The most sensitive service type of organization in the world is the Hospital. Reasons are obvious, however different they might be on the scale of service or domain of expertise, most of them happen to have the same management frame work, as all hospitals root from the same school of medicine. The only exception being the Ayurvedic treatment centers. 

DataWell Corporation

 DataWell commenced as a partnership firm in 1975, manufacturing and assembling communication equipments and parts for computers at Pune formerly known as Poona in Maharastra state of India. The managing director, Mr. Sanjeev (earlier worked for IBM) had his close friends and family members to assist him in the operations and planning. The firm grew vigorously and had in its clientele very prestigious customers from the private sector as well as from the Government of India. Initially the firm adopted a traveling marketing and service teams for their clients spread in India. They stationed engineers for larger accounts.

 The 1980s saw the firm establishing itself further into the field of software training, by now they had started selling computers for communication. DataWell was able to attract the status of authorized training centers from world famous brands such as Autodesk, Microsoft and later on even from Novell and Oracle. Their main competitor was only MIIT a company owned and operated by an IT Major. Software training turned out to be a venture with very high returns to scale in a short time and

by the year 1991 they had spread their wings to nearly 110 centers in India covering almost all the major cities and metros. DataWell fully owned only 12 centers and the balance were either franchises or satellites. A venture capitalist or entrepreneur could align with DataWell either as a Franchise or a Satellite. In the case of a franchise the VC or entrepreneur would invest up to 80 % of the cost for designing and running the DataWell center at an exclusive region in India. The cost includes payment of salaries and maintaining professional staff. The franchise would remit 20% of the returns, subject to self-audit, to DataWell corporation besides the royalty (deposit) amount. On the other hand a satellite would invest up to 30% of the center design and maintenance cost, and would receive only 25% of the returns through DataWell, due to professional staff salaries being paid by the corporation.

 By 1990 the corporation had also started to market software from Microsoft and other majors in India. This software sales was run by a separate Cell. All this meant that the headquarters was situated at Pune, with their corporate offices at major cities and metros. A typical DataWell center would have a software training premises, which included computer lab, reception, library, Administrative cabins, classrooms. In the same premises there would be an exclusive office space for DataWell software sales which included their own application software besides selling leading software, and a DataWell hardware and communication division.

 Problems since 1995

 Industry

 The IT industry was facing a recession, and the dot com boom had just misfired.

There were many players in software training and sales, the same applied to the hardware markets. With the price cuts, feature based competition all companies were facing a dwindling profit margin. However, there were exceptions with respect to certain major players due to their international presence and public issues. MIIT had such a backing. Some of the Indian IT training companies listed in the stock market crashed. To add on software licenses, and newer versions were being released. The Indian IT market was trying to adjust to global requirements being lead by the developed American and European markets. DataWell which was in the number 2 position with respect to training and sales was thrown to 10^th position. At this time an excellent offer was made by a major Auto manufacturer to buy the company. Mr. Sanjeev declined the offer.

 Partners  

 The franchises felt they were being left out during further growth decisions of the company, such as DataWell had gone public and they were not consulted or offered participation. There was delay in satellite payments. Some felt if they had invested their money even in nationalized banks they would have had a steady return. The Chennai center closed down because a Franchise turned satellite felt the ‘company had done a breach of trust’.

 Bangalore, Delhi and Mumbai centers run by the company were doing well. 4 of the remaining franchise centers were managing by themselves. Some felt in the training side good staff were leaving the organization for better prospects.

 On the whole many of franchise and satellites were ready to wind up their operations and move on.

 Management

 The organization under Mr. Sanjeev had friends and relatives at key and critical positions to manage the entire operations and planning. These positions would include Partner handling, Growth and Quality assurance, Finance and Administration, Training Centers, Hardware Division, Software Division. All reported to the MD. And each of the position heads had freedom to design their staff network which would trickle down up to the branch manager levels or even beyond.

 Due to industry changes, there was difference of opinion among the management members. One of the senior most advisor and friend of Mr. Sanjeev quit the group to start his own enterprise and two members followed very soon. A relative and senior manager was held up in a quid pro quo case at a bangalore center, and was soon recalled to the head office.

 Market  

 The market position held by DataWell fell drastically due to bigger well established global brand names in the hardware market, multi channel software sales by leading players including Microsoft and a software training market which was becoming more and more skill based was swinging towards professional courses offered by regular universities and institutes. The private trainers were losing ground on account of certifications and the need to obtain post graduate or masters certificates recognized by the industry. MIIT with their backing had swung into some major advertisement campaigns to bring focus on their strengths but the effort did not pay any rich returns. DataWell management adopted a policy to wait and watch. Whereas another major IT training company sold its operations and move on.

 Personnel

 Staff who gained talent at their current employment quit for better pastures. New staff and some of the old staff had difference of opinions leading to frequent conflicts which decreased productivity. The mingling(being at the same location) of staff from different cells (training, hardware and software) was not encouraged by their respective heads, and was viewed as grouping against the management, for they had a divide and rule policy with personnel but at the corporation level it was a single listed company according to the staff.

Discussion questions:

 1. Technology strategy should lead to a good match with the KYC and Consideration Sets, how would you examine the business policy in DataWell and its compliance to its own regulations, positions or market changes and strategies for facing competition.

2. Into how many segments can you divide the target market for a corporation like DataWell? How would you determine their respective market growth, develop growth strategies and policies for an organization like DataWell. 

NEED IDENTIFICATION - DEMANDS

As a guideline for forecasting demands we may have:

o   Quantitative models: Averages, moving Trends, regression, factor analysis

o   Significance Tests: T-Test, Chi Square Test(test of hypothesis)

o   Huff’s gravity model

An organization may have the policy to choose one or more of the above tools to aid decision-making during demand forecasts. The tools used depend upon the risk, certainty or uncertainty conditions (refer to classroom discussions).

Benchmarking  (at the procurement/production levels)

Thore (1996) defines benchmarking as “the systematic comparison of elements of performance of an organization against those of other organizations usually with an aim of mutual improvement”

 Genesis of benchmarking: traced from scientific management, historic evidence from 400 BC, Can be seen as a strategic tool

What is its Significance? -      Adds value to the customer, sustains Competitive Advantage, develops the potential product

                The new competitive environment

Schools of thought- In a nutshell

Deficiency                                           Medicine                                 New

Need ----- Survival ----- Strategy ………………… ..Markets ------------  intermediate

Unmet                                                 Military                                   Existing 

opportunities

Military and medical sciences have evolved as the highest among other sciences due to the need of humanity to survive and grow. These evolutions show the strategy adopted and the question we may have ask, was it by chance or design? Some of the business strategies can be seen as network marketing, flank attacks to gorilla attacks, White knight to pacman, all have a basis in the finest theories of business strategy known to management sciences and can be listed as;

Absolute Advantage (based on natural resources)

Comparative Advantages (arising due to less opportunity costs than the competition during production

Corporate strategies (based on quality, pricing and market growth)

Competitive Advantages (arising due to 5 forces leading to focus, differentiation, cost leadership)

Core Competencies (based on customer benefits, difficult to surpass or copy, sources, resources and outsourcing)

Brand equity (based on values by sender vs. as held and reflected by receiver includes promotions)

   --

   --

   --

The new-age of Innovation (N=1  R=G based on individual customer experience and strength of  resources from global relationships)

Blue Ocean  (making competition irrelevant or insignificant)

                                                Futuristic Strategies

 Due to the proliferation of needs and competition we find more tastes & preferences on the market prowl, which in turn have added to customization based on value propositions. Values according to customer centricity have been based on the ratio of benefits by cost (V=B/C). This includes considering both tangibles and intangibles.

Conventional consumption has transformed into consumption by global trends for example Kellogs corn flakes is available across the globe and has a global acceptance with a local flavor depending on the value proposition.

 We find that an attempt to create unbeatable-ness using technology, resource sharing and innovation becoming the hallmark of futuristic strategies. The question is it will be on a continuum of market benefits?