updated issues, growth strategy and how to implement

8/8/2019 UPDATED Issues, Growth Strategy and How to Implement

http://slidepdf.com/reader/full/updated-issues-growth-strategy-and-how-to-implement 1/14

Strategic Management

Case study on

WIPRO

Submitted to: Submitted by:

Prof. Shaveta Sharma Kukreja Anshita Sharma (18/09)

Meenakshi Tiwari (126/09)

Parul Bhargava (38/09)

Himanshu Jain (148/09)



1967, Western India Vegetable Products Limited. Azim H. Premji transformed the Rs. 70 mncooking and baking fats company in to diversified combination of a number of very different

businesses in 1994.Wipro , to stay competitive needed to support each of its businesses with significant financial andmanagerial investments against competitors with the world¶s best technologies and brands as well.

Wipro In 1994 :

Product Portfolio in 1994 comprised of vanaspati, toilet soaps, toiletries, hydraulic cylinders,computer hardware and software, lighting, financial services, medical systems, diagnostic systemsand leather exports.

Wipro Corporation for the purposes of management control, was split into eight separate µminicompanies¶, each with its own separate µequity¶.

Status of Wipro SBU s in 1994

Wipro Consumer Products

WCP was for long, the largest µcompany¶ in Wipro Corporation¶s portfolio. It manufactured andmarketed the traditional vanaspati products, fatty acids and glycerine, toilet soaps, toiletries andleather products for the export market.

The company¶s ³Camel´ and ³Black Bird´ brands, which served the needs of commercial users like

biscuit manufacturers and bakeries, were the market leaders in the institutional segment; and itsflagship brand´Sunflower´ had recorded gains in market share, despite increased competition, in theconsumer segment.

WCP faced fierce competition from unorganized players as well as government policy werestringent which provided 9% advantage to a new entrant in a 4% margin business.

WCP tapped the existing gap in the market and launched Santoor and Shikakai soaps with sharpfocus on distinct niches and the absence of competiton from the toilet majors in these niches.

Wipro Fluid Power

In 1994, the company was a market leader in hydraulic cylinders and its customers included allmajor earth-moving and construction equipment manufacturers in India.

WFP was being positioned to act as one of the spearheads of Wipro¶s plans to become a globaloperation.

Wipro Infotech



In 1994, Wipro Infotech (WIL) was the second largest information technology company in India.

Its product offerings included PC¶s, minis, superminis, engineering workstations, mini super computers, on-line transaction, processing mainframes, laser and dot matrix printers and software

products and services addressed to specific customer needs.

WIL, faced conflicts arising out of multiple alliances and interests. In response, it restructured itsorganization. It carved itself into nine business divisions, each with its own marketing and salesstaff, distribution channels, and finance and human resources departments. Each division was set uparound its distinct product lines.

Wipro Systems

Wipro Systems was one of the star performers in the Wipro Corporation¶s portfolio, having achieveda growth of over 70 percent in its revenues.

Wipro Systems commenced operations in the early 1980¶s to tap the growing demand for software.But in 1990, it changed its focus. This time it focused on providing on-site professional services-³body shopping´ to overseas clients.Wipro Systems entry into this market had a substantial impacton its performance. Turnover increased by over Rs. 80 mn in 1991-92 and profits nearly doubled.And for the first time since its operations began, its cumulative profit performance was positive.

In 1994, Wipro Systems was aiming to be one of the top three software operations in India by theyear 2000.

Wipro GE

It marketed imaging systems and manufactured CT scanners, ultrasound systems and imageintensifiers for X ray systems. it identified medical electronics as an area to diversify into because of its high margin potential. Wipro entered this market in 1988. At that time GE was looking for a tie-up to shore up its presence in India. GE struck a deal with Wipro because it was a trusted name andwas culturally compatible but not because of its manufacturing or service capability. In 1994 WiproGE became second largest player in the medical systems market in India with a turnover of Rs 600mn.

Its success can be attributed to the fact that WGE provides total solution which includes projectfeasibility analysis, site planning, marketing support, applications training and the luminary

program.

The company aimed at becoming an important regional sourcing centre for GE so that there aregreater chances of becoming a global sourcing centre.

Wipro Biomed



1998: formed, to market and service bio research and diagnostic systems from BeckmanInstruments, USA¶

1992-93 the company aimed at becoming a µsingle comprehensive source¶ for bio research anddiagnostic instruments. The top management was meeting the same customer in the research

institutes in the universities and R and D establishments of pharma companies with their Beckman products so they wanted to leverage this.

1994: targeted the hospital segment, tied up with PPG Hellige. They leveraged the corporatereputation for quality and service as WIT was selling computers to these hospitals and they had astrong presence there.

Wipro Biomed made a foray into manufacturing. It extended its Beckman collaboration into amanufacturing one and set up a plant to manufacture diagnostic reagent kits with knowhow from anAmerican company.

Wipro Financial Services

WFS Extented medium to long term finances to companies for the purchase of capital equipment. Itdid not operate in consumer finance segment. They provided prompt customer service to demand a

premium

1992: Wipro entered financial services due to the impetus provided by the reforms in the financialsector.

1994: WFS was recorded as the best corporation in the Wipro Corporation¶s portfolio. It generatedrevenues totaling Rs 461 mn and a post tax profit of Rs 362 mn.

Strategy: Do no aim to be everything to everyone. Use the expertise to tailor products and services tomeet individual needs of the customers. The expertise and knowledge of these areas were leveraged.

Mid range companies were targeted who do not have a smooth access to the banking system

All the employees were µgeneralized specialists¶. They were trained to do all the tasks.

WFS hiked its investments in WFS equity after its initial success. Securing additional credit linesfrom banks and financial institutions was not very difficult for Wipro due to its corporate image.

Wipro Lighting

Wipro entered this business as the competition was weak and it offered good margins.

Strategy: To use the retail channel through Wipro consumer products and the competence in dealer management.

1992-93: launch of lighting products in the southern and western markets of India



1993-94: WL achieved a turnover of Rs 220 mn. It however failed to generate profits.

WL confronted strong competition in the market place due to the government reforms whichattracted a lot of competition.

I SSUES AND SOLUT I ONS:

Should all businesses be sustained?Looking at the

financials and sharewipro holds they

should try andrevive businesseslike leather, and

toiletries, may be

launching newprice points toreach out to the

large masses

Try and focus onsustenace in westand north zones by

customised andeconomic offeringsand south and east

zones should be

tackled by buildingbrand awarenessand relationship

with clients.

Healthcare issomewhat recession

proof whencompared to other

verticals, and Wiprohas assets needed to

establish a biggerhealthcare practice,

so focussing on WiproBiomed would help.

Selectivelylooking at

acquisitions,and that toowith smaller

players wouldhelp as Wipro

have morecontrol and say.

It can move torelated-

diversificationtowards

telecommunicaon and Media iIndia and try an

target otheremerging

countries likebrazil, china an

korea.



Roles and responsibilities of teams?(HR Perpective)

Basic goals andculture should flowfrom managementwith autonomy and

responsibilityflowing through the

organisation tobring it into

implementation.

Conduct aworkforce

assessment todefine the

complimentaryresources that

facilitaterealization of thebusiness vision.

Design actionplans to

develop or on-board requisite

skills for theorganization'sfuture state

needs.

Working on theirpersonnel from foursides- Business skill

transformation,Culture

transformation,Technology

transformation,

Technologytransformation. .

A guidedcoalition of

leadership tosupport the

businesschange

imperatives.

Corporate division relationship(holding orintegrated)

Integrated approach beit in terms of client

sharing between SBUs orresource mobilisationwould turn out to be

more beneficial insteadof fighting for contractsamong each other.



R ECOMMENDAT I ONS:

STR ATEG I ES THAT CAN BE FOLLOWED:

Flexibility to be sustained or not??

Flexibility in terms of innovation FORUM setup

and teams rotation,focusing on new clientsand new geographies

would help.

Sustaining flexibility ininter business operationsshould be limited because

the increased span of coverage and marketcontrol would require

some discipline in place.

Working on a three waydisciplined approach involving-P ull Deliver customer value

earlier

Flow Wait states reductions,reducing handoffs, quick

feedback

In station Quality to improvedefectresolutions upstream.

Adaptation required or not??Clarity and formalisation, on

regulations imposed by

regulators and ratingagencies in the new offshorelocations, introduction of

defined targets to measureperformance, focus on new

businesses.

Adaptation will beneeded to focus on

emerging markets likebrazil, china and korea

to gain first moveradvantage in valueservice offerings.

Have a channel whichworks as an Eye of an

employee forcomplete informationupdates about Wipro

helping them inadaptation to new

events and changes.



Growthengines to

focusupon

OrganicGrowth

Leadershipin India

Strategic

acquisitions

Gamechanginginitiatives

G rowth Engine #1:- Organic G rowth



IncreasePenetration

globally

by ensuring proper resource alignmentgoing beyond conventional budgets.

identifystrategicaccounts

lower account mortality and achieve better utilisation of available resourcesthrough better choice of accounts.sort accounts on basis of outsourcing experience and competitive landscape.

Focusingmore on High

GrowthBusiness

identify, invest-in and accelerate all high growth areas of business.ensuring that high growth areas get more time and investment.

more focuson new

geographiesand vericals

serious focus on this issue needs t0 be addressedappointing special work team for each geographic.

Stratgiec Alliances

Alliance with best in class companies in tech, portfolio, tools and applications

Marketing

Thought leadership Relationship programs

SMB strategy

Indirect Sales Lead with solution templates

Enterprise Strategy

Penetrate key accounts through all service lines

G rowth En ine#2:- Leadershi in India



They can have dominance through utilization of three business models combinedtogether as mentioned below:

360º service portfolio Domain Competency Engagement model

Position as both anintegrated provider

of solutions and offering arange of options

Leverage businessknowledge tosuggest innovative solutions

Focused approach with select targetaccounts supported by pre salesexcellence

Leverage distinctiveservice lines like BPO, TIS,Quality Consulting, Testing etc

Understand businessand proactively suggestsolutions

Experienced service providers,consultative selling,innovative pricing models, supported bypre sales excellence

Cross sell and up

sell different servicelines

Business Analysts in

each account toanalyze pain areasand propose solutions

Dedicated client engagementmanagers for high potential accounts anddelivery excellence

Focus on largeDeals

Invest in stronger, focused Large Deal teams within service lines.Separate team and leadership for the same.

StrenghtenAlliance Initiative

This team will:-Work with dedicated and leveraged headcount

Focus on strategic alliances that span Verticalswork to create differentiated value proposition with the partner.create and review joint pipelines withh each partner.

G rowth Engine # 3 - G ame Changing Initiatives



Building RightCapabilty and

leadership

PerformanceManagement Innovation Consulting Brand

G rowth Engine #4:- Strategic Acquistions

ENABLERS

M&A based on StrategicPlan

Strategic planning exercise toalign organic and inorganictargets at the Sub-Vertical, servicelines and Geo levelsCreate leveraged organisation ineach Business Unit and serviceline to support increased M&Aacivity .

Stregth comptence forsuccessful M&A

integration

Create a team from functions-such as HR, Finance, Legal and IS-who can be a part of the acquiredcompany.Create a full time position of Integration Officer for eachtransaction.Assimilate local Talent fromacquired entity



VariableCompensation

Scheme

refine drivers of variable pay programsevaluate and design program that reward growth insteadof merely Plan achievement.

Enhance Internalplanning and

Analysis

Scale up internal systems to enable multi dimensionalreporting.Improve cost productivity- Revisit cost/activity driverssystems to measure game changing initiatives.

Enabler #1:- Building Right Capability and Leadership

Enabler #2- P erformance Management



Intellectual Propertycreation

Incremental Innovationmodel

Enhance Customer Valueamd build a strong

Innovation Brand for Wipro.

Enabler # 3 - Innovation

Enabler#4:- Consulting



All this would lead and bring transformation in following dimensions:

Enabler#5:- Brand

updated issues, growth strategy and how to implement

Documents