Case Study Part II
The objective of this executive summary is to present the facts and issues concerning the initiatives in the “Operation Optimize” in AcuScan Inc. This will involve the situation that the company is currently in regarding the administration’s desire to make a transition into retail markets by introducing anew product but still maintaining the quality of their traditional products as well as their excellent employment environment. In order to do so, this executive summary will give a concise report of the current situation of AcuScan in their efforts to develop a new product and at the same time maintaining the previous services that they render. In relation to this, it will also give emphasis on the key points that are related to the aforementioned situation. Furthermore, it will also give the corresponding conclusion regarding this issue that AcuScan is facing. Lastly, recommended solutions and actions as well as its corresponding explanations will also be given.
Summary of the Situation
More than a decade ago, AcuScan launched the “iScanner” that helped boost the company’s status to instant success. The iScanner became the security scanner choice for airports in the whole country. iScanner is used by 40% of the market in terms of their protection and security purposes. Due to this, the company experienced a dramatic growth that involves having 1,500 employees across the United States in just 10 years. AcuScan also has regional centers throughout the country. In 2002, the company’s revenue reached the amount of $100 million (University of Phoenix).
However, the economic slowdown continues to affect the company. Despite the decision of the administration to lay off 500 employees and revamp their supply management that cut costs by 15%, there is still a decline in the project revenue of the company. The sales and service revenue continue to decrease. It is expected that the sales and service will drop by about 30%, with only the services providing 70% of the revenues (University of Phoenix).
In this kind of situation, the company has to take extreme action. Cliff O’Connor, the CEO of AcuScan decided to enter on a new venture. Connor together with other administrators want to explore the possibilities of a new project wherein they will develop a new product in order to expand their market. This is seen as a bold step for the company because they have not created any new product since it started. The company believes that engaging in the production of a new technology will enable them to tap on a different market, which will aid them to increase their revenue and have a competitive advantage with other organizations that offer similar services (University of Phoenix).
Nevertheless, there are some difficulties and problems that must be address. Before this new product emerges there are still some issues that must be given due attention. AcuScan still faces a short-term budget crisis. Despite losing 500 employees, the company still has to cut-cost in order to give way for the creation of a new product. The analysis of the senior management entails that every department with the exception of Sales and Marketing should find ways to cut-cost by 15%. The Sales and Marketing departments are excluded from the budget-cut because the company believes that they are the key revenue generators (University of Phoenix).
In line with these, Chris Martinas and Pat Lambert the officials responsible in the Product Development and Marketing, respectively proposes a solution. They deem that in order for AcuScan to succeed in the current tough economy, the company must expand its technology. They should venture into new markets and regain their status of being the cutting-edge leader in technological products and services. In order to achieve this, the company should develop a product that will create solution to customer need that is not yet recognized by the company’s competitor. AcuScan must act now in order to dominate this potential market and develop the product as the soonest possible time because competitors are also looking for new ways to apply their technologies (University of Phoenix).
The new product that the Marketing and Product Development departments propose involves the use of iScanner technology in a new market. To be able to address the ongoing revenue and market share declines, they developed a product concept line with past product trends that will cater to the current needs of a new market. This plan is referred to as “Operation Optimize.” It will focus in a retail setting that will allow retailers to use iScanner technology in identifying incoming customers and track their movements as well as information about each customer like their needs, wants, and desires, which could be seen in their unique retinal scan. Nevertheless, there is some information from a reliable source that the Secur-A Corp. is in the process of developing a new technology that is involved in retail application (University of Phoenix).
Another issue that the company also needs to solve is the existing faction within its employees. Some of the executives of the departments believe that the Operation Optimize is a good way for the company to increase its revenue and once again become the cutting-edge leader in this industry. However, there are some employees who deem that the plan cannot be properly executed even impossible to accomplish because of the company’s lack of resources such as a low budget (University of Phoenix).
There are important points that must be highlighted in AcuScan’s current situation. These key points should be given due attention as these are the main problems or issues that must be address. The main concern that the company is facing is the fact that it is loosing revenue on the sales of existing products. In connection to that, the company is also not acquiring enough profit from maintenance contracts because their product is becoming a commodity. Due to this, another concern emerged and that is the plan to move into new markets to expand the scope of the company. They want to venture into a new business without compromising their existing business relationships. AcuScan decided to tap a new line of clienteles by using the existing technology that they have and develop in into a new product. However, there are some problems in the creation of a new product. The company has limited resources and budget to actually engage in this kind of development. Furthermore, the disagreement among the employees of the company like the Director of Development and the new Marketing Executive with regards to the development strategy are delaying the progress of AcuScan.
The issue that holds a lot of weight in holding back the AcuScan’s progress in solving the problem of their company is the disagreement among its employees. The new Marketing Executive already has a clear plan that will aid AcuScan in entering the retail market. This will further enhance the reputation of the company as the leader of eye scanner. However, the Director of Development is not convinced that a quality product can be completed in the deadline that was given to them. Everybody agrees that something must be done the only problem is the way to do it.
The soundest action to take to address the problem is to distribute the creation of the product in phases. In doing so, the product development can be properly planned, completed, and tested because of the methodical manner that will be use. This will also ensure that the company will create a product that abides by a high standard of quality. High quality products have made AcuScan the leader in the industry during the past. They should maintain this kind of reputation by making sure that they operate within the high standards that they have.
University of Phoenix. Critical Thinking GEN480: Assessment Case Study.
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