Scenario One
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Situation Analysis and Problem Statement: Gene One Corporation
Karen Berdugo
University of Phoenix
May 30, 2006
Situation Analysis and Problem Statement
The first environmental benefits that come to mind when discussing bio-technology may include reduced pesticide applications, less soil tillage and reductions in associated fossil-fuel use. Gene One entered the industry with innovative gene technology that did just that. As a result, the company quickly grew into a multi million dollar company. With such success, Gene Ones executives and Board of Directors are faced with the decision to maintain its privately owned state or go public within the next three years.
Situation Background (Step 1)
As a privately owned company, Gene One has been able to establish the company as an innovator in the biotech industry. In order to achieve its goals of being a leader in the industry, Gene One needs to realize more visibility and creditability by becoming a public company. In order to do this, Gene One must build its brand image, increase its customer base and implement a marketing infrastructure. (University of Phoenix, 2006).
The executives at Gene One have decided to offer an IPO within 36 months. Before this offer can be accomplished, the executives must address various issues that become barriers to implement their strategy of maintaining competitiveness within the biotech industry and ensure that they continue to reach their projected growth targets of forty percent per year.
Issue Identification
With the economic indices on the bio tech industries side, executives at Gene One must act expeditiously to acquire long-term competitive advantage. To do this, all members of management must agree that the aggressive goal to offer an IPO within a 36 month period is the best decision. However, the current situation at Gene One does lend itself for an easy transition. First, Gene One must meet the requirement as outline in the Sarbanes-Oxley Act (SOA) of ensuring that IPO directors are independent and one member of the Board must have financial experience serving as a CFO or CPA. (University of Phoenix, 2006); this is not the case at Gene One. Secondly, since it is imperative that Gene One can demonstrate financial success to Wall Street and Investors, accountability of employees for marketing and financial strategies will inevitable and a necessity. Therefore, current staffing may have some reservations on the news to go public, which in turn may lead to an employee turnover. Lastly, a recent article cautioned investors on biotech investing as a result of a recent scandal. This places Gene One at a greater challenge to demonstrate that the company is capable in becoming the leader in the industry.
Although Gene One is faced with apparent barriers, it does have greater opportunities to achieve its goals of 40% growth within three years.
Opportunity Identification
Gene Ones decision to become a public company will provide them an opportunity to gain more creditability and visibility within the industry. With more creditability, investors will be more inclined to endow financial participation, which will give Gene One an opportunity to gain capital for growth in technologies. (University of Phoenix, 2006). As the company continues to grow, Gene One will have an opportunity to offer more jobs and become well known as a well established employer. The SOA requirement provides Gene One the opportunity to recruit experienced individuals that will strength the leadership of the organization and become more marketable to investors. Lastly, with an aggressive marketing plan, Gene One will be able to build on its brand image, which is also very important to investors.
Although Gene One has many opportunities that will have appositive effect on their goal to increase profitability with a 40% growth rate, the executives will have to be careful to consider any/all obstacles and how their decisions will affect those who are directly or indirectly related to the plan and