AN AFRICAN TIGER

Case Based Presentation

TIGER WHEELS LTD.

A South African company. Manufacturer of aluminum alloy wheels. Customers: BMW, Mercedes, Volvo, Audi, Opel & Porsche. Revenue of ZAR3 3.8 billion made it 10th largest in world. In 2005, new plant in Kentucky (U.S.) with Ford contract to supply aluminum at attractive prices.

EDDIE KEIZAN
Present CEO of Tiger. 1960s- Articled clerk & part-time waiter at coffee shop . Worked as spanner boy, become a petrol head & emerged as a car racing driver. Keizer get job due to his passion as unpaid spanner boy. 1968- Got sales job in international company selling fan belts, piston rings. Earn extra he write in columns on car road test. 1970- Appointed as the driver for Ford team. 1972- With Blignauts team, he won F5000championship & prize money of ZAR 3000.

EARLY YEARS AT TIGER

Used prize money for acquisition of Tiger from Jimmy Joannou. Specialized car dealers. 1973, fuel crisis and apartheid policies challenges. Diversification in motorcycles ,bicycles steel to aluminum , niche segment to enhance its productivity.

REVAMPING BUSINESS
Focusing on trading & manufacturing

Avoiding bankruptcy

Converting all inventories into cash (except wheels & tires)

PORTERS DIAMOND MODEL

STRENGTH
Innovative product. Associated with leading brands. Economies of scale. 71 % stake in ATS. Plant of Polland and Germany. Related business i.e retail chain.

WEAKNESS
Industry is exposed to cyclical downturns in the automotive industry. Dependent on the automobile industry. Also facing less efficiency in some of the plants i.e. Bablegi , Kentency, Albama.

OPPORTUNITY
Expansion of business. More association to the top brands. Merger & acquisition. Economies of scale. Setup plant in country having much resources and low labour cost. Access to latest technology.

THREAT
Competition from Superior, Sorbet, HayesLemmerz at global level. Location of the plant. Export and import policy. Licensing. Economic crisis. Availability of raw material, power, labour in local market.

EFE MATRIX
OPPRTUNITY
1. 2. 3. 4. 5. Expansion of business More association to the top brands Merger & acquisition Economies of scale Setup plant in country having much resources and low labor cost 6. Access to latest technology

WEIGHT
15% 8% 14% 10% 12% 5%

RATING
4 3 1 1 2 3

WEIGHTED SCORE
0.60 0.24 0.14 0.10 0.24 0.15

THREAT
1. Competition from Superior, Sorbet, HayesLemmerz at global level 2. Location of the plant 3. Export and import policy 4. Licensing 5. Economic crisis 6. Availability of raw material, power, labor in local market
Poor(1), below average(2), above average(3), superior(4) 11% 6% 2% 4% 10% 3% 4 1 3 3 2 4 0.44 0.06 0.06 0.12 0.20 0.12

TOTAL WEIGHTED SCORE

100%

2.47

CHALLENGES
Corporate expansion. Location of the plants. Mergers and acquisition. Sources of finance. Import and export policy. Competitive strategies for foreign market. Utilization of all the plants efficiently.

PROBLEMS
Interaction between the national and foreign environments are complex. Coordination between different culture of employees are difficult. No clear reporting lines to the management. Faces extreme competition on global level. Personality conflict between the heads. Location of the plants. Also facing less efficiency in some of the plants i.e Bablegi , Kentency, Albama .

SOLUTIONS
Proper training & development to the employees. Appointing skilled employee. Proper guideline given that who will report whom. Proper research should be done before building any plant. Restructuring sales and marketing. Preparing a formal strategic planning and annual budget concepts to be reviewed. Monthly directors meeting to review the income statements of the company. Focus on higher utilization of assets and working capital and restructuring the borrowing facility with banks. Operational control of manufacturing plants to be monitored from time to time.