Essilor is a global corporation, focused on the production of optical lenses, offering a wide range of optical products like corrective lenses, frames as well as the most popular and worldly known innovation Varilux. Essilor's rapid growth throughout the world has established it as one of the most renowned international companies.
The introduction of the progressive lenses saw Essilor sustain its implementation of the global approach the company required. The company's strategic approach is a guarantee of its economic performances, distribution methods and service excellence of product offered. While the company focused on rapid expansion, the market responded lucratively as it grew faster and bigger. As Essilor's market became globalised, the company expanded its distribution network through its wealth of mergers and acquisitions.
Essilor gradually broadened its innovation beyond just distribution network and also placed get emphasis on the provision of excellence service for its products. Fully-serviced laboratories were operated in each country to meet the popular demands of their lenses, customer needs and expectations were met with the introduction of the high-tech laboratories. As the company became integrated, it implemented new technology and procedure. Even as the market continued to grow rapidly, the Korean market proved difficult for Essilor, demands for its progressive lenses were restricted. The company for the first time experienced its first failure and immediately pulled out of Korea. It did not take long for Essilor to realise the importance of the Korean market after their competitor became a top brand there. Essilor eventually went back to the Korean market with high hopes.
In this study, I will examine the reasons for the failure of Essilor Korea and also use the case study to identify how new innovation can come in to rectify the problem.
The problem Essilor Korea faced will be clearly addressed in this methodology and I will also propose a framework of analysis on how to combat the problem. The company re-entered the Korean market with new strategies that involved merging with the top local manufacturer (Samyung Trading) leading to a 50-50 joint venture. However, the agreement also specified the management outlines, which stated that the venture will be controlled by two CEOs respectively.
Stephen Shawler, a US citizen with years of marketing experience represented Essilor Korea whilst S.J Lee took the position of the first co-CEO and also the president of the tie-up. Shawler was fairly accustomed to the Asian culture and knew the problems he might face in the country. He outlined the objective to the success of working in Korea as the commitment and the understanding of people in the organisation. Shawler was ready to adapt this policy in order to get the best result; he formed a close bound with the Lee family, who were top stakeholders of Samyung Trading.
Stephen Shawler, tried every available avenue to build a strong bound in the company from the top management to the bottom staffs, but his entire attempt proved abortive. After six months of extensive trials the sales remained stagnant and growth plunged drastically. The reasons for Shawler's failure after six month will be clearly stated here, as I embarked on an extensive study of this case and can report on my findings.
Determining the appropriate strategy should have been Shawler most paramount concern as he was dealing with a different market and people. He moved into the market with his mind set on just getting the right people in order to get the job done since that approach worked for him in his previous experiences. Shawler focused more on the team development and totally forgot the issue of transformation and change there, mainly because the members of the team were familiar with a different strategy. In this case, the strategy looked more like a fast track process and he just wanted to get result through his team member rather than take it one step at a time.
Stephen Shawler failed to realise the impact of cross-cultural management in multinational company. This issue is as important as the sales and growth aspect of an organisation especially when the company's top marketing manager has a different cultural background. Cultural differences in the organisation lead to an increase in the team members' resistance to change. The team did not trust Shawler and believe there was no transparency in his management.
The joint venture between Samyung and Essilor asserts that power should be shared amongst representatives of each company. Lack of interdependence between the two CEOs proved and gave rise to poor planning; loose control and that resulted to poor management. S.J.Lee was very rigid and could not support Shawler's decision in the company. On the other hand, after several attempt to come together as one on decision making failed, Shawler also ignored the over powering conflicts that happened between them.
Shawler emphasis on change was too rigid; he implemented this change aggressively and did not care about the effect on the team.