VICTORIA HEAVY EQUIPMENT COMPANY Harvard Case Solution & Analysis

Victoria heavy equipment company Case Study Solution

Introduction:

Victoria Heavy Equipment Limited was formed in 1917, initially the company was involved in manufacturing the equipment used in the forest industry, in the beginning periods the company was proved to be successful, by the time passes the management of Victoria diversify its risk and starts to operate in the crane manufacturing industry. Despite of the operational success, Victoria faces severe financial difficulties, in 1970, the Victoria is purchased by the father of current chairman Mr. Brain Walters, the leadership of Mr. Walter Sr. proves to be beneficial for the company and the company starts to make good profits in just a span of seven years. After the retirement of the father of Mr. Walter, his brother was named as the CEO and Chairman and after the death of James Walter, Brain was made the CEO and chairman of Victoria.

Some drastic initiatives were taken by Brain Walter in improving the financial and operational performance of Victoria and which mainly includes the cancellation of the contract with the authorized dealer in the U.S. and upgration of plants and equipment in order to reduce the costs as low as possible. Not only were this various model of cranes and mobile cranes developed by the management in order to sustain the competitive advantage for a long period.

The competition in the crane manufacturing industry is said to be high with almost 50% of the market share held by a single manufacturer Washington Crane Company; Victoria comes on the second place regarding the market share in the global crane manufacturing company. The competition is also increasing due to the entry of various Japanese companies; these Japanese Crain manufacturers are giving a huge competition to the U.S. based producers of crane due to the high quality of their Crain.

Problem Statement:

Until 2005, everything was going in favor of Victoria, however, after 2005, the situation was starting to be worst the profits were starting to reduce along with sales growth in sales. Furthermore, the global financial crises of 2008 resulted in the substantial decrease in the demand for the Crain of Victoria and other Crain manufacturer due to reduced development in the real estate sector. Apart from the external economic environment, the internal organizational environment of Victoria also become unfavorable for the organization. Severe conflicts have arisen in the management of Victoria due to extreme changes in the organizational structure.

Situation Orientation:

Strategic Gap time frame:

It can be argued that there is a gap between the quality and price of the products of Victoria and Washington Crain Company. The Crain of Washington are superior to the Crain of Victoria in terms of quality, reliability, and price and if Victoria sells its Crain at prices similar to Washington, it is highly likely that they will lose their market share in no time. In order to maintain a competitive advantage over a long period of time Victoria have to offer their products at substantially lower prices as compare to Washington or they have to bring the quality of their Crain at the quality level of Washington.

It is clearly evident from the case study that Victoria has already taken steps to maintain the gap between prices of their Crain by upgrading the plants and equipment used in the manufacturing of Crain. However, it can be said that further steps needed to be taken in order to ensure the continuous reduction in the prices of their goods.

Insider perspective:

The insider perspectiveis unfavorable for Victoria. Currently there are many disputes and uncertainties among the insider perspective of Victoria which can affect the operational and financial performance of Victoria.The new organizational structure is not greatly welcomed by all the managers; this dissatisfaction can result in great hurdles in achieving the desired gap between the prices and quality of Crain manufactured by Victoria to those of manufactured by Washington. Furthermore, due to the issues in succession planning in insider perspective of Victoria can also affect the performance of Victoria adversely. In the absence of positive insider perspective, it is almost impossible for Victoria to achieve their goals and objectives.

Situational Analysis (7S):

Structure:

There were rapid changes in the organizational structure of Victoria in the recent years; this different organizational structure receives mix response of the management. A particular group of management is in favor of new structure while part of the management is in extreme opposition to the new structure of Victoria. However, the new organizational structure was of particular benefit to Victoria as it gives every manager a responsibility to improve the performance of their division and management might exert more efforts in improving the performance of their division because of the new reward system.

VICTORIA HEAVY EQUIPMENT COMPANY Harvard Case Solution & Analysis

 

 

Strategy:

This is one of the most crucial elements of the organization, and this element plays an important role in obtaining sustainable competitive advantage for the company. All the other components of the 7s framework depend on this element, and all the elements should have to design strategy of the organization. Victoria has a clear strategy to successfully compete with the Washington and other Japanese Crain producer and to maintain a good reputation as an employer as well. In order to compete with the four times larger competitor and with many successful newcomers, it is very important for Victoria to clearly define and communicate their strategies with stakeholders inside of the organization and outside of the organization as well such as customers and investors..................

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