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Case Analysis I
Today the world is caught up in the throes of change. The wheels of time are in rapid motion, causing turmoil in all walks of life. To cope with this upheaval, proactive organi- zations focus on relentless ingenuity, creativity, commit- ment and determination to stay in the game, edging out the ordinary. Ability to manage constant change while moving ahead keeps an organization sustainably surviving. This is a case where one-time successful company, not being able to keep the pace with the winds of changes in dynamic business scenario, is gradually fading out. We will scan through the changing business environment especially in North Region, KRC's response to these changes and the performance trail of one of its successful sales executives amidst this shifting landscape.
Tyre industry is an ancillary to automobile trade. The industry saw good growths during 1990s because of sub- stantial increase in vehicle sales; during that period KRC and its dealers had registered healthy augmentation with relatively less effort. What were the key success factors of yesteryears? Demand of tyres was so high that the tyres were sold at a desired price; dealers' investment was less as whatever stocks used to come, sold out in cash. The price and investment factors resulted in high profitability to those few tyre dealers. It was a sellers' market and both the manufacturer and the dealers enjoyed the merry time. Being 'effective' was the only condition to remain success- ful in seller's market environment. But with the passage of time, as it happens with the maturity phase of any industry, the competition gradually increased with the entry of many new players, price wars started and sustaining the growths and profitability became more and more challenging.
This 'new reality' resulted in a gradual shift of the busi- ness setting from seller's to buyer's market. Let us identify what are the success factors to operate in a buyer's market. The more the trade environment becomes cut-throat in nature, the more one needs to shift one's business from 'effective' to 'efficiency' platform. Before we go deep, we need to be aware of what type of business KRC deals in. Tyre category is neither a low involvement product (LIP, e.g., chocolate) that can be purchased...