ay competitive. We need
to do more than what we see right now around us. Hope that you have read the disappointing five
years’ performance report and its declining trend for our company.” Ms Lilita stated. “Yes
Madame. In my view our performance can be increased if there is a good salary increment to our
employees to motivate them”. Mr. Shemsu quickly replied her without a good thought. Ms Lilita
just stared at him without any reply. “Rather, tell me any newly innovated products in your
department that we can use of them by commercializing within a year’s time!” She just threw so
critical question that Mr. Shemsu does not want to hear usually. “Yeah.. Yeah… we had two
prototypes which were tested a year ago. And… and….”, he could not continue to utter. “And..
what?” she just inquired him to answer. “They failed the commercialization test. Of course we
can modify them and try again.” He replied. “You want to re-test a failed product? You mean
that there has never been any attempt for a year’s time by your department to innovate new
products? This company in its history and as part of its strategic focus has been always
emphasizing new product innovations. What has been your department doing so far? I want you
to submit the latest R and D report”, she threw questions after questions to him. “Ms Madam, we
were just worried not to incur huge costs of innovation to the already higher cost of our organization.” he replied somehow after a deep silence. “I am asking you your departmental
duties, talking about cost issues is mainly the job of another department” she replied and told
him the discussion is over. Mr. Shemsu went out of her office with a big shock. He never thought
that this young CEO is so aggressive and determined in her job with no excuses at all.
Mr.Shemsu right now started to worry about his job security.
After Mr. Okello, who was a previous CEO left the organization for personal reasons some three
years ago, Baro Co. has not been in a healthy business performance. The company has been run
by delegated Deputy Vice President Mr. Ojullu, who is a bit good in communications but so slow
in the implementation of activities. That is why the board of directors of Baro replaced him by
Ms Lilita based on open national competitive talent search. Actually Mr. Okello is a good friend
of Mr.Shemsu. After shocking revelation of the R & D manager’s poor grasp of the competitive
reality for Baro Co., Ms Lilita decided to call a meeting with Marketing and Operations directors
of the company. Both managers have a more understanding of the competitive environment, but
still behind to capture necessary strategic solutions for the problems the CEO is seeking for.
“How is our brand image these days in the eyes of customers?” Ms Lilita inquired the Marketing
Director. The Marketing Director replied “Madam our brand has been powerful but since the last
four years competitors are introducing different new co-brands that somehow started to catch the
taste of customers. Noticing this, I discussed with Mr.Shemsu two years ago regarding the need
to introduce new products.” “What response did he give you?” Ms Lilita asked him. “Well he
said that for each moves of competitors we cannot throw away our existing products. Our
existing products are part of the history of Baro. His view is that competitors as well as
customers will be fed up to new ‘fashion type” products and at the end of the day our customers
would be still with Baro.” the Marketing Director replied. “So what type of the activities are you
doing in your department right now to review the brand issues for Baro products? And on what
basis should the brand promotion of the company need to focus given the current market
realities?, Ms Lilita asked the Marketing Director. “We are planning to discuss these aspects
further with R and D department.” the Marketing Director replied her. “Do we have financial
backings to execute any additional investment moves?” she inquired the Finance Director.
“Rather our corporation is highly indebted for the last five years and we are in difficult position
to manage the debt financing.”, replied the Finance Director. “I see you don’t have any financial
rescue plan worked out by your unit” she said to the Finance Director. Now things seem to be
gloomier for Ms Lilita.
Questions
1) In what dilemma is the CEO right now? Explain
2) What internal and external environmental forces are affecting Baro currently? Which
forces are more dominant in your opinion?
3) What strategic insights can you suggest to Ms Lilita to reposition Baro Co.?