Case Study on
Cycle & Carriage (C&C):
From Crisis to Astra
TABLE OF CONTENTS
Background of the case
Aim of Report
Analysis & Application of Concepts
Vision and Mission
External Opportunities and Threats
Internal Strength and Weaknesses
Long Term Objectives
BACKGROUND OF THE CASE
Cycle & Carriage (C&C) was the 3rd largest car distributors in 1999 with its rich history and experience in automotive business back in 1957 where it obtained the sole rights to distribute Mercedes-Benz cars in Malaysia and Singapore. From the 1960s to late 1980s, C&C had explored from assembly of cars to distributing and retailing of cars, diversified in areas of marine, locomotives engines, medical equipment, television and radios products, and merchant banking. However these are small investments relative to the automobile operations. During the mid-1980s recession, C&C ventured into the property market and by the late 1990s, it had focused mainly on the automobile and property markets as their two core business, with expansions into the Asia Pacific region. 2.
In Sep 1999, the scene changed when Daimler Chrysler, the main manufacturer of the luxury and prestige Mercedes-Benz cars, announced to take back the distribution of these cars forced C&C to re-strategize their business plans as its stock price collapsed upon this announcement. 3.
Among many plans of C&C to further diversify through acquisition and joint ventures, it seemed to have found their answer to this crisis, their viability and prospects in the early 2000. An opportunity in the huge automobile market in Indonesia was presented. PT Astra International, a very well-known automobile distributors company was facing financial problem from the 1998 economic crisis which caused it to accumulate a debt of S$3.4 billion and had put up for bid of a 40% share. C&C leverage on this situation and led a consortium to purchase this as it viewed that there was a great potential given Indonesia being the 4th largest populated nation and Astra’s accessibility of the extensive network. In addition, it was a business where C&C was good at. However, with the successful acquiring of the share in Mar 2000 thereafter, C&C was faced with new problems associated with Astra. The growths were not very significant due to the political instability and the devaluation of the Rupiah. C&C had to invest more into this acquisition and by end of year 2000 had 31% of the stake in Astra solely. Nevertheless, with a strong vision of being the leader of automobile in the region, sheer perseverance, strong leadership and management team, and sound strategy planning, implementation and continuous evaluation of the strategies, C&C had gain in the long run with the latest underlying profit of US$812 million in 2010, an increase of 55% over 2009.
AIM OF REPORT
This report aimed to analyse the strategy in a competitive and changing environment, and how C&C deal with radical changes in their underlying success factors. The analysis is based on the process of Strategic Management as shown in Figure 1.
Figure 1: The Process of Strategic Management Diagram
ANALYSIS AND APPLICATION OF CONCEPTS
Strategic management can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organisation to achieve its objectives...
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