CASE STUDY: VICTORIA HEAVY EQUIPMENT LIMITED

SUBMITTED BY:

HIMANSHU SHARMA

RAMAN KUMAR

HARPREET SINGH

KAMRUL AHSAN

INTRODUCTIONVictoria Heavy Equipment Limited was established in 1917 in Victoria, British Colurabia to produce horse drawn log skidders for the forest industry. The young firm showed a flair for product innovation, pioneering the development of motorized skidders and later after diversifying into a crane business, producing the country’s first commercially successful hydraulic cranes. The Brain Walters Sr. was the chairman and the founding man of the company. The chairman paid close attention to the crane business and in 1977 he decided that victoria would focus on cranes and will go exclusively in the international market.

CONTINUED:At the time Brain Walters Sr. retirement in 1990,it was clear that crane business has been a good one. The company’s sales and profit were high and victoria cranes were well in the exports and international business also. After his retirement in 1990, his brother James Walter succeeded the company and exercise his personal control over the company’s operations. Victoria was continuously increrasing it’s position in market. But in time as the load was continuously growing James health began to fail and the company’s general manager John Rivers was given responsibility to handle company’s operation. As James walter suffered a heart attack his brother Brain walter’s took over the company’s U.S. operations and John Rivers was doing work with him.

CONTINUEDWhen Brain Walter’s took responsibility for U.S. operation the firm’s distributor was selling only 30 -40 cranes per year. But other companies were selling more than victoria 150 cranes in a year. As others were selling more than him he quickly cancel all the existing in dealerships as the dealer’s were not selling more so that he could again form hi organization structure so as to beat other player’s in the market. As he changed the strategy other companies understood that he wanted to gain a foot hold and a solid reputation in U.S. market.

VICTORIA IN EARLY 2000’S

Victoria entered the early 2000’s with the sales of approximately $75 million and by 2007 , partly as a result of opening a new plant in California had succeeded in doing this figure. Profits reached their highest level ever in 2005, but declined some what over the next two years costs rose and rate of sales growth slowed.

PRODUCT LINE OF VICTORIA HEAVY EQUIPMENT LIMITED

THE CRANES PRODUCED BY VICTORIA LIMTED

LTM – 1000 : Five basics Sizes, Averaging $750000, Custom made.

Delivery with in 60 days.

LTM- 1000 A-100: 70 tonnes capacity, Load lifting upto 61 metres, More powerful.

MARKETS:There were two important segments in the crane market:- Custom built cranes And Standard cranes. The company was in both the cranes manufacturing. Two important markets of victoria were United States And Canada. The U.S. market was approximately $ 630 million and share of victoria was 15%. In canadian market victoria share was 60% but it was small in revenues only $66 million. The squamish plant producin about 150 cranes were supplied both in canada and united states.

PRIMARY CONSUMERS:The primary consumers in the mobile crane industry were contractors. As the victoria’s competitior Washington cranes supplied cranes in time and it’s service was good and in time spare parts victoria was tha not good. So if cranes were not delivered at right time the contractors would lost the contracts and no contractor will like this. As victoria prices were high than the washington cranes so contractors were preffering washington cranes. So for this victoria reduced it’s prices but still didn’t do well in the market.

DIVIDING MARKETING REGIONS:Victoria divided the world into eight marketing regions. The firm carried out little controversial advertising , but did paricicpate frequently at equipment trade shows. One of the company’s most effective selling tools was it’s ability to fly in prospective customers from all over the world in walter’s executive jet.

Victoria believed that the combination of it’s integrated plant produced a convinced customer. There were over 14 such visits to the British Columbia plant in 2007, including delegations from China, Korea, France And Turkey.

COMPETITORS:As the world’s second largest producer of cranes , Victoria faced competition from 5 MAJOR Crane producer which were more larger and diversified.

1.Washington crane of U.S.

2.Texas Star of Mexico.

3.Toshio of Japan

4.Sato of Japan

The major competitors of Victoria were more diversified and were having more market share than victoria but victoria was in number two.

ORGANIZATION STRUCTURE:

As the problems had ended Brian Walters semi retirement and brought him back into the firm full time. Although sales were growing but the company system was not good. As the system of the company was totally centralized so the development of company was not growing. The root cause was centralization as most workers directly report to the General Manager John Rivers.

The walter’s thought that if we need to grow more we have to change this system.

PROBLEMS IN ORGANIZATION STRUCTURE:As walter’s recognised that due to centralization company was not growing. The staff groups were not working. River’s had been unable to accept the redistribution of power and resigned. There was civil war in the company. Politics and factional disputes were the rule rather than exception. Line managers were upset by the intervention of the staff VPs of employee relations, Manufacturing, and marketing. Staff personnel, on the other hand, were upset by ‘poor’ line decisions.

ORGANIZATION MAJOR CENTRES:

The new organization contained seven major centres for performance measurement purpose:1.Engineering( R&D)2. International Marketing.3.Corporte Staff.Major profit centres were:1.Crane Corp.2.Victco Ltd.3.Craneco.4.Victoria owned Canadian sales .

CHANGE IN COMPANY’S PRESIDENTBy mid 2007 Brian Walter’s had resigned and Michael Carter a long time employee close to retirement, was aked to become the president of the company and become the president and handle company’s operations.

The new president decided to change the designs of the cranes with the help of R&D centre. As the design was new but it was not up to expectations of the walter’s so there was again a conflict between the company chairman and president.

CONTINUED:As there was a conflict in between the president and the chair man the whole company was in a conflict. First of all the centralized system. As the system was removed more an more were resigning from the company. As they all wanted the autonomy power as they don’t want decisions to be taken by small managers rather than by top managers. The executive thought that the structure was not appropriate As some one put in : The semi independence of the operating companies and the lack of real leader ha led company in poor coordination and low market share as because of internal problems.

STRATEGIC DECISION AND IMPLEMENTATION PROCESS:

The effective strategy implementation at Victoria Heavy Equipment Limited is predicated on the assumption that functional areas within the firm have basic understanding of the strategy. Termed strategic consensus, concept refer to extent to which Victoria Heavy Equipment Limited perception converge on shared understanding of strategic priorities. The Victoria Heavy Equipment Limited performance implication of communication and reaffirm the important roles that frequent communication and shared understanding play in implementation process. Specifically, strengths and opportunities are frequent, strategic consensus at Victoria Heavy Equipment Limited is enhanced and strategic performance improve as well as growth in net revenues. Victoria Heavy Equipment Limited is rewarded with higher levels of marketing forces and strategic performance.

SWOT ANALYSIS:STRENGHTS:

Operating in a global environment around the globe Victoria Heavy Equipment Limited operate well in countries as Victoria Heavy Equipment Limited performance is highly influenced by the political and legislative conditions of countries like in Europe.  For Victoria Heavy Equipment Limitedlegislation, the government encourages providing mix of job opportunities from flexible paid jobs to highly skilled, higher paid jobs (Balchin, 2004).Victoria Heavy Equipment Limited understand that business has great impact on jobs and people factors being in and labor intensive sector and employs large number of workers offering high level of loyalty and therefore represents desirable employees.

WEAKNESSES:One of the influential factors on the economy is high unemployment levels, which decreases the effective demand for many goods, adversely affecting the demand required to produce such goods. These economic factors are largely outside the control of the company, but their effects on performance and the marketing mix can be profound, expected to contribute greater amounts to Honda's profits over the next few years. Victoria Heavy Equipment Limited are affected by any slowdown in construction market and be exposed to market concentration risks. Some government legislation and policies have impact on performance of Victoria Heavy Equipment Limited, such as demanding payments from suppliers and changing agreed prices retrospectively 

OPPORTUNITIES:Several trends indicate that Victoria Heavy Equipment Limited have moved toward variety of social changes. Victoria Heavy Equipment Limitedincreased the amount of car manufactured items available. Demographic changes such as selling population, to focus on added value products and services and focus is one key to the business, supply chain and operational improvement at Victoria Heavy Equipment Limited . The type of goods and services demanded by consumers is the function of Victoria Heavy Equipment Limited social conditioning as well as consequent attitude and beliefs as Victoria Heavy Equipment Limited is aware of business issues that are always changing.  Technology at Victoria Heavy Equipment Limited is macro oriented environment variable which has influenced the development of Victoria Heavy Equipment Limited products and services quality. 

THREATS:During the year 2003, there has been pressure on Victoria Heavy Equipment Limited and managers to acknowledge full responsibility to society, and act in ways as to which Victoria Heavy Equipment Limited benefits in the society are known. The societal issue threatening Victoria Heavy Equipment Limitedhas been environmental issues, key area to act in social manner, by recognizing broad ethical standing. Victoria Heavy Equipment Limited social responsibility is concerned with ways in which there exceed to obligation of stakeholders specified through regulation and corporate governance .