Hola Kola The Capital Budgeting Decision 5 Harvard Case Study Help

Home >> Hrm >> Hola Kola The Capital Budgeting Decision 5

Hola Kola The Capital Budgeting Decision 5 Case Study Solution & Analysis


Historically, the company's core customers include the Original Equipment Manufacturers (OEMs), which used to sell Hola Kola The Capital Budgeting Decision 5 Case Study Solution products withtheir own brand name. Its customer circle consists of Original Equipment Manufacturers (OEMs), who used to sell Corp items with their own brand name. He rearranged Company as an international brand and educated his divisional supervisors to understand marketing and its significance.

Issue Declaration

Organization's transition from an item based to a marketing company is not going as efficiently as planned.Overcoming the unwillingness of divisional supervisors to include marketing effectively is still a significant difficulty. Creating a consistent brand name identity throughout the whole world and using marketing techniques that finest fits the local culture is no easy task.
Executive Summary
Situational Analysis

Yun had a rather clear picture in his mind about how Hola Kola The Capital Budgeting Decision 5 Case Study Analysis can change from a low end to a high end product supplier. He knew that improvement can only be done through placing Company as a company using high-end items and this might only be done through high level of marketing.

In spite of having a clear vision about how to construct Business brand name, with a potential support of its executives, Yun faced numerous marketing difficulties in early years of its efforts.

Among the marketing difficulties for Yun was the perceptions of executives about the worth of marketing. They thought about marketing and selling as exact same tools and believed that quality products do not needed marketing for increasing sales. As their focus towards marketing was quite low in their previous service practices, and the present marketing requirement was excessive high, the gap was too wider and to fill this space with incorrect understandings about marketing was rather challenging for Yun.

As specified above, marketing focus was very low in previous practices, therefore there were no proper marketing budget plans for each of the item on the portfolio. There was no marketing preparation done for the existing products. Along with it the item range of the company was increasing with the ripening of brand-new product concepts by the R&D sector of Enterprise. Yun had a challenge to perform marketing preparation and to create marketing budgets for existing along with for brand-new items from the very start, and this would take a huge time.

A huge shift would be needed in existing marketing expenses to construct the Hola Kola The Capital Budgeting Decision 5 Case Study Help brand name. This would result in increased marketing expenditures for Enterprise and might disturb the administration regarding increased costs, as they were reluctant to marketing expenses previously and an abrupt big shiftwould make them disturb. This might result in declining executive assistance for global marketing. In this situation, Yun faces a challenge for justifying increased marketing expenses by demonstrating the long term worth of big marketing expenses.

Internal Analysis
SWOT Analysis

Business strengths lie in its big product portfolio. Organization has biggest number of patents in the industry with total variety of 15499 patents granted in United States( USP). Big amount of R&D costs has made it possible for the company to grow its product portfolio at a higher rate than its rivals. Hola Kola The Capital Budgeting Decision 5 Case Study Solution spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its total revenues.

Another strength of Hola Kola The Capital Budgeting Decision 5 Case Study Help is its ability to establish ingenious products at a continuous rate. It significant proves for the innovation and product designing of Business is that the company has received many awards for its development and product design.

Unlike Apple and other competitors, Business is focused on producing devices which can be quickly integrated with any type of open source Operating System (OS) and software. This supplies Organization an edge over Apple gadgets.
Porter's 5 Forces Analysis
Org's capability to produce luxury items at low cost of production is also one of the significant strength of Corp as it allows the business to record more market by supplying quality products with expense control.


Hola Kola The Capital Budgeting Decision 5 Case Study Analysis weaknesses are concealed in the business's reliance on outsourcing software for its devices due to business's failure in developing software, unlike Sony. Corporation also has low revenue margins as compare to Apple due to big distinction in the costs of Apple and Venture with a much lesser difference in quality. The diverse focus of the company due to a great deal of products in its portfolio, result in the less efficient production and make the business unable to charge greater prices like Apple. The company is likewise ineffective in managing its patents and frequently faces the problem of patent violation.


Opportunities for Hola Kola The Capital Budgeting Decision 5 Case Study Help lie in the growing Smartphone market and the business's effectiveness in the market. Company presently runs in about 80 nations and the business has an opportunity to increase its geographical growth by moving towards more emerging markets outside Asia.


The vibrant market environment of innovation market position an extreme danger on Org's survival and require the business to invest much of its revenues share on R&D in order to make it through in the long run. The market saturation in developed nations i.e. saturation of mobile company is also a huge risk for the business's growth in the presence of strong rivals like Apple.

4 P's of Marketing
Swot Analysis

Hola Kola The Capital Budgeting Decision 5 Case Study Solution uses quality items and has a quite abundant portfolio which caters to various sections. Most of the items are in the top three of their particular markets. LCD and mobile phones are the biggest products of Corp, whereas DRAM is also not far behind in comparison of them. Following is the line of product of Corp:

• Laptops.
• Cellphone.
• Ac system.
• Personal computers.
• Hard disks.
• Washer.
• Fridges.
• Electronic cameras.
• Microwaves.
• Flash memory.


Hola Kola The Capital Budgeting Decision 5 Case Study Analysis uses both market competitive and market skimming rates strategies for its wide range of products. In competitive prices it adjusts the price according to the competitors in order to gain advantage, whereas, it uses market skimming technique where the item has an included value and by selling a couple of items it can reach break-even.


It has one of the best supply chain networks, with retail suppliers, their own sole distributors, E commerce channels like Amazon and so on. All its items are timely supplied to the selling location/ delivered to the customers directly in case of online order.

Vrio Analysis
It uses both offline & online channels of promo to market their items. Paid item advertisements, social promotion and digital advertisements are utilizes to produce awareness about Org items.

Worth Chain Analysis.

It's an analytical structure for recognizing company activities that include worth or competitive benefit for the business.

Incoming Logistics.

For its incoming logistics it owns different logistics firms as it subsidiaries. It looks after its providers and produces an unified relationship with them and even minimized their payment cycles to boost this relationship further which includes worth to their chain network.


Business's core competency is its mass manufacturing it produces 90% of its items internal. Divided into three different departments its operations are namely IT & Mobile Communications, Device Solutions and Consumer Electronic Devices. It is keeping operation hubs worldwide to further include worth to its worth chain network.

Outbound Logistics.

Its outbound logistics system efficiency is one of the main reasons Hola Kola The Capital Budgeting Decision 5 Case Study Help has the ability to take on Apple. Venture's own Electronic Logitec system plays a significant function in the outbound logistics operations. It even performs the jobs of collection of payment, settling insurance claims, etc. on behalf of Org.

Marketing and Sales.

Bring in target client attention towards the product is done through marketing and sales to communicate with them the worth and competitive benefit the item provides. Hola Kola The Capital Budgeting Decision 5 Case Study Help advertising spending plan is continually increasing considering that they began their rearranging globally and will continue to do so as they are constantly wanting to broaden and invest in high prospective growth markets. The spending plan is spent on occasions, print and media ads, public relations etc.

Corp Service. Venture put their consumers on top and continuously strive to provide unmatchable client service requirements. As after sales service is becoming incredibly crucial to keep customers happy and engaged, they even conduct studies through 3rd parties to find out their customer's feedback and implement it in the positive way to decrease or if possible totally remove their consumer issues. By including a direct assistance line to call them 24 hr they have actually further increased the included worth of Hola Kola The Capital Budgeting Decision 5 Case Study Solution service.


Hola Kola The Capital Budgeting Decision 5 Case Study Solution has diversified market division, based upon its provision of large range of products to a great deal of consumers. Enterprise target client sections can be divided into 3 classifications i.e. Hola Kola The Capital Budgeting Decision 5 Case Study Solution IT and Mobile Communications, Company Customer Electronics and Company Device options.


Hola Kola The Capital Budgeting Decision 5 Case Study Solution geographical division is based upon 2 requirements i.e. area and density. Corp serves about 80 countries worldwide with its items provided to Urban as well as Rural areas of the nation. The Company is also growing its global existence and the business's flexibility in finding its plants encourages worldwide growth of Business.


Venture produces items that can be utilized by both males and females. The target consumers for Corporation IT and mobile interaction products have an age variety of 18-65 with majority at a young or newly wed life cycle phase. Apart from it, Company Customer Electronics are targeted to a client sector with an age range of 25-65.


The psychographic division of Hola Kola The Capital Budgeting Decision 5 Case Study Help s based upon the social class and the lifestyle of the customer. Corp target consumers on the basis of social class are mainly upper middle, middle and working class customers, as Business sell items like mobile phone not much cheaper i.e. Motorola as well as not much pricey i.e. Apple. It provides quality products to middle level customers at a slightly high cost than others targeting the very same section.


Hola Kola The Capital Budgeting Decision 5 Case Study Solution majority target consumers have unique behavioural characteristics. They are attracted towards Enterprise because of its moderate prices with an extent of quality.

Quantitative analysis.

Sales of Hola Kola The Capital Budgeting Decision 5 Case Study Solution has increased astonishingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net earnings of.48 billion $ to 5.9 billion $. Digital media is the biggest selling category of Enterprise with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales.

Qualitative analysis.

Whereas, the core strength of the business is presently making but long gone are those days when good products were selling themselves. Kim has actually currently started to enhance the marketing activities of Corp and very soon it will end up being one of its core strength like manufacturing if not better.



Business runs styles, makes and sell a huge portfolio of customer electronics. It operates in an exceptionally competitive environment and has effectively placed itself as the maker of quality items. The response is yes.


As, said earlier that Hola Kola The Capital Budgeting Decision 5 Case Study Analysis operates in an extremely competitive environment, which means all the companies have comparable items. So, the response for rarity is no.


Due to the nature of the industry, it is really simple for competitors to comprehend the performance of the products and easily make their own designs. Yes, Corporation is just behind IBM in registering new patents every year, however the advantage is really short-term in this market.


Chairman Lee has completely turnaround Company, from going nearly bankrupt throughout the Asian financial crisis of 1997 to the top 25 company on the planet. Definitely yes there is proper company in the business and the results promote themselves.

External Environmental Analysis

PESTLE Analysis


Being an international brand name spread nearly in every country worldwide, bulk of the environments like USA, Europe, China etc., are really conductive for its operations. However, it deals with some political pressures in less developed nations where order scenario is bad. Latin American, African and some Asian nations fall in this category, where political instability do have an effect on Hola Kola The Capital Budgeting Decision 5 Case Study Help operations.


Purchasing power of clients is essential for business like Organization to be successful and grow. Emerging markets like India, middle-eastern countries etc. offer growth chances, whereas, due to recession even the clients of developed nations suffer terribly. It is extremely crucial for the business to keep an eye on the ongoing economic situation of the nation prior to entering the market.


Multinational companies have to deal with various social and cultural issues throughout its operations in a foreign nation. Corp has also faced numerous concerns however have adopted to the local environments of most of the nations incredibly well. It has actually customized its items, practices, policies and so on accordingly in order to achieve success.


With an annual expense of 2.4 billion dollars in Research study & Development, and with consistent innovative item launches, Hola Kola The Capital Budgeting Decision 5 Case Study Solution is one of the leading ingenious business of the world. With a clear mission to be ahead of the rest when it comes to technological developments, Organization has increased to the no 25 of the top successful companies of the world.


Each country has their own laws and policies, being a multinational business Enterprise need to strictly follow those laws in their jurisdictions. Failure to do so, will result in major legal consequences. So, it needs to study or work with a local law specialist prior to starting its operations in a particular nation.


With the increasing awareness among customers about the environmental & ethical infractions of business, Corporation needs to guarantee that it follows all the security standards. Ecological damages, ethical misconducts are not appropriate and in some countries the consequences can be extremely severe. On the other hand it has to do some Business Social Obligation practices to show the residents that it cares about their environment and individuals.

Porter's Five Forces

Risk of Replacement

Danger of alternative for Company's each product classification is quite substantial. Running in an incredibly dynamic industry lead the company to deal with a high hazard of substitution. Aspects for high danger of alternative for Hola Kola The Capital Budgeting Decision 5 Case Study Solution Smartphone consist of the presence of high variety of suppliers and Market saturation in industrialized countries, that make the expense of changing for customers nearly no. Substitution hazards for Corporation visual display lie in the altering lifestyle of customers. Clients can change to enjoying visuals in the house towards outdoor activities. Together with it, Organization printing services items are threatened by the increasing destination of customers towards cloud storage.

Competition Amongst Existing Companies:

The rivaly amongst Org and its close rivals is intense. The major reason behind this is the approach of market saturation in numerous number of item classifications, forcing Corporation to introduce more ingenious functions in existing items and new ingenious items to keep its development. The major rivals for Hola Kola The Capital Budgeting Decision 5 Case Study Analysis samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO and so on.

Hola Kola The Capital Budgeting Decision 5 Case Study Help has a large supply chain consisting of about 2700 providers across the world.( Corp Sustainability Report, 2016) Supplier's bargaining power for Enterprise is low as Organization runs economies of scale and its orders are of prospective size and worth. These huge orders enable Corp to negotiate rates with its providers. Due to incapability of Business to build its own software, it has to outsource its software application advancement to Google, which ends up being a potential provider of software for Corp, resulting in high bargaining power of Google. In most of Hola Kola The Capital Budgeting Decision 5 Case Study Analysis has a power to negotiate costs, but it provide substantial costs to its providers to construct a strong supply chain and to have strong relationships with its providers.

Bargaining Power of Buyers:

Haggling power of purchasers for numerous variety of item classifications of Corp is extreme. Among the factor causing the extreme bargaining power is the schedule of a great deal of competitors in almost each item category i.e. rivals of Company Smart device, with a really little distinction. The high accessibility of providers of Smartphones with minimum distinction, make the switching cost for purchasers practically absolutely no, for this reason increasing the bargaining power of purchasers. Market saturation in most of the item classifications likewise make the bargaining power of purchasers more extreme in for Hola Kola The Capital Budgeting Decision 5 Case Study Analysis. In spite of igh bargaining power Corp is rather capable of offering its items at a greater cost than much of its rivals, due to high-end quality item and a fair brand image.

Danger of New Entrants:

Threat of brand-new entrants for Hola Kola The Capital Budgeting Decision 5 Case Study Solution is rather low. Along with it, requirement of substantial proficiency and research and development expenditures for survival in the market also make new entrants hesitant to enter in the market. Market saturation is also one of the barrier of entry in innovation market.

Competitive Analysis

Organization's high item diversity offers it differentiation from its competitors. It is among the three top brands by market share. Unlikely to its close competitors including Sony, Intel and Nokia, who focus bulk on a single item category with Sony concentrating on consumer electronic devices, Nokia on cell phones and Intel on chips, Corp had a big R&D spending on all of its product categories which make it possible for the business to make potential income from sales of practically all of its items. (See Display) However, due to the large product range the business faces high variety of rivals.

The company ranks initially in 4 item classifications i.e. DRAM Chips, LCD Displays, Big Screen TVs and Microwave, in regards to worldwide market share, among 8 various item categories. Venture was the global leader in manufacturing DRAM, SRAM and NAND flash chips. Business earnings from chips was less than Intel but its revenues from chips was growing quicker than Intel and has actually grown close to the income levels of Intel, as provided in the case Display 2.

Together with the chips Organization mobile market was likewise thriving at a high rate than its rivals i.e. Motorola and Nokia. Venture's cellular phone's sales development was 51% as compare to Motorola with just 4% and Nokia with absolutely no sales growth. The significant reson behind Venture's high growth despite of greater costs than Nokia and Motorola was the company's high-end quality cell phones.

Enterprise was likewise reaping the benefits from increasing market share of high end LCDs as given in case Exhibition 3. The significant reason, making the business enable to avail the chance is its mass production at low cost. Sony was the greatest competitor for Hola Kola The Capital Budgeting Decision 5 Case Study Help in LCD market, nevertheless, it had actually likewise begun joint endeavor with Organization in 2003 for LCD producing, lessening the competitors for Enterprise.

Porter's Competitive Technique

Low Cost Management strategy of porter is totally carried out by Org the method they accomplish economies of scale by enhancing their core competencies of production. They constantly bring something brand-new and ingenious whether it's an item or a service.


Alternative Option 1

The Chief Marketing Officer (CMO) of Hola Kola The Capital Budgeting Decision 5 Case Study Help would develop a brand-new brand name image by targeting the more youthful generation of the particular nation. As, especially mobile phones of Company are incredibly popular amongst the younger group.


1. It is the very best technique to construct Client Life time Worth (CLV) by creating a long-term relationship with customers. Develop loyalty through delivering worth and profit for long-lasting, as research has actually revealed it is much cheaper to maintain present clients than to bring in brand-new ones.
2. Another pro of this alternative is that word of mouth spread more quickly among more youthful individuals and which in turn will bring in brand-new consumers for my items.


1. Old clients who were associated with Venture before might not like this brand-new image the company is trying to depict.
2 It will incur further costs to rearrange some products and it might not even bring success as the patterns change extremely quickly among the younger group.

Alternative option 2.

Enterprise has actually made producing its core competency for the many part of their service and due to which its supervisors are not afraid to totally step out of their convenience zone. It would be done by setting up training workshops throughout which value of marketing will be taught and numbers will be offered. Failure to get the passing ratings will get benched. Marketing environment must be created internally initially as real marketing starts inside the corporation.


1. Its pro will be that all the marketing method fans will come out and likewise the opposite ones.


2. Its con can produce a really unhealthy environment in the office, as people often resist modification due to the fact that they fear it.

Identify the best alternative

Option is the best as it plainly has more pros because as soon as a Customer Lifetime Worth is built the business will benefit from it till that customer is alive and has purchasing power. Plus, our target clients are the younger generation which are bound to live longer than the current old age people. However, Org's primary objective is to produce loyalty amongst its consumers and make them redeemed it from them and even purchase their various products also.

Execution Plan

• Targeting more youthful generation through social marketing, creating a link with them like Pepsi make with music. And set the expectations attainable and reasonable.
• A team including best marketing and sales specialists should be put together, and both views should be considered prior to securing the resources required to implement the plan.
• Thorough communication of the plan should be done as it is very crucial for everybody to be on the exact same page to make it work.
• Jobs and timelines need to be develop and interacted accordingly to each person responsible.
• The manager should utilize a dashboard which reveals the progress of all the jobs which have actually been done or about to be done and by whom.
• The supervisor must keep an eye on and keep a consistent examine the private and general performance.
• Everyone must want to adapt midway because any new pattern or policy might come in due to which all the things already prepared have to be adjusted. It's much better to have contingency plans currently prepared.
• At the end of the campaign the supervisor ought to communicate the results and if successful ought to commemorate with the group.


The M-net program revealed engaging analysis about the low and high development prospective areas and how much advertising spending plan must be allocated accordingly. This change the budget allotment of different countries and numerous managers were unhappy and argued but the analysis done by the program was accurate and revealed figures like The United States and Canada and Russia development possible merited a 35% allocation while they were receiving 45%. Whereas, China and Europe should be getting 42% however were rather provided 31%. It truly assisted to relatively disperse the resources and record more clients by spending more on ads on the high development capacity areas of the world.

Hola Kola The Capital Budgeting Decision 5 Case Study Analysis is a leading 25 company on the planet now and prepares to get ahead of Sony who sits presently at no. 20. Its continuous investment in R&D and ingenious practices have moved them to new heights however for them its' only the start and they wish to be amongst the leading 3 brands worldwide. They entirely turnaround from almost declaring bankruptcy during the Asian Financial Crisis to a world renowned brand name, known for quality and development. Their worth chain and their core competency their manufacturing capability, along-with global brand name image building have actually seen their sales go from 16 to 44.6 billion $ from 1997-- 2002. With further expansion in China and other emerging markets those numbers will just increase further in the future. Their marketing efforts should be directed towards more youthful group in the middle of the internal arguments about marketing and should create Client Life time Worth as it will not only give them benefits now but will continue to reap it till the customer lifetime. As the cost of keeping the customer is much cheaper than drawing in a brand-new one.