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Case: Alpha Electronics' Global Strategy

Alpha Electronics was once a leader in India's consumer electronics industry but lost market share to Japanese competitors in the 1990s; in response, the company sent managers worldwide to study Japanese firms' practices, boosted R&D and training, closed old plants, and committed to quality improvements to regain market position, which led Alpha Electronics to become a top global manufacturer of mobile communication technology components.
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0% found this document useful (0 votes)
306 views2 pages

Case: Alpha Electronics' Global Strategy

Alpha Electronics was once a leader in India's consumer electronics industry but lost market share to Japanese competitors in the 1990s; in response, the company sent managers worldwide to study Japanese firms' practices, boosted R&D and training, closed old plants, and committed to quality improvements to regain market position, which led Alpha Electronics to become a top global manufacturer of mobile communication technology components.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Case: Alpha Electronics’ Global Strategy

For years Alpha Electronics is one of the India’s most successful consumer electronics firms. In the face of
withering competition from the Japanese, however, this firm began to fall by the wayside. Alpha Electronics
has remained the exception: Today it is one of the world leaders as a manufacturer of components in mobile
communication technology, including cellular telephones, paging devices, automotive semiconductors, and
microchips used to operate devices and computers.

Alpha Electronics heard the call to battle in the early 1990s. The firm then controlled the emerging market
for cellular telephones and pagers but, like many other firms at the time, was a bit complacent and not
aggressively focused on competing with the Japanese. Meanwhile, Japanese firms began to flood the world
market with low-priced, high-quality telephones and pagers. Alpha Electronics was shoved into the
background. At first, managers at Alpha Electronics were unsure how they should respond. They abandoned
some business areas and even considered merging the firm’s semiconductor operations with those of
another MNC Electronic company. Finally, however, after considerable soul searching, they decided to
fight back and regain the firm’s lost market position. This fight involved a two-part strategy: First learn
from the Japanese and then compete with them.

To carry out these strategies, executives set a number of broad-based goals that essentially committed the
firm to lowering costs, improving quality, and regaining lost market share. Managers were sent on missions
worldwide, but especially to Japan, to learn how to compete better. Some managers studied Alpha
Electronics’ own operation to learn more fully how it functioned; others focused on learning about other
successful Japanese firms. At the same time, the firm dramatically boosted its budgets for R&D and
employee training. One manager who visited Germany learned an especially important lesson. While
touring a plan, he noticed a flag flying in front of the factory emblazoned with the characters P150. When
he asked what it meant, the plant manager told him that the factory had hoped to increase its productivity
by 150% that year. The manager went on to note somewhat dejectedly that it looked as if only a 60%
increase would be achieved. Because Alpha Electronics had just adopted a goal of increasing its own
productivity by 20%, the firm’s managers soberly realized that they had to forget altogether their old ways
of doing business and reinvent the firm from top to bottom.

Old plants were shuttered as new ones were built. Workers received new training in a wide range of quality-
enhancement techniques. The firm placed its new commitment to quality at the forefront of everything it
did. It even went so far as to announce publicly what seemed at the time to be an impossible goal: to achieve
Six Sigma quality, a perfection rate of 99.9997%. When Alpha Electronics actually achieved this level of
quality, it received the prestigious CII -National Quality Award.

Even more amazing have been Alpha Electronics’ successes. The firm has 20 offices and more than 3,000
employees. It is currently number three in market share there in both microchips and cellular telephones.
Alpha Electronics controls much of the total market for these products, has regained its number-two
position in semiconductor sales, and is furiously launching so many new products that its rivals seem
baffled.

Today, Alpha Electronics generates over 96% of its revenues in India. Major new initiatives are underway
in Asia, Africa and Eastern Europe. Alpha Electronics has set new—and staggering—goals for itself. It
wants to take quality to the point where defects will be counted in relation to billions rather than millions.
It wants to cut its cycle times (the time required to produce a new product, the time to fill an order, and/or
the time necessary to change a production system from one product to another) tenfold every five years. It
also wants over 75% of its revenues to come from foreign markets by 2010.
Questions:
1. Perform SWOT analysis for the above situation.
2. Describe how Alpha Electronics might have arrived at its current strategy as a result of a
SWOT analysis.
3. Write a short note on similar kind of pressures faced by any other Indian firm you are aware.
What are the strategies deployed to handle these pressures?
4. Discuss Alpha Electronics’ primary business strategy. Where the SC strategy does fits in the
business strategy?
5. What are the implications for SC strategy of the above?
6. Design an appropriate SC for Alpha
7. Compare and contrast the SC of a responsive vis-à-vis an efficient firm. Give at least 3 real life
examples of each.
8. How do you measure success of a strategy? Elaborate with respect to the above case.
9. In your view , give an appropriate definition of SCM strategy.
10. What external considerations are to be taken into account while formulating the strategy?

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