For the past five years, Future Computers has struggled and maintained a poor record on profit realization and penetrating the market. Notably, its major weakness has been poor infrastructure and lack of enough capital to expand beyond Kansas market. Its primary consumers have been local university students in addition to small upcoming firms keen on digitalizing their services. A careful analysis explored better options and strategies that could help the company expand further and improve on its revenue collection and customer base. Although all the options presented on the table were good, such as trimming down the workforce, the best decision was getting into a joint venture with a stable and well-founded IT firm.
Argument on the validity of business decision
The decision of a joint venture is best for Future Computers since it will enable the company combine its resources with expertise in the field of IT, thus expanding its services to the market. After an in-depth analysis, it became apparent that a joint venture would help the company expand its distribution networks, increase its capacity, and access better and better resources. At the same time, due to its current financial challenges, a joint venture would help it cover some of its debts that were gradually affecting the company’s financial flexibility. According to Killing (2013) a joint venture would help it pay off urgent debts, thus put it at a good position in terms of service provision and paying off its staff. The decision would be the best for Future Computers as it would offer it the opportunity to stabilize its operations concerning human resource management and service provision. It would increase the capacity of work, in addition to more significant finance and technology.
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Logical structure of each argument
However, besides the positive sides to the decision, Future Computers will have to contend with various risks it may face. They include complexity in forming the joint venture, more extended time in formulating an effective plan, and mismatch in operations and management. Killing (2013) argues that d espite the risks, the management team of the two companies can work out on comprehensive research to come up with clear objectives that will help it establish flexible and good working relations in the joint venture. Additional problems that may be faced in the decision include different purposes by the two companies, different organizational cultures, and unclear communication plans in the overall management.
Despite all the risks as mentioned above and drawbacks, considering the current status of Future Computers, forming a joint venture with a company dealing in IT products and services would help the company get stability and gain relevance in the market. Killing (2013) argues that s uccessful joint venture majorly depends on detailed research and exploration of the objectives and aims. For Future Computers to form a workable joint venture with another like-minded company, it is essential to establish effective communication frameworks and bring everyone on board.
In business, no decision is tamper proof and 100 percent right. Depending on the circumstances and status of the company, the best choice can help stabilize operations, increase revenue realization, reduce conflict among employees, and forge the way forward for the business. For a struggling company such as Future Computers, a joint venture in which two firms combines their resources to gain a tactical edge in the market would present the best option. Although other decisions are also available, a joint venture offers the best platform for Future Computers to regain its status in the market.
References
Killing, P. (2013). Strategies for joint venture success (RLE International Business) . Routledge.
