is to increase investment in a three-year period in the capacity of optical fiber. The second part is to offer IBM a partnership in one of Cornings newly acquired business from a joint venture. The third proposal is in the specialty materials sector. It consists of selling 49% of Cornings television glass business in the U.S. and invest in developing glass for liquid crystal displays. Analysis Proposal 1:Laboratory Sciences Sector This proposal proposed that it sell its share in one of Cornings highly reputable joint ventures of Ciba Corning for 150 million. Furthermore, use the proceeds from this deal to acquire three laboratory-testing companies for $300 million, $125 million, and $50 million. Each of these three companies are leaders in there laboratory-testing segments. Big, multi-line players with huge R&D and biotechnology companies on the cutting-edge of reagents research dominate the laboratory-testing market. Proposal 2:Communications Sector Proposal 2 proposed that management first invest $100 million in a threeyear time span to increase Cornings capacity to produce optical fibers by 50%. In addition, the proposal also suggested that management offer IBM a partnership in PlessCor Optronics (PCO). The train of thought is that when Corning offers IBM a partnership PCO will become IBMs preferred second source for cable terminal peripherals. PCO has been growing in sales to about $10 million although it still is incurring operating losses. Corning pioneered the technology of optical fiber and has the expertise to dominate and lead the market. In addition, there is tremendous

opportunity abroad with decrepit phone systems and little copper wires to be replaced. Proposal 3:Specialty Materials Sector (Television Glass) Proposal 3 proposed that Corning sell 49% of its US television glass business for about $100 million to Asahi, a Japanese glass company; and channels the proceeds into developing glass for liquid crystal displays. Corning has had previous beneficial relationships with Asahi. In addition, Asahi offers expertise in large-size television bulbs and the growing HDTV technology. More importantly, Asahi has also established relations with the Japanese TV manufacturers setting up facilities in the US. Asahi would significantly alter the connections across companies in an industry that is very tightly knit. Recommendations In conclusion, it is recommended that Corning accepts proposal 3 and invests in its specialty materials sector. There are a number of reasons why Corning should choose this option. The main reason is that this proposal most fits with Cornings strategic goals and company values. The specialty materials sector is growing at an alarming rate and by partnering with Asahi Corning is in prime position to take advantage of that growth. In addition, Asahi has many network connections that Corning has already benefitted from; therefore by fostering this relationship Corning will be promoting its strategic goal of becoming an evolving network of alliances. Furthermore, this proposal also helps reestablish Corning in foreign markets and further its pursuit for a larger international presence. The other proposals are intriguing offers, however, they have some downfalls. The first proposal offers a tremendous opportunity to delve into an untapped market in the medical diagnostics field. However, the investment needs are too large and profits in Cornings current ventures are low. This makes it very difficult to support without a return for a long period of time. The second proposal offers a great opportunity as well. However, Cornings lack of action in this market has brought on competition. This makes it even harder to dominate the market and

a much more riskier investment. Overall, proposal 3 offers the most potential and also supports Cornings strategic goals and vision.