Group Discussion

Introduction of
Group Discussion innovation

Concepts

eBook 01
 Table of Contents

Chapter Topic Page

No. No.
1 Group Discussion 1-2
1.1 Introduction
1.2 GD Process
1.3 Significance of Group Discussion
2 Skills Evaluated in a Group Discussion 3
3 Different roles in a Group Discussion 7
4 Types of GD Topics 9
5 How to Handle GD Topics 11-18
5.1 Content Generation Techniques for
Factual Topics
5.2 POPBEANS Technique for Abstract
Topics
5.3 Action Plan for Case Study
6 Sample GD 19
Sample Case Discussion 30
Practice Case Studies 45
 Group Discussion

1.1 Introduction
Group discussion or GD is an integral part of business
environment and hence carries significant weight in
selection process of B-schools. It is a tool used by the
panel to gauge whether the candidate possesses the
desired personality traits.

Group discussion may be defined as a methodical and

focused interactive process for the exchange of ideas,
thoughts and feelings. In a group discussion, the
participants are generally made to sit in a semi-circle so
that they face each other while expressing their views on
any given topic/issue/problem.

1.2 GD Process
There are usually 7-12 participants to which a topic/case
is given. Candidates are given 2 minutes to think and 15-
25 minutes for discussion. There may be no set rules
while the evaluators/panel simply observe and may
intervene in between the discussion.

The primary objective for the candidates is to analyze the

topic, break it into relevant heads and get on with the
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discussion in a coherent manner with the ultimate
objective of reaching a consensus or a solution.

1.3 Significance of Group Discussion

A GD round is ideally conducted in order to understand
interpersonal skills of candidates. Since group
discussions in an interview involve discussing topics
with individuals you have never interacted with before,
the panel may judge you upon your comfort in being able
to put across your point and your ability to lead a
discussion. This will allow them to assess your capability
in terms of being part of or lead a team in the
organization. It also portrays to the interviewer a side of
your attitude which you might probably display in a
group/team. This carries significance because business
management in its essence is a group activity and
working with groups is a key to success of a manager.
A GD also sheds light on your listening skills, attitude
towards team members, creative thinking, humility and
communication skills among others.

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 Skills Evaluated in a Group Discussion

A GD is conducted to assess you on a wide skill set. Here

are some of the important personality traits and skills
that a candidate should possess to perform well in a GD:

Subject Knowledge: This may reflect on your intelligence

or general awareness. Since a topic may be from any
field, a candidate’s intelligent thoughts on the same
reflect how well read and aware they are. Knowledge is a
sharp differentiator and helps you to leverage a strong
competitive advantage.

It is important to keep yourself updated on current

events, national and international affairs, burning social
and economical topics, scientific and environmental
issues, key controversial topics etc. to prepare for Group
Discussions. The uniqueness of your ideas, your
knowledge, your initiative and your creative approach to
the topic or case may contribute to your success in the
group discussion.

Problem solving skills are essential and therefore do not

hesitate to give solutions. Your approach to the case
study will be observed keenly by the evaluators.
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Communication Skills: It is rightly said that without
means to communicate or express, knowledge is of no
use. A right balance of speaking and listening skills is
essential to ace a group discussion. Your
communication skills are generally evaluated on the
basis of following parameters:

1. Clarity of voice/Voice modulation

2. Command over language/wit & humor
3. Assertiveness

Further, in order to be effective in a discussion, you have

to communicate well with the group both verbally and
non-verbally.

For verbal communication, you should speak confidently

in a measured tone and pace. You should speak
articulate your thoughts and speak fluently, coherently
and with good command on the language.

For non-verbal communication, the emphasis shifts on

eye contact with the group members, body posture while
sitting and hand movements. Facial expressions also
reflect on your composure.

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Leadership Skills: The success of a team largely depends
on its leader. The same applies to a Group Discussion. A
natural leader may be able to take charge of the
discussion to take it to a conclusion by the end. The
group may accept a leader who takes initiative and is
assertive, objective, patient, persuasive and good
conversationalist. A leader may be able to define the key
issues of a topic for discussion at the beginning, redirect
discussion at opportune stages and pacify aggressive
members among other things.

Taking initiative is indicative of your ability to impart

direction to the group and define the key issue(s) along
which the discussion has to progress. The three "Cs"
which rank you high on this parameter are clarity (the
main points to be discussed), content (the vertical depth
in each point) and confidence.

To be ready to start a discussion, you may consider “Key

word approach” to start defining the dominant words in
the topic. This helps you chart a discussion path and
guide the team members. For example, given a topic like
“Should National Anthem be made compulsory for all
entertainment events”; the key words may be identified
as “National Anthem”, “Compulsory” and “Entertainment

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Events”. This may help you in forming an objective
discussion path.

Logical Ability/Analytical Skills: This indicates your

ability to effectively flowchart your thought process and
analyze the topic in a comprehensive manner. It reflects
your ability to construct logical arguments and structure
the discussion in a streamlined manner, avoiding random
forays.

Lateral Thinking: This reflects your ability to think off the

feet and contribute on a creative and unorthodox
tangent. It is even more relevant for an abstract topic,
where the scope to view the topic from an avant-garde
angle is proportionately more (e.g. in a topic like "red and
blue", somebody who translates this into a coke (red) and
pepsi (blue) warfare or discuss the marketing strategies
of kingfisher (red) and jet (blue) or harp on the gender
differences as mentioned in John Gray's "Men are from
Mars (red) and women are from Venus (blue)", will
definitely stand apart.)

Team Management & Group Dynamics: Candidates

participating in GD are evaluated on their ability to work
in a team. Corporate world is all about working in teams

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and hence it is important for you to demonstrate the skill
to strike a balance between individual excellence and
group performance. A person scoring high on this
parameter will be more suitable to work in groups and
hence contribute effectively to organizations.

In case of a GD, your group behavior is reflected in your

ability to interact with the other members of the group.
There may be several roles in a GD and you may
demonstrate any one or more to highlight your team
dynamics.

Different roles in a Group Discussion

Generally, candidates assume different roles in Group

Discussion to highlight themselves in the process. Some
of these roles are desirable or neutral while others are
undesirable. Playing a desirable role in GD will definitely
fetch you a good score. The roles are identified as below:

1. Initiator (desirable role): Defines the problem to

start the discussion; lays out suggested path
2. Information or Opinion seekers (neutral role):
Request facts or suggestions and ideas from other

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 team members when faced with a problem or
decision making situation
3. Fault Finders (undesirable role): Intentionally find
fault in everything that the other members are
saying
4. Followers (undesirable role): Tend to agree with
other’s views as a routine by nodding their heads
5. Encouragers (desirable role): Warm and responsive
to others; accept others’ contributions
6. Aggressive (undesirable role): Easily get annoyed
and get antagonistic at times
7. Dominators (undesirable role): Assert authority to
manipulate group, interrupt contribution of others
8. Indecisive (undesirable role): Have a fickle mind
and sometimes contradict own words and
statements
9. Harmonizer (desirable role): Contribute in releasing
tension by finding a middle way at difficult times
10. Audience (undesirable role): Do not have their own
substantial views and opinions
11. Summarizer (desirable role): Put together all the
good ideas during discussion to summarize and
suggest an acceptable solution to the group. Need
good listening skills for this.

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 Types of GD Topics

Group Discussions are generally based on variety of

topics which can be broadly classified into three types.

1. Factual
These topics are based on static or dynamic
components of the environment such as social, political,
economical, etc. These may be current, i.e. they may
have been in the news lately, or could be unbound by
time. The objective of these topics is to check your
general knowledge, your ability to analyze the events and
sensitivity towards them.

Generally, the factual topics may be from the following

areas- social, political, economics, education, sports, IT,
environment, national & international events etc. Within
Factual, we may further classify the topics as the
following two types:

Factual Generic: These topics require only a basic level

of awareness with respect to various segments of our
environment. They test you more on interpersonal skills,
behavior and your ability to generate or add on to points
under discussion.
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Examples: Cricket as a religion in India, Which is better:
Nuclear family or joint family?

Factual Specific: These topics assess you on the specific

challenges in gathering and analyzing information. In
specific topics, mere awareness of the news may not be
enough; a thorough understanding of the topic is
generally required.
Examples: WTO and its impact on Indian Economy, GAAR

2. Abstract
These topics assess your perception and interpretation
on wide-ranging subjects. The way you look at the topic
decides your subsequent participation and performance
in a GD. The challenge for the person starting the
discussion may be to put forth multiple inferences from
the abstract topic and then suggest a discussion on
some of the readily acceptable ones to the group. The
ability to generate new or creative ideas and ability to
add relevance to an otherwise abstract topic are crucial
to do well such kind of GDs.

Examples of Abstract topics: Smart work v/s Hard work,

Modernization is not westernization, Red, Borderless
world – a myth/reality? etc.

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3. Case Study
Sometimes, the candidates are given small case studies
instead of general topics. This idea may be to evaluate
candidates basis their perspective, rational thinking and
problem solving attitude. This also eliminates much of
subjectivity as the case study material is given on the
spot and hence requires no prior knowledge.

How to Handle GD Topics

Since there is no syllabus for a Group Discussion, the

only way to be prepared is to make sure you are well
read. However, there are techniques to better understand
the topics and manage discussions.

1. Factual Topics
The first step towards approaching factual topics is to
look at the topic from multiple perspectives. Try to get
the reasons behind the topic/issue. This would help in
covering more areas of the topic. It is highly
recommended that one should not take a pre-mediated
stand before the start of the topic, as it may restrict one
to contribute new ideas to the topic and also the
discussion becomes more of a debate.

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5.1 Content Generation Techniques for Factual Topics

For content generation, two techniques are advised

below:
a) 5W & H Brainstorming: You may evaluate the GD
topic with this technique by answering the 5Ws
(Who, What, Where, When, Why) and 1H (How). This
helps in basic information gathering to better
structure the discussion by asking basic questions
about a problem or an issue.

For example: Is Reservation required in Education

Institutes and Job?
 Who – Who needs reservation? Who is opposing it?
Who is benefitting?
 What – What is the concept/purpose of
reservation? What is the problem in
implementation?
 When – When did it start? Till what time is it
proposed to continue?
 Where – Where is reservation implemented? Where
is it required?
 Why – Why it should or should not be there? Why it
has become a topic of national importance?

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  How – How can it be restructured to address all
the concerns?
b) SPHELTIR Technique: This technique allows to
view a topic from different angles and gather
content for discussion. This may allow you to
source some new points and gain an advantage in
discussion.

For Example: Is Reservation required in Education

Institutes and Job?
 Social- Untouchability, years of oppression,
 Political- Caste based vote-bank politics, women
vote bank
 Historical- Genesis of caste system in India, any
timelines set by constitution
 Economic- Upliftment of poor, impact on economy,
creamy layer segment
 Legal- Indian Constitution, Right to equality (Art.
14)
 Technological- Impact on quality of education,
research etc
 International- Is reservation making India less
competitive in world? Similar policy elsewhere in
world
 Religion- Reservations for Minorities

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2. Abstract Topics

Abstract topics open up a world of possibilities and

hence it is up to the interpretation and acceptability of a
suitable definition by the group to begin the discussion.
Here, the initiator has a responsibility to try and win over
the others with his/her line of thinking. You may consider
following to interpret the topic:

5.2 POPBEANS Technique for Abstract Topics

The content generation for abstract topics may be
generated through association to the following aspects:
POPBEANS: People, Objects, Places, Beliefs, Events,
Actions, Nature, Science

For example: If the topic given for discussion is “Black”

It may be associated with different aspects as advised
below:

People – Black people

Places – Coal mines
Beliefs – Association with color black in cultural settings
Events – Black Death has been used for incidence of
plague, Black Monday for stock market crash

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Actions - Aztecs considered black as a symbol of war
and used it signify battle
Nature: Black clouds signify rain, Night
Science – Black color absorbs radiation

3. Case Study
The discussions around case study should be very
specific to the problem at hand. It is important to
evaluate the issues and find suitable solutions with the
objective of achieving a common ground by the end of
the allotted time. You may approach a case study
discussion in the following manner:

5.3 Action Plan for Case Study

The following action plan should enable you to sail your
way past the case study with ease:

 Situation/Context Analysis: The first step in a case

analysis is to go over the case line-by-line and jot
down the relevant points, facts and data. The aim
of this exercise is to capture the crux of the case in
brief. Both the internal as well as the external
factors relevant to the case should be elucidated.
This analysis provides a shape for things to come

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 in further analysis. The factors external to a case ,
say, related to an organization would comprise
things like level of competition, market share, raw
material prices, tight labour market conditions,
price-cutting, customer preferences, etc. The
factors internal to the organization comprise
mainly of its labour policies, dispute-redressal
systems, project approval schemes, marketing
strategy, capacity expansions, etc.

 The 'PACER' format for Case Analysis: This

standard format is applicable to most of the case
studies. Some minor variations might be needed
depending on specific situations. It might not
always be possible to fit the entire format to a
specific case; however, an attempt should be made
to incorporate as much as possible. It usually
helps to write down the format headings on a sheet
of paper and then fill in the details accordingly.

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 P- Problem Definition: The problem should
ideally be defined in a crisp, single line,
incorporating the most important decision issue
to be solved in the case. To have a better grasp
of the problem, being quantitative at this stage
helps. An important thing to remember is not to
mistake the symptoms for the root problem. For
example, a falling market share or a decline in
sales is, invariably, a symptom while the real
problem may lie with the nature of the industry
or the quality of the product.
 Alternatives Generation: The next step is to list
down the various alternatives to resolve the
problem and achieve the objectives set out in
the case study. At this stage, all the alternatives
that come to mind should be listed even if an
alternative provides only a part solution to the
problem at hand. Sometimes, this part solution
can be later combined with some other
alternative to provide a complete solution.
 Criteria for evaluation of alternatives: List down
the parameters that are important to the
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 solution of the problem at hand. These
parameters can be profitability, growth in
market share, image, sales, etc.
 E- Evaluate the alternatives: This stage uses the
criteria to evaluate the various alternatives
generated earlier. The positive and negative
aspects of each alternative are to be kept in
mind while evaluating the alternatives.
 R- Recommendations: At the end of the
analysis, provide recommendations to resolve
the situation. Also look at short-term as well as
long-term implications of the recommendations
in solving the problem.

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 Sample GD

1. Are Reservations In Jobs Justified?

Points Against:

The very idea of providing reservations to any segment

of the population is based on negatives. It allows for
preferential treatment without a thought being given to
the caliber or eligibility aspect. Just about any individual
from the reserved castes scheduled castes, scheduled
tribes and backward castes can get a Government job or
admission in an educational institution on a much lower
eligibility criterion for percentage of marks and a higher
age. This lowering of standard breeds inefficiency,
discourages the really meritorious and negates the very
concept of equality of opportunity. 49.5 percent
reservation means that half the administrative machinery
has inbuilt inefficiency, while Article 335 of our
Constitution lays down that reservation should be
consistent with the maintenance of efficiency of
administration.

By rejecting people of higher competence from general

category and accepting the reserved category with lower
competence, the reservation policy acts as a disincentive
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to the meritorious and more capable. Thus inhibits
healthy growth or development of an individual. Such
brilliant students, victims of unfair favouritism of our
reservation policy, get frustrated and leave for foreign
countries which favour merit alone. This brain-drain
adversely affects the intellectual capability of our
country. Not only this, the system of reservation, says
Justice Chinnappa Reddy, has in many cases
paradoxically generated “a spirit of self-denigration” -
each community of caste competing to be more
backward than others.

Private enterprises, being interested in efficiency alone,

do not follow the retrograde policy of reservation. Their
sole criterion of selecting people is merit and ability to
deliver the goods. This is why they are doing extremely
well. But, of late, demands for introducing reservations in
private sector has been raised in some influential
quarters. Should this come about, God save whatever
efficiency we still have in at least a few segments of our
administration and economy.

It is a shame that in this computer and space age we, by

institutionalizing our reservation policy, admit that we
are a decadent society based on caste. What image does

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it convey in the international field? Can casteism be done
away with by having caste based reservations? Should
we not follow economic criterion instead so that only a
few families do not benefit perpetually by this unfair
policy? The criterion of creamy layer is patently humbug,
for it is so applied that even those with sufficient means
and standing in society succeed in getting the benefit of
reservation. All this breeds discontent and occasions
social unrest. Therefore, the sooner we do away with
reservations the better for the nation.

Reservations were supposed to be an interim

arrangement for 10 years as per our constitution so that
the low caste people could come up socially. But
encouraged by our shortsighted politicians with their
sights fixed on this sizeable vote-bank, its beneficiaries
have formed it into a habit to claim reservation as a
matter of right. Instead of striving hard to excel, they
seek the shortcut of reservations and the vested political
interests perpetuate it. This vicious circle can be broken
by the Government by having a firm cutoff year for
reservations and spreading education among the
depressed classes on a priority basis. But can we do so
by assigning low priority to education with a mere 4
percent budget allocation for it?

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Instead of facilitating spatial growth of education and
development among the depressed classes, reservations
have spawned a new elitist group a mere 5 percent
among them, which has cornered all the benefits meant
for 22.5 per cent. The same is going to be the fate of the
most backwards among backward classes.

A further reservation of 27 percent to the other backward

classes has aggravated the employment problem and
has formed caste animosities and hatred. This
retrograde step is not going to do any good to the nation.
In the name of social justice, an injustice of the worst
type is being perpetrated because of the accident of birth
in a higher caste. Moreover, the argument that since the
new reserved categories have suffered injustice through
centuries at the hands of upper caste people, the latter
should atone for that, is beyond comprehension. How
could a young boy or girl be held responsible and guilty
for an alleged crime supposed to have been committed
by his or her forefathers? Two wrongs do not make one
right?

The only hope of the children of ordinary families for a

better future is through education and open-to-all
competitive examination. This has been shattered by the

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additional 27 per cent job quota for other Backward
Class (BC) candidates following acceptance of the
Mandal Commission Report. That is why they resorted to
agitation and even self-immolation, but to no avail. It has
further fractured our caste-ridden society. The author of
the Mandal Commission Report himself admits that the
system followed by the Commission in compiling the list
is unscientific.

It is really damaging to the nation as a whole that instead

of tackling our population problem largely due to the
illiterate, backward and superstitious people of backward
classes, we give them the lollipop of reservations! In
spite of their wretchedness and poverty they produce
more children and make the life of these innocents more
miserable than theirs. Therefore, if at all reservations are
to be given they must be linked with adoption of family-
planning methods. This will prove to be an effective
deterrent against population explosion and will also
benefit these classes themselves.

Points in favour:
The obnoxious caste system might have served some
purpose when it originated centuries ago but now it is a
hindrance to our social progress. The claim of the

23
apologists of caste system that caste was changeable
according to merit and competence of the individual and
was not strictly hereditary is disapproved by the story of
Karna in the Mahabharat who inspite of being equal to or
even more in valour, skill, warfare and charity than the
Kshatriyas was made to suffer humiliation for being a
Sut Putra (Son of a Shudra) till his death. Again we have
the story of Eklavya, a low-born. Dronacharya, the
teacher of Arjun, the great archer of the epic Mahabharat,
demanded his thumb as Gurudakshina (Fee), even
though he had refused to teach him archery fearing that
he might surpass. Thus centuries of oppression and
untouchability cannot be undone in just a few years of
honest and sincere efforts. Therefore, the makers of our
Constitution stipulated reservation for scheduled castes
and tribes for a period of ten years but it had to be
extended again and again because they could not come
up in such a short time. It is only fair and just to reserve
some seats for these deprived and oppressed people,
who could not enter even temples and educational
institutions. The question of any inefficiency creeping in
or harm or injustice being done to others does not arise
because one, these classes too must fulfill certain basic
minimum educational or technical qualification, and, too,
some states like Tamil Nadu, Andhra Pradesh and

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Karnataka have over 50 percent reservations yet their
efficiency is second to none. Again, no hue and cry of
lowering efficiency or standards is raised when a son of
a rich father gets admission in a technical or
professional course in spite of lower marks. Then why
these double standards?

Our constitution lays down equality among equals and

not among un equals. Through the policy of reservation,
our depressed and backward class people are sought to
be brought to the status of equality with others. It is
really shameful for a modern civilized society like ours
that even after 55 years of independence, a scheduled
caste barat party is not allowed to go through a Rajput
dominated village near Agra, young lovers belonging to
higher lower caste are hanged in village panchayats in
broad daylight without a whimper of protest! Hence,
reservation is an affirmative action to bring about socio-
economic betterment of these classes and must,
therefore, continue.

Being a Welfare State, we owe it to the weaker sections

to ensure their well-being through governmental action.
Their economic backwardness, poor state of education
and social deprivation are all due to our society which

25
even at this late hour should not prevent their upliftment.
It is because of this oppressive, humiliating and
torturous caste system and resultant deprivation that
has led thousands of scheduled castes people (From Dr.
Ambedkar to Ramraj now Uditraj) to get converted en
masse into other religions. Resort to such conversions
as a means of escape from caste-based oppression is a
shame on the entire society.

If the Brahmins can work as pujaris and act as agents of

God for all auspicious occasions like births, marriages,
deaths, etc. as a birthright, why should the Hindu society
not view some reservation for backward class people
with charity and generosity.

Even now the total reservation is only 49.5 percent for

about 76.5 per cent of the population while over 50 per
cent seats are available for about 23.5 per cent
candidates of higher castes. Besides, true social justice
can come with a price and reservations are the prices
that are privileged classes should be willing to pay so
that the accident of birth is no more used against their
lowborn brethren.

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Mahatma Gandhi once said, “Swaraj for me means
freedom for the meanest for our countrymen. I am not
interested in freeing India merely from the English yoke. I
am bent upon freeing India from any yoke whatsoever.” It
goes to prove that Father of the Nation would ensure
individual freedom for one and all. But can such freedom
be possible for the exploited and oppressed weaker
sections?

The depressed and backward class people cannot fare

well in an open competition because of centuries of
suppression and deprivation, and, hence, they cannot
develop themselves. In this modern age of knowledge
explosion through mass media, they may get alienated
from the main stream of our society. This can generate
dangerous consequences for the nation as a whole.
Therefore, to avoid such an eventuality, we should accept
our downtrodden brethren with an open arm and give
them a helping hand in realizing their potential. This way
only we can achieve our common destiny, for didn't our
ancient seers proclaimed “Sarve Bhawantu Sukhinah ma
Kashchid duhkh bhag bhavet”. (Let all be happy, let no
one be miserable).

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Conclusion:
Inequalities will always exist. Society will always try to
set right these inequalities in some ways. Policy checks
here should be to see if the solution is working in the
long term or not.

2. Should we allow incurably diseased persons to live or

not?
Points In Favour:
If we feel sad to kill even an animal or a bird, how can our
conscience allow us to kill a fellow human being just
because he is incurably ill? Moreover he has done no
harm to society and his illness is not because of his
fault. Therefore, we must provide him proper treatment
and allow him to live as long as nature has willed it.

God has gifted us life. So, he alone has the right to take it
back. No human being has a right to interfere in His
scheme of things. Once on this earth, every man has a
right to live as long as God does not want him to die.
Therefore, the reasoning that just because a man is
suffering from an incurable disease, he should be put to
death is untenable and beyond reason.

28
It is not always the case that incurably diseased persons
spread contagious diseases as some might argue. Even
in those rare cases where it may be true, these persons
are not real health hazards because it is medically
established now that all incurable diseases are not
contagious. However, as a precautionary measure, we
should open separate hospitals or isolation wards for
persons suffering from incurable contagious diseases
and thus quarantine them.

Killing an incurably diseased person will put an end to

research work in medical science. Even otherwise,
suffering people have been the subject of research work
quite less. Now new vistas of progress have been opened
in medical sciences and alternative medicine like
Acupuncture, Acupressure, Reiki Pranik healing, Touch
therapy, Herbal therapy, Diet therapy, etc. hold a ray of
hope for the so called incurably diseased persons. So,
why snatch life from them?

Points against:
This world is governed by Darwin's survival of the fittest
principle. An incurably diseased person is weak and has
no value whatsoever to the society. Moreover, he has no

29
means to live. Therefore, it would be in the fitness of
things to kill him even against his wish.

An incurably diseased person is the cause of constant

worry to his family, his demands are unending and
notwithstanding the best possible attention, care and
treatment given to him, he always remains dissatisfied
and disgruntled. This adversely affects peace of mind
and comfort of the family members. Therefore, the best
way out of such a situation is to put an end to his life.
These days we are saddled with the responsibility of
reducing our burgeoning population. The many diseased
persons constitute a good part of it. Even otherwise their
contribution to society being nil and burden great, it
would be justified and reasonable not to allow them to
drag on their agonizing life.

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 Sample Case Discussion

1. Chemco Case

Started in 1965, ChemCo is a leading manufacturer of car

batteries in the U.K. market. Since then, it has been under
the charge of Mr. Jones, the founder-owner of the firm. In
1999, the company decided to go for a diversification by
expanding the product line. The new product was
batteries for fork-lift trucks. At the same time, Mr. Marek
was appointed the Senior Vice President of marketing in
the company. However, soon after its successful
diversification into fork-lift batteries, the sales in this
segment began dropping steadily. Mr. Marek wanted to
introduce some radical changes in the advertising and
branding of the new business but the proposal was
turned down by the old-fashioned Mr. Jones.
At this juncture in 2002, the firm is losing heavily in the
fork-lift batteries business and its market share in car
batteries is also on a decline. Mr. Jones has asked Mr.
Marek to show a turnaround in the company within a
year. What steps should Mr. Marek take to take the
company out of its troubles?

31
Some of the facts on the case are:

 ChemCo is a quality leader in the U.K. car batteries

market.
 Customer battery purchases in the automobile
market are highly seasonal.
 The fork-lift business was added to utilize idle
capacity during periods of inactivity.
 This is a low-growth industry (1% annual growth
over the last two years)
 Large customers are sophisticated and buy based
on price and quality. Smaller customers buy solely
on price.
 There is a Spanish competitor in the market who
offers low priced batteries of inferior quality.

Situation Analysis:
Company
 Established player in car batteries
 Losing heavily in fork-lift truck batteries
 Old fashioned owner resistance to change

Competition
 Low priced competitors
 Foreign competitors gaining market share

32
Customers
 High quality product, but low end customers care
more about price than quality

Problem Definition:
 Mismanaged product diversification in a price
sensitive market

Alternatives:
 Alternative 1: Establish an Off-Brand for the fork-lift
business
 Alternative 2: Educate the customer market about
product quality
 Alternative 3: Exit the fork-lift battery business

Criteria for evaluation of alternatives:

 Establishing the firm's quality image
 Increase in market share
 Increase in sales
 Cost of the product

33
Evaluation of Alternatives:
Alternative 1
 Protect firm's quality image in the automobile
industry
 Redesigned product to reduce the cost of
manufacture
 Low price to enable it to compete with Spanish
producer

Alternative 2
 Make use of the quality leadership in car batteries
market
 Offer reliability testing, extended warranties etc. to
promote quality image
 Set higher prices to extract surplus from these
advantages

Alternative 3 and 4
 A passive strategy, not proactive

Recommendations:
Alternative 1 is recommended in this case. Since the firm
operates in an industry which has low growth, hence it
can expand market share and sales only by taking the
customers from other players. Hence, it needs to tackle

34
the Spanish competitor head-on by aggressively pricing
its product. At the same time, launching a low-priced
product under the same brand name erodes the high
quality image in the car batteries market. Hence, the best
option is to go for an off-brand to target the fork-lift
customers who are increasingly becoming price
sensitive. This will enable the company to ward off the
threat in short-term and build its position strongly in the
long-term.

2. Nakamura Lacquer Company

The Nakamura Lacquer Company (NLC) of Kyoto, Japan,
employed several thousand men and produced 500,000
pieces of lacquer tableware annually, with its
Chrysanthmum brand becoming Japan's best known and
bestselling brand. The annual profit from operations was
$250,000.

The market for lacquerware in Japan seemed to have

matured, with the production steady at 500,000 pieces a
year. NLC did practically no business outside Japan.
In May 2000, (much to your chagrin!) the ambitious and
dynamic, Mr. Nakamura (Chairman, NLC) received two
offers from American companies wishing to sell lacquer
ware in America.

35
The first offer was from the National China Company. It
was the largest manufacturer of good quality dinnerware
in the U.S., with their “Rose and Crown” brand accounting
for almost 30% of total sales. They were willing to give a
firm order for three years for annual purchases of
400,000 sets of lacquer dinnerware, delivered in Japan
and at 5% more than what the Japanese jobbers paid.
However, Nakamura would have to forego the
Chrysanthemum trademark to “Rose and Crown” and
also undertake not to sell lacquer ware to anyone else in
the U.S.

The second offer was from Sammelback, Sammelback

and Whittacker (henceforth SSW), Chicago, the largest
supplier of hotel and restaurant supplies in the U.S. They
perceived a U.S. market of 600,000 sets a year, expecting
it to go up to 2 million in around 5 years. Since the
Japanese government did not allow overseas
investment, SSW was willing to budget $1.5 million for
the next two years towards introduction and promotion.
Nakamura would sell his “Chrysanthemum” brand but
would have to give exclusive representation to SSW for
five years at standard commission rates and also forego
his profit margin toward paying back of the $ 1.5 million.

36
What should Mr. Nakamura do?

Situational Analysis:
 The Nakamura Lacquer Company: The Nakamura
Lacquer Company based in Kyoto, Japan was one
of the many small handicraft shops making
lacquerware for the daily table use of the Japanese
people.
 Mr. Nakamura- the personality: In 1948, a young
Mr. Nakamura took over his family business. He
saw an opportunity to cater to a new market of
America, i.e. GI's of the Occupation Army who had
begun to buy lacquer ware as souvenirs. However,
he realized that the traditional handicraft methods
were inadequate. He was an innovator and
introduced simple methods of processing and
inspection using machines. Four years later, when
the Occupation Army left in 1952, Nakamura
employed several thousand men, and produced
500,000 pieces of lacquers tableware each year for
the Japanese mass consumer market. The profit
from operations was $250,000.
 The Brand: Nakamura named his brand
“Chrysanthemum” after the national flower of
Japan, which showed his patriotic fervor. The

37
 brand became Japan's best known and best selling
brand, being synonymous with good quality, middle
class and dependability.
 The Market: The market for lacquerware in Japan
seems to have matured, with the production steady
at 500,000 pieces a year. Nakamura did practically
no business outside of Japan. However, early in
1960, when the American interest in Japanese
products began to grow, Nakamura received two
offers
 The Rose and Crown offer: The first offer was from
Mr. Phil Rose, V.P Marketing at the National China
Company. They were the largest manufacturer of
good quality dinnerware in the U.S., with their
“Rose and Crown” brand accounting for almost
30% of total sales. They were willing to give a firm
order for three eyes for annual purchases of
400,000 sets of lacquer dinnerware, delivered in
Japan and at 5% more than what the Japanese
jobbers paid. However, Nakamura would have to
forego the Chrysanthemum trademark to “Rose
and Crown” and also undertaken to sell lacquer
ware to anyone else the U.S. The offer promised
returns of $720,000 over three years (with net
returns of $83,000), but with little potential for the

38
 U.S. market on the Chrysanthemum brand beyond
that period.
 The Semmelback offer: The second offer was from
Mr. Walter Sammelback of Sammelback,
Sammelback and Whittacker, Chicago, the largest
supplier of hotel and restaurant supplies in the U.S.
They perceived a U.S. market of 600,000 sets a
year, expecting it to go up to 2 million in around 5
years. Since the Japanese government did not
allow overseas investment, Sammelback was
willing to budget $1.5 million. Although the offer
implied negative returns of $467,000 over the first
five years, the offer had the potential to give a $1
million profit if sales picked up as anticipated.
 Meeting the order: To meet the numbers
requirement of the orders, Nakamura would either
have to expand capacity or cut down on the
domestic market. If he chose to expand capacity,
the danger was of idle capacity in case the U.S.
market did not respond. If he cut down on the
domestic market, the danger was of losing out on a
well-established market. Nakamura could also
source part of the supply from other vendors.
However, this option would not find favor with
either of the American buyers since they had

39
 approached only Nakamura, realizing that he was
the best person to meet the order.

Decision problem: Whether to accept any of the two

offers and if yes, which one of the two and under what
terms of conditions?

Objectives:
Short Term:
 To expand into the U.S. market.
 To maintain and build upon their reputation of the
“Chrysanthemum” brand

Long term:
 To increase profit volumes by tapping the U.S.
market and as a result, increasing scale of
operations.
 To increase its share in the U.S. lacquerware
market.

Criteria: (In descending order of priority):

 Profit Maximization criterion: The most important
criterion in the long run is profit maximization.
 Risk criterion: Since the demand in the U.S. market
is not as much as in Japan.

40
  Brand identity criterion: Nakamura has
painstakingly built up a brand name in Japan. It is
desirable for him to compete in the U.S. market
under the same brand name
 Flexibility criterion: The chosen option should offer
Nakamura flexibility in maneuvering the terms and
conditions to his advantage. Additionally,
Nakamura should have bargaining power at the
time of renewal of the contract.
 Short term returns: Nakamura should receive some
returns on the investment he makes on the new
offers. However, this criterion may be
compromised in favor of profit maximization in the
long run.?

Options:
 Reject both: React both the offers and concentrate
on the domestic market
 Accept RC offer: Accept the Rose and Crown offer
and supply the offer by cutting down on supplies to
the domestic market or through capacity
expansion or both
 Accept SSW: offer; accept the SSW offer and meet
it through cutting down on supply to the domestic

41
 market or through capacity expansion or both.
Negotiate term of supply.M

Evaluation of Options:
 Reject both: This option would not meet the
primary criterion of profit maximization. Further,
the objective of growth would also not be met.
Hence, this option is rejected.
 Accept RC offer: The RC offer would assure net
returns of $283,000 over the next three yeas. It also
assures regular returns of $240,000 per year.
However, Nakamura would have no presence in the
U.S. with its Chrysanthemum brand name The RC
offer would entail capacity expansion, as it would
not be possible to siphon of 275,000 pieces from
the domestic market over three years without
adversely affecting operations there. At the end of
three years, Nakamura would have little bargaining
power with RC as it would have an excess capacity
of 275,000 pieces and excess labor which it would
want to utilize. In this sense the offer is risky.
Further, the offer is not flexible. Long-term profit
maximization is uncertain in this case a condition
that can be controlled in the SSW offer. Hence, this
offer is rejected.

42
  Accept SSW offer: The SSW offer does not assure
a firm order or any returns for the period of
contract. Although, in its present form the offer is
risky if the market in the U.S. does not pick up as
expected, the offer is flexible. If Nakamura were to
exhibit caution initially by supplying only 300,000
instead of the anticipated 600,000 pieces, it could
siphon off the 175,000 required from the domestic
market. If demand exists in the U.S., the capacity
can be expanded. With this offer, risk is minimized.
Further, it would be competing on its own brand
name. Distribution would be taken care of and
long-term profit maximization criterion would be
satisfied as this option has the potential of $1
million in profits per year. At the time of renewal of
the contract, Nakamura would have immense
bargaining power.

Recommendations:
 Negotiate terms of offer with SSW: The terms
would be that NLC would supply 300,000 pieces in
the first year. If market demand exists, NLC should
expand capacity to provide the expected demand.
 Action Plan: In the first phase, NLC would supply
SSW with 300,000 pieces. 125,000 of these would

43
 be obtained by utilizing excess capacity, while the
remaining would be obtained from the domestic
market. If the expected demand for lacquer ware
exists in the U.S., NLC would expand capacity to
meet the expected demand. The debt incurred
would be paid off by the fifth year.
 Contingency Plan: In case the demand is not as
expected in the first year, NLC should not service
the U.S. market and instead concentrate on
increasing penetration in the domestic market.

44
 Practice Case Studies

1. Mr. Secret Keeper is a Corporate Head (HR) in a

company. He is very nice and gets along well with
all people. People often consult him for help and
advice. One person (named “Mr. A”) approaches
him for a job because he is right now jobless. Mr.
Secret Keeper takes the guy's qualifications and
asks him to come after a week however, since no
job available. He keeps frequently postponing the
job offer. Mr. A keeps visiting the HR head, Mr.
Secret Keeper, often and becomes his close friend.
Then, one day, Mr. A confides with the HR Head “I
was in prison for 18 years for a crime that I had not
committed. With two years remaining of the
sentence, I ran away from jail. Even now, police is
in look out for me.” Mr. SecretKeeper tells the
person to go home and that he would give him a
job. However as soon as he leaves, Mr.
SecretKeeper calls up the police and gives the
details of Mr. A and asks them to arrest Mr. A.
Because of this betrayal of trust by the HR head,
people in the organisation have started losing faith
in him. A senior person in the office complains to
the VP that the Mr. Secret Keeper has “broken
45
 faith”, so others could not come to him.
Assume that you are the VP of the company. What
would you do about the situation?
2. Co. A is the manufacturer of large jet engines in the
U.S. with a 40% market share. The major
purchasers of jet engines are the commercial
airlines. There is one major U.S. competitor and a
potential Japanese competitor who will not be able
to enter the industry for another 10 years. The. U.S
competitor's prices are below Co. A's but it delivers
the engines in 3 months while Co. A does it in 2
months. Co. A is going into losses. What should
the higher management do?
3. A South India based food retailer is looking to
expand into North India. The retailer has 15%
market share in South India, with three major
competitors having 10-12% shares each. The rest
of industry is fragmented amongst smaller players.
Two of the competitors already have operations in
North India. Our company has no experience of
retailing n North India and a minimal knowledge of
the region. Should the company open stores in
North India too?
4. A lady by the name of Lata has been working in an
insurance company for the last 5 years, joins a fast

46
 moving consumer goods company. She is a very
bright prospect and does outstandingly well in her
training period of one year and her colleagues
during that period also vouch for that fact. After
one year of training, she is given charge of a small
territory in which she does very well and is again
praised by her colleagues and supervisors alike.
She is then given charge of a much larger territory
after a few months. Her supervisor after a time
complains to the senior management that Lata has
not been good at her job and is finding it difficult to
handle her customers. Even the person in charge
of overseeing Lata's training personally, reports
that she is not performing well. Lata in turn
complains that her job is going on perfectly well
and if there are any complaints it's because she is
being victimized in the male dominated
atmosphere. The matter is then reported to the
head office. What should head office do?
5. M. Soft is a software co. established 6 years ago
by PCC (a construction firm). PCC cannot give a
very high salary as it would not be consistent with
their other business. The ultimate aim of MSoft is
to enter the export market but in 6 years they do
well in the domestic market. MSoft decides to hire

47
 a firm SYSQS to start a training program and to
improve their business operations. SYSQS does a
good job and MSoft starts to reap the benefits in
the form of several prestigious projects. MSoft
employs 15 new people. Then in the middle of a
crucial project, two senior executives leave for
better remuneration. What should the GM of MSoft
do?
6. A fertilizer company, Pizza and Urea, is located
near a village, Payamudirsholai on the banks of
river Pamba. One day, the villagers find fish dying
due to fluid waste from the fertilizer plant. The
community makes a representation to the Govt.
through their local MLA and fishing being the main
source of income for these villagers, Govt. issues
an order whereby the fertilizer company is to be
closed down and they also have to pay
compensation to the villagers, while the fertilizer
company's contention is that it is not due to their
fault. The company manages to get a stay order on
the govt. ruling from the High Court. While, the
social activists go to Supreme Court and hope for
justice, common villagers suffer due to the death
of fish. Suggest a solution to the problem in the
case.

48
7. Over the past few years, a retail bank has moved
from 10 branches in one state to 100 branches in 8
states. All the branches are operated
autonomously and the company as a whole is
losing money. Specifically, the branches in four of
the backward areas are losing money. But,
government regulations state that it must have
some branches in backward areas too. In the past,
the bank has tried to mandate cost reductions and
had formed committees with representatives from
each branch, but to no avail. What should the bank
do now?
8. There is a private rail company 'Aage Nahin
Jayenge'. Its trains aren't running on time. So, there
is lot of criticism in newspapers. The manager
appoints a person as in-charge of a 'Punctuality
Cell' and gives him all the powers and asks him to
deliver the results. The person tries to coordinate
everything. Drivers who don't run the train on time
are asked to report to the manager. But the drivers
and station masters say that it’s not their fault. The
tracks are bad and motor engines used are quite
old. What is the manager supposed to do?
9. A student gets admission to a premier engineering
college securing a very high rank in the entrance

49
 test. However, his performance in the first year is
very bad and he fails in two subjects.
Simultaneously, a rumor starts floating around in
the engineering college that this student cheated in
the entrance test to secure very good marks. This
loss of repute for the examination procedures is
putting pressure on the Principal to quell the issue.
However, some students are demanding a high
level enquiry, which would lead to a high drop in
institute's reputation. What should the Principal of
the engineering college do?
10. Mr. A works in a multinational firm where he is
Senior Manager (Production). Recently, Ms. B was
appointed Vice President of the company, with Mr.
A reporting to Ms. B. Due to some problem in the
production line, Ms. B requests a late evening
meeting with Mr. A. When Mr. A goes for the
meeting, Ms. B makes some inappropriate
advances on him. Mr. A promptly reports the
matter to company HR manager. The HR manager
finds it hard to believe Mr. A's story and along with
Ms. B, accuses him of inappropriate conduct. The
matter has leaked to the press and is causing bad
publicity for the company. What should the
company do?

50