1. The Vision Trap By: A V Raghu Vamshi 08IT-001 Aseem Sidhu 08IT-009 G Lakshmanan 08IT-012 Praveen Sebastian 08IT-021 Puneet Kukreja 08IT-022 Rishabh Garg 08IT-025 A Case in Strategic Drift

2. Company : Timeline January 1981 Gerard H. Langeler in Tektronix April 1981 Birth of Mentor Graphics Corporation Fall of 1981 Ready with the Business Plan, Financing, Employee Set, Product Specifications June 1982 Design Automation Conference in Las Vegas

3. Company : Timeline (Contd.) 1982- 1984 Head on Head with Daisy Systems March 1984 Slippage of order from Gould-AMI semiconductor in Idaho 1985 Severe recession slows things down 1985 Bolt from the blue??? (Success!!!)

4. Company : Timeline (Contd.) 1990 400 Million $ in sales 5 th most profitable company 18 th Largest Company established in 1980’s 1991 Losses in quarters 1, 2, 3 15% workforce laid off 1991 Back to Basics

5. Articulating a vision based on current short term objective – (Beat Daisy) Mistake-1 Consequence The Company paid heavily in terms of deteriorating product quality, decreasing stock value and employee burnout, aimlessness Management did not comprehend clearly, the definition of ‘Vision’

6. Letting the followers define the terms of Leadership Mistake-2 Consequence Management did not comprehend clearly, the definition of ‘Vision’ A more grandiose vision partly based on customer comments

7. Getting locked into the inappropriately defined vision of ‘Leadership in Six Boxes’ Mistake-3 Consequence Management did not comprehend clearly, the definition of ‘Vision’ The company competed in non-core competence areas and lost heavily

8. 10x imperative – an even more abstract vision Mistake-4 Consequence Management did not comprehend clearly, the definition of ‘Vision’ Loss of focus on improving internal processes. Focusing on customers did not yield any results

9. Changing the Way the World Designs. Together. Mistake-5 Consequence Management did not comprehend clearly, the definition of ‘Vision’ Schedule slippage because of unending stream of problems got 8.0 delayed.

10. The management should have.. Defined a “Mission” and a “Vision” for the company Kept in mind, the future compatibility problems and tried to offer its software on SUN platform rather than APOLLO platform Focused on the core competence areas hiving off the other businesses

11. What went right for the company was that of.. The attitude of “Believe in Yourself” The acquisition of a Californian company The Return to Basics – Getting the vision right this time

12. GM’s loss to Toyota - A Modern example of ‘ Strategic Drift’ "GM’s vision is to be the world leader in transportation products and related services. We will earn our customers’ enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people."

13. Toyota becomes the World Leader.. 24 th April 2007 – Toyota ditches GM to take the No. 1 spot Main Drivers of Growth – Lean Production System – Pioneering Petrol / Electricity hybrid car – Prius – Camry, the most popular car in the US

14. Why GM lost out? Focused on Gas Guzzling SUV’s – Strategy was fine as long as gas was cheap Was late to enter the Hybrid car market – GM’s Volt still not released in the market Labor Issues – Rising Labor cost

15. Thank You..!