1. SWOT Analysis
Strengths
Value-added processing for the customers enables organization to fulfill its orders
Extensive success in the industry for a long time.
Recognized as a leader in technological and service advancement in the industry.
Innovative market forecasting tools that minimized input costs.
A diverse customer-base protects the company from the pitfalls of a financial crisis.
An efficient and effective logistics department for making timely deliveries.
Weaknesses
Lack of adequate input of owners in functional management.
Failure to evenly distribute “top heavy” sales through the customer base.
Limited to the local business to minimize cost of transport.
Opportunities
High level of loyalty among customers in the industry could help in development of operations.
Close proximity with the customers increases possibility of face-to-face interaction to improve industry practices.
Organization is well aware of the customer preferences in terms of delivery scheduling and quick order responses enabling it to edge out competition.
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Threats
Fluctuating order sizes make it difficult to streamline revenue streams.
The long-standing loyalty with consumers can lead to excessive dependence on particular customers.
Low profit margins due to fluctuating sales can result in the company’s inability to grow.
Government restrictions can hinder the company’s quest to expand its customer base to the rest of the state and nationally.
2. Urgency – why solve the problem now?
• These are symptoms the manager is experiencing that require immediate action.
The company, SOSLP, has a limited promotional budget for extending to its clients.
The reduced orders from Matworks make compliance with its requests questionable.
Restrictions by the government create a legal dilemma for SOSLP.
3. Problem statement
How should SOSLP respond to Matworks’ invitation to sponsor its annual sales meeting?
4. Evaluative criteria
Increase the annual sales of the company by 10% each year possibly seeling over $1 million dollars in the first year.
Incorporate a formal policy of using 3% of profits on advertising, promotions, and corporate social responsibility over the next 3 years.
Ensure that the company does not experience legal repercussions or tax deficits for decision to engage in promotional practices.
5 & 6. Alternatives and Analysis
Accept higher-end promotional dinners for Matworks.
+A clear demonstration for the support of the firm’s idea.
+Increase employee job satisfaction due to associated excursions.
-The option is approximately 3% of the sales earned by the client.
-Option decreases the working capital.
-activity falls beyond the stated lowest value for “out of line” practices
-Could cause legally questionable practice for these high magnitude payouts.
Accept lower-end promotional dinners for the client.
+The cost is below 1% of total annual sales from the clients.
+Still shows support for Matworks’ proposal.
+Increases the employee satisfaction and enjoyment in the company.
+The costs are not far beyond the appropriate travel and expense budget.
-Decreases the net working capital.
-Signals legal concern for the high magnitude of practice.
-May result in a negative perception from the client for choosing the least expensive option.
Decline the promotional proposal altogether.
+Eradicates concern for violating legal standards of practice.
+Working capital remains intact.
+Maximizes employee attendance by eliminating time lost when absent.
-Reinforces status quo by neglecting need for customer satisfaction.
-Is a show of disrespect and may hamper relationship with the long standing customer.
7. Recommendation
Accept to implement lower-end outing options for the proposal made by Matworks.
8. Implementation
Contact Linda Lewis via email to confirm acceptance for the invitation.
Communicate with other management teams in steel suppliers companies to confirm their decision on the proposal.
Gauge success of the practice based on criteria mention in #4.
References
Rosenthal, D. W. & Farmer, R. T. (1999) Southwestern Ohio Steel Company, L.P.: The Matworks Decision . North American Case Research Association (NACRA).
