Question: MultiCorp is a diversified, multi - profile company. It is essentially a conglomerate company with three diverse strategic units acting as independent businesses under separate
MultiCorp is a diversified, multiprofile company. It is essentially a conglomerate company with three diverse strategic units acting as independent businesses under separate brands in different industry sectors: Unit Alpha, Unit Beta, and Unit Gamma. MultiCorp is governed by the central head office, which oversees the three subsidiary business units and their financial performance indicators without any operative interventions. Each strategic business unit has its managing director who has complete discretion and accountability for its competitive strategy, investment priorities, budget allocation, and yearly profits or losses. Unit Alpha is in the food manufacturing business. The unit produces and distributes various goods, including, but not limited to vegetables, groceries, meat, and dairy products. These product lines require unique production processes, storage arrangements, transportation approaches, and underlying equipment and are organizationally implemented by a separate specialized product department. However, these products are delivered mainly to the same circle of customers, including major retailers and local food shops. A shared and common organizational structure
serves all the product lines' needs in HR finance, accounting, logistics legal, marketing, and sales support. Unit Beta competes in the restaurant business. Specifically, the unit controls a chain of small fastfood restaurants occupying the lowcost market niche. The chain includes more than restaurants
located in different geographical regions, and more restaurants are planned to be opened in the near future. All restaurants offer their customers the same interiors, menus, prices, meals, and services and imply standardized policies, working procedures, and supporting equipment. However, each restaurant is run separately by a chief manager responsible for its overall financial wellbeing and all necessary business processes, eg recruiting, training, procurement, cooking, servicing, cleaning, and complaints management. Except for Unit Beta's lean central office, where chainwide branding, marketing, and other strategic decisions are made, the restaurants operate independently, and chief mangers are responsible for each restaurant's profit and loss statement. Finally, Unit Gamma runs a chain of resort hotels. These hotels gravitate towards the highend price segment and offer premiumquality services to their customers. Unit Gamma's competitive strategy implies improving its brand recognition and achieving consistent customer experience. For this purpose, the unit's leadership plans to standardize all customerfacing and, to a lesser extent, backoffice processes across all chain hotels and all its suppliers and service providers. Moreover, Unit Gamma intends to become "closer" to its customers and build lifelong customer relationships. This strategy requires collecting and managing more customer information, individual preferences, and transaction histories. Further, Gamma leverages and takes advantage of the information by aggregating it to provide customized services, launch loyalty programs, develop special offers, and promote personalized discounts.
Case Questions
What are the particular business processes standardized companywide and within each of its business units?
What types of data are integrated across the whole company and within its business units?
What is the highestlevel structure of the IT landscape in the company and within each of its business units?
Operating Models
a What is the operating model of MultiCorp? Please provide the rationale that supports your answer.
b Do you suggest the same operating model of Multicorp for each of its three strategic business units or something else? Explain your rationale. In addition, use the operating model matrix, and remember to state your answer and the explanation justifying your proposition.
Building on the core diagrams proposed by Ross, Weill, and Robertson, draw the Core Diagram for MultiCorp
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