| Corning is a company with a multi million profits and a | | | | successful and profitable venture. Distributing those |
| century long history. James Houghton is a current CEO | | | | 100$ million in three years is a smart decision and with |
| of the company that is facing a few dilemmas and | | | | growing market for such technologies it would bring |
| they have to be resolved as soon as possible in order | | | | profit without a doubt. The core strategy of the |
| for the company’s further successful development. | | | | company coincides with such decision as Corning has |
| The core of the company’s operations and main | | | | been in this business for a long time besides it is only |
| course of business was edge-cutting technology, | | | | going to strengthen their evolving network organization. |
| however at this time their technology is not a market | | | | Interrelated businesses will only win from this situation |
| leader and they have to decide what to do with their | | | | and gain a supportive partner in the face of PCO, such |
| three major branches. They need to remodel or cut | | | | businesses as their testing laboratories in need of local |
| off one or two of them so that they can carry on | | | | operations based on fiber produced by the same |
| gaining leading positions in the business world and | | | | company. |
| produce excellent product. | | | | The third division of Corning’s business is television |
| Lab sciences division is one of the three vital arteries in | | | | glass. In 1988 company had to close three big factories |
| the body of the Corning company. Currently this | | | | manufacturing television glass, the reason for it being |
| branch is not being he most success, although in the | | | | an increasing expansion of Asian and especially |
| course of past seven years, according to the financial | | | | Japanese competitors. Their production was of higher |
| statement, it has been the most profitable of the three | | | | quality and definitely with newer high-tech features. |
| and future forecast predicts further growth. The | | | | Moreover one of the Japanese companies bought |
| problem arises though, Ciba-Geigy a Swedish | | | | considerable shareholding in one of Corning’s |
| company who owns 50% of the Ciba Corning | | | | companies Owens Illinois. In this difficult situation of |
| corporation is a partner who needs to be taken into | | | | severe competition and forced reduction of business |
| consideration. They could buy Corning’s share for | | | | units, Corning has to make a decision as to further |
| 150$ million and Corning would be free to do whatever | | | | activities in this field. Suggestion to cooperate with |
| they want. Ciba is a very well developed company | | | | Asahi and to sell 49% of its glass business would be a |
| with reputation and mutual business. On the other hand | | | | helping hand for a drowning company. Asahi as a |
| the competitors are spending huge amounts of money | | | | Japanese entity and a former business partner for a |
| on the R&D, three times as much as Corning. It’s | | | | long period of time, which guarantees a secure |
| inefficient for real breakthrough and simply dangerous | | | | environment, would be perfect candidate for the |
| considering the possibility of losses if the competitors | | | | creation of a new fruitful alliance. It would provide an |
| win over their market share which can happen if they | | | | ensured cooperation with other Japanese companies |
| do not increase R&D funding. Corning would be | | | | and help survive on the American market. On the |
| probably better off in case of terminating mutual | | | | other side Corning will acquire resources for the |
| business with Ciba-Geigy and turning to expanding | | | | development of liquid crystal displays which are major |
| fields such as professional testing for AIDS or | | | | products of the future. Timing of this venture is suitable |
| chemical addiction. Combining forces with three other | | | | for both companies, as the foreign wants a helper to |
| companies each of which is a professional in a specific | | | | promote itself on an unknown market and Corning |
| field (pharmaceutical, clinical and environmental testing) | | | | wants a technologically update partner. |
| Corning would be able to gain leading positions again. | | | | In case of purchase of Corning by Asahi, the company |
| Spending almost 500$million on the investment into the | | | | would place itself in a new position in a strategic sense. |
| purchase of such promising companies and getting | | | | Clearly in this situation Asahi would be the one with |
| back about 150$ million from selling of Ciba would be | | | | most control, because of their connections with |
| an optimal decision. This choice is a very risky one, | | | | Japanese TV manufactures and cutting edge |
| although if money starts working immediately on the | | | | technology. Thus Corning is left a role of the marketer |
| new products of the three new entities, it would most | | | | and public relations specialist. On the other side there is |
| probably bring more profit than Ciba with its low return. | | | | a wonderful possibility to spend time and money for |
| Considering the history of the company and its quality | | | | R&D to design an innovative model of liquid crystal |
| orientation, a new redirection of funds into a more | | | | displays, the goal that was set when creating a mutual |
| perspective business would be a better idea than | | | | business with Asahi. As was already said, Corning in |
| sticking with a more or less safe but slowly dying | | | | this partnership will not be the one in leading position, |
| company. Corning is a company with a big experience | | | | but rather in learning and in case of successful |
| in laboratory testing and important connections and | | | | technology development it will be a profitable one. |
| partnerships that will help maintain high profit levels. | | | | In such egalitarian corporation as Corning it is important |
| Another business sector Corning is involved in is | | | | to keep in mind that although all ‘children’ |
| communications sector. In 1980s when this field was | | | | companies are independently run, there needs to be a |
| only developing and Corning had a lot of patents on | | | | firm controlling hand. Big money is involved in all three |
| fiber and fiber and fiber-making products, it was | | | | of possible ventures described above and by taking |
| receiving high profits. In a few years market for fibers | | | | risk with any of them, company can lose a lot. On the |
| grew immensely and Corning as a leading producer in | | | | other side by taking these steps or not taking them as |
| the field gathered big dividends. The problem in the | | | | in IBM case, they can realize huge profits and bigger |
| present time is that the customer needs a new | | | | market share due to increased quality (alliance of three |
| approach with the fiber technology. For instance | | | | professional laboratories) and technological innovations |
| Corning should be focusing on the local systems rather | | | | (in Japanese partnership). |
| than on long distance links which was already | | | | According to their corporate strategy that follows |
| saturated enough in the US market. Besides it was a | | | | from their strategy wheel, Corning aims at keeping |
| right decision to start introducing new sophisticated | | | | businesses in four different areas. Specialty materials |
| terminal peripherals to large communication companies | | | | such as video displays, LCD, memory storage; |
| and computer corporations. This is a way of the | | | | communications- optical fibers and fiber optic cables; |
| moving progress and together with these new | | | | laboratory products and testing; consumer house |
| technologies in computer sphere and local systems. | | | | ware-cookware, tableware, sunglasses are those |
| Taking into consideration the amount of money that | | | | areas. Regarding the companies current situation |
| Corning is going to spend on the development of its | | | | keeping all four of them and maintaining a 25% share |
| laboratory testing division, it should hold back from big | | | | of the whole company business is not a strategically |
| purchases and new joint ventures. The possible | | | | secure decision. House ware division needs to be at |
| PCO’s partnership with IBM seems like a good | | | | least reduced to 15%-10% in order to lessen spending |
| project with a lot of potential but it should not be | | | | on the part which is not company’s unique |
| considered at the moment. PCO is able to develop on | | | | competency. Efforts should be focused on the other |
| its own and thus it is on a safer side for the company | | | | three segments to return invested money and to |
| to just continue doing what it was and stick to the 10$ | | | | make profit. Narrowing down production and |
| million profit a year, even incurring operating loses. | | | | operations would only save company money, human |
| The proposal with 100$ million investment into | | | | resources and help maintain focus on the ultimate goal |
| expending the U.S. capacity and making tough new | | | | of surviving. |
| fibers for the service homes is a prospectively | | | | |