The Case Centre’s top 40 bestselling cases

Thirty sixth place  -SKF Bearings: Market Orientation Through Services (A) Restructuring the Before and After Market
The case
Case: SKF Bearings: Market Orientation Through Services (A) Restructuring the Before and After Market SKF Bearings: Market Orientation Through Services (A) Restructuring the Before and After Market
Authors: Sandra Vandermerwe and Marika Taishoff
Institution: IMD
Ref: IMD-5-0383
Date published: 1990

In the spring of 1987, Mauritz Sahlin, Chief Executive Officer of SKF, the world’s largest bearing company, decided to transform the business to improve profitability and return on assets. The only viable long-term solution was to change the strategic orientation of SKF from the production line to the market. A complex reorganisation with far-reaching consequences was planned, including the creation of SKF Bearing Services, intended to act as a springboard for the company’s new market culture. Would this strategy succeed?

This case is part of a series which includes SKF Bearings: Market Orientation Through Services (IMD-5-0376) and (B) and (C) cases (IMD-5-0384 and IMD-5-0385).

 
The authors

Sandra Vandermerwe is an Extraordinary Professor at Gordon Institute of Business Science (GIBS), University of Pretoria, South Africa; an Associate Fellow at Imperial College Business School; and an Adjunct Professor at the European School of Management and Technology (ESMT), Germany.
e sandra.vandermerwe@btinternet.com

Marika Taishoff PhD is Director of the Monaco Fulltime MBA, and of the Online EMBA at the International University of Monaco where she is also a Professor.
e mtaishoff@monaco.edu

 
The teacher

Julie Verity Julie Verity is a Senior Visiting Lecturer on the MBA programme at Cass Business School, London. Julie discusses teaching the case and reveals the extra surprise it brings.

A colleague recommended the case to me, and I also saw one of the authors, Sandra, leading a session on the case with executives at Shell, where I was employed as a consultant to the in-house learning teams. It was then that I saw its potential.

At Cranfield School of Management, where I was teaching at the time, we focused on organisational culture and its influence on strategy formulation and implementation. This case is an excellent example of an organisation trying to effect a mindset change and enabled us to use the Cultural Web as a very useful tool of analysis. The sequential nature of the case allowed us to play out how the changes made at SKF affected the culture and enabled – or blocked – what they were trying to achieve.

Widely relevant

Over the years, I have used it many times on MBA programmes and executive development programmes, most recently just last year. I used it at Shell after Sandra had 'led the way'! The case is relevant to many large organisations that have experienced the same history as SKF and are facing a similar sort of paradigm shift from a producer to a customer orientation. 

Enduring value

The case is rich in approaches within the overarching themes of change, mindset, formulating new strategy and understanding the customer. I have used it as the integrating thread on programmes and as the capstone case to courses. It is an old case and it’s sometimes hard to convince younger students that such organisations are still relevant in today's fast, technology-full world. But it retains the values I have described above and many lessons around change can still be drawn from it. 

An extra surprise

I have kept up with SKF's progress since the case was written and use this evidence to argue that the turnaround described in part C of the series was perhaps celebrated too soon. There are quotes in the Financial Times and from commentators asserting that a decade later, the company has still not improved its margins or achieved a full transition to focus on the customer. This aligns with research that shows cultural change takes a long time – longer than the three years covered in the case. This is the extra surprise that can be brought to the teaching of this case and illustrates a great reason for looking at older cases.

 
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