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Autor: anton • March 29, 2011 • 2,603 Words (11 Pages) • 514 Views
Running head: SITUATION ANALYSIS AND PROBLEM STATEMENT: GLOBAL COMMUNICATIONS CORPORATION
Situation Analysis and Problem Statement: Global Communications Corporation
University of Phoenix
Situation Analysis and Problem Statement
Global Communications (GC) is a technology firm struggling with the after effects of the bust in the Information Technology Industry. GC is faced with how to rebound, based upon the strategic initiatives presented by the Senior Leadership Team. This paper will explore the real problem that Global Communication faces meeting the challenge for continued competition in the technology arena. Through the application of the 9-step problem solving method the writer will dissect the situation and assess the issues, opportunities, ethical dilemmas, and goals to come up with the problem. The writer will then calculate the alternatives, risks and pros and cons of the possible decisions; followed by an evaluation of the development and implementation of the final solution and the final results. The first step, however, will be to explore how GC came to this apex.
Situation Background (Step 1)
Global Communications has experienced a drop in stock value as a result of the recent bust in the high tech industry. During the boom time, many companies popped up. This influx of new providers saturated the market and provided more competition and the need for further technological advances to keep up with consumer demand. GC's challenge was keeping up with the needed advances and turning a profit. This is something that they have not been able to do.
As a result of lagging profits and a lowered customer base, GC recently made changes to infuse fresh ideas into the corporate mix. Katrina Heinz, the new CEO, brings with her the knowledge of the global long-distance industry. It is Katrina's desire to increase revenue and profit through globalization. Another new person, Nancy Everhardt was brought aboard as the EVP for her expertise in growing the small business market through the creation of products that were more attractive to consumers. The new corporate team has tried to stem the downward spiral by negotiating a new contract with the Union which included concessions on education and health benefits. However, after further evaluation of the current financial situation this has not been enough to realize the changes that the Board of Directors demands.
In order to turn things around financially, the corporate team has devised a plan to increase market share, profitability, and globalization. The plan entails the downsizing of the domestic call center and outsourcing those positions to a more technologically advanced work force in India and Ireland. The savings in the cost of labor would decrease the overhead for advancement.Need citation here The question at this point is, at what cost?
There are many challenges facing GC in this scenario. At this juncture the learner will point out several that are on the forefront. The first issue is the problem of dwindling stock prices. The recent reaction to the troubles of the IT industry has resulted in a greater than 50% reduction in GC's stock value. There is also the issue of GC's inability to effectively compete in the marketplace. The market is saturated with competitors who have diverse capabilities that better serve the demands of the consumer. GC has not been able at this point, to provide the technological advances that consumers are looking for.
The direction that Global Communications wishes to move in creates another issue in that the possible downsizing of the Domestic Call Center would displace a large percentage of employees. Employees have become complacent with their current skill sets and are not returning to school to maintain a competitive edge as an employee or producer of advanced technological capabilities(Gincel, 2005). GC's plan is to outsource to an area where technological skills are readily available, India and Ireland. Although the technological advances GC is seeking will be available in those locations, this move could also cause a backlash within the current and future customer base. Continued moves to offshore locations are causing many consumers to look twice at companies that use this tactic for an increased market share (Stones, 2003). The final issue identified is the possibility of litigation by the Union officials.
There are many opportunities for Global Communications in moving forward with its plan of action. The first opportunity is the possibility of increased technical sophistication by partnering with a satellite provider to offer video services and a satellite version of Broadband. This in turn will allow GC the opportunity to increased market share. By providing the consumer with a more diverse product to choose from, GC will be able to gain a competitive edge in the market and garner new customers in the process.
Another opportunity found is the chance to cut unit cost by outsourcing the call center to India or Ireland. This move will allow GC the chance to become a key player in the global arena. It will also provide GC with a labor force that is technically advanced to meet the needs of a growing market at a lower price (Rossheim, 2006). The combination of all of these opportunities will provide GC with the much needed profitability capabilities to sustain its operations for the next three years as well as produce a higher yield for stockholders.
Stakeholder Perspectives/Ethical Dilemmas
When there is an opportunity for change, there must be an evaluation of the various entities that these changes will affect. The Senior Leadership Team's interest in the strategic change management that they are trying to accomplish is to increase the market share both domestically and globally by creating technological advances, while cutting cost in order to make a profit and increase the yield for shareholders. From the perspective of the Union officials, their stake in this move is the retention of the jobs and benefits of the current workforce. The employees wish to continue to work for the company that they have shown loyalty to by conceding to the changes in the education and health benefits. The consumers' stake in the changes is the chance to have a better product at a competitive price. The shareholders primarily want a high yield on their investment.