Professional Documents
Culture Documents
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. Corning’s 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. Corning’s 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 Corning’s
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 Corning’s newly acquired
business from a joint venture. The third proposal is in the specialty materials sector.
It consists of selling 49% of Corning’s 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 Corning’s 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.
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 Corning’s
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 Corning’s 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, Corning’s 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 Corning’s strategic goals and vision.