The success attributable to leadership in Compaq Computers and Konica Corp - Case Study Example

Download file to see previous pages From its beginning until 1991, the company witnessed considerable growth and profit. However, as a result of the intense competition in the market, the company lost momentum and for the first time in its history, the company declared loss in 1991, followed by laying off 1700 employees and cutting the price of the products. However, as the new leader Eckhard Pfeiffer took up the task, he introduced a totally new approach and strategy. On his beginning, as Salazar (1996, p. 638) reports, Pfeiffer declared his seven point strategy that included continuing to be the major global supplier of PCs and systems, PC division introducing new cost-effective and entry level products which are high performing, the system division providing quality service and customer support, maintaining high quality and reliability, high quality customer service and support, a continuously decreasing price of products ensuring competitive prices in all markets, and an increased sales and distribution. A look into the history of the company proves that the company managed to do all this, and the leadership of Pfeifer in achieving all these in the shortest time cannot be neglected. Pfeiffer’s Success Mantra and What Konica lacked Pfeiffer did not aim at short term management but long term success. His success lies in the fact that he clearly understood what went wrong with the company and he prepared a clear strategy for the company. In addition, he executed what he prepared. According to him, the failure of the company happened because its success made the company rest on its laurels for a while and hence, the company did not notice the signals of the growth of its rivals. So it focused only on the high-end market, keeping is products expensive. However, for Pfeifer, the picture was very clear. He knew what to do. His strategy was to slash prices on high-end products to keep the existing range of customers, and to introduce new entry level, low margin products which are designed to sell profitably at a price that matches low-cost competitors. Now, it is time to see how Pfeifer managed to introduce the low-priced line in a short time. Similarly, even before it falling into loss, Konica realized the threats ahead, reading from the changes in the market. In the year 1986, Fuji Film had 67.5% of the film market share, and Kodak had an increase in its market share by one percent. However, Konica lost one point of market share, falling from 22% to 21%. In addition, competition on the price of photofinishing was intense. The price of developing the film and the price of color printing were going down considerably for the last five years. So, the estimate was that the mini-labs would handle 25% of the amateur photofinishing market by 1989. In addition, as Turpin and Shen (1999) state, the camera section where Konica had a 5.5% share too was facing intense competition as the markets had matured and as companies were introducing cameras with a lot of new features and which are user-friendly; and the main players in the ...Download file to see next pagesRead More