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List of Case Studies on Strategy - Case Catalogue IV

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2<br />

Restructuring estructuring T TTurnaround<br />

T urnaround Strategies<br />

Strategies<br />

Low-Cost Airlines in India: Took<br />

<str<strong>on</strong>g>of</str<strong>on</strong>g>f with Pride, Landed in Troubles<br />

The primary objective <str<strong>on</strong>g>of</str<strong>on</strong>g> the case study is<br />

to analyse the sustainability <str<strong>on</strong>g>of</str<strong>on</strong>g> Low-Cost<br />

Carrier (LCC) model in Indian aviati<strong>on</strong><br />

industry. This case would enable a discussi<strong>on</strong><br />

<strong>on</strong> the factors that are critical for the<br />

successful functi<strong>on</strong>ing <str<strong>on</strong>g>of</str<strong>on</strong>g> LCCs; the factors<br />

that have led the Indian LCCs into trouble;<br />

and the sustainability <str<strong>on</strong>g>of</str<strong>on</strong>g> LCCs in the l<strong>on</strong>g<br />

run. Since 2003, when Air Deccan entered<br />

with its LCC model, Indian aviati<strong>on</strong> was<br />

revoluti<strong>on</strong>ised. While with the increase in<br />

demand, opportunities increased, so did the<br />

threats with the increase in competiti<strong>on</strong>.<br />

In a span <str<strong>on</strong>g>of</str<strong>on</strong>g> 2 years, the industry witnessed<br />

25% annual growth and the entry <str<strong>on</strong>g>of</str<strong>on</strong>g> four<br />

new players. It was estimated that by 2010,<br />

air passengers would increase to 50 milli<strong>on</strong>.<br />

However, instead <str<strong>on</strong>g>of</str<strong>on</strong>g> doing well, by 2007<br />

Indian LCCs were bleeding. In 2007, Air<br />

Deccan merged with Kingfisher Airlines<br />

while, GoAir moved out <str<strong>on</strong>g>of</str<strong>on</strong>g> the LCC model,<br />

adding business class in its aircraft. With<br />

SpiceJet and IndiGo remaining as the <strong>on</strong>ly<br />

LCCs in India, the case delves into the<br />

reas<strong>on</strong>s behind the failure <str<strong>on</strong>g>of</str<strong>on</strong>g> LCCs in India<br />

and enables an interesting discussi<strong>on</strong> <strong>on</strong><br />

what needs to be d<strong>on</strong>e to make the LCC<br />

model successful, given the potential<br />

demand.<br />

Pedagogical Objectives<br />

• To understand the critical success factors<br />

for a LCC player globally and in India in<br />

particular<br />

• To analyse the performance <str<strong>on</strong>g>of</str<strong>on</strong>g> LCCs in<br />

India and the reas<strong>on</strong>s behind the failure<br />

<str<strong>on</strong>g>of</str<strong>on</strong>g> LCCs in the country<br />

• To explore and evaluate various opti<strong>on</strong>s<br />

to make Indian LCCs operati<strong>on</strong>s<br />

ec<strong>on</strong>omically viable.<br />

Industry Aviati<strong>on</strong>/Airlines<br />

Reference No. RTS0189<br />

Year <str<strong>on</strong>g>of</str<strong>on</strong>g> Pub. 2009<br />

Teaching Note Available<br />

Struc.Assig. Available<br />

Keywords<br />

Industry analysis, Low Cost Carriers, Low<br />

Cost Carriers in India, Air Deccan,<br />

Aviati<strong>on</strong>, Business Model, Positi<strong>on</strong>ing,<br />

CSFs, GoAir, Indigo, SpiceJet, Jet Airways,<br />

Kingfisher Airlines<br />

Luxury Industry in Turbulent Times<br />

This case was primarily written to debate<br />

<strong>on</strong> how to manage troubled times for <strong>on</strong>e<br />

<str<strong>on</strong>g>of</str<strong>on</strong>g> the highly recessi<strong>on</strong>-pr<strong>on</strong>e industries –<br />

Luxury Industry. It captures the<br />

performance <str<strong>on</strong>g>of</str<strong>on</strong>g> luxury industry during<br />

www.ibscdc.org<br />

turbulent times – Wars, recessi<strong>on</strong>s and US<br />

Financial Crisis (2008). The current<br />

financial crisis has had crippling effects <strong>on</strong><br />

luxury industry. The c<strong>on</strong>notati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> luxury<br />

is used in a very generic sense in this case<br />

study, symbolising all the ultra-premium<br />

and super premium goods. It also enables<br />

an interesting discussi<strong>on</strong> <strong>on</strong> whether the<br />

industry succumbed to the troubled times’<br />

business pressures or did it use those troubled<br />

times to come out with business and market<br />

innovati<strong>on</strong>s. This case study particularly<br />

looks at what happened to fashi<strong>on</strong> brands<br />

as a result <str<strong>on</strong>g>of</str<strong>on</strong>g> US Financial Crisis. This case<br />

tries to resolve the following questi<strong>on</strong>s.<br />

Firstly, is luxury industry a recessi<strong>on</strong>-pro<str<strong>on</strong>g>of</str<strong>on</strong>g><br />

or a recessi<strong>on</strong>-pr<strong>on</strong>e industry? What made<br />

the luxury brands to hold back their<br />

expansi<strong>on</strong> plans, lay <str<strong>on</strong>g>of</str<strong>on</strong>g>f employees and<br />

set their minds <strong>on</strong> improvement <str<strong>on</strong>g>of</str<strong>on</strong>g> sales?<br />

How can luxury brands uphold their growth<br />

during turbulent times? Who can be their<br />

target customer and how should be their<br />

positi<strong>on</strong>ing strategy during crisis times?<br />

Pedagogical Objectives<br />

• To analyse and understand the nature<br />

and business dynamics <str<strong>on</strong>g>of</str<strong>on</strong>g> luxury industry<br />

and to debate <strong>on</strong> whether luxury industry<br />

is recessi<strong>on</strong>-pro<str<strong>on</strong>g>of</str<strong>on</strong>g> or recessi<strong>on</strong>-pr<strong>on</strong>e<br />

• To examine the performance <str<strong>on</strong>g>of</str<strong>on</strong>g> luxury<br />

sector in the light <str<strong>on</strong>g>of</str<strong>on</strong>g> US Financial Crisis<br />

(2008)<br />

• To analyse the ways in which luxury<br />

brands can sustain their growth when<br />

industry is engulfed by ec<strong>on</strong>omic and<br />

financial crisis.<br />

Industry Luxury Goods<br />

Reference No. RTS0188<br />

Year <str<strong>on</strong>g>of</str<strong>on</strong>g> Pub. 2009<br />

Teaching Note Available<br />

Struc.Assig. Available<br />

Keywords<br />

Luxury Industry, US Financial Crisis,<br />

Luxury Brands, Premium Brands, Brand<br />

Loyalty, Recessi<strong>on</strong>, Purchasing Power,<br />

Disposable Income, Brand c<strong>on</strong>scious<br />

customers, C<strong>on</strong>spicuous C<strong>on</strong>sumpti<strong>on</strong><br />

Revl<strong>on</strong>'s Revolving Fortunes:<br />

Resolving the 'Core' Brand<br />

Challenges<br />

This case study, while providing a landscape<br />

<str<strong>on</strong>g>of</str<strong>on</strong>g> the cosmetics industry, <str<strong>on</strong>g>of</str<strong>on</strong>g>fers scope to<br />

discuss the factors that enabled Revl<strong>on</strong> in<br />

becoming a global brand and why in spite<br />

<str<strong>on</strong>g>of</str<strong>on</strong>g> being such a renowned and popular brand,<br />

it lost out in the global cosmetics industry.<br />

It also enables to discuss the measures that<br />

the new CEO, David Kennedy, should take<br />

to rejuvenate Revl<strong>on</strong>. “In the factory we<br />

make cosmetics; in the drugstore we sell<br />

hope”, said Charles Revs<strong>on</strong>, founder <str<strong>on</strong>g>of</str<strong>on</strong>g><br />

Revl<strong>on</strong>. Guided by this principle, Charles<br />

had strived to promote glamour, fantasy<br />

and excitement through Revl<strong>on</strong>’s core<br />

products, nail colours and lipsticks. Despite<br />

the intense competiti<strong>on</strong> posed by players<br />

like L’Oreal, Estee Lauder and Procter &<br />

Gamble, Revl<strong>on</strong> emerged as a str<strong>on</strong>g<br />

c<strong>on</strong>tender, becoming a multi-milli<strong>on</strong> dollar<br />

company in a short span <str<strong>on</strong>g>of</str<strong>on</strong>g> 6 years.<br />

However, trouble started brewing when the<br />

reigns <str<strong>on</strong>g>of</str<strong>on</strong>g> the company were passed <strong>on</strong> to<br />

Michel Bergerac, Charles’ handpicked<br />

successor, in 1975. With the company’s<br />

focus shifting from its core beauty business<br />

towards diversified areas like healthcare,<br />

Revl<strong>on</strong> started succumbing to its<br />

competitors. Post acquisiti<strong>on</strong> in 1985, the<br />

company witnessed a series <str<strong>on</strong>g>of</str<strong>on</strong>g> efforts to<br />

restore its lost glory. But burdened under a<br />

debt-load <str<strong>on</strong>g>of</str<strong>on</strong>g> $2.9billi<strong>on</strong>, and with the<br />

miserable failure <str<strong>on</strong>g>of</str<strong>on</strong>g> Vital Radiance, its latest<br />

product launch for women above 50, the<br />

dilemmas surrounding Revl<strong>on</strong> have<br />

increased greatly.<br />

Pedagogical Objectives<br />

• To understand cosmetics industry’s<br />

dynamics – critical success factors,<br />

industry attractiveness, competitors’<br />

analysis, etc.<br />

• To analyse the reas<strong>on</strong>s for Revl<strong>on</strong> losing<br />

its market share inspite <str<strong>on</strong>g>of</str<strong>on</strong>g> being an old<br />

player with formidable brands<br />

• To discuss and debate the challenges<br />

facing the new CEO, David Kennedy and<br />

to explore all the possible ways and<br />

means for reviving Revl<strong>on</strong>.<br />

Industry Cosmetics<br />

Reference No. RTS0187<br />

Year <str<strong>on</strong>g>of</str<strong>on</strong>g> Pub. 2009<br />

Teaching Note Available<br />

Struc.Assig. Available<br />

Keywords<br />

Brands, Brandings, Positi<strong>on</strong>ing, Cosmetics,<br />

C<strong>on</strong>sumer behaviour, Revl<strong>on</strong>, P&G,<br />

L'Oreal , Advertising, Marketing<br />

Starbucks in US: Too Much<br />

C<str<strong>on</strong>g>of</str<strong>on</strong>g>fee Spilling All Over?<br />

What helps retailers decide ‘how much <str<strong>on</strong>g>of</str<strong>on</strong>g><br />

a good thing is too much’? This is the<br />

dilemma that Starbucks, the leading<br />

retailer, roaster and brand <str<strong>on</strong>g>of</str<strong>on</strong>g> specialty<br />

c<str<strong>on</strong>g>of</str<strong>on</strong>g>fee is facing. Starbucks, with over<br />

14,000 stores and $9.4 billi<strong>on</strong> in sales<br />

worldwide, exemplifies how a commodity<br />

can be successfully c<strong>on</strong>verted into a<br />

premium brand. In about two decades, the<br />

company has grown from 17 to more than<br />

10,000 stores in the US – its largest<br />

market. However, now it is feeling the<br />

strains <str<strong>on</strong>g>of</str<strong>on</strong>g> rapid expansi<strong>on</strong> with the same<br />

store sales in the US and the share price <str<strong>on</strong>g>of</str<strong>on</strong>g><br />

the company declining. The situati<strong>on</strong> has<br />

led to the reinstated CEO Howard Schultz<br />

ruing that in its efforts to grow; Starbucks<br />

has commoditised its brand. In the first

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