AcQuire Technology Solutions Business - Case Study Example

AcQuire: Business Case Report [Name] [Professor Name] [Course] [Date] [WORDS 2083] EXECUTIVE SUMMARY AcQuire Technology Solutions is an Australia-based manufacturer of mining software. Lack of an effective strategy for its global operations is however responsible for the company susceptibility to revenue loss after the 2008 Global Economic Crisis. The company needs to come up with strategies that can ensure it is protected from incurring losses in case of another global financial crisis (Geary 2011, 6-7; Flint, 2010, 49-53). The issue was caused by lack of preparedness on the part of the company. The company lacked sustainable strategies that could protect it against loss of revenue. Therefore, AcQuire remained in a vulnerable position to external or macroeconomic factors such as high inflations. This resulted to ultimate loss of revenue during the 2008 Global Financial Crisis. AcQuire had also failed to have sustainable globalisation strategies causing it to be vulnerable to financial loss during the 2008 Global Financial Crisis. As a result, company was exposed to volatility of the mining industry. This was aggravated by the company’s over reliance on the sale and export of homogeneous products that were principally exported to developed countries. acQuire needs a sustainable globalisation strategy that is resistant to a repeat of a financial crisis. To realise this, several recommendations are available. Diversifying acQuire’s product lines has the potential to increase its revenue base hence positioning it as a market leader in innovative software products. acQuire should expand in phases cost-effectively. This should be ensured by seeking new distributors in foreign countries rather than launching operating bases at one go (Geary 2011, 6-7; Flint, 2010, 49-53). Training its existing employees to be more sales goal-oriented is a cheaper and more risk-free alternative that the company should use rather than hiring new sales team (Baker 2010). Further sales performance should be improved cost-effectively through engaging in online sales and retailing of its line of products. The company should also use online advertisement. INTRODUCTION A) Issues AcQuire Technology Solutions is an Australia-based mining software manufacturer. Lack of an effective strategy for its global operations made the company susceptible to revenue loss after the 2008 Global Economic Crisis. There is a need to come up with strategies that can ensure the company is protected from incurring losses in case of another global economic crisis (Geary 2011, 6-7; Flint, 2010, 49-53). B) Causes The issue was caused by lack of preparedness on the part of the company. The company lacked sustainable strategies that could protect it against loss of revenue. Therefore, AcQuire remained in a vulnerable position to external or macroeconomic factors such as high inflations, hence resulting to eventual loss of revenue during the 2008 Global Financial Crisis. In any case, the impact of the 2008 Global Financial Crisis on the company’s economic situation informed it of the need to re-examine its growth pattern and strategies in a way that could make them more sustainable (Geary 2011, 6-7; Flint, 2010, 49-53). AcQuire had also failed to have sustainable globalisation strategies causing it to be vulnerable to financial loss during the 2008 Global Financial Crisis. For instance, the company was exposed to volatility of the industry as it relied on the sale and export of homogeneous products. Rather than diversifying, it relied on its line of software products that were principally exported to developed countries. Since most of the developed economies were affected by the crisis, the company’s finances dwindled. As suggested by Fischer (1997, 16-18), financial crisis can be caused by over reliance on the benefits of globalisation in case of volatility or capital flows hence making recipients to be vulnerable to loss. Towards this end, it is clear that acquire needs to review its globalisation strategy and make them sustainable and resistant to a repeat of a financial crisis. DISCUSSION C) Decision Criteria In order to come up with the resolutions that can hedge financial loss in case of a repeat of the 2008 Global Financial Crisis, there is a need to weigh the alternatives for sound approaches to be adopted (Flint 2010, 49-53). Indeed, understanding the complexities of linking economic development to sustainability offers insights into ways in which the strategies should be pursued. This includes the expected economic benefits that can be attained through using certain strategy (Geary, C. 2011, 6-7). AcQuire should review its investment decisions and set the finances it should spend on investment. These can be ensured through examining the fatal and non-fatal risk. Among the risks likely to be faced include further exposure to financial risks if the company invests substantially in new product range without considering the market viability (Geary 2011, 6-7; Flint, 2010, 49-53). This situation could be fatal for the company. Alternatively, the company could consider a non-fatal strategy of investing a section of its surplus assets. In the second option, the company would only lose a section of its investment when the products give less or no returns. In any case, the company would still be able to operate. This would make it more sustainable. There is need to consider likely expansions to give the company larger operating base. The company is yet to make headway into emerging markets such as China and India. In addition, it has not exploited viable markets in developing economies (Ansoff n.d., 113-5). The company may consider entering these new markets, adding its line of products that are specifically designed for these markets, or seeking acquisitions to launch bases in these areas. However, an imminent risk anticipated is that Acquire may fail to realize return on investment. As an alternative, strategic expansion plan could be useful where the company expands into new markets in phases until it is able to stabilise. Todeva and Knoke (2005, 3-5) suggests that under such situations, organizations may consider collaborating with local distributors or franchises instead of establishing their own shops. Such options are more risk free as the company can withdraw in case of financial crisis. Such may make its finances and operation to be more sustainable. Other possible approaches include using strategic pricing and vibrant online marketing with the view of increasing sale of products to increase revenue. Indeed, this could allow the company to have financial reserves that could be used in case of a repeat of another global economic crisis (Geary 2011, 6-7). However, possible risks include the fact that unpredictable industry trends such as inflations, rise in dollar, increased minimum wage, increase distribution cost and dwindling cash flow may affect the company’s revenues prompting it to use its financial reserves. In any case, Acquire can apply strict control of production and distribution cost to have more revenue base (Flint 2010, 49-53). AcQuire could review its sale model. One way this could be ensured is through designing a compensation plan to reward behaviours in the workforce that promote its sales objectives. The company could target the compensation scheme towards directing the sales force towards sales goals such as getting new clients and cross-selling to existing clients (Sujan, Weitz and Sujan 1988, 9-10). However, the related risks include poor performance from the sales force, organizational culture and failure to understand what motivates the workers. At this stage, AcQuire could further engage in training its current workforce to engage in online advertising. In addition, they can be trained no how to use the social media to increase the appeal of its products (Sujan, Weitz and Sujan 1988, 11). AcQuire has a large employee-base that has the potential to attract new crop of clients globally. D) Alternatives From the analysis in the decision criteria, acQuire has three sets of alternatives that will enable it have sustainable globalisation strategies causing it to be resistant to financial loss in case of a repeat of the 2008 Global Financial Crisis (Akkaya 1998, 3-5; Wu et al. 2007, 284). First, AcQuire should seek expansion in emerging markets or viable markets in the developing countries to give it a stable operating base. AcQuire may consider collaborating with local distributors or franchises in these markets instead of establishing own shops (Akkaya 1998, 3-5). Current analysis shows that the company has not ventured fully in emerging markets in Africa, except for South Africa and Kenya. Seeking global operation through the use of foreign distributors such as retail stores offers potential for increases revenue base. Such options are more risk free as the company can withdraw in case of financial crisis hence making finances and operation to be more resistant to global financial crisis (Wu et al. 2007, 284). AcQuire should diversify its product mix. Rather than dealing in one software product, AcQuire can consider producing more innovative products so that in case its flagship product lose appeal in situations of global financial crisis, it will still have other products (Ansoff n.d., 113-5). An alternative could include introduction of innovative value-adding software to build its reputation as innovate market leader in mining software. In which case, rather than specialising in one line of engineering software for mining industry, it should also introduce more software ware products for a range of industries. The basis of this alternative is that the company should seek to appeal to the wider global market and client base (Trembley and Trembley 1996, 775-6). AcQuire should come up with vibrant marketing strategies. Training its employees to be more sales goal-oriented is a cheaper and more risk-free alternative it can use to increase its sales instead of hiring new sales team (Sujan, Weitz and Sujan 1988, 11). Further sales performance could be improved cost-effectively through engaging in online sales retailing of the product in addition to online advertisement. Using distributors in foreign countries will also make it to have a broader appeal (Dalberg 2011). CONCLUSION E) Solutions A set of multi-prong approaches are available for AcQuire to stabilise its financial might, hence affording it an ability to have a stronger financial base in case of another global financial. Dealing in diversified products through production and importation of different software will ensure that the company is able to appeal to more customers globally (Trembley and Trembley 1996, 775-6). This will enable the company to be able to sell, in case the demand of its other products decline. Further, AcQuire can use distributors in foreign countries through strategic alliances to expand in phases, rather than launching operating bases at one go (Mehta et al. 2013, 364-6). This will enable the company to reach a broader market base and to resist external forces such as global financial risks that may force it to close shop, hence suffering financial losses associated with operating a large number of offices. At this stage, promoting the sale of its software products through strategic marketing in foreign bases will also create global awareness of its products and increase its sales output. In return, the company will be able to financial reserves that can be used in cases of global financial crisis (Baker 2010). F) Implications and Implementation Diversifying acQuire’s product lines has the potential to increase its revenue base, hence positioning it as a market leader in innovative software products. This will however have implications on its finances from the outset. The company’s executive will have to consider hiring more employees and hiring consultants to train its current employee-base (Ansoff n.d., 113-5). The company should consider investing in further research and development. Expanding in emerging markets such as in China and other viable markets in developing countries such as India and South Africa has several implications. First, the company needs to hire new distributors. Delivery or distribution of the new line of products also has hidden costs which will have to be determined (Wu et al. 2007, 284). In which case, the company should be willing to adjust its budget to increase spending for foreign operations. Engaging in strategic sales and marketing also has several implications. The current employees may resist change, as the company considers using its current workers to be more sales-oriented. The company will need to consider changing organisational culture through educating them on the need for change. Employees will further be trained on sales and marketing strategies. This implies further spending on training the workforce (Ataman, Heerde and Mela 2009, 6-8). To conclude, diversifying acQuire’s product lines has the potential to increase its revenue base hence. acQuire can expand in phases cost-effectively through using distributors in foreign countries to expand in phases. Training its existing employees to be more sales goal-oriented is a cheaper and more risk-free alternative it can use. Further sales performance could be improved cost-effectively through engaging in online sales retailing of the product in addition to online advertisement. Reference Akkaya, M.F. 1998. 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