Bahria University Islamabad

Subject: Strategic Management

MBA 6 (A)
The Case of Strategy Planning Assignment No. 1(
By R Chandrasekhar
Submitted To:
Sir, Imtaiz Ahmad Mohar
Submitted By:
Suhaib Tariq
Atif Bashir
Usama
Syed Ahsan Ali jafri
Case Review:
This case is about T.R. Jagmohan, the CEO of Coolex, the country's largest manufacturer of
air-conditioning systems. T.R. Jagmohan is talking with his friend Ashish Mahapatra, the
professor of University of Southern California, who was in the country on a lecture tour.
Coolex was founded in 1965 by group of technocrats and when T.R Jagmohan joined Coolex,
they had 55% share of the market and in current situation it was decreased to 40%. They also
set conservative target approach which is 61% growth rate in 4 years.
T.R. Jagmohan also invited Mahapatra in meeting and there they meet with the top
management of the Coolex. Every member of the top management explains his or her core
competencies accordinf to their perspective.

Fact File:
T.R. Jagmohan, the CEO of the Rs 620-crore Coolex, the country's No. 1 air-
conditioner manufacturer. .
Coolex was founded in 1965 by a group of technocrats.
When Jagmohan joined the company as a management trainee 14 years ago, we had a
55 per cent share of the local central air-conditioning business. Today, it stands at 40
per cent.
Coolex recorded a turnover of Rs 620 crore in the year ended March 31, 1997.
Seventy per cent of this came from central air-conditioning, 15 per cent from unitary
air-conditioners, and 15 per cent from our trading operations.
Coolex internal strengths are based on 3 characteristics of strength. One, it needs to be
unique to Coolex. Two, it should be difficult to emulate. And three, it should be
internally sustainable over a period of time.

Main Issue:
Coolex has operated in traditional strategy system which is good 14 years back but in current
situation many factors are changed. Now more competitors are in the market and new
technologies are developed by the competitors.
It is true that Coolex has the biggest market share with turnover of Rs 6.2 billion but they
dont have the sustainable growth strategy for the long-term. They more see the competitors
strategy rather than focus on their own competitive edge. They just see their internal strengths
but ignore the effect if they apply these strengths to the environment.


Question and Answers:
1. How should Coolex evolve its strategy? Should it continue with the conventional
approach, with its focus on the external environment, in the face of potential
competition?
Answer:
They should work different from conventional approach. They should focus on the new
innovation electronics and energy management and must see the environmental factors.
And if they focus on project management skills, increase compensation of technicians,
increase their logistic support then this is bog opportunity for them to regain their market
share and can maintain sustainable position for the long term.
2. Is it feasible to link strategy-planning at Coolex to its core competencies? Or is the
competencies-based approach to strategy-development old wine in a new bottle? Has
Coolex got a grip on its core competencies at all?
Answer:
Yes it is feasible to link their strategy planning with their core competencies because core
competencies can work as a competitive advantage. In case they mention three internal
strength which are unique, difficult to emulate and internally sustainable, if they focus on
these strengths it is very favorable for them. Core competencies are also their innovation in
the electronics, logistics(on time delivery), technical staff and if they combine these all
strengths then they can create entry barrier for the competitors.
If they focus on competitors strategy instead of focusing on their core competencies then it is
not feasible because if one strategy is good for their competitor then it must be good for
Coolex.
Coolex has not enough control on the core competencies because they follow conventional
approach in which there is lack enthusiasm, they must change new strategy planning.
3. Is there an alternative to the traditional approach to strategy-formulation?
Answer:
The alternative approach for traditional approach is adopting the environmental changes,
introducing new technologies and capacity building for the long term. Motivation for the
employees is another factor for the new strategy formulation.
4. Are the managers of Coolex asking the right questions? What should the road-map
for Jagmohan and his team be?
Answer:
Yes managers of Coolex are asking the write question and that is comparing internal
strengths with external factors. Road map for the Coolex should be they more on human
resource, marketing and operation management. Because human resource (employees and
workers) is the main part of the organization that control all other factors and if they are
motivated then automatically organization will grow. Marketing can build the image of
product in the eyes of customer. Increase in the operation management can help for the long-
term strategy and organization can also invent new products in the field of electronics.

Recommendations:
In current situation Coolex has 40% of market share and they are the market leaders,
they should focus on building their image stronger in the industry and then increase
the market share.
If they pay better compensation then they can motivate the employees easily and can
retain their best employees of the organization.
They should increase the level of communication between the different departments
because director operation said they has the operation management skills, director HR
said they has best staff , director finance said they has the money to cover expenses, if
all of these departments know the requirement of each then this is competitive
advantage for Coolex.
Research and development is very important for the new innovation, if they include
the R&D department then they also can see the effect of new technological changes.