ISM UNIVERSITY OF MANAGEMENT AND ECONOMICS

MANAGEMENT AND BUSINESS ADMINISTRATION PROGRAMME

BACHELOR STUDIES

IV year student

Monika Baublytė

2010 12 09

THE VSM GROUP

CASE STUDY ANALYSIS

Supervisor:

Lec. Benas Adomavičius

2010 12 09

VILNIUS, 2010
How would you describe the strategic capability of Viking Sewing Machines in 1997? In 2003?

 Strategic capability – set of capacities and skills that create a long- term competitive advantage
for an organization.
 According to the company’s history and experience in the business, it is easy to say that they
have a lot of experience in technological perspective. There were many changes, which started
in 1997 when the new CEO came into the company.
 Innovations in technology;
 A very important step a company made was they involved retailers into the team and decisions,
retailers were very important to VSM. Moreover VSM Group transformed retailers into ‘Dealer
– Partners’.
 Retailers integration became very important. The after – market included services such as
training in sewing techniques, software and for embroidery construction.
 It was written in the case that different departments such as marketing and product development
were moved into the same building, this mean that every department must know how each is
working, to understand each one and to work as a team to reach goals.
 There were changes in operating systems - a new accounting system developed, which was
necessary to assess the accounting information in new ways to keep track of various activities in
the new value chain.
 Changes in organizational structure were made as well, the company’s claims of a new
commitment that they have to think more about the customer and less about technical features.
 In 2003 VSM Group bought a new very strong brand called Pfaff which was a great deal for
cost efficient and better quality, but on the other hand Pfaff did not give any significant
competences to VSM Group. In the end of the case, it was said that company was little bit
uncertain about what a new purchase will give and in the end they conclude that there was just
too much things for the retailers to keep track of an it did not deliver benefits they were hoping
for.

Are the core competences in 2003 more robust than in 1997? 

It can be stated that core competences in 2003 were more robust than in 1997 because of the
technological development, such as:

 Product development;
 New software programs were bought (know – how techniques which were used in computerized
sewing machines; construction of embroidery);
 Innovations in products;
2. What are the next strategic issues Viking will have to address? What strategic options might be
considered? 

 Viking has to deal with Pfaff acquisition and all the brand management issues. As it was mentioned
in the case, they found many difficulties with 2 strong brands and incomprehension about what they
have to do, because both sides do not connect. Leading to this they find many difficulties in
branding;
 The sewing machine industry is not transparent. Necessary information about competitors, prices,
products is not collected properly. The industry is rather poorly monitored;
 Strategic development should be concerned on technological conduct, how everything is developed
according to strategic issues. A threat is competitors who are developing their technological
capabilities, leading to this, Viking must give attention to this as well and not be concerned on
customer too much as they concern in their strategy development document;
 Maintaining and managing the value chain;
 Develop relationships with customers. It is very important to have good relationships with
consumers and to increase loyalty and trustworthy;
 A strategic option could be a good marketing campaign, which will reach the target group and will
give a feedback (brand attitude, brand recognition, loyal customers etc.);
 Viking could expand range of services; add more attractive services, which increase sales and
attract for example: to offer a book or a magazine about sewing, which could help for beginner
user;
 Be social responsible, participate in various events, charity programs, all this will help to increase
customer loyalty, and trustworthy among other stakeholders;
 Create, integrate and retain corporate culture, which fit the company’s mission and vision;

3. What could the new CEO do?

 A new CEO not what could do but what must do it is to follow the written mission statement and
the strategy development plan, which are the key factors to maintain, develop and lead business to
success;
 Enter new markets, for example manufacture sewing machines for professionals designers and
afterwards use them for marketing campaign;
 Ongoing personnel training’
 Increase commitment to the company if it is done less risk on employees turnover;
 Include all departments in top management (“Starbuck” case, where a simple employee can become
a board member and initiate offers and make decisions together with board members);
 Hire “right” people;
 Acquire more valuable companies and gain biggest market share;
 Invest in new technologies such as nanotechnologies;