Week 17

1. Can you think of an organization that has implemented a ‘high risk strategy’ that has resulted in success (why was it high risk at the time and why was it a success – was it good luck or good judgement)?

I think Samsung entering into mobile phone market was high risk strategy and has resulted in success. Before 2000 Samsung were more focused on home appliances and in early 2000 they entered into mobile phone market for the first time. During their time of entrance they could not compete with other well established mobile companies like Nokia, Motorola and Sony Ericsson. Later in mid 2000 when the trend of Smartphone was growing Samsung went from selling zero phones to quarterly sales of 50 million units in two years. In 2008 Samsung took no.1 spot in U.S. mobile market and now it has the largest market share in mobile phone market with 32.1% market share (Samsung, 2013).

2. Now, do the same for an organization who embarked on a high risk strategy that resulted in some sort of failure (why was it high risk and why did it fail – bad luck or poor judgment?)

I have chosen Kingfisher Airlines as an organization which embarked on a high risk strategy and resulted in some sort of failure. Although most of the management gurus and experts say the failure of Kingfisher Airlines is because of global recession of 2008 but there were other many reasons behind the failure. First of all, the owner of the company Mr. Vijay Mallya didn't take suggestions on business operations and didn't involve any skilled executives in decision making process. Likewise, he squandered the opportunity of attracting middle class families by projecting Kingfisher as elite or executive class airlines. The major cause of failure of this company was because of poor judgment made by the executives or owner.

References:

G. Johnson and K. Scholes (eds), Exploring Techniques of Analysis and Evaluation in Strategic Management, Prentice Hall, 1998.

Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson Education, Chapter 14 

Samsung, 2013. Samsung.com. [Online]
Available at: http://www.samsung.com/in/aboutsamsung/
[Accessed 25 11 2013].