GAZ Group Russia: The Gazelle Light Commercial Truck - Case Solution
In early 2013, Bo Andersson, the CEO of the Russian automotive company GAZ Group Russia, was happy with the implementation of the company's new product-market strategy and the related organizational processes. This case study discusses the major challenges he encountered when he assumed his post as the CEO of the company and how he transformed the company.
Case Questions Answered
- What were the major challenges facing Bo Andersson when he assumed the CEO role at GAZ Group Russia?
- How did Bo Andersson transform GAZ?
- What is the current GAZ business model? How do they create value for their customers?
- GAZ operates in Russia and has had success in exporting to Cuba, Mongolia, Eastern Europe, Northern Africa, and Turkey. They are targeting several other emerging markets for growth, including North Africa, India, Southwest Asia, Central Europe, and Eastern Europe. Which capabilities will enable them to expand to their emerging market targets? What capability gaps do they have? Do they need to address these to compete in other emerging markets? How might they do this?
1. What were the major challenges facing Bo Andersson when he assumed the
CEO role at GAZ Group Russia?
One major challenge that Bo Andersson had when he assumed the CEO of GAZ Group Russia was corruption. Since the beginning, Andersson was explicit that he would only accept the job under the condition of total transparency. Corruption was a major issue in Russia, and the manufacturing industry was no exception.
In order to confront this problem, Andersson formed committees to approach all complaints of corruption issues, changed the purchasing process to fully automated electronic payments, and established a top management purchasing committee for daily oversight.
Another major challenge was that the industry was extremely volatile and driven by the short-term business climate. When the economy expanded, customers were more ready to take loans to buy cars, but when the economy was in recession, customers were not buying so much.
The company requires the ability to try to meet the changing demand faster. In order to do that, they needed to be able to change the production of a model in an easier manner.
To address this challenge, the company made the assembly line able to produce two or more models. That way, when the customers’ demand changes, they can change easily and in an efficient way.
Another major challenge was that because of the discontinuation of passenger car manufacturing and workforce reduction, followed by the global economic crisis in 2008, GAZ Group Russia had…
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