Management
Executone Information Systems, based in Milord, Connecticut, which designed and marketed telecommunications products for small-and medium-sized businesses, has become a major telecommunication company competing with AT&T and Northern Telecom since 1988. Because of economic recession in 1993, many companies had to change their product strategy to overcome this unbreakable situation. Not only the largest company in this business area such as AT&T decided to lower price and revenues, but also Executone reduced its profit margin since it had recently overhauled healthcare communication system that was malfunctioning after installation. With this current situation, even though Executone showed slightly incremental Return On Sale from 0.4% in 1991 to 1.2% in 1992 in its Annual Report, this was not yet its great appreciation. After facing this crisis, Alan Kessman, the president of Executone Information Systems, questions its future business that it would be able to conquer with its rivals in the market. To achieve the highest degree of success in this industry, Kessman wonders whether any mid-course adjustment should be implemented. 1. Continuing every product with more advertisement and introduci
3. Dropping healthcare system and making some changes in its organization Reducing product line by dropping non-system telephone products looks like another good alternative for Executone since these items had a positively high cost of good sold and did not generate a large amount of return for investors. However, according to Harvard Business School (1994), even though the company did not generate a large amount of return in 1992, its sales, 12.7%, was the second highest revenue as percent of total sales (p15). Therefore, with dropping these products, the company could lose much money, which potentially impact to return on sales, -0.6% compare to 1.2% (See Appendix B). Therefore, the company did not have any cost in producing and carrying these items (See Appendix B: SG&A very slightly decreases when drop these products). These points support that reducing product line by dropping non-system telephone products is also not the best solution for Executone at this time. Continuing every product line on the market by putting more advertisement and introducing promotion campaigns is not the best solution in helping Executone to become successful in this situation since there were some flaws from this approach. With adopting its strategy, the company could gain more sales, resulting in increase in return on investors. However, this approach would definitely not only cost the company a huge amount of expense but also impact on its overall profit. Furthermore, by implementing all of current company pr
Some common words found in the essay are:
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Approximate Word count = 1016
Approximate Pages = 4 (250 words per page double spaced)
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