Harvard Case - MobiChair
"MobiChair" Harvard business case study is written by H. Irving Grousbeck, Sara Rosenthal. It deals with the challenges in the field of General Management. The case study is 11 page(s) long and it was first published on : Oct 9, 2013
At Fern Fort University, we recommend MobiChair pursue a focused growth strategy targeting emerging markets while simultaneously strengthening its core business in the US. This strategy involves leveraging its existing strengths in product innovation and sustainable manufacturing to cater to the growing demand for affordable, high-quality mobility solutions in emerging markets. This will be achieved through a combination of strategic partnerships, targeted marketing, and adaptive product development.
2. Background
MobiChair, a US-based manufacturer of mobility products, faces a crossroads. The company has achieved significant success in the domestic market, but faces increasing competition and a maturing market. The CEO, John, is tasked with navigating the company towards future growth, considering the potential of emerging markets. The case study highlights the challenges of international business expansion, corporate social responsibility, and strategic decision-making in a dynamic global environment.
3. Analysis of the Case Study
SWOT Analysis:
- Strengths:
- Strong brand reputation for quality and innovation.
- Experienced management team with a focus on sustainability.
- Established manufacturing infrastructure and supply chain.
- Strong customer base in the US.
- Weaknesses:
- Limited international presence.
- Reliance on a single market (US).
- Potential for price pressure due to competition.
- Lack of experience in emerging markets.
- Opportunities:
- Growing demand for mobility solutions in emerging markets.
- Potential for strategic partnerships and joint ventures.
- Expanding global middle class with increasing disposable income.
- Government initiatives promoting accessibility and inclusivity.
- Threats:
- Increased competition from low-cost manufacturers.
- Currency fluctuations and economic instability in emerging markets.
- Potential for regulatory hurdles and cultural differences.
- Supply chain disruptions and logistical challenges.
Porter's Five Forces:
- Threat of New Entrants: High, due to low barriers to entry in the mobility product industry.
- Bargaining Power of Buyers: Moderate, as customers have multiple options but value quality and brand reputation.
- Bargaining Power of Suppliers: Moderate, as MobiChair relies on a diverse range of suppliers.
- Threat of Substitutes: High, as alternative mobility solutions exist, including traditional wheelchairs and assistive devices.
- Rivalry Among Existing Competitors: High, due to the presence of both established and emerging players.
Financial Analysis:
- MobiChair's current financial performance is strong, but growth is slowing.
- Expansion into emerging markets requires significant investment in infrastructure, marketing, and product adaptation.
- The company needs to carefully assess the financial viability of its international expansion strategy.
Marketing Analysis:
- MobiChair has a strong brand in the US, but needs to adapt its marketing strategy for emerging markets.
- Cultural sensitivity, language barriers, and local preferences need to be considered.
- Digital marketing and social media will play a crucial role in reaching target customers.
Operational Analysis:
- MobiChair's manufacturing processes are efficient and sustainable, but need to be adapted for different markets.
- Local sourcing and production may be necessary to reduce costs and improve responsiveness.
- The company needs to develop a robust supply chain management system for international operations.
4. Recommendations
Phase 1: Market Research and Strategic Partnerships (6-12 months)
- Conduct thorough market research to identify high-potential emerging markets with a strong demand for mobility solutions. Focus on countries with a growing middle class, supportive government policies, and a favorable regulatory environment.
- Establish strategic partnerships with local distributors, manufacturers, and non-profit organizations. These partnerships will provide valuable market insights, access to local networks, and support for product adaptation and distribution.
- Develop a pilot program in one or two selected emerging markets to test the feasibility of the expansion strategy. This will involve adapting products to local needs, establishing distribution channels, and testing marketing strategies.
Phase 2: Product Adaptation and Manufacturing (12-18 months)
- Adapt existing products to meet the specific needs and preferences of target markets. This may involve modifications to design, materials, and features.
- Consider local production to reduce costs, improve responsiveness, and build relationships with local communities. This could involve setting up joint ventures or establishing manufacturing facilities in strategic locations.
- Develop a robust supply chain management system to ensure efficient and reliable sourcing, production, and distribution in emerging markets.
Phase 3: Marketing and Sales (18-24 months)
- Develop targeted marketing campaigns that resonate with the cultural nuances and language preferences of target markets. Utilize digital marketing, social media, and local advertising channels.
- Build strong relationships with key stakeholders in emerging markets, including healthcare professionals, government agencies, and community organizations.
- Offer competitive pricing and financing options to make MobiChair products accessible to a wider range of consumers.
Phase 4: Continuous Improvement and Sustainability (Ongoing)
- Continuously monitor market trends and adapt products and marketing strategies to meet evolving customer needs.
- Invest in research and development to create innovative mobility solutions that address the specific challenges faced by people with disabilities in emerging markets.
- Maintain a strong commitment to corporate social responsibility by supporting local communities, promoting accessibility, and contributing to the sustainable development of emerging markets.
5. Basis of Recommendations
These recommendations are based on a comprehensive analysis of MobiChair's strengths, weaknesses, opportunities, and threats. They address the company's core competencies in innovation and sustainability while capitalizing on the growth potential of emerging markets. The recommendations are aligned with MobiChair's mission to improve the lives of people with disabilities and its commitment to ethical business practices.
Key Assumptions:
- The demand for mobility solutions in emerging markets will continue to grow.
- MobiChair can successfully adapt its products and marketing strategies to meet the specific needs of these markets.
- The company can establish successful partnerships with local stakeholders.
- The financial risks associated with international expansion can be effectively managed.
6. Conclusion
MobiChair has the potential to achieve significant growth by expanding into emerging markets. By leveraging its strengths in innovation, sustainability, and brand reputation, the company can create a sustainable and profitable business model that benefits both its customers and its stakeholders.
7. Discussion
Alternative Options:
- Focus solely on the US market: This option would involve consolidating MobiChair's position in the domestic market and focusing on cost optimization and efficiency improvements. However, this strategy would limit the company's growth potential and expose it to increased competition.
- Acquire an existing company in an emerging market: This option would provide MobiChair with immediate market access and established distribution channels. However, it would require significant investment and could pose integration challenges.
Risks and Key Assumptions:
- Political and economic instability in emerging markets: This could disrupt operations, impact profitability, and create reputational risks.
- Cultural differences and language barriers: These could hinder marketing efforts and create communication challenges.
- Regulatory hurdles and legal complexities: Navigating different legal frameworks and regulatory environments could be challenging and time-consuming.
- Competition from local manufacturers: MobiChair needs to be prepared to compete with low-cost manufacturers in emerging markets.
8. Next Steps
- Form a dedicated international expansion team: This team will be responsible for conducting market research, identifying strategic partnerships, and developing a detailed implementation plan.
- Develop a comprehensive financial model: This model will assess the financial viability of the expansion strategy and identify potential risks and opportunities.
- Secure funding for the expansion project: This may involve seeking external investment or exploring alternative financing options.
- Establish clear performance metrics and KPIs: These will track the progress of the expansion strategy and ensure accountability.
Timeline:
- Year 1: Market research, strategic partnerships, pilot program launch.
- Year 2: Product adaptation, manufacturing setup, marketing and sales launch.
- Year 3: Expansion into additional emerging markets, continuous improvement and sustainability initiatives.
By taking a strategic and phased approach, MobiChair can successfully navigate the challenges of international business expansion and achieve its growth objectives while maintaining its commitment to corporate social responsibility and sustainability.
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Case Description
The MobiChair case describes the story of Lucy Ahn and Josh McKinnon, graduates of Stanford's Graduate School of Business who are also in a relationship, who take on the role of co-CEOs of a power wheelchair company after being offered the position by a mentor who is on the company's board. MobiChair is facing stalled growth and the board hopes to revive the company with new leadership. Though hesitant at first, the couple decides to take on the challenge and soon find themselves faced with a series of interpersonal issues and conflicts that threaten to overwhelm them. From their very first meeting with MobiChair's top three vice presidents, Ahn and McKinnon pick up on red flags that indicate the company operates with a "good enough" culture where 6-hour workdays, a focus on the tactical rather than the strategic, and reluctance to change are all the norm. In the second vignette, McKinnon must deal with an HR manager who defies instituting an employee recognition program McKinnon has requested. On a trip to the company's East Coast office, Ahn and McKinnon are alarmed to find that several top managers are underperforming and need to be replaced, after having assured the West Coast staff that they will not be shutting down any offices of undergoing layoffs. Finally, the co-CEOs are faced with an ultimatum from the controller which forces them to decide whether they can manage without her, or whether they must tolerate her antics until a suitable replacement is found.
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