CanGo Business Issues - Essay Example

 Analysis Report Introduction The video episode emphasizes the importance of Strategic Management. CanGo is faced with a number of issues which needs to be resolved if the business is to continue to grow and remain successful. Some of the issues facing CanGo in order of priority include: 1. Lack of vision and mission statements 2. Lack of a strategic plan 3. Lack of knowledge of the strategic planning process 4. No decision on how to gain and maintain competitive advantage 5. Need for training and matching of skills 6. No risk assessment of projects Issue #1: Lack of vision and mission statements CanGo does not have a vision or a mission statement. A vision statement indicates where the where the company wants to be and the time frame within which the company expects to achieve its vision. A mission statement clearly indicates the purpose for which the business was created and its standards of behavior. Recommendation CanGo’s management team should prepare both a vision and a mission statement which will guide its strategic plan. Both the vision and mission statement will act as a guide to CanGo in its uncertain business environment. The vision and mission will help direct the company in terms of the decisions that management makes. Decisions should be consistent with the vision and mission of the company. Issue #2: Lack of a strategic plan CanGo’s management does not have a strategic plan. Although CanGo is said to be the fastest growing company in the Hudson Valley there is no plan in place to achieve this status. According to Liz it is an accident. The formulation of a strategic plan is very important in any business. According to Daft (2007) the best way to control the operation of a business is through strategic planning. The company has ill-conceived ideas of having done the right things. They lack a proper understanding of the strategic management process and how to gain and maintain a competitive advantage over their competitors. There is no indication of the vision and mission of the company; plans are just made as the managers go along. Recommendation CanGo needs a strategic plan. In order for this to be possible a consultant with knowledge of strategic management needs to be employed. The development of a strategic plan will ensure that the goals of the organization are properly defined and will enable the company to achieve its long term goals as outlined in its vision statement. Issue #3: Lack of knowledge of the strategic planning process CanGo does not have adequate knowledge of the strategic planning process. Elizabeth has decided to introduce online gaming but they have not carried out the proper strategic analysis. According to Purcell (2001) the strategic planning process consists of three main areas: strategic analysis, strategic choice, and strategic implementation. Strategic analysis addresses issues such as where the company wants to go, its resource constraint and the key threats from the external environment.. No proper analysis has been done to determine the company’s capabilities and the level of competition in the industry. Recommendation CanGo needs to perform an analysis of its strengths and weaknesses and the opportunities and threats in the environment (SWOT analysis). This will include an analysis of the company’s internal resources to determine whether it has necessary capacity, personnel and other resources required to carry out the required tasks. The company needs to determine whether it has money, markets, machinery, materials, manpower and make-up (Purcell 2001). In analyzing the external environment the company could use Porters five forces model and the PESTLE model. Issue #4: No decision on how to gain and maintain competitive advantage The need to gain and maintain competitive advantage over business rivals cannot be overstated. CanGo’s management team has not considered the issue. However, gaining a competitive advantage is very important to CanGo’s survival. Recommendation In assessing the feasibility of the online gaming project, CanGo should look at issues relating to strategic choice. They include: the basis on which CanGo decides to compete, the direction to take and how it is going to achieve its choice (Purcell 2001). Porters generic strategies of gaining competitive advantage (cost leadership, differentiation and focus) are useful in this scenario. The company should choose whether it wants to lead the industry by providing the product at a lower cost than its competitors, differentiating its product from its competitors of focusing on a specific segment of the market through any of those means. The company’s success may be short lived if its management does not act swiftly. Issue #5: Need for training matching of skills Although the company is successful its leader (Elizabeth) does not have the required knowledge. Elizabeth does not appear to have a proper understanding of markets and customers. This seems to be an organization-wide issue. Additionally, there seem to be a mismatch between personnel skills and roles. Nick has been given the task of implementing the online gaming project and he has little or no knowledge of project management. Debbie has promised to teach Nick how to prepare a Gantt chart. Recommendation The company needs to determine the skills set that its team members need in order for the business to be successful. It is important that Elizabeth employ a human resource manager to carry out the functions of staffing the organization. Human resources will enable the formation of a skills bank that will provide information on the skills of CanGo employees. This will enable the company to provide a close if not perfect match between individuals and roles. It will also ensure the efficient and effective utilization of CanGo’s employees. Issue #6: No risk assessment of projects The approach to decision making at CanGo needs to be improved. Elizabeth appears to make all the decisions. Ethel points out that it was not even assessed the pros and cons of investing in the online gaming business. The company is considering marketing and implementation without even carrying out a net present value analysis. Recommendation Investing in online gaming requires the use of technology, personnel with information technology skills CanGo needs to perform a proper risk assessment before it enters this market. A number of techniques including Project Evaluation and Review Technique (PERT), breakeven analysis and payoff matrix could be employed when making investment decisions. Additionally, break-even analysis could be employed as an aid to strategic planning and decision making. References Daft, R. (2007). Management. 8th edition. USA: Thomson Learning Purcell, S (2001) The Strategic Planning Process. Student Accountant Magazine, February 2001 Read More