Organizing Performance: Four Vignettes Harvard Case Solution & Analysis

Organizing Performance: Four Vignettes Case Study Solution

Identification and Evaluation (Alternatives)

Based on the scenarios given in the case study two possible alternatives of organizational configuration option i.e. Low Price and Local Value Creation and four possible alternatives of organizational structure can be evaluated for four vignettes.

Alternative for Organizational Structure

Alternative 1: Simple Organizational structure with centralization

Pros:

  • Cost Control
  • Efficient production

Cons:

  • Confusing for organizations with complex operations

Favourable for organizations having simple operations, low expansion policies and selling low price products.

Alternative 2: Simple Organizational structure with decentralization

Pros:

  • Flexibility
  • Cost Control

Cons:

  • Low efficiency
  • Can create confusions for organizations with complex operations

Favourable for simpler organizations with less focus on cost control and high focus on expansion.

Alternative 3: Complex Organizational Structure with decentralization

Pros:

  • High flexibility
  • Easy to manage operations
  • Low confusions

Cons:

  • High cost than simple structure

Favourable for those organizations with complex operations and less requirement of cost control.

Alternative 4: Complex Organizational structure with centralization

Pros:

  • Cost and efficiency control
  • Low confusions

Cons:

  • Less flexibility
  • High cost

Favourable for organizations with complex operations and high requirement of quality and cost control.

Recommendations

Based upon the evaluation of above alternatives and deep analysis of the vignettes, the recommendations for the organizational structure to the above stated organizations is as follows;

Walmart is recommended alternative 1, as the company has simpler operations with high requirement of cost and efficiency control.

Starbucks is recommended alternative 2 as the company has simpler operations with high requirement of flexibility to support its expansion.

HBS is recommended alternative 3, as the company has complex operations and requires an efficiency control to maintain the quality of its products and services.

Google is recommended alternative 3 as the company has complex operations with high requirement of flexibility in its structure due to its vast geographical expansion.

Alternatives for Organizational Configuration Option

Alternative 1: Low Price (Spending more on Core Operating Units than Market-Facing Units)

Pros:

  • Efficient production due to high cost control
  • Low per unit cost due to efficiency

Cons:

  • Low expansion opportunities
  • Low value proposition
  • Favourable for organizations offering low price products

Favourable for organizations requiring high cost and efficiency control.

Alternative 2: Local Value Creation (Spending less on Core Operating Units than Market-Facing Units)

Pros:

  • High value proposition
  • High expansion opportunities

Cons:

  • Low cost and efficiency control
  • High per unit cost

Favourable for those organizations which focus more on expansion.

Recommendations

Based upon the evaluation of above alternatives and deep analysis of the vignettes, the recommendations for the organizational configuration option to the above stated organizations is as follows;

Walmart is recommended alternative 1, as its core competency is its lower prices and it cannot bear the effect of increasing cost.

Starbucks is recommended alternative 2, as the company is expanding and it requires a high value proposition to capture the market.

HBS and Google, however are recommended to run in between these two alternatives to support their expansion with increased value proposition through spending on market-facing units as well as to control their efficiency in their operations.

Exhibits

Exhibit A: Brief Analysis of Four Vignettes

 WalmartStarbucksHBSGoogle
Organizational StructureMore CentralisedDecentralizedMore diverse due to complexity of operationsDiverse and decentralize due to scale of business
Business StrategyLow Price ProductExpansionExcellence and diversityDifferentiation
Organizational Configuration optionLow PriceLocal Value CreationGlobal Standard of Excellence and Dedicated Service RelationshipGlobal Standard of Excellence and Expert Knowledge Designs
Resource Allocation for Market facing units Very High Very LowModerateHigh
Resource Allocation for Core operating unitsVery LowVery HighModerateLow

Exhibit B: SWOT Analysis

 WalmartStarbucksHBSGoogle
StrengthsLargest retailer

Strong power on suppliers and competitors

Large Scale operations

Brand recognition as quality products at affordable rates

Largest coffee house

High wealth

Availability of wide product and service categories

Quality products and services

Leading Search Engine

Advertising and display

User Traffic

Android and mobile technologies

WeaknessesLow profit margins

Quality compromise

Dependence on coffee beans

Poor World image

 

 

Complexity in business operationsHuge reliance on Secrecy

Declining advertising rates

Dependence on advertising for revenue.

OpportunitiesExpanding business in developing countries

Quality improvement

 

Based on expansion of supplier networks, retail stores, to emerging markets.Expansion in other countries in terms of teaching services.

 

Android operating System

Move towards non-ad businesses

 

ThreatsOnline retailers i.e. Amazon

Trend towards healthy products

Threats from coffee bean suppliers

Failure of any level of supply chain

Instability in countries

Loss of key researchers and teachers can lead the company to compromise with the quality.Arrival of Social Media

Injection of mobile computing in the market

Exhibit C: Porter’s Five Forces Analysis

 WalmartStarbucksHBSGoogle
Competition from SubstitutesHighestModerateLowestModerate
Competition From New EntrantsHighestModerateLowestModerate
Competition From Established RivalsHighestHighLowestModerate
Power of SupplierLowestLowHighestHigh
Power of BuyerHighestHighLowestLow

 

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