Vision Mission Goals and Strategic Management Assignment

Assignment Task

Strategic Standpoint

Car-It’s mission, vision, and values.

In terms of Car-it’s mission, vision and values the best alternative would be the Merger. By merging with Scooter me, Car-it will experience greater exposure to the market and will be able to reach out to a wider community as its mission is to reach out to a larger audience by ensuring the values of safety, affordable pricing along with quality and envisioning to be the largest retailer with increased demand and market share. By increasing the additional capacity by 10?r-it will be able to sell more units, which will add on to profitability without incurring marketing and admin expenses. It will also help to strengthen the Car-it’s position in the market and access new markets. Alternative two focus more on increasing the unit price resulting in which the demand for models may fall and alternative three will be riskier as the entire production capacity will be in the hands of a third party without having much control over the production and concerns about quality and with the current situation the business is already incurring losses hence alternative of merger is the best one that is in line with Car-it’s mission, vision and values.

Having the least risks to the business. Jason

The best alternative that possesses the least risk to Car-It would be alternative 3 the Merger. Due to Car-It already experiencing a loss three years into the business, they may continue this trend if they don’t improve operations and become insolvent. Working with Scooter-Me allows for certain Car-It costs to be covered by Marlin’s business. Furthermore, Ron will just need to focus on production, while he relies on Marlin’s expertise and knowledge through the joint venture to help Ron access potential new markets to gain more market share. Alternative two is riskier as they have to incur new costs, and do not have current financing available, and maybe they were denied for bank assessment reasons. Alternative three is also risky as it is dependent upon a supplier to satisfy quantity and quality components of the car, meaning they must be on time with delivery to satisfy the retail store agreement and uphold the integrity of its production; which may present as challenging.

Yield the highest profitability.

 In terms of profitability, it can be noted that the outsourcing alternative yields the highest profit which is two times the profit resulting from the option of merger and organic growth amounting to $210,750 despite the risks and concerns. With the option of keeping it as is the company incurs a loss of $17,878. With the option of organic growth and merger, the company is in almost similar profit situations amounting to $95,540 and $99,663. Therefore in terms of profitability, Ron should opt for outsourcing. If he is concerned about the risks in terms of outsourcing, he can opt either for a merger or organic growth.

The ability of the company to get financing. Kevin R

The alternative that fits best with the company’s ability to get financing is alternative 3, the Merger with Scooter-Me. This alternative allows Car-it to remain responsible and in control of the Children’s car division, while also being the most promising for growth and sustained success. The shared resources and market growth opportunities provided by Scooter-Me will help alleviate the existing financial challenges and increase the chances of obtaining financing from ABC Bank. Alternative #1 for Orangic Growth, though this would increase production capacity by 40% due to its larger facility and additional employees. However, ABC bank may remain hesitant to increase the company’s operating line of credit as the increase in Fixed costs would further strain the cash flow. For alternative #2 Outsourcing, though the increase in revenue due to the large contract and reduced costs are favourable, ABC Bank may view the dependence on a single contract for a major portion of its revenue as unfavourable.

Exploit the company’s core competencies.

For Car-it to exploit it’s two main core competencies of the unique engine design and frame design, they would need to maintain control of their own production. As stated earlier, this also ties into their mission, vision, and value. The merger will allow Ron to focus on these competencies and to secure a strategy of value leadership with Marlin’s help. Together they will also be able to access new markets with greater capacity and at a greater pace versus growing organically as Marlin has the resources. That means the second best option would be the organic growth as outsourcing can open up the risk of Car-it’s core competencies being copied by foreign manufacturers.

Preserve the unique design of the engine-battery. Jason

In terms of preserving the unique design of the engine, the company should opt for an alternative one of Organic growth. With the company staying in-house, the information used to build the cars will be retained internally, and eliminate the threat of outside exposure while still producing a profitable operation that could be reinvested into obtaining a patent to protect the company If the company were to later outsource or to prevent competitors from creating replica designs. Furthermore, since Ron and Harry are the only ones trusted to produce and provide authenticity of the unit, merging or outsourcing will expose its unique manufacturing design process of the cars to its new partner or to overseas suppliers; eliminating it’s competitive advantage completely through exposure.

Approval of key stakeholders (consider Ron, Martha, Harry, ABC Bank, customers and community).

The customers will benefit most with the merger as Marlin will be able to bring Ron into an established value chain with a state-of-the art facility. Ron will be able to focus on innovation which his customers already expect. With Scooter-Me covering the selling, general, and administrative expenses, in the short run it will be less of an investment for Ron and stil maintain his competitive edge, if not improve upon it. Yet in the long run, Ron will lose 50% ownership of his company. The merger will also make Martha’s role redundant and force her out of her job.

Ron, Martha, and Harry will prefer to maintain full control, so alternative #1 the organic growth option will likely receive approval from them. However, because the organic growth option does not provide a solution to the financial issues, it might not receive approval from ABC Bank.

Alternative #2, the outsourcing option on the other hand may receive approval from ABC Bank, due to the generation of additional revenue without requiring additional financing. Though it will compromise the company's core competencies, mission statement and values, Ron, Martha, and Harry may not approve. The customers will also be alienated with a cheaper version of the custom car they first fell in love with.

Organic growth will gain support of the community as Car-it is a homegrown business. Although the funding with ABC Bank is not readily available, Ron can look for funding elsewhere, perhaps with silent partners providing the needed capital.

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