No-Cable And Case
Background of the organization
No-Cable & Case is a Singapore based mobile phone and tablet, case, and phone repair chain that operates in Singapore and Malaysia. They six flagship stores that also sell Samsung branded phones and tablets, and 41 shopping center aisle stores that sell cases and accessories, and do basic repairs such as screen replacements for all android phones. Recently they were an unsuccessful bidder for the official repair centre for Samsung mobile phones in Kuala Lumpur. In Malaysia they are seen as a premium dealer for Samsung. No-Cable & Case has approximately 300 employees. It is organized in a functional divisional structure. Jo tends to run the business, and deal with HR issues, while Alicia is more entrepreneurial.
The business was established in 1996, is run by two siblings, Jo and Alicia Leung. However, it was not a pure start up. In 1972 their father established Train, Plane & Bus, a luggage and leather goods manufacturing, wholesale and retail business that operates in Singapore and Australia, and since 1998, has had a manufacturing facility in Hunan, China. He funded the establishment of No-Cable & Case, and was actively involved in its day to day operations until his death in 2006. Train, Plane and Bus I run by Jo and Alicia’s older brother, Tony. It is almost 10 times the size of No-Cable & Case on all financial metrics However, while the retail stores are sometimes in the same location, the business operate separately. Jo and Alicia both own 50% of No-Cable and Case. Tony and the siblings mother own half of Train, Plane & Bus each. Jo, Alicia and Tony would inherit equal shares of their mothers holdings on her death.
Over the past five years, No-Cable & Case have grown an online retail business. Initially this was primarily through ebay, but now 80% of its online sales come from company websites in local languages The online business has grown to be about the same size as the retail business. About half of the online sales are to ASEAN nations, and the other half are to Australia and New Zealand. They have a policy of having local domains in each country they operate in, but deal with all customer enquiries from their head office in Singapore. This business has moved beyond their core market, and provides other electronics, fashion item including short run branded clothing, fashion accessories, costume jewelry, and watches. Some of these products are sold using premium home brands owned by No-Cable and Case. Alicia, in particular, has led this development, and has created a competitive advantage for the firm through its ability to identify fashion trends, and source unique items that are attractive to teenagers and young adults. In recent business media articles they have been described variously as Singapore’s version of Kogan www.kogan.com or Universal Store www.universalstore.com. However, these descriptions are not truly accurate.
With the impending changes to the GST for online goods in Australia, Ebay’s public statements that it may no longer operate in Australia because of the manner in which the GST will be collected at Platform rather than store level, and the impending opening of AMAZON’s fulfillment center in Australia, Jo and Alicia have identified the need to establish a presence in Australia.
Galaxia Emporia was established by Mirayam Glover in 1999. It has 25 stores in Australia, (Melbourne, Adelaide and regional Victoria) and an online store that is about 50% of its sales. Mirayam has decide it is time to cash out of the business, for public stated reasons that she wants to spend more time with her school-aged children. However, in reality, she is bored with the day to day operations of the business. What she enjoys is the challenge of being an entrepreneur, and building a business, rather than operating it. In many ways her personality is similar to Alicia’s. Mirayam also has a branded Juice and Salad business that she started in 2016, which is now operating in 7 stores in second-tier shopping centers in South East Melbourne.
Over the past 5 years, the day to day management of Galaxia Emporia have been led by Gary Smith, an 49 year old Queenslander how learnt his retail and management skills in his families convenience store and petrol business chain in and around the Gold Coast. If asked he would describe himself as an old-style wheeler and dealer, who does not suffer fools gladly. The other members of the top management team are Trixia O’Toole, who heads marketing and retail operations, and Jenna Madigan, who is head buyer. Logistics are outsourced to Lott Logistics. Jenna has extensive experience in dealing with international buyers and suppliers. The other two have less experience in cross cultural communication and engagement.
Jo and Alicia have agreed to purchase Galaxia Emporia, and then use it as it Australian base. Galaxia Emporia was only about half the size of No-Cable and Case. The financial aspects of the acquisition were clear, favorable and easily manageable. Financing could come from retained earnings, and they could also access, if necessary financial support from their brother. They want to use Galaxia Emporia’s local knowledge warehousing and distribution network to support the establishment of 25 No-Cable & Case stores in Australia over the next 2 years. They are committed to creating having a presence for Galaxia Emporia in Sydney, the Gold Cost, Brisbane and Perth in the same time frame. However, they are not sure if they should expand the brand to South East Asia. They are also not sure as to how they will manage the Australian Business, both in terms of fulfilment of their online activities, and the day to day operations of the retail store business.
Jo and Alicia flew to Melbourne to meet with Mirayam and finalise the acquisition. The They also met at dinner with the other three members of the top management team at dinner. Mirayam has agreed to stay on for six months in an advisory capacity, making herself available 2 days a month. However it is clear that her focus will be on her new business. In her meetings with Jo and Alicia, Mirayam has been very supportive of the current management team. However, while Alicia recognizes Jenna’s skill as a buyer, she believes her own experience may be equal or stronger. Alicia more confident with the knowledge and skills of Gary, but did not personally like him at the first meeting. Jo however, thought he would be an acquired taste, and reminded Alicia that he deals with the same part of the business as Jo does. And that Alicia does not want to deal with that area. So it was more important that Jo and Gary have a good working relationship. Both though they could work with Trixia.
On the flight home to Singapore they reviewed their initial experiences meeting. Jo recognized that most of the challenges in the acquistiion would fall to her to deal with. And she was unsure how to proceed. Should they keep the same managers? Should one of them move to Australia? Should they get one of their Singapore team to move to Australia to be their eyes and ears. What could they expect from the current Australian Management team? But what really came out of the meetings is that they did not know what they did not know. What else did they need to consider to make the people aspects of this acquisition work? It was clear they needed external help, and decided to employ a human resource consultants to advise them on how to handle the initial people related issues, and future management issues. Jo in particular wants evidence based advice that draws from the international human resource management literature.
You are the consultant that they have hired to advise them.
- Cross-border mergers and acquisitions raise international human resource management issues. Identify and evaluate the issues that exist in this case, and recommend actions to address the issues.
- There are different implications related to the source of managers used by a firm. Discuss the use of host country, third country and parent country nationals in the context of the case with particular reference to compensation.
- There are different implications related to the source of managers used by a firm. Discuss the use of host country, third country and parent country nationals in the context of the case with particular reference to performance management.