Rakish Iron Works

-A CASE STUDY ON
RAKISH IRON WORKS
FAILURE AND COMEBACK
- By Ankit Yadav
RAKISH IRON WORK
A SHORT-LIVED SUCCESS
Pursuing this strategy, the It made a huge investment Within a remarkably short The market responded The competing companies The advantage enjoyed by
management announced a commitment in the span of time, it introduced favorably to its new understood the game plan Rakish turned out to be a
slew of measures aimed at infrastructure for new products to cater to products and the turnover of Rakish quickly and short-lived one and the
enhancing the width of producing low-value steel. the market demand for and profit rose reacted by expanding their major players once again
the product line by adding low-value products. appreciably. product line too. began to dominate the
a few more varieties to it. market.
COUNTER PLAN- Another Failure
This required the organization to
Once the product differentiation be aggressive in sales promotion
The cost reduction measures Eventually, the company was
efforts failed, the management of measures and diligent in cost
could not help the company for forced to abandon its low-cost
Rakish changed its strategy and reduction in fields like marketing,
two reasons. strategy endeavors.
adopted a low-cost strategy. advertising, distribution and
services.
1. The cost of marketing

did not have a significant
influence on the price tag
of the product.
2. The cost reduction

efforts had a negative fall-
out on sales promotion
and on the actual sales
performance.
REASON BEHIND
CONTINUED
FAILURES?
What could have been the reason for the
failure of the earlier strategies of Rakish?
• Rakish Iron & Steel Company was the 4th largest company in
the industry having 21% market share. The company set itself
an ambitious target of being industry leader in the next 10
years and accordingly prepared a blueprint on how to go about
it.
• Product differentiation was identified as its primary strategy for
the future and accordingly few market segments were
identified where low-value steel was in demand and
competition was negligible.
• This strategy was very well received by the market initially
leading to increase in turnover and profits for the company.
However, competing companies were quick to follow suit with
similar strategy and began to dominate the market.
• One of the reasons for the failure of the strategies
of Rakish Iron & Steel Company could be the
Allocation of Resources.
• The failure to allocate appropriate resources or
balance resources to accomplish the strategies
frequently implies that some of the plans are not
REASON! accomplished due to insufficient resources, while
other plans are accomplished inefficiently because
of too many resources which could be the case
here.
• They had great assets in the planning team but
were lacking in the execution process.
REASON!
Performance Projections: Rakish Iron and Steel However, before setting its goals, it should
Company has designed a strategy to achieve have also studied and made note of as to
market dominance position and how to go where competition would likely be in the
about it i.e. to win in competitive situations. future.
Unless it is done so, Rakish Iron and Steel

Data from competitors, key benchmarks,
Company may find itself achieving the goals it
and/or past performance form a valid basis for
has set for itself and still lose - finding itself
comparison. Expected future levels of
behind the competition. In a competitive
competitor or comparison performance could
market, it is not good enough to achieve it's
be used to set and validate Rakish company's
goals unless they place the company in a
own plans and goals.
winning position.
COUNTER MEASURES TO PREVENT THIS
CONTINUED DOWNFALL?
• When the company was almost clueless about its future strategies to
accomplish the performance goals, Rajesh Sharma joined the board as
the HR Director of the company.
• Learning about its ill-fated strategy initiatives, he made a proposal to
develop the workforce of the company as a competitive advantage in the
market.
• The board of directors greeted the proposal with suspicion and contempt.
• They could not believe that the employees could be developed into a
A BOLD MOVE formidable force for the organization through proper HR measures and
that in due course this would lead to cost reduction and quality
enhancement.
• However having no worthwhile alternative schemes, they set aside their
reservations and approved the HR director's proposal. Simultaneously,
the directors allowed a huge budgetary support for drastically improving
the training infrastructure and the compensation packages.
• The HR director's proposal began to take shape and the management
kept its fingers crossed.
WHAT NEXT?
Mr. Rajesh Sharma’s
Proposal
• Mr. Rajesh Sharma, newly joined HR Director of Rakish Iron
and Steel company, learn't about the ill-fated strategic
initiatives of the company, made a proposal to develop the
workforce of the company as a competitive advantage to
secure market dominance position.
• Mr. Sharma's proposed to develop the workforce which
would lead to cost reduction and quality enhancement.
• The Management of the company approved a huge
budgetary support for drastically improving the training
infrastructure and the compensation packages. The proposal
was slowly beginning to take shape.
IS IT WORTH
IT?
IS Mr. Rajesh Right?
By definition, plans describe activities or

Without appropriate plans to develop,
actions that have not yet taken place. Many
acquire, or motivate the human resources
times in order to execute the plans, the
necessary to carry out desired actions,
workforce must possess skills, knowledge,
Rakish Iron and Steel Company may not be
or abilities that they do not currently
able to achieve its strategic objectives.
possess.
The workforce may not have the skills,

knowledge, or abilities to carry out the Organizations must invest in their people to
actions required for success in the future. ensure they have the skills for today and to
Hence Mr. Sharma's proposal may trigger do what is necessary to succeed in the
the much-needed desired change that will future.
enable the company to achieve its goals.
POSSIBLE SOLUTIONS!
• Communicate the strategy and its related action plans to the workforce thus enabling them to know as to
what is required of them rather than leaving it to guess work.
• Workforce Development by ensuring that clear linkages exist between the company's strategic objectives and
education and training. Workforce skills are developed based on work demands and workforce needs. Ensure
that the training plans are developed based on worker and manager input.
• Address key issues of training and development, hiring, retention, workforce engagement, involvement,
empowerment, and recognition and reward as a part of the human resource plan. Define appropriate
measures and targets for each.
• Develop relevant metrics to monitor progress thus sending a clear message to the workforce that the plans
are important. Prompt and regular feedback is provided to teams and individuals regarding their
performance. Feedback covers both results and processes.
• Redesigning work to increase worker responsibility. Broadening worker responsibilities; creating self-directed
or high-performance work teams.
• Form partnerships with education institutions to conduct student research and develop workers and ensure a
supply of well-prepared future employees.
• Developing gain-sharing or equity building compensation systems for all workers to increase motivation and
productivity. Compensation, recognition, and rewards/incentives are provided for results, such as for
reductions in cycle time and exceeding target schedules with error-free products or services at less-than-
projected cost.
THANKYOU!

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-A CASE STUDY ON

FAILURE AND COMEBACK

1. The cost of marketing

2. The cost reduction

Unless it is done so, Rakish Iron and Steel

By definition, plans describe activities or

The workforce may not have the skills,

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