Wallace Group Case
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SWOT ANALYSIS
Despite all the problems that The Wallace Group, Inc. has it has many strengths. The company generated 70 million dollars in sales equating to 3.5 million dollars in profits. The company is clearly successful with three separate operation groups. The market that The Wallace Group sells to is large so they will stay around since The Wallace Group is a big contributor to the other companies success. The biggest weakness that the company has is the president of the company is also the majority owner. His name is on the company, he makes the decisions, and he is in charge of everything. He is the quarterback of the company but many of his employees do not like the way he is running his team. It seems that as long as he is in the position he is in there will be problems and people will be unhappy despite all the success the company has. The Wallace Groups opportunities are endless. The two new programs with the Defense Department could bring in an extra 56 million dollars. The company is also refining older technologies already in place giving The Wallace Group the opportunity to be one of the best companies out. The threats of the company vary though as it could go into turmoil. If another company comes around as a competitor and starts taking some of the customers in any of the operational groups then it could mean trouble. The Wallace Group is divided into three separate groups but if three separate companies come along that concentrate on only one section and do a better job than the Wallace Group then changes will need to happen. With this particular case and the information provided we believe that a financial analysis would be inappropriate at this time.
Problems
Communication skills
One of the biggest problems is the communication between the chain of command and communication between the groups. No one knows the direction each other would like to go. There is a major dissatisfaction among management and the employees. With the communication being lost this creates an unclear message on the strategies, goals, objectives, and the mission of the company.
Top management responsibilities
A complex MIS apparatus has been constructed by the central office to collect data from three very different operational groups. In addition, the central office appears “staff heavy” for such a small firm. This analysis is based on an examination of the organization chart.
Mission and direction of the company
We do not know if the company has a mission statement but no one has ever mentioned it which serves as a big problem. A mission statement defines what the company is, where the company is trying to go, and what the company stands for. It is a setting stone for to all employers. It also keeps everyone on the same page and direction of where everyone is striving to go.
Acquisition strategy
The acquisition strategy has moved The Wallace Group away from its area of distinctive competence in electronics into areas where it does not have distinctive competence. In a small firm such as The Wallace Group, this has resulted in a tendency not to effectively utilize scarce technical personnel. It also contributes to lack of morale on the part of employees because the firm does not have a clear mission. The acquisition strategy has locked the Electronics Group into using the Plastics Group as its major supplier, thus increasing costs for one group and making them less competitive. Presumably, the Plastics Group is also locked into using the Chemicals Group and is faced with a similar situation.
Mr. Wallace
Mr. Wallace has been a little narrowed minded when it comes to the problems of this company. Yes he is a major factor in the company and it would not be where it is today without his tactical decisions that he made, but he needs to understand that the company has gotten too big for one person. Although he is the decision maker he needs to take in count his team and listen to their concerns as well otherwise the company will head in a disastrous turmoil.
Through the analysis of the case we find that no one has been trained to upgrading in stage manager. There is a lack of inexperience that has been shown throughout this whole case study from talking to Frances, reviewing the interviews, and the case in itself. We believe think that being a small entrepreneur is it okay to have little knowledge of the operations but to be successful, you must have proper training. This includes but is not limited to:
Taking entrepreneurship classes
Reading the latest books and applying them into the company
Go to conferences
Make sure you have fresh, train employees who is up to par of the company
Establishing short term and long term goals that need to be accomplished
In order for a stage I manager to become a stage II or III manager that will need to know the basic skills of being a manager first. We truly think that if our client was to follow the steps provided above it will truly help out the company and understand there is always room for growth.
The transfer pricing problems through backward integration can be slowly fixed. The plastic group was paying off debts from the other groups making the prices higher. The price can slowly decrease overtime until it is back to the ideal price level. I would keep the high prices in only one group to ensure there are no other unneeded issues with other companies.
When we took on this case we discovered that Mr. Wallace has had some issues with the direction of the company. He has been asked to for resignation