Walden Acquisition of Able Corporation
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Able corp. is a power tool company with serious issues. They have no knowledge of their market share, the size of the market nor the dynamics that drive the market in their line of business. The cordless products sector is showing the most growth among all power tools. Their manufacturing facilities are located in high cost labor areas causing their product costs to be higher. Their current strategy for new products is first in, abandon and move on. This is because whenever they create a new product a competitor comes along and copies it, and able just gives up. Walden is a multination conglumerate that focuses on short term quarterly results. They expect profits to increase every quarter. Able is more focused on the long term of building market share. How could I reconcile ables long term goals with walden's short term goals.
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Solution Summary
Able is more focused on the long term of building market share. How could I reconcile ables long term goals with walden's short term goals.
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The biggest problem in reaching a consensus on the business plan or reconciling the longer term goals of Able with Walden's short term goals is obviously the vast difference in the corporate culture of Able Corporation and its new parent, ie, Walden International. Able is a traditional, family based business with little or no trait of a progressive and modern business entity whereas Walden is a bottom line focused modern business entity.
Able's top management have their own vested interests in the current strategy and its employees are well accustomed to the traditional management style with minimal focus on modern business issues such as quality, customer centric marketing approach,etc.
Thus, the conflict between the proposed strategies of Walden International and the current strategy of Able Corporation is bound to happen. Walden's focus on improving the short term quarterly results with enhanced focus on quality and innovation, improved marketing practices and focus on new and emerging segments in the power tool industry conflicts with the ongoing strategy of Able.
Able's current management has been very conservative and have done little to tackle competition in the past few years. The company has failed to realize the full potential of its product with obsolete marketing strategies and lack of competitive instinct.
Walden wishes to completely change the corporate culture of Able and wants to transform it into a modern and progressive organization with increased focus on improved short term bottom line profitability to make this acquisition a success.
From the discussion above, we can reach the following points regarding the main hindrances in reaching a consensus on the goals:
1) The vested interest of the Able's top management in the current strategy of managing Able as a traditional, conservative, family based business.
2) Ongoing arguments and friction among the current management itself is a big roadblock to reaching a consensus on the business plan with Walden.
3) Walden's lack of expertise in the power tools industry and lack of experience among Able's top management to run a modern and transformed business entity is a key source of conflict in terms of reaching a consensus on the business plan.
From the discussion above, we can come to the conclusion that in order ...
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