Guns Germs And Steel Case Study Summary

ARVIND MILLS

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Environmental Factors
POLITICAL LEVEL –
Inability to anticipate & manage risk
 NAFTA –
▪ Poor prediction (Thought NAFTA impact would be 10 years; but impacted in less than a year)
▪ Mexico emerged as a new garment cluster (Competition)
▪ 17% Duty for outside of NAFTA made Arvind non‐competitive

 Lack of vision
▪ Got carried away by its success, hype by media, stock market and industry

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FUNCTIONAL LEVEL
Blind expansion /Careless /lavish spend p /
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p
 Commoditization
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Invested hugely into expanding mfg set ups
Lavish spend on plants – Huge Fixed Cost (Santej Plant)
Failed to realize commodity is imitable
Insufficient Measures to create product differentiation (Biz Level)

CORPORATE LEVEL
EXTERNAL FACTORS (Contd.,) d  Failed to anticipate and Manage Risk
 Steep fall in Denim price
 Sudden fall in Denim market world‐wide

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De‐risking Balance Sheet
 Failed to sense market volatility

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Economic Factors
 Collapse of global Denim Market
 Prices of Naphtha Feedstock for Arvind’s Captive Power Plants
Prices of Naphtha Feedstock for Arvind