Ciba: Attempting to live up to a vision in a crisis situation (A)

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The China Resources Beer (CR Beer) case study is a compelling narrative of the world’s largest beer producer by volume under the leadership of CEO Hou Xiaohai. In 2016 CR Beer embarked on a pivotal transformation journey. This case study offers critical insights that particularly resonate with Chinese corporations navigating similar challenges in an era marking the end of China’s rapid economic growth. Faced with industry saturation, changing consumer behaviors, the rise of digital technology and the imperative shift from expansive to high-quality growth, CR Beer’s story mirrors the predicament in which many Chinese companies find themselves today. The case delves into CR Beer’s strategic overhaul, how it optimized its vast 60,000-employee structure, streamlined operations and embraced digital transformation to remain competitive. CR Beer’s transformation was characterized by tackling “three mountains” – operational inefficiency due to numerous small factories with high costs and low-capacity utilization, weak brand presence in the high-end beer market and an underutilized and mismatched workforce. The study also highlights the company’s innovative approach to rebranding for younger consumers, integrating consumer insights into product development and exploring new business models. It underscores the importance of internal cultural shifts to support these external changes and the role of leadership in guiding transformation. CR Beer’s journey from traditional efficiency to future-readiness offers valuable lessons in managing large-scale organizational change, strategic management and business innovation. It provides essential insights for understanding the complexities of transformation in a rapidly evolving industry, making it a crucial read for those interested in organizational change, particularly in the context of the Chinese market and its unique challenges and opportunities.

Five friends created DIDA in 1983 and turned it into a global provider of IT infrastructure and services. Riding the wave of rapid growth of communication networks and increasingly global business relationships of corporations, DIDA established its brand through its strong alignment with dominant infrastructure companies such as Cisco and Microsoft. Navigating the end of the internet bubble, DIDA served as a major reseller of these companies’ products, adding value with its integration services by increasing its clients’ efficiency and enabling collaboration within corporate networks. By 2005 DIDA had resumed rapid growth through partnerships, equity-based alliances and, most prominently, acquisitions, which led to a network of subsidiaries in more than 50 countries and six continents. By the end of 2009, DIDA had shown its critics that it could grow and integrate. However, its revenue was growing faster than its profits and it was not poised to help corporations move to the next generation of internet technology which would require new capabilities for installing and managing large data centers for computing as a service (CaaS) and cloud computing. The case ends with DIDA’s CEO reviewing the prospects of shrinking core markets and displacement by technological disruption. He acknowledges the need to make choices and get ahead of technological trends again in a changing IT infrastructure landscape. DIDA could seek to further grow its core business or internalize new capabilities to get ready for a CaaS future. Should DIDA seek more profitable growth organically or through acquisitions?

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