Case Statement:
An Indian electronic hardware company 'A' has merged with a foreign electronic hardware company 'B'. Should the brands be merged? What should be the plan for the existing employees? Should there be 2 sales heads be employed
I: An Indian electronic hardware company 'A' has merged with a foreign electronic hardware company 'B'. Should the brands be merged? What should be the plan for the existing employees? Should there be 2 sales heads be employed?
C: I would like to understand the pre-merger business models of both the companies. What is the product portfolio of both the companies?
I: Both the companies are dealing majorly in electronic switches.
C: Understood. Who are the customers base we are catering to?
I: Both the companies operate in B2B and B2C market. However, for this case you can consider only the B2C portion of the business.
C: Okay and pre-merger, did both the companies have sales team and what was the hierarchy? What was the price range and quality of the switches for each company?
I: Both the companies had a well functional sales team with a sales head at the helm. Company 'A' operated in the price range of Rs. 20 – Rs. 50 while Company 'B' operated in the price range of Rs. 30 – Rs. 100. Company 'A' deals in non-premium switches only while Company 'B' deals in both premium and non-premium switches.
C:Is the Indian company 'A' have enough experience in the Indian market? Has the Foreign company 'B' already doing business in India?
I: With these case facts in mind, answer all the questions posed earlier.
C: So, the approach to the first question in my opinion should be that
The products in overlapping price range should be merged to reduce the number of SKU's. The non-premium switches to be clubbed under the same brand.
The premium switches should be sold under a different brand name to maintain the value attached to it.
In short, less SKU's at lower cost and wider SKU's range under the brand would optimise the market strategy.
I: Can you gauge the effects of having both affordable and premium switches in the same brand segment.
C: As I understand it, to allude to the exclusivity of the premium switches we can probably launch these under a different brand name. Since the higher priced SKU's come from the former foreign parent company, it is likely to add to the premium quality image
I: Okay how would you approach the second question pertaining to the plan for existing employees
C: If we have an option, we should look to reduce the sales team. Further, the sales team should be segmented based on the reduced number of SKU's depending on their experience in that SKU and the general market experience of the Sales team.
I: Okay and what is your approach to the last posed question.
C: Lastly, only one Sales team head should be maintained who should ideally be from Indian Company 'A' because he/she might have a better knowledge of the Indian electronic hardware market given the prior experience. The Sales head of Foreign Company 'B' should be moved to another functional role.
I: Thank you, I think we are done.
