Case 1: Expansion: Right or Wrong

A restaurant was established at the heart of Kathmandu in 2000 with the slogan your next
kitchen. It was established with an initial capital of Rs. 5 million with 20 staff. It served
mainly Nepali food items. However, it had Indian as well as continental foods in its menu. In
the opening years, its turnover was satisfactory. On an average, it served 2000 customers per
month Its net profit margin was approximately 25 percent of the sales Its greenery
environment and free Wi-Fi services along with complementary dishes attracted the
customers.

The success of the restaurant for the first three years of its operation inspired its owners to
expand its branches. In 2004, it started two new restaurants in other parts of the city. By the
end of 2006, it had altogether 7 branches inside the Kathmandu city. The total number of the
staff reached 210 As the number of staff grew up, the employees were unionized

From 2007, the restaurant started experiencing hard times. Its total sales started decreasing.
Out of the seven, only two restaurants were in profit. Out of the rests, three were in break
even and two were in loss. Employee turnover was severe. The restaurant could not update its
menu and operation management was also stagnant. Adverse political conditions further
supported by Mapase (drinking and driving rules by the traffic police severely affected the
sales of the restaurants

By the end of 2008, the management decided to close down the restaurants running in loss.
The union strongly opposed this decision. To settle this, the management had to pay a big
amount for compensating the employees. The number of employees was reduced to 150. The
management plans to offer stock ownership to the employee to restate the previous position.
One of the major shareholders commented that we would not have expanded beyond two

Questions:
a. What corporate strategy did the restaurant follows? Do you think it was suitable time

to adopt the strategy? Comment

b. Enlist the major strategic decisions taken by the restaurant. What factors

make them strategic?

Case 2: Liberty Media's Malone:
Time Warner deal gives AT&T substantial diversification

The ATAT Time Warner deal is a great move for both parties especially in a world
increasingly cutting the cord, said Liberty Media Chairman Jahu Malone.
“The bigger opportunity is to make the content businesses more profitable and more certain."
Malone told CNBC.
The telecommunications executive said the deal provides AT&T with substantial
diversification of its core business. Even if people decide to buy content a la carte through
over-the-top streaming plans, Time Warner's channels and shows would be in demand for
these smaller services, he said. AT&T would also benefit from getting the lowest possible
transfer prices for Time Warner's portfolio
“There is definite synergy between owning the content and having the largest distributer.,”
Malone said. AT&T announced in October that it was purchasing Time Warner for more than
$85 billion. The deal still has to pass US regulators, and Donald Trump has said that as
president he would block the deal However, since it isa regulatory issue, it is unclear how
much power the president-elect would have in the matter:
Content is becoming more valuable as consumers move away from standard cable and
satellite packages and toward other digital content providers like Netflix or stand-alone
services like HBO.By baving Time Warner. AT&T has a better foothold not only in the
content, but can bolster its digital advertising business. The company is one of the leaders in
cross-screen advertising, and having content that people want to watch could potentially draw
in advertisers who seek to reach these people on mobile and on TV
Source: Michelle Castillo http://www.cnbc.com/2016/11/10/liberty-medias-john-malone-time
warner-dual-gives-att-substantial diversification has 10 Nov 2016

Questions:
a. Explain what type of strategy is adopted by ATAT to expand its business

b. What are the likely advantages and disadvantages of pursuing the above strategy
Case 3: Diversification of Business
The Best Restaurant, the most famous restaurant chain in the country, was established in 2005
in Kathmandu. Currently it has 15 restaurants, 10 in Kathmandu valley and the rests outside
the valley. It serves umque menu targeting mainly the foreign tourists and charges premium
price. Around 60% of its customers are foreign nationals.
The restaurant decided to expand into diverse business by leveraging on its restaurant brand.
In 2010, acquired Sweer Travels to push itself aggressively in the tourism market and
achieved immense success. h became a recognized travel agency specializing in mountain
flight and trekking. However, the industry analysts viewed that it may be risky for Best
Restaurant to be shifting its focus away from its restaurant brand.
Meanwhile, Best Restaurant chain posed a threat with the increased competition in the
restaurant business. By 2016, many new restaurants targeting the similar customers came in
existence.

Questions:

a. Discuss the strategy adopted by Best Restaurant to replicate its success in restaurant
business.

b. What would be the possible threat of diversification to Best Restaurant?

Case 4: Expansion of a Publication
KAVI publication was established in 2002 with an initial capital of 1 billion. Currently, its
capital exceeds 30 billion with over 100 staff. It now publishes over 150 books. It does not
have explicit vision, mission and objective with no formal resource planning.
Initially, it was mostly involved in publishing books on accounts and finance. Later, it
involved itself in publishing other books on management of plus two and college level. It also
started publishing question bank and exam solution manuals. By 2005, it started publishing
books of school levels. Again by 2010, it started publishing science related books. It has also
published books on literature and politics. However, it has published very few books on
education and humanities. Its market has spread throughout the country.
The publication is managed with simple structure. The managing director is the owner who
directs and controls all the activities. The delegation of nuthority and responsibility is very
poor. Some of the family members are also involved who exercise some premium power with
no defined position.
The books of the publication are 15 to 20% expensive than the competitors. However, it has
been able to attract the readers due to consistency in quality. The publication believes that the
readers are ready to pay certain extra amount for quality.
The writers are moderately satisfied with the royalty they get. Transparency is poor. The
publication emphasizes standardized way of writing books. Some writers view this has
affected their creativity negatively. Employee turnover is low compared to other publications.
Salary and other benefits are good. Career development opportunities to the employee seem
very poor.
Books in school and college levels are mostly based on personal relationship. For many,
quality is secondary. There is tough competition among the publishing houses. The
publishing houses are more regulated for the school level by the Curriculum Development
Centre. There is news that corporate sectors are also interested in publication business.
Currently, it is constructing a high tech building for its central office. It also plans to open
school and college in near future.

Questions
a. What corporate and business strategies are followed by the company? Do you think

they are suitable for the publication? Justify your view

b. What type of organzational structure is followed by the organization? Is it suitable for

the publication? If not which structure do you suggest?

c. What are the likely barriers for the successful implementation of the strategy in

the publication?
Case 5: Vision, Mission and Core Values of Chaudhary Group, Nepal.

To be five billion dollar enterprise by 2020.

Mission
 Understand consumer insights and meet their needs with safe, effective and world
class products.
 Enhancing the value we deliver to our customers.
 Develop a lasting relationship with our customers.
 Recruit, develop, motivate and retain the best talents within the country, recruit if
need be from abroad and provide them a challenging and demanding environment.
 Become globally competitive.
 Become the most admired company in Nepal.

Core Values
Integrity- We employ the highest ethical standards, demonstrating honesty and fairness in
every action that we take.
Accountability- We accept our individual and team responsibilities and we meet our
commitments. We ake responsibility for all our performance in all our decisions and actions.
We celebrate success and see resas opportunities for growth.
Teamwork- We as part of a global team are committed to working together throughout the
world by bringing together the best thinking from our professionals.
Innovation - We thrive on creativity and innovation. We anticipate market trends
and move quickly to embrace them.
Excellence- We deliver what we promise and add value that goes beyond what is expected.
Quality- Quality is integral to our practices. Processes, documentation and audit systems are
in place to ensure quality standards are maintained and practiced

Questions:
a. Are the statements concise, clear and actionable?

b. Do these statements provide a sense of direction to the managers?

c. Do these statements motivate the stakeholders?