vsm – value chain network
TRANSCRIPT
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The VSM GroupThe VSM Group
Bhuvaneshwari.T
Gagan Krishnamurthy
Gangotri Bajpai
Gaurav Sinha
Harshil Kachhawa
Priyanka prasad G
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Overview of the CaseOverview of the Case
Emerging strategies of VSM group, 1997- 2003
Acquisition of major competitor
Issues of strategic change in global environment
Bases and direction of competitive strategy
Managing change at top level management
Strive to be the pioneer company
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HistoryHistoryy First machine 1872
y Freja, an instant success 1883
y
European Patent Rights for Sintered Steel- 1950s
y OEM production of Sintered Metal, part of VSM
y 1996- Search for buyer of sewing machine business
y Svante Runnquist replaced Jorgen Johansson
y 1997- Electrolux sold VSM AB to Industry Kapital
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Mission StatementMission Statement
y Develop, produce, market and sell consumer sewingmachines
y Grow business by creating demand for more creative
uses of sewing machine
y Secure growth, profitability by providing superior
satisfaction to consumers, dealers
y Provide growth opportunities to the employees
y Become leading premium company in the world ofsewing
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VSMVSM Strategic Capabilities and CompetitiveStrategic Capabilities and CompetitiveAdvantageAdvantage
Resources Competences
ThresholdCapabilities
ThresholdResources
TangibleIn Tangible
ThresholdCompetencies
Capabilities forcompetitive
advantage
Unique Resources*Tangible
*Intangible
Core Competences
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VSMVSM Value Chain networkValue Chain network
Inboun
d
Logistics
Operat
ions
Outbo
und
Logistics
Market
ing andSales
Servic
es
Supp
ort
Activi
ties
Primary Activities
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SWOT ANALYSISSWOT ANALYSISSTRENGTHS:
Customer oriented.
European patents rights on sinteredmetal Technology.
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WEAKNESS :
y Very little information was collected on market share.
y
VSM collected information on competition throughsales companies and retailers.
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OPPURTUNITIES:
y Large market to be covered after integration of pfaff.
y Signs of lagging behind in product development fromBernina.
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THREATS:
y Demand for sewing machine declining in westernhemisphere in terms of unit sold.
y Relying heavily on retailers.
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Competitive Strategies
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Global ScenarioGlobal Scenario
yJANOME: Largest Competitor by Volume
Main Activity Domestic Sewing M/c.
High Volume Producer (1.5 Million units in2003)
Complete Range
Own R&D facilities (developing sewingembroidery m/c)
Strategically Poised
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yJUKI OPERATIONS
Catered the markets of both industrial andDomestic.
Made entire range of Computer Controlled
machines for SINGER.
Models in USA had modest features.
Less aggressive in Product Development.
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y Brother (USA Based Company)
High Volume Producer (1.3 million in 2003)
Well known for Office machinery such as
typewriters, labelers, faxes etc.
Catered Domestic and Industrial Markets
Competitive Prices (undercut VSM by 20-30%)
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Local CompetitorLocal Competitor
y Bernina Fritz Gegauf AG
Highly Reputed Company
Product Range resembled VSM
Top Model accepted embroidery files fromothers including VSM
Quality Bench mark for VSM
Lagged Behind in Product Development
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Which Strategy to follow?Which Strategy to follow?
Overall low-cost leadership strategy
Best cost provider strategy
Broad differentiation strategy
Focused low-cost strategy
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ManagingManaging ChangeChange
Expansion of After-Market Services
Upgrades through Softwares
Introduction of Web-shop
Acquisition of Pfaff
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Acquisition of PfaffAcquisition of Pfaff Decline in the whole industry.
Pfaff went bankrupt
Singer was on the brink of bankruptcy.
May 2000 -VSM acquired Pfaff.
The brands were promoted on different dimensions
Change of production plant from Germany to Sweden.
Taking over Zetina plant.
Lowering prices of Pfaff in home market.
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Looking back into the futureLooking back into the future
y 1999- Focus on Dealer-Partner
Programme
y
y 2004- Addition of Pfaff thus rethinking of
marketing strategy.
y Expand U.S market- setting up store-in-
stores in collaboration with Jo-Ann
Fabrics
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Strategic DrawbacksStrategic Drawbacks
y Time wastage on integration of Pfaff andGerman market.
y Clash: cutting costs by co coordinating thedistributive and marketing activities.
y Overdoing subsidiary functions like retailingsupport and education
y Indecisiveness on exclusive stores for Pfaffand Husqvarna.
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ConclusionConclusion
y Strategic leadership: charismatic leader
y Enabling success- overall business strategyvs. strategies in separate resource areas
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ENABLING SUCCESSENABLING SUCCESS
People Finance
Technology Information
BusinessStrategy
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