strategic management

MGT604 Strategic Management

Meetings and Ideas Log

Team Members for Group 2 & Stakeholder Role

· Binod [Operations manager]

· Daljeet [GM of suppliers]

· Peter Vella [Union Official]

· Rupali [General Manager]

Fri 03 April 21:30 PM

· PV, Binod and Daljeet meeting

· Both watched disruption video

· Company is in crisis, press coverage, the camera is bursting into flames for no reason

· Tech development had a look, all with in spec

· Chinese customers, 70% of production, call to advise to cancel their contract with us

· GM thinks that the relationship with china can be rebuilt

· Liquidation threat

· Strategy plan by next meeting, we don’t have time

Our previous plan to make cameras for mobile phones is not going to work soon enough. We have liquidation issues. We need a Plan A (Rescue) and a Plan B (Liquidation). Need both plans because legally not allowed to run a company that is insolvent under the Corporations Act.

Daljeet

· Task division - new concepts, research

· Previous discussion was to collaborate with phone company and medical

· Patents - could look into licencing the patents so we can move in a different direction, we could do a deal that would get cash back into the country

· Warranty/Replacement/Guarantee

· Apple example with low battery scandal

· Give a refund/insurance/

· Collect the cameras from all the customers, drop it there

· Is it an issue in the production?

· Need to work out what the actual problem is

· We need to shape the narrative - separate the issue from the camera versus battery, want the focus to be on the camera

· Battery issue or Battery + Camera

· PV - Nobody is going to buy a camera that might burst into flames, customers are not obliged to buy

· Look at the supplier of batteries - this likely to be external, maybe we need to control the battery supply, only have us replace or make the battery. [ Research, how do go pro cameras get their battery?]

· Short term we are not going to have sales - whether or not we find out what the problem is

· Who are our stakeholders and what are our obligations to them - map out the stakeholders

· Our main customer in China

· Who is the other 20%

· Background research into crisis management

· Obligation to recall our cameras from sale (Ethical and Legal responsibility)

· Odd that that technical did not find an fault with the camera

· What is the problem and where is it?

· How did the technical section do their investigation

· Possibilities

· Is there a precedent, yes there is in NYC police https://www.nytimes.com/2018/10/21/nyregion/police-body-camera-explode.html

· Defamation someone is campaigning this up

· Can we get a camera to burst into flames (faulty batch?)

· Can we get a camera that is damaged to investigate

· Could be a battery issues - thorough investigation, cameras have litihium batteries, batteries could be incompatible or faulty, could be how the camera is used. Could be a new type of battery - overheating

· Tentative options

· Lease or sell the patents

· Liquidate

· Might be hard to sell the business to the customer (vertical integration)

· Merger - company might have a long term value, but a short term crisis that means that the company can’t survive in the short term (ownership stake). Common during a time of company distress

· Our long term value comes from the patents

· Goal to survive in the short term, so that we can reconnect with the long term value from the patents and the innovation

· Ties in with the theory of core competencies, barney’s resource theory, we have things that other companies don’t have that are of value!

· Crisis is for now, value will return

· Three or more parts

· Stakeholders analysis

· Things we must do (reputation, legal, ethical, employees, investigations, refunds or replacements, repair).

· We have to pull from the shelves, as we now know that there is a problem

· Company’s resources, advantages, core competencies

· Can we get into a new market quickly? Others might be reluctant to partner with us even in a new market

· First thing they are going to ask is what went wrong, we need to know answers on that.

· Other precedents

· Apple iPhones catching on fire

· https://melissaagnes.com/iphone-fire-apple-lacks-appropriate-issues-and-crisis-management/

· https://www.washingtonpost.com/business/how-samsung-moved-beyond-its-exploding-phones/2018/02/23/5675632c-182f-11e8-b681-2d4d462a1921_story.html

· Android batteries on fire

· Plan for now (crisis plan)

· Plan for short term (stabilise company)

· Plan for longer term

· Likely a battery issue - other components of the phone are not explosive, could also be a software issue around how the phone battery is managed. Software monitors battery condition.

Binod

· Consumer assurance

· Samsung recalled the product, gave another phone free of cost (what could we give?)

· Need to retain customer,

· What are we going to do to approach the 70% customer that is the retail chain

· Idea - research what happened with previous phones/cameras/batteries catching on fire and how was that handled

Peter

· Customer might not want the camera, even if it is free

· Even if they do take it, safety risk, legal issues

· We are a small company, privately owned, not a huge amount of money

· Is the problem in one line or all?

· Giving it for free etc has the same effect as choosing the liquidation option

· Battery issue - pull the product, figure out the issue, then re-sell online etc

· If it is a camera issue - plan is to offload the company via integration

· Long term we don’t want to be in this market anyway, medium to long term plan is the exit this market

Meeting ended Friday 03 Apr 2020 22:38

Contribution by PV 04 APR 20:00

Option	Title	Explanation
A	Do Nothing; Liquidation	Put the company into liquidation
B	Power Through	Attempt to ride through the crisis, fix the problem and recover sales/key account
C	Sale of Business	Sell the business to a phone manufacturer (e.g. Samsung/Apple)
D	Lease of IP	Lease the IP to any phone manufacturer in return for royalty payments

Daljeet: 07-04-20 20:37PM

Plan D is a one option that i believe is safer

Complete liquidation is not a good idea

Plan C could be used as another option, that will save the company at least financially.

Meeting Tue 07 Apr 2020

Peter Vella

Daljeet

Binod

Peter Vella explained the four options, C and D viable.

Meeting Ended 21:33