Running Head: Case Analyses

Assessment (Individual) - Case Analyses

 Case Analyses 2

Table of Contents

Table of Contents.......................................................................................................................2

Case 1: Ryanair..........................................................................................................................3

1.1 Summary of the general strategies used by Ryanair........................................................3

1.2 Identified strategic theories/concepts...............................................................................3

1.3 Application of strategic theories/concepts.......................................................................4

1.4 Evaluation of the concepts applied...................................................................................4

Case 2: Fosters...........................................................................................................................5

1.1 Summary of the general strategies used by Fosters.........................................................5

1.2 Identified strategic theories/concepts...............................................................................5

1.3 Application of strategic theories/concepts.......................................................................6

1.4 Evaluation of the concepts applied...................................................................................6

Case 3: Philips versus Matsushita..............................................................................................7

1.1 Summary of the general strategies used...........................................................................7

1.2 Identified strategic theories/concepts...............................................................................7

1.3 Application of strategic theories/concepts.......................................................................7

1.4 Evaluation of the concepts applied...................................................................................8

References..................................................................................................................................9
 Case Analyses 3

Case 1: Ryanair

1.1 Summary of the general strategies used by Ryanair

In the case study, it has been identified that Aer Lingus, as well as British Airways,
simultaneously ran their airlines between Dublin and London where Ryanair wanted to
operate as well in 1986. Both the airlines gave budget-friendly flight services which means
that Ryanair will have to give a better deal to survive the competition. However, reducing the
ticket prices will hamper the “quality of service” as the other competitors might reduce their
prices too (Rodríguez-García et al., 2020). This was a challenging situation for the Airline
company. On top of that Ryanair was forced to use a 44 turboprop since they lacked
authority to operate bigger passenger planes on the Dublin to London circuit. Thus, seating
capacity was also less. Furthermore, a higher tax rate was also an issue as it is a private
airline company (Rodríguez-García et al., 2020). More issues like maintaining a proper
website were another requirement to provide the best service to the customers.
To overcome all these challenges Ryanair applied some general strategies like
differentiating the prices and services for airline tickets, providing extra benefits and pers to
the “first-time flyers”, expansion of the fleet through aeroplane renting, selling snacks as well
as promotional items in flights and selling unused cargo capacity for freight services.
However, Ryanair had been on the brink of going out of business in 1991. By eliminating
leisure stops, offering duty-free items, modifying labour agreements, as well as effectively
turning the tables, Ryanair lowered expenses at the very moment. One of the greatest
prosperous airline companies in the industry in 1999 was Ryanair.
1.2 Identified strategic theories/concepts

The strength of the firm's brand in consumers' thoughts, the corporation's philosophy,
and the way the corporation perceives itself in the industry all played a role in Ryanair's
performance.
a) Differentiation Strategy - A differentiation plan is a tactical move used by
organisations to attract clients by offering them services or products distinctively
different from what their rivals could be offering in the industry (Islami et al., 2020).
This helps to gain a competitive advantage over others.
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b) Customer Experience - It generally comprises more than one strategy which

helps to deliver a positive customer experience throughout their product buying or
service utilisation journey.
c) Cost Leadership - It is a strategic approach used by businesses looking to
achieve a comparative edge by producing goods, services, or processes at the most
affordable price (Islami et al., 2020).
1.3 Application of strategic theories/concepts

By putting a strong emphasis on passenger care, the airline company set out to set
itself apart from other low-cost carriers. It began providing superior customer experience
after analysing the market's robust growth for low-cost, also known as "cost efficiency,"
service demands (Prichinet, 2020). As a result, it quickly turned its attention to a
differentiation strategy and scaled back its business. Based on the amount of incoming traffic
as well as the time of day, they started offering varying charges. To increase the overall
revenue of the Airline company, Raynair even started to sell some of the tickets at premium
prices. Utilizing a variety of techniques, an increasing number of businesses have gained
market dominance in recent times. such as combining cost leadership with top-notch service
quality. This strategy arrangement is not appropriate for all businesses and is quite tough to
implement. Raynair utilised the unused aircraft space by providing freight services and
started selling merchandise and snacks on planes to generate extra revenues (Prichinet, 2020).
The first-time passengers were given extra benefits. The quality of service and the
distinctiveness gained a better client base. However, soon Raynair became bankrupt as
maintaining both the strategies together took a heavy toll on the airline business.
Ryanair made the last-minute decision to use the cost leadership strategy only and
used the accompanying practical techniques. In the beginning, Ryanair cut back on its loss-
making flights as well as removed onboard facilities. Secondly, it changed how duty-free
items are sold on aeroplanes. Thirdly, it modifies the labour agreement to tie flight attendants'
pay to their productivity, cutting down on needless personnel expenditures. With the
implementation of such a set of initiatives, Ryanair's operating costs, ticket sales, and
customer volume to improve.
1.4 Evaluation of the concepts applied

In my opinion, although the low-cost combined differentiated strategy led to

significant losses, it also helped Ryanair understand its approach was on the correct track.
 Case Analyses 5

With the differentiation and cost leadership strategies along with a positive customer
experience approach, Ryanair will be able to draw in diverse societal groups and expand its
identity beyond that of a low-cost carrier. By providing the extra services they were able to
gain more customers and the additional aircraft space bidding also generated revenue. But
this was clear mistake as the airline was facing financial losses. However, under the
governance of Michael O’Leary, all the extra amenities were cut down and the free meal
vouchers and services were eliminated (Prichinet, 2020). He even changed the employee
contracts to reduce unnecessary payouts and the “loss-making” flight routes were also
cancelled. He solely focused on cost leadership to eliminate the cash flow issues. Finally, the
business's capacity to reduce manufacturing costs and offer high-quality goods at competitive
pricing determined how successful its cost leadership plan was.
 Case Analyses 6

Case 2: Fosters

1.1 Summary of the general strategies used by Fosters

Fosters’ major strategy is to form strategic partnerships. Such collaborations are

typically formed to establish synergies that do not exist when every participant operates
independently (Ferguson, 2005). Strategic partnerships seem to be collaborative, adaptable
agreements that are the result of the shared needs of businesses to bear the liabilities of a
frequently unpredictable industry by working together to achieve a shared goal. Fosters’
major strategy is to form strategic partnerships. Such collaborations are typically formed to
establish synergies that do not exist when every participant operates independently.
Furthermore, Fosters Group's wine enterprise conversion has been separated into three
stages: the “Exposition phase (2005)”, the “Action phase (2005–2008)”, as well as the
“Resolution phase (2008-2010)”. They originally entered into a hazardous acquisition
agreement with Southcorp to realise its vision of building a great wine company that would
dominate the globe. To reduce expenses and capitalise on synergies, they want to merge the
offices of Southcorp and its sales force with those of CUB. It then purchased Southcorp, a
second luxury winemaker, in 2005, and as a result, became one of the largest international
wine corporations. However, the merger failed.
In the end, Fosters chose to remain in the wine industry, but it altered its business
strategy and reduced the number of unfocused wine offers. A decrease in sales was brought
on by the multi-drink approach, which not only damaged Fosters' wine vengeance but also
caused issues for beer. Fosters eventually gave up on their effort at product diversification.
1.2 Identified strategic theories/concepts

Synergistic partnerships seem to be collaborative, adaptable agreements that are the

result of the shared needs of businesses to bear the liabilities of a frequently unpredictable
industry by working together to achieve a shared goal. Fosters’ major strategy is to form
strategic partnerships and synergy. Such collaborations are typically formed to establish
synergies that do not exist when every participant operates independently (Salazar-Ordóñez
et al., 2018). Synergy is the idea that the collective productivity and worth of the two
businesses would be higher than the combination of their components. Despite being
primarily a producer as well as supplier of beer goods, Fosters recognised more development
potential in the marketing of wine over beer. It also saw another chance to combine the
 Case Analyses 7

production and sales of these two alcoholic beverages in order to realise cost savings. Fosters
acquired Beringer Wine Estates, a notable California winery with yearly revenue of about
$1.2 billion, in 2001 (Laube, 2000). It then purchased Southcorp, a second luxury winemaker,
in 2005, and as a result, became one of the largest international wine corporations. However,
the merger failed.
Fosters also used low-cost mass marketing due to their tight budget. A low-cost or
marketing advertising approach enables firms to employ sales tactics with a little financial
burden. This enables them to continue producing prospects as well as building their identity
while concentrating their resources on other crucial operational domains.
1.3 Application of strategic theories/concepts

Fosters has been using one sales team to concentrate on the widespread advertising of
beer and other inexpensive spirits while distributing expensive wine to specialised restaurants
as well as alcoholic beverage shops. The shops would then sell it to wine tasters with extra
refined tastes (Ferguson, 2005). In this way, Fosters thought of taking up global distribution
as well. This was done in an attempt to establish collaboration between the “beer” as well as
“wine” assets of the enterprise. This convergence of these operations by companies that
prioritise focused product differentiation and relatively low-cost mass advertising of the
premium wines.
1.4 Evaluation of the concepts applied

After analysing their strategy, I can say that the product differentiation along with
mass marketing strategy with partnership turned out to be a grave mistake for Fosters. The
holdings were bought at a noticeable price, particularly Southcorp (Business Standard, 2013).
Despite appearing to be the ideal organisational match between the greater perspective and
growth level for wine revenues and the low significant growth rate for beer revenues, the idea
failed miserably. The synergy between Southcorp and Fosters was not achieved as they had
thought. The assets of Southcorp were devalued, and the business was facing financial risks
(Thieberger, 2008). The focused differentiation of the product also turned out to be a bad idea
due to fund constraints as well as poor execution of the strategies.
 Case Analyses 8

Case 3: Philips versus Matsushita

1.1 Summary of the general strategies used by Philips and Matsushita

When Matsushita first began to internationalise, they utilised other regional business
owners to promote as well as sell their goods. Because the corporation had never set up
global supply chain hubs, it needed to work with regional distributors in potential countries.
And after a little while, the demand for their items increased, leading them to apply for
distribution licences. The company also needed to hire regional merchants to help with
distribution because they did not have any industry knowledge themselves. On the contrary,
Philips in 1982 built its global trademarks by using the same labels for several subsidiaries.
American, as well as British Philips, were founded by the corporation (Bartlett, 2020). The
business merely needed to create its brand identity and choose an equivalent manufacturing
approach. As an electrical corporation, Matsushita was completely aware of Japan's
reputation for technology as well as innovation and saw how it could help their business.
Their phenomenal achievement was mostly built on two opposing strategies - extremely
centralised organisational culture and large-scale manufacturing for Matsushita whereas
diversification of their global product range along with regional adaptiveness for Philips.
1.2 Identified strategic theories/concepts

From the case study, it can be said that the centralised structure followed by
Matsushita helped the company to take effective and efficient decisions related to business
operations and practices. It also followed a cost-leadership strategy wherein companies focus
on reducing the cost of the products and services (Wada, 2018). Matsushita realised that in
order a competitive market worldwide, outside Japan, it will have to reduce the cost of its
products. Therefore, the company started mass production of the items. Philips on the other
hand focused on a local strategy where the company adapted the regional policies and utilised
its resources to grow. It also realised in order to become a global leader it needs to have a
diversified product range in which the customers would be interested and would be able to
purchase the household items under one roof (Heij et al., 2019). It adopted the product
innovation strategy using which the company created a different identity for itself.
1.3 Application of strategic theories/concepts

Though Matsushita had never been into the creative business from the beginning,
their key strengths were in large-scale manufacturing at a minimal cost. The majority of the
 Case Analyses 9

time, Matsushita produced products as quickly as its rivals did. They quickly adjusted to the
business environment (Hanno, 2017). This approach carried some risk because depending on
other businesses for the process of innovation was time taking and required huge funds.
However, the mass-production strategy helped Matsushita to survive the competition. To
maintain competitiveness, Philips changed to a regional priority. It also began to concentrate
on centralised control, which produced a better balance of consistency as well as
differentiation. It also focused on product innovation.
1.4 Evaluation of the concepts applied

The examples of Philips as well as Matsushita show how different techniques for
joining the global market will have varying effects on businesses in terms of benefits and
drawbacks.
Matsushita upon applying the mass-production strategy was able to cater for the needs
and provide quality products to the consumers. The company benefitted in numerous ways
which included greater degrees of precision, decreased labour costs, increased levels of
productivity, and quick delivery and promotion of the goods in the market (Hanno, 2017).
Matsushita has the benefit of cheap prices and excellent efficiency over Philips. Its businesses
benefit from being productive thanks to this high level of management. However, it also has
problems with intellectual delight, and a lot of control can easily lead to cultural clashes
inside the organisation. Additionally, Matsushita's own capacity for invention is inadequate.
Philips' capacity to concentrate on only one commodity as well as innovate new
products well is its main edge. It is very utilitarian, and several nations have their own
organisations and marketplaces. In addition, this decentralised organisation has the drawback
of being expensive and lacks the strain to adapt to the shifting worldwide competitive climate
(Heij et al., 2019). It also catered for a wide of customers across the world. The innovation
brought by Philips was unique to the core and the company was able to gain a competitive
edge.
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References

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Faculty & Research - Harvard Business School. Hbs.edu.

https://www.hbs.edu/faculty/Pages/item.aspx?num=38222

Business Standard. (2010, May 26). Fostersss Group plans to demerge wine, beer biz.

@Bsindia; Business Standard.

https://www.business-standard.com/article/companies/Fosterss-s-group-plans-to-

demerge-wine-beer-biz-110052600188_1.html

Ferguson, A. (2005, December). Lion’s big gamble. Australian Financial Review; Australian

Financial Review. https://www.afr.com/companies/lions-big-gamble-20051201-kae3h

Hanno, M. (2017). Harvard Business Review Analytic - Philips versus Matsushita the

competitive battle continues. ResearchGate; unknown.

https://www.researchgate.net/publication/330263276_Harvard_Business_Review_Anal

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Heij, C. V., Volberda, H. W., Van den Bosch, F. A. J., & Hollen, R. M. A. (2019). How to

leverage the impact of R&D on product innovation? The moderating effect of

management innovation. R&D Management, 50(2), 277–294.

https://doi.org/10.1111/radm.12396

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differentiation strategy model matter? Designation of organizational performance using

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Laube, J. (2000, August 28). Fosterss’s Buys Beringer in Blockbuster $1.5 Billion Deal |

Wine Spectator. Wine Spectator; Wine Spectator.

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