After the revolution, Kralovopolska’s management team sought to ensure that quality assurance was integrated in all processes of manufacturing and company management. With this goal, the company forged forward to achieve ISO 9000 certification and other relevant certifications by the end of 1994 (cited in Newman & Nollen 117). Quality can be divided into two main categories; product quality and process quality … thus the goal of process quality is to produce error-free products through total quality management (Siegel & Shim, 1999).
As the technical director, Vladimir Relich said, “Our products were always high quality, but they did not meet West European standards. Now we have certificates of quality according to West European standards. Our products are higher in quality than Italian products. ” Quality and customer satisfaction may not be disintegrated or separated. When a product is of high quality, it’s bound to create a market niche and give the customer the satisfaction that would produce brand loyalty. This would be Kralovopolska goal in the current markets and mission for any new markets to be explored. Financial stability
In 1991, the Czech government allowed the market to set prices in the equipment industry that Kralovopolska operated. This opened a wide gap for inflation which soared up to about 58 percent. Short-term financing was scarce, nominal interest rates were 14-15 percent between 1991 and 1993. Matters did not get better since in 1991, the government devalued the currency. However, the company would be able to survive these financial challenges by its good history of loan interest repayments. Financial stability is not only a goal for any business but a critical and aspect of any company’s survival.
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When other companies’ finances were dwindling, Kralovopolska was no exception. However, because of a good history with its previous credits, the company was more fortunate than other companies as it was able to obtain short-term credit and long-term financing by the government. Plans to go onto a joint venture with a technologically advanced company seem more viable now more than ever. The company’s technological abilities have to be advanced either by joint venture or purchase of high tech systems and machinery.
This then translates to the need already noted need for financial resources to enable the company acquire the required technological resources. Management’s flexibility By studying the Kralovopolska case, one is readily made aware of the style of employment and promotion that was used. Political affiliation was not applied but rather merit. The ability to change the management when required to bring on board the right skilled person for the right position would see the company progress successfully through phases of economical, political and social changes.
Competitive organizational structure Similar to most local firms, Kralovopolska’s organizational structure was based on function till 1991. However, for the company to successfully compete with the changing trends in the market and industry both locally and internationally, it needed to adopt a different structure – probably an operational structure that would ensure that the company’s operational units were sufficiently managed. In order to achieve this, the company’s top management restructured departments to ensure they adequately served the growth needs of the company.
Panek, Kralovopolska general director, was a trained economist and with his skills he would help transform the company’s finances and ensure strategies adapted were consistent to the company’s profitability goals. The rest of the team was mostly composed of engineers with professional lifelong experience in the company. This would work to the company’s advantage since the team would carry on the original dream and goal the company has all through the years.
Continuity of the company’s business would largely depend on this and looking into the future the same team would be best suited to note what the company lacked and what would need to be done to ensure the company achieved a market leadership position in the industry. Research and high technology capability Research and development (R & D) was previously done as an integral central component under CHEPOS, the holding company. With time, Kralovopolska moved onto be independent in R & D.
Through an internal research and development group, alliances with universities and technical colleges, the company was able to work on their own research and development. Through commercial agreements with companies outside the Czech government, Kralovopolska, sought to make long-term purchases of high-technology components to enable it make, sell and deliver new products. “Location of the machines and equipment within the operation will determine the pattern of its flow, but the nature of its technology will determine its capacity”, states Pycraft (2000).
This is a fact that the Kralovopolska top management noted seriously and sought to ensure the company’s technological needs were sufficiently catered for as the team sought to be a part of a joint venture initiated by the Realization of Investment Activities (RIA) with a French firm. Though this joint venture did not materialize, the company’s intention and effort to attain technological advancement can well be noted and appreciated.
Currently the company seems to be deficient of the core technological components that would enable it to be competitive operationally. In order to compete with other market players in the West European markets and possibly expand to other areas, the company would need urgent upgrades to the current technology. Having considered the company’s standing in the market and level of financial and technological stability, it would benefit to look at some of the alternatives that would be available as the general director seeks to ensure the company’s future is secured.
Kralovopolska’s main competition lies in companies in the West European region that seem to be technologically advanced and stable in terms of financial standing. To ensure this kind of stability the company would have to position itself strategically in the market and abroad by acquiring high technology and financial assistance either from banks, the government or other joint ventures.
In terms of market standing, Kralovopolska is among the top three companies in the local market. Internationally it seems to have established a market position that other West European companies may not be able to attain in the near future. With this level of market dominance, an immediate investment in technology may seem expensive and far fetched, though it would be the one strategy the company may need to steer it to becoming an all round leader in the industry.
Human resource seems sufficient if one considers the experience and training of the current staff, however, with the rapid technological advancements, there would be need to seek “more tech suave” staff member who would be consistent with the new technological advancements the company would need to make. People skilled in latest technology would give an added advantage over both local and international competitors. Foresight and forecast of local and demand from abroad, would help the company allow the kind of financial as well as technological flexibility that would ensure deep market penetration and sufficient demand satisfaction.
With the quality certification at hand, the company is well able to be a highly competitive market player locally and internationally considering current consistency to the West European standards. Joint ventures, short-term credit, long-term financing from the government, are some of the alternatives that the top management would exploit to make the company get back to profitability and achieve the success it intends to in the future.
As the general director explores the path ahead, strategic decisions would be the most beneficial step to take for the future of the company.
Newman K. L. , Nollen, S. D. “Kralovopolska: Managing the Transition to a Market Economy. ” Case Research Journal. North American Case Research Association (1996): 117-127. Siegel, J. G. , Shim, J. K. Operations Management. New York: Barrons Educational Series Inc. , 1999. Pycraft, M. Operations Management. South Africa: Pearson South Africa, 2000.
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