Demonstrate how to evaluate client capabilities and business opportunities - Assignment Example

How to Evaluate Client Capabilities and Business Opportunities This paper provides an analysis of some of the IT, business and ethical issues that occur during merging and acquisitions processes. After evaluating different factors involved we recommend course of action and explain reasons for recommendations. Paper provides samples of the management consulting for specific situations and examines issues of supporting of two prices, authority of managers and conflict solving. The goal of management consulting in our case is to increase effectiveness of financial and business performance, insure development and growth of business and suggest ways of solving problems within organizational structure.

In evaluating client capabilities and business opportunities we refer to work of P. Wickham and L. Wickham (2008) in order to study opinion of professionals on related matters of management consulting. Issue of two prices for customer loyalty program Analyzing current operating differences between national and regional chains, we need to take into account both IT and business factors involved in issue of two prices for a customer loyalty program. Let’s start with examining IT factor. Changing IT applications to support two prices will be expensive.

It will help us to evaluate these expenses differently if we can view costs related to changing IT application as investments into securing higher incomes in the future (Wickham P. & Wickham L., 2008), as opposite to viewing these costs as simply expenses. Maintaining loyalty program can be the key issue in making profit in a case with newly acquired chain and “provides cost advantage in comparison with competitors” (Wickham P. & Wickham L., 2008). And keeping sales high will justify costs involved into changing IT applications.

In our situation national chain had in the past similar experience of discontinuing loyalty program which affected consumption and led to 30% drop in sales. Considering that discontinuing loyalty program will occur in the same chain, the same locations and will affect the same population and clients, we can forecast loss of customers and loss of income as a result. Previous experience also showed that regional chain was not able to regain former level of sales even after introducing new loyalty program.

Loosing one third in sales is very high risk. It will affect health of company’s finances and resources available to invest in new projects (Wickham P. & Wickham L., 2008). It’s also important to show to buyers that store cares about needs of customers. By investing into changing IT applications national chain has to achieve balance between risk, resource requirements and expected profit. Business factors that we need to evaluate are buyer power and competitive rivalry (Wickham P. & Wickham L., 2008). Supermarket chain has to maintain sufficient number of buyers through understanding importance of each existing individual customer and through attracting new buyers.

In the past regional chain already suffered big loss of buyers. It means that there are other supermarkets in the areas where regional chain has stores. Evaluating competitive environment (Wickham P. & Wickham L., 2008) indicates strongly that customers have a choice and can easily move to the competitors who offer loyalty programs. By discontinuing use of two prices supermarkets’ competitive advantage will suffer (Wickham P. & Wickham L., 2008). Considering provided explanations and analysis we recommend for the national chain to modify home-grown IT applications in order to enable it to support two prices.

This solution will help newly acquired regional chain not to loose its customers and positions on the market and to stay much more competitive. Authority of managers in taking advantage of deals Regional chain gave to its store managers authority to take advantage of deals offered by supplier and purchase extra quantities of products. It had obvious benefits, supermarkets made better profit as a result and managers were motivated to look for better deals since they received bonuses for it. Ii means also that managers looked for better deals and then were able to offer those better deals to buyers.

Everyone involved in a process benefitted as follows: chain was able to sell more and profit more, customers were satisfied as their power to buy increased which made store more attractive (Wickham P. & Wickham L., 2008), and staff was motivated to work smart and benefitted from it. It’s important to find out if possible how mush profit chain made as a result of such deals and how big was the contribution of these deals in sails (Wickham P. & Wickham L., 2008). If profit was significant and sales were high then we recommend first course of action which will justify costs of changing IT applications.

Since such system of operating offers several clear advantages simultaneously, in first course of action we recommend that IT applications developed by national chain should be modified to support store managers in taking advantage of deals (in stores which had the physical capacity). We also recommend establishing clear lines of authority and responsibilities of store and category managers in order to clarify how different departments work cohesively together. In second scenario sails and profit from deals were insignificant and allowing store managers to take advantage of deals was more of a motivating factor for them since it added certain bonuses to their salaries.

In this case we take second course of action. This means that high costs of changing IT application will not be justified and will not benefit company. Accordingly as a second course we do not recommend investing into working out IT issue. In case of not modifying IT applications we recommend to human resource managers to find a ways to keep experienced store managers of regional chain motivated and interested in continuing in their positions. Ethics, business, IT and how to solve problems Since our recommendation in situation with scanners was to modify code for scanners of the national chain we need to change its IT applications.

Problem arose with a leader of IT Tech who lost modified source code and therefore can not make additional changes until next release of the code will be available from the barcode reader manufacturer. Such situation is an evidence of poor fulfillment of his work responsibilities by head of IT Tech department. Loosing important information, not having back up of it and hiding fact of loosing code from management are all sings of a very poor work ethics. After loosing source code this person should have reported to his management about the problem which was not done.

Lack of integrity and irresponsible behavior affect negatively competitive advantage (Wickham P. & Wickham L., 2008). Responsibility of a consultant for Mergers & Acquisitions project is to the company that requested their consulting services and not to certain individual within company. Consultant will not do his job well if he decides to hide facts and cover up somebody else’s mistakes. Integrity is vital part in the work of consulting. In order not to be in danger of ruining his reputation, consultant has to find a way to present a problem with lost source code and possible solution to it to management of the supermarket chain with honesty and conviction.

Then top management will have to think about the problem and possible solutions as well. If due to lost source code, IT applications can not be changed until next release of the code is available, we recommend that national chain contacts manufacturers of barcode scanners right away to find out when new code will be available. We also recommend that IT department tries either to find lost code or to restore it. References Wickham, A.P., Wickham, L. (2008). Management consulting, delivering an effective project (3d ed.). Harlow: Pearson Education, Prentice Hall.