Gemcom Software: Business Consulting - Case Study Example

Gemcom Software: Business Consulting Report Name Professor Course Date Table of Contents Executive summary 2 Introduction 4 Background 4 A look at our client 4 The key business issue 7 Finding, conclusion and recommendation 9 References 14 Executive summary Gemcom is a world leader in PLM market based upon end-user software. The company has operation in Australia, Asia, and Russia. Although currently the Russia market is not larger in term of revenue, there is high potential of growth and increase the company’s profits. The main issue identified is that the company has difficulties in maintaining relationships with the extended partners. After the analysis, it was concluded that the relationship between the company and the Russia team was strained by the following two reasons. 1. There is perceived disparities between contribution and reward. 2. Break down in trust and respect. 3. Change in partnership agreement 4. The success of the Gemcom software. To address the issue the following was recommended that the manager should. 1. Manage the emotional as best as possible when making the decision. 2. Revisit the core business vision and the reason of being partners, especially with the team and their team leader. Perhaps the initial goals and expectations has been met and new one need to be set.. 3. Define the immediate goal for the relationship. In other words define early whether the relationship is one you want to fix or one you want to unwind 4. The manager should also find out who has what rights and obligations under the partnership agreement and under the Russia business law as well as international law. 5. Endeavour to the right thing. 6. The manager should avoid taking the issue personal. It is important to focus on business issue and deal with them in a business like way. 7. Finally, it is recommended that the manager should be creative and supportive to ensure the decision arises is suiting all the partners. These recommendations when followed have potential of improving the relationship with the Russian team. Introduction The purpose of this report is to provide the manager and the owner of Gemcom software with options of resolving the partnership issues in Russia. After observing the business operation and collecting information from the managing director Gemcom software Australia Mr. Pyne Andrew as well as from other employee then I prepared a comprehensive report. This report consists of the company overview, the relationship issues that the organization has with the employees and stakeholders. In the report we have identified the business issues as the in ability to maintain good relationship with the partners in Russia and prepared viable recommendation to address the issues are presented. The goal of the recommendation of this report is to be implemented so that Gemcom software Russia can achieve its goal. In addition the recommendation will assist the company to continue growing, achieve higher level of success and reach its full profit potential. The report is structured as follow; the first section includes the introduction, the next chapter is the background, then issue is then presented and last chapter are the recommendations. Background A look at our client Gemcom is a world leader in PLM market based upon end-user software. The company’s PLM software market is comprised of 3D software for design, product data management, simulation digital manufacturing, and social collaboration. The company is estimated to have a market share of $10 billion in software and service as at 2011. In year 2012, the company expanded its strategy to encompass PLM within the broader market that is defined as 3D experience. It is estimated that this addressable market represent double of the current PLM based upon its internal and external market data1. The company purpose: Gemcom software allows business to digitally define and simulate product as well as the process and resources to manufacture, maintain, and recycle them minimizing their impact on the environment. As the pace of technological advancement accelerates companies are increasingly depending on Gemcom software intellectual capital. The optimal response to on demand market place requires that products designed to be tested, shared, and experienced virtually in real time. Likewise, internet has evolved to an environment with access to global information, online communities, and real time interaction that position end user to become contributors. Gemcom software believes that from the product creator to the final consumer, everyone can play a role in creating delightful experience, going beyond product features and function. The company software and consulting service enable its customer to: Reduce design cycle time, to accelerate time to the market, Collaborate with partners and suppliers, create manufacture, and maintain product facility more efficiently. The company software addresses wide range of products from consumer goods, machine parts, and semiconductors to automobiles, aircrafts, ships, and factories. The sale of the software forms 90% of the company’s revenue. In addition, the company also provides selected service principally to larger consumers. The services comprise of methodology for design, deployment and support and training services2. The company software application help the customers address the following issues 1. Product quality 2. Time to market 3. Supply chain collaboration 4. Globalization 5. Regulatory compliance 6. Manufacturing efficiency 7. And social innovation The company maintains a long-term focus, financial model with high level of requiring software revenue. The company has a diverse, highly educated employee base from different nationalities. The company long-standing financial model has enabled it to maintain high recurring software revenues well as investment in critical areas such as customer support even during the time of financial challenges. The company has substantial commitment to technological innovation. This has enabled it to create new markets. One of the key components that have enabled the company to define and create new markets is the close relationship with the customer as well as partnership with customers who are global leaders in their respective industries. The company works closely with the customers, often involving them in various stage of product development. The company has developed a net work of partners for sale and marketing and product development. Gemcom calls this model extended enterprise. The company plan to continue with this model in future. To market and sell its product, the company operates through a direct force and indirectly through value added resellers, with the total sale well balanced between the direct and indirect sale channels. Gemcom software continues to expand its indirect sale channel and expertise to it targeted markets. Ownership: Gemcom family are the principle share holder of the Gemcom software as at 31st December 2012, with 40% share capital and 51% voting rights. Since the Gemcom family holds more than 50% of the share, they control the company. To ensure that the ability of the Gemcom family to control Gemcom software is not used in an abusive manner half of the company’s board of directors is composed of independents directors and audit committee3. Competition: The Company operates in highly competitive market place. As it continue to broaden its addressable market, by expanding its current product the company face an increasing level of competition from new and existing competitors. The company competitor competes in specific areas of its portfolio. The key business issue The main issue identified is that the company has difficulties in maintaining relationships with the extended partners. To implement the 3D strategy the company has develop extended enterprise model and partners with other companies in areas such as product development, to enable the software developers to create and market their own software application, using Gemcom product architect4. The company has difficulties maintaining the relationship with one of the partners in Russia. Apparently, one of the agent’s team Leander and the team want to pull away from the company. The particularly agent had had a very good relationship with the company for six years. The agent was a software developer and had a team, which was responsible for marketing the Gemcom software products in Russia. This has happened when the company wants to acquire the agent’s business and his team. According to the managing director Mr. Pyne Andrew, the agent has approved the company’s plan. However, the team leader formed her own company and took the team with her. She then approached the company and proposed that that the company should switch the agency from the existing relationships and follow her into her new company. The Gemcom Russian is not a large market in term of revenue. It account for only 5% of the total revenue of the company. The revenue from the market was stable. The company was anticipating that the Russian market would grow in the near future. In fact, the company has just translated two of their product in Russian language, which they believe it will accelerate the growth of the business in Russia5. The managing director Gemcom software Australia provided the information. Additional information was collected from the other employees and from review of the company document such as financial report. Finding, conclusion and recommendation Gemcom software is a unique business and has many opportunities to increase its annual revenue and customer base in Russia. The popularity of the company combined with the unique service and lack of close competitor in Russia provide the company with the opportunity to develop its strategic plan to operate to fullest potential. Why partnerships dispute arise: After the analysis it was concluded that the relationship between the company and the Russia team was strained by the following two reasons. 5. There is perceived disparities between contribution and reward. the team leader and the team in Russia has felt that the reward she get from the company does not match her contribution 6. Break down in trust and respect. Like any other relationship trust and respect is the foundation of business partnership. The trust and respect between the company and the team Leader and her team in Russia has eroded. Moreover, the fact that Gemcom software has been successful is another reason why the relationship with Russia team has weakened. The revenue in Russia has been stable and there was minimum risk. In addition, the translation of the product into Russian language will grow the market. Ironically, nothing stresses the partnership more than stress6. In successful business, the partnership disputes are more heated. This is because in such a case there is more to fight for and resource to fight. To avoid the partnership dispute the following are recommended. a. Know why you are partner. It is important for each partner to have a clear understanding of why each partner is in a partnership. This will help to define the roles, responsibilities, and expectations from each partner. In addition, this will enable partners to hold a constructive discussion in case of disagreement. b. Know your strength and weakness. It is important to not underestimate your weakness or overestimate your strength. In addition, it is important to appreciate how your partners see your strength and weakness. In addition, most importantly work on your weakness. Furthermore, it is important to understand how each partner contributes to the business. Moreover, be open about discussing your strength and weakness and do so regularly. Be committed to working on your weakness and acknowledge your partner’s strength. c. Make sure you share a common vision for both the business and there partnership. Revisit this vision and mission regularly as the business continue to grow. Other dispute arises out of simple reason such as different sense of the direction that the business should take or what you are trying to accomplish7. d. Do not make things personal or take things personally. It is possible to criticize an idea or a business practice without attacking your partners personally. Similarly, accept that your idea can be criticized without you feeling personally attacked. Remember that reasonable people agree to disagree. Work on business differences in a way that does not damage the trust and respect. e. Keep things open. Be open to criticize, new ideas. In case of issues, air them in a manner, which includes all partners. Most importantly Listen to your partners to maintain the respect and trust f. Have a professional advisor or an advisory board. As a manager, it is important to get experienced practical caring advisory board and listen to them. Getting help from professional advisors is the first step of mitigating a problem in partnership. To save the ailing relationship between Gemcom software and the Russian team leader and the team, the managing director Gemcom software, Mr. Pyne Andrew should do the following. 8. Mange your emotional as best as possible. Emotional cloud judgment and perspective and erode trust and respect further. It is important to remember that trust and respect is always necessary in resolving the dispute even in the case of separation 9. Revisit the core business vision and the reason of being partners, especially with the team and their team leader. Perhaps the initial goals and expectations has been met and new one need to be set. Bearing in mind that this has come when the company is planning to acquire the agent, team maybe things have changed or the expectation of the team and their team leader turned to be wrong. The manager should thus discuss the issues with the team and the team leader the visions and reason for being partners or what the new agreement entails8. 10. Define the immediate goal for the relationship. In case of a dispute such as the case of Gemcom, it is important to define early whether if the relationship is one you want to fix or one you want to unwind 11. The manager should also find out who has what rights and obligations under the partnership agreement and under the Russia business law as well as international law. It is also important to find out how those law are applied in practice 12. Do the right thing. Remember if you end up in court to seek the help of the judge, the partner who has acted with the most integrity, fairness and common sense is most likely to get the court assistance. 13. The manager should not take it personal. It is important to focus on business issue and deal with them in a business like way. Avoid attacking the partner integrity and motives unless there is good reason to do so. 14. Be creative and supportive. Remember the most obvious solution are not always the best one. Solution built around the respect, fear and the need of all the partners are likely to be perceived as a breakthrough by all the involved parties. These recommendations have potential of improving the relationship with the Russian team. It is my hope that you will arise at the right decision that will be a win-win for both Gemcom software and the team leader and her team. Once more, thank very much for consulting me. I hope that this report provides you with the information you need. Please feel free to contact me if you wish to discuss any issue further. References Cavusgil, S. Tamer, Gary A. Knight, and John R. Riesenberger. 2012. International business: the new realities. Upper Saddle River, N.J.: Prentice Hall/Pearson Wang, William Y. C., Michael S. H. Heng, and Patrick Y. K. Chau. 2007. Supply chain management issues in the new era of collaboration and competition. Hershey, PA: Idea Group Pub., (an imprint of Idea Group). http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=164196 Gage, David. 2008. The Partnership Charter How to Start Out Right with Your New Business Partnership. 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