Analysis of Interviews

In total eleven interviews were conducted with members of the organisations outlined in the Short Histories above.

In the context of the concepts and ideas of the key thinkers provided in Essay Two, and the headings included in Table 8 above, the interviews generated responses that are organised below under the following headings:

1. Strategy and Operational Effectiveness;

2. Organizational Practices;

and

3. Internationalization of Firms.

While these headings are taken from Porter‟s proposed New Global Competitiveness Index (2008-9) links to concepts arising in Penrose ([1959] 1995) and Drucker (e.g. 1966) were made that indicate the appropriateness of these concepts when thinking about the sources of competitiveness within a location and arising from within firms from their internal strategy, activities and business practices.

In structuring the interviews sets of questions were developed to probe activities and processes that the businesses engaged in. A number of prompts in the form of questions are outlined in Table 9.

The sections that follow outline the responses to the questions in terms of the main themes. In the limited time available with interviewees it was not possible to cover the full scope of all questions with each one individually.

Table 9: Organizing Themes and Questions for Interviews

 STRATEGY AND OPERATIONAL EFFECTIVENESS

Nature of competitive advantage – Underutilised resources What trade-offs have been selected for the business strategy?

How have the businesses identified or used under-utilized resources?

What systems are in place to minimise costs?

Degree of customer orientation

What steps are taken to stay ahead of competitors by satisfying customers?

Is analysis conducted on whether any other products can be produced for existing customers?

Are processes in place to get feedback from existing customers?

Value chain breadth

Can existing inputs be used to deliver new lines of goods?

What are the mechanisms that are used to determine the life-cycle of existing products and what are the steps taken to develop new products?

Capacity for innovation

What products or services can be developed using existing resources?

Can there be efforts made to develop an enterprising/ more enterprising management team?

What evidence is there of R&D activity and its impact?

Production Process Sophistication

To what extent were those productive opportunities identified addressed through upgraded production processes?

Are the current generations of production processes available?

Extent of Marketing/Degree of Market Orientation What is the nature of the marketing conducted?

What steps are taken to identify the customers‟ reactions to the products being produced?

Who decides on the reaction to feedback received and what mechanisms are used to decide on what the reaction should be?

Has authority been disseminated or does centralised decision making feature?

Reliance on professional management

How are management requirements identified and addressed?

Clarity about who has decision-making authority How pervasive is delegated authority?

Are decisions taken by those closest to the relevant information?

 INTERNATIONALIZATION OF BUSINESS

Breadth of international markets

To what extent are markets considered and treated as local or global?

Extent of regional sales

Where is demand located? How is demand identified?

Control of international distribution

The responses by interviewees to questions posed are provided in transcripts in Appendix 3. These responses have been summarised with the most salient points organised under the headings below.

Strategy and Operational Effectiveness Strategy and trade-offs

In the development of strategy tradeoffs are a necessity. Firms cannot cover every eventuality. It is necessary to make decisions which are judgements on options and this is the function of effective executives. In a company that is growing strategy often emerges and develops. In the case of Pretty Polly the reliance on a single product proved costly and eventually contributed to causing the closure of the firm. NKMP‟s strategy to rely on an expanding milk market caused problems in 1989 and they changed their strategy changed to look at diverting into other products. The appropriate strategy emerged in the case of FEXCO when it became apparent that there were opportunities that were not being catered for in the Tourist business and that underutilised resources existed to cater for this productive opportunity.

In small business particularly the effectiveness of strategy is quickly felt. In one enterprise inerviewed stock was ordered and purchased up to six months in advance. When this stock was put on sale there is a very quick reaction from the customers and at that stage the judgement of the executive is put to the test.

Adding an additional line of service to existing products or services is less risky and judgement is easier to determine by sampling existing customers‟ attitudes. This is evident in the strategy adopted by Liebherr Container Cranes with their introduction of additional equipment in Belfast on a trial basis. In FEXCO the provision of an additional service was prompted by the retail section in the form of a retailer who was also a shareholder in FEXCO.

The protection from being the leader in the market place is one strategy that can work as long as the leadership is maintained but globalisation has put this strategy to the test and has ended this for a number of industries, including Pretty Polly, in the Kerry region.²⁷ The means used by the various firms to avoid imitation included using dependability in their reputation and in the case of Liebherr, their own staff not only erected cranes on customers‟ sites but also commissioned the cranes ensuring they were fit for purpose and in requisite order. In the case of FEXCO the competitor edge of the relationship with Western Union was addressed by it becoming a shareholder in FEXCO so that a

„complementor‟ relationship was developed rather than a competitive one.

Identification and Use of Underutilised Resources

The identification of underutilised resources is based on the knowledge that is within a firm and on the attitude of members to resources. The more knowledge that is within a firm the better chance of recognising the products or services that existing resources can be leveraged further to produce. The greater the amount of debate and exchange of views between the executives within a firm, the greater the opportunity to develop additional new services and products that existing resources can also produce. This was recognised by NKMP early on in their growth when they brought in systems to improve the farming techniques for their suppliers and the output of land and the stock. FEXCO too recognised the contacts that they had built up in the Bureaux de Change as an underutilised resource and used it to launch the VAT recoupment line of their business.

By recognizing the potential return from ICT, they allied this to the use of an IT system that was purchased to streamline the Prize Bond system.

Minimising Costs

Efforts to increase volumes and cater for these volumes with existing resources are evident in the use of IT in some firms including FEXCO and Kerry Group. Relentless efforts to feed information from acquisitions‟ cash-flow, margins etc. to the Kerry Group on a real-time basis have been effective for the Kerry Group in their application of a

27 As reported in Irish Examiner, August 17,2012 other examples include Burlington a large material factory located in Tralee which closed in the 1990‟s, Textura a textile firm in Killorglin and Wenzel a leather

„Kerry‟ way of doing business which focussed on efficiency and managing not only costs but cash-flow.

More recently the recession has forced firms to look further at costs and reduce costs to maintain margins and employment. One firm reduced overheads in accountancy services, while others leveraged IT as a means to drive value by reducing the transaction requirements in terms of transactions processing systems.

In the case of the failed Pretty Polly, investment in robotics was seen as the way to retain competitiveness by cutting the numbers employed. Firms looked at the reduction of the number of activities involved in the production processes as a possible way of increasing their competitiveness. The streamlining of the operations by centralising processes rather having the process carried out in a number of locations had to involve trade-offs that were difficult to get accepted.

Meeting Customer Needs

In the firms interviewed none revealed that they used customer surveys to generate feedback – at least directly or explicitly. For example, the closeness of NKMP to their suppliers/shareholders/customers was a constant conduit for information to executives of the firm. The development of the feed mill in Farranfore and the use of greyhound racing as a promotional tool strengthened the communication between NKMP and its customers/shareholders/suppliers (often a role that was played by a single individual).

This was quite a unique situation and was used effectively in the development of the firm.

The question may now be posed has this uniqueness lost its usefulness and is the focus of Kerry Group on its international development rather than in the promotion of an entrepreneurial platform that will provide sustainable employment in the region. The investment by Liebherr Container Cranes has been constant both in processes and in physical assets in the Killarney region and this is a response to global competition in the market place mainly from producers in Japan and China.

Customer Satisfaction Development

The customer decides what is value rather than the producer. This is apparent in the retail sector by the reaction of the customer to what is being offered. The development of a new service or new products can involve substantial business expenditure and may not lead to increased customer satisfaction. While this can be avoided by market research, small

firms do not have the resources to carry out such research. Speaking to firms such as Killarney Plastics, a resident of Tralee Technology Park, who have been affected badly by the recession they have found the internet a valuable tool to seek out new markets abroad and also enables them to get instant feedback and reaction from their customers to products.

Delivering New Lines

Identifying new services and products is the job of the effective executive who must increase their knowledge and identify the products and services that existing resources can produce. There is evidence of this to date in some of the firms that have been part of the research for this Portfolio. The recognition of the capacity of technology to process repetitive operations to yield efficiencies and carry out operations that are otherwise not viable, have permitted provision of new services and products. The recognition of opportunities to avail of such resources within the region must be encouraged. To date the benefits of IT has been recognised by a number of firms in the area and utilised to reduce costs and turn large volumes of small transactions into viable business. Further efforts along these lines are the types of mechanism required to create further sustainable employment.

Product Lifecycle Analysis

There is evidence that no product lifecycle analysis was conducted at Pretty Polly. Efforts to identify changes in demographics, in low-cost production locations and lifestyle were not taken into consideration: this is the function of the executive. If this is to be done by the executives they may need training or need to hire in specialised persons. This is costly and time-consuming for smaller firms and if it is to be done it must be focussed and monitored. Assuming that demand will exist, no matter what is not realistic for most businesses. In small firms executives do a multiplicity of roles and marketing research is carried out by an executive as an extension of his existing role.

FEXCO have been able to anticipate the decline of lines of their business and have simultaneously identified opportunities that can use activities and processes that exist within the firm to develop further new processes to deliver value to current customers or new customers. The mechanism used seems to be networking and the capacity to listen and the belief in the capacity of staff was evident in the conversations with Brian

McCarthy. The ability to hive off activities that have ceased to be cost effective was carried out by NKMP in shifting processing of milk to a central processing plant in Listowel. This was continued in the phasing out of milk delivery by farmers to their nearest creamery and was replaced by bulk collection at the farms. The decision was made - even though it involved the phasing out of custom and practices and social activities - in the interest of the firm. The strong links between management and the supplier/shareholder/customer enabled this change to take place.

Exploiting Existing Resources

The capacity of IT to streamline and monitor processes and deliver new products has changed the face of business. The development of software can make what was a tedious and costly process into a routine activity. The potential of this source of competitiveness is not location based. It is knowledge based and offers potential in peripheral areas such as Kerry.

The development of new products from milk was the first part of the development process by NKMP. They saw the surplus of milk as an opportunity to get into the export market by producing casein from milk. The shortage of casein provided an outlet for surplus milk production and a chain reaction followed from this by identifying what casein was used for and following through the product line.

The use of IT systems to process the VAT recoupment and the processing of prize bonds enabled FEXCO to deal with the processes needed to operate Western Union‟s products.

They used such processes in Britain and Europe and established themselves as efficient and profitable firm. Their connection with Western Union attracted a bid for 25% of their operations. This, in turn, served as a stepping stone into financial services for FEXCO.

Developing Capacity to Identify New Opportunities

The balance between having capacity and having over capacity is a judgement call and the decision makers must work on getting this right. Decisions were made in the NKMP plant in Listowel to add a milk powder drying system at the time that the plant opened. It was both an additional expense at a time when financial resources were scarce but such a commitment was required for success in diversifying into casein from milk. Such financial „risks‟ were a feature of Kerry‟s history and yet they managed to control

operations sufficiently, and secure sufficient funds, to improve their liquidity position time and again over their acquisition history.

Capacity for Innovation

The capacity of a firm to develop additional services from resources being used by a firm is dependent on the capacity of the executives to see how activities can be utilised to provide services that are capable of providing new products or new services.

This was evidenced in the production of images from Stockbyte to the requirements of the American market and became apparent on Kennelly‟s visit to Los Angeles. The internet was used by Stockbyte as was the capacity to produce images yet the combination of the capacity to produce top-class images and to use e-commerce created a profitable business that was sold to Getty at, with the benefit of hindsight, an opportune time.

Liebherr‟s development of container cranes fulfilled a need in the explosion of container traffic since its advent in the 1950s. Altobridge linked satellite communications technology and connectivity of remote areas to provide localised broadband systems.

R&D can be a very expensive activity and is slow and time consuming. It can take many different forms. Pretty Polly was the most advanced production unit with cutting edge technology when it opened in Killarney. It did not retain this position because its efforts to introduce robotics resulted in industrial relations problems. Firms can assign dedicated members of staff to the task. One of the firms interviewed had a number of staff engaged exclusively in investigating the viability of the firm‟s next project and reported that

“Much of this work is by its nature slow and it is costly”. R&D may occur informally where „receptive‟ minds are conscious of new opportunities and a reliance „on an intuitive quality‟ to make a judgement on the necessary action to be taken. R&D can be carried out with the co-operation of the customer. Here the customer becomes involved in a partnership style research and development. This was evident with Liebherr‟s experiment with the rubber-tyre wheeled gantry crane which was put on trial in Belfast.

FEXCO through their research and development in I.T. systems have been able to adapt their capacity to process high volumes of low value activities into viable businesses. This started with their development of the necessary software to process the prize-bonds and the VAT recoupment activity. The capability of developing monitoring systems and the

software to control the monitoring of these systems is becoming an important part of creating sustainable employment in peripheral areas.

The Kerry Group have programmes to attract graduates and people in food technology that are interested in doing PhD‟s in food science and other related subjects. They are setting up a research facility in Co. Kildare that will be a centre of research for the many facets of their firm.

Enterprising Management

Enterprising management are not risk takers but are the type of management that have research done before decisions are made. Decisions are judgements and there are examples of good decisions and bad decisions. Management in the Kerry Group were looking at growth and saw this growth initially in Ireland and expanded rapidly. When they had expanded in this market to their satisfaction they saw no difficulty in expanding to England and to the USA and still continue to do so internationally. The decision by the Kerry group to get involved in the beef industry was a new departure. Their strategy was to be involved in industries with a high margin. The beef industry did not fit into this category and after a period of time they sold their interest in this industry.

The extent of enterprising management is evident in the capacity of many interviewees to persuade their staff that they can do „the impossible‟ such as running successful international businesses from a home-base in Kerry.²⁸ This went beyond successfully negotiating for transferring the processing of national prize bonds from Dublin to a peripheral location and is evident in targeting international markets that can be served from Kerry.

Examples of enterprising management was evident in support and encouragement provided to individual staff identified as having potential to contribute solutions to business and being supported and trusted to deliver.

28 This belief is evident in other companies such as Annadale Technologies in Killorglin which was

28 This belief is evident in other companies such as Annadale Technologies in Killorglin which was