uring petrol using a catalytic system that Walters developed.
Fortunes were positive until 1961, when the company, now with 438 employees, came under the stewardship of Jameson Walters, the founder's grandson. The grandson turned his back on the primary business of the mineral discovery and marketing, and began a series of highly leveraged acquisitions. This prompted the name change to KMI and the company grew in size to 800 employees.
In 1999, stewardship passed on to Jameson's son, Randolph, who decided that it was time to re-strategise the company. Randolph called a meeting of the key executives of KMI and told them that he detected the following problems in the company.
He then invited each of the key executives to prepare for him a report stating what the problems were, why they were problems, and suggestions for rectifying the problems. There were three key executives -- the Director of Manufacturing, The Director of Finance, and the Director of Marketing -- and within two weeks Randolph had three reports in front of him.
Charged with creating new product lines for KMI, the Director of Manufacturing saw the problems with low ROE as being directly connected to the theory of core competence (Prahalad & Hamel, 1990).
Using this theory, a company can analyse its current situations in terms of its root or core businesses. In KMI's case, the company's most profitable periods were those in which the mining and selling of coal, and the creation of petrol through the catalytic processes were the most profitable.
The Director of Manufacturing also pointed to the competitive factors that had affected the company's profitability. Management in the past had too quickly adopted the "model du jour" and followed the trend.
It completely redid its manufacturing processes to a "just-in-time" process (Schoneberger, 1982) and then adopted the concept of "flexible manufacturing" (Meredith, 1987), finally sett...