Management communication case analysis

Management Communication Case Analysis

Gather as much information as possible to understand all Yellowtail's process and systems, such as: financial information, production capacity, market share, market factors, etc.;

Run a thorough internal analysis with focus on financial figures. The following are essential: cash situation, cost structure, financial position, management structure and capacity constraints;

Run an external analysis - PEST analysis (political, economic, social and technological factors). It is very important to determine the company's market position, its competitors, the industry outlook (sales trends, product life cycle, etc.), market regulation, technological pace, market demand, industry prices, etc.;

Run a SWOT analysis based on the information gathered before and determine the company's strengths, weaknesses, opportunities and threats;

Formulate a strategy for the future that is meant to improve the current state of the business (increased sales, increased margin, improved customer satisfaction, etc.).

Gunnerson's in-basket

The in-basket was full of issues that required Gilcrist's immediate attention. She had to:

Handle an unexpected visit from OSHA - the Occupational Safety and Heath Administration of the Department of Labor;

Deal with a production problem and a case of potential sabotage coming from one of the company's employees;

Decide on the boat show where the company should be present in the current year;

Decide what to do with Sagittarius acquisition offer;

Pick up the environment regulation compliance issue and prepare for a meeting with EPA representatives in the next week.

At this point the first 3 issues can't be delayed without risking potential losses for the company. Gilcrist should try to solve them as soon as possible, while performing other tasks with the same priority from her own agenda, such as attending Gunerson's funeral or meeting Stewart Marschal in Miami. The last 2 issues will have to be postponed for a few days, but not more than 1 week, otherwise they could turn into a potential loss as well.

Criteria to make decisions

The criteria to make decisions should be in line with the business strategy. Once the business goals are set, decision making process should become easier. Thus, Gilcrist should take under consideration the following aspects:

worsening of sales figures due to oil crisis and a poor marketing activity - the company should work on the costs side to improve margin and to be more commercial to boost sales;

the company enjoys a good reputation among customers and this should be preserved as it is - maintaining the quality standards is important at this point;

the consumption pattern changed a lot over the years - the buyer's preferences changed towards sailing, so as the buyer's professional profile, which implies that this is a dynamic market and flexibility is essential to adapt to these changes.

Before making important decisions, Gilcrist should undertake some or all of the following steps:

Define the problem;

Define the criteria related to the problem and specify the goals to be reached through the problem's resolution;

Weigh the importance of each criterion using the importance of each goal behind it;

Look for alternatives to reach the goals she wants to accomplish;

Determine the extent to which each criterion can reach the goal(s) - a probability;

Determine the optimal decision by multiplying the alternative's expected result through with respect to a given criterion with the criterion's weigh and aggregate the alternative's expected results with respect to all criteria. The alternative with the highest score should be considered optimal.

At this point Gilcrist's first criterion to make decisions should be avoiding potential losses while squeezing all open issues in her busy calendar.

First 3-5 priorities

The first thing to do is to do all formalities needed to meet Stewart Marschal, Chris Craft's dealer in Florida, as her boss' requested. Thus, Gilcrist needs Sarah Clarke to book her a flight to Miami and a flight back to San Diego that would allow her to attend Olaf's funeral. Also, she should contact Marschal to let him know she's coming and ask him to make dinner reservations for their business meeting.

The following priority is for the OSHA inspection. She should meet its inspectors and explain the company's current situation. That is, she should explain those people that the owner recently died and she just took over the responsibilities. The purpose of all these explanations is to get a delay for their visit to have time to find out more about the situation and to fit this visit in her busy schedule. In case the request is refused, Gilcrist should assign one of the managers to replace her. Before meeting with the inspectors it is recommended that she contact the yard foreman (Charlie Douglas) and inform him about the OSHA visit and ask him to try to leave a good impression about the yard. She should also schedule a short meeting with Charlie before her flight and discuss about the yard.

The following priority is to get informed and try to solve the open issues.

The marketing manager has asked her to specify to which events the company would participate in the year to come. To answer to that question, Gilcrist should ask Paul Lees for more information, such as: Yellowtail's event schedule in the last 5 years, sales breakdown for all regions for the past 5 years, the list of the company's current dealers and their details.

The company has to be in compliance with EPA standards and for that the new manager needs to know the costs of doing so. Thus, she has to contact the financial manager and ask him to provide her with these figures. While she does that, she might as well ask for a more detailed sales breakdown for the last 5 years and for the cash flow projections for the year to come.

Gilcrist needs to know what the production figure looked like for the past years and for the current year. For that she needs to ask Charlie Douglas for the production schedule, milestones and potential delays.

The new manager needs the owner's approval for Sagittarius potential acquisition to be taken under consideration. If she doesn't get it, she should contact Sagittarius' representatives and let them know that this is not an option for the moment. If she gets the approval, she should let them know that is analyzing the option of a potential acquisition.

Memo

Dear Mr. Boswell, after a brief, yet deep analysis of Yellowtail's performance in the last few years, I can conclude that:

The company's financial performance needs improvement. In 1974, the profit margin was close to 2%, the return on assets 4.5%, the return on investment 14.5% and the sales went down 16% even though the industry's sales decreased with 10%, which is considerably less;

The financial position needs even more improvement. Thus, the current ratio is 2.13 and the quick ratio only 0.87 due to inventory in excess, the inventory representing 59% of the current assets. The poor liquidity is aggravated by a high debt to asset ratio of 0.7, which implies that Yellowtail is quite vulnerable when it comes to covering its financial obligations;

The company requires investment to be in compliance with air and water pollution regulation on one hand and with labor regulation on the other hand; lot of work needs to be done on the operational side. It looks like a lot of issues have been postponed and now are due a long time ago;