General Motors recently reported losing $56 billion dollars in revenue due to the impact of this crisis. TeraTech need to find a competitive product line or customer solutions to remain the frontrunner in its industry. In 2006 Ford did a horrible job executing its strategy on the Ford focus product. The branches from North America and Europe had a disagreement with the design. Both completed two different designs and failed). Instead of coordinating and work with each other the leadership team failed and cost the company money. “"Ford did a terrible job executing on its strategies this year," says Lepsinger.”There's really no other way of saying it.” (Hudson Valley Business Journal, 2007). TeraTech leadership seems not to collaborating with each other well and how they plan for a new product line for its customers. TeraTech should have suggested a strategic plan and research on ways to improve customer solutions three years in advance. The lack of ineffective leaders caused the company to scramble and work within budgets and time constraints.
TeraTech has the ability to plan a strategy for internal operations and ensure all resources are maximizes through cost effective solutions. The company has an option to remove, SVP Customer Service, Paul Ridner from the organization and hire a new leader with strong customer service leadership talent. As the SVP of Customer Service an effective measuring tool on producing quality service needs to be provided. He should have done an annual customer feedback on the company’s product and service. A new perspective on customer service and business will be helpful to bring the company forward. A unique strength for competitive advantage is finding and using what works for their organization and industry; and allocating resources effectively.” (Kerin, 2005 p 582)What really works? (1)Strategy: Devise and maintain a clearly stated, focused strategy. (2)Execution: develop and maintain flawless operation execution. (3) Culture: Develop and maintain a performance-oriented culture. (4) Structure: Build and maintain a fast, flexible, flat organization (Kerin, 2005 p 583).
TereTech can also bring in an OD consultant to help with corporate culture. The OD consultant would work in conjunction with new SVP of Customer Service department. The OD consultant will help the company capitalize on the capabilities they posses. The company is capable of providing customer support however, needs some improvement to gain customer loyalty. The OD consultant will help with developing existing and acquire new talent to offer the best customer service. Offering incentives to employees who exceed expectations will gain strong interest. An article produce by Harvard Business Review published, “Leaders can earn commitment from employees by ensuring that the ones who contribute more receive more of what matters to them” (Ulrich and Smallwood, 2004 p120).
Apple Inc – (Successful through product innovation and customer service)
Apple is one of the leaders in innovation by developing new apple computers and I pods and I phones. The company has capitalizes on new innovation and change the way people listen to music and communicate. Back into 2005 when I pod music player was introduced, Apple reported in the second quarter of 2005, received $320 million in profit. Brand is important in Apple’s business strategy. “Apple Computer had incurred huge losses running in millions of Dollars. Steven Jobs, the original co-founder returned as interim Chief Executive Officer. Under his leadership, Apple Computer reorganized to concentrate on its more profitable competencies” (Barnhart, 2008 p 6). The company retains its customers through other services from branding and new innovative products. Combining the current services with new products maintain customer loyalty through branding. Overall, Apple is very successful and continues to push the envelope to higher and innovation product offerings. (MarketingTeacher, 2008).
TereTech can learn from Apple by conducting research and find ways to improve customer needs and satisfaction in order to become a frontrunner. This is an opportunity for the company to increase sales growth, retain current customers and obtain new clientele. The company employee lacks the skills to build the product and has poor customer support. The company needs to develop an innovative CRM program that will monopolize its market and crush competitors. TereTech has the ability to use external resource by hiring an external IT project management consultant in CRM. The CRM project manager will help the company develop a successful plan for a new product.
The manager will be in charge of the new produce development process. Kerin wrote about the new product process that includes a strategy development, idea generation, screen and evaluation, business analysis, development, market testing and commercialization -refer to Table 1 (Kerin, 2005). TeraTech will benefit having an expert in CRM on its team to allow leaders to focus on internal operations strategy.
Evaluate the Alternatives
To evaluate the alternative solutions TeraTech needs to identify the goals it must achieve to realize the long-term goal it desires. The goals TeraTech want to accomplish in the highest priority are (1) maintain customer retention and relationship and (2.) Increase 10% in annual net income. These two are ranked highest due to long-term business relationship. Every company need loyal customers in order to make profits and grow. By focusing on a strategy to retain customer is important. The other importance is increase sales. In order for the company to grow and develop a new product software sales goal need to be met. Sales staff needs to meet sales goals in order for the business to move forward. The company need to evaluate existing and acquire new talented for the organization.(3) Develop a new CRM analytical and modeling tool to meet customer demands through quality work and (4) Improve organization culture to a customer service focus environment. Goal three and four are ranked second due to the impact of goals one and two. Without achieving the goal for one and two, then three and four will be difficult to achieve.
Identify and Assess Risks
Based on the alternative solutions TeraTech should consider hiring an external IT project manager and OD consultant. Due to budget constraints the company can hire someone that will work on a project basis comparable to hourly wage. The risks on over budgeting are not consequence poses positive outcomes. Some mitigation techniques and strategies to consider is negotiate with external project manager and consultant on a fixed cost project. The company needs to communicate to employee the strategy and invite ideas to improve operations.
Another alternative solution that is relevant to the company goal is letting go the SVP of Customer Service, Paul Ridner. The company need to really focus on this area and by hiring someone that understand the company’s vision and value customer service is important. The risks involve letting go a SVP is losing some expertise. A new SVP can work collaboratively with the Director to improve customer service. The probability for this solution is high and can be implemented. The consequence would not impact customer service but taking a risk investing in new team member. The mitigation techniques should negotiate and termination date so a new SVP can come onboard immediately.
Both alternative solutions were taken in considerations due to the business needs analyze. The goals for the company are to retain customer retention and improve sales. The current leader in SVP customer service is not working effectively by hiring a new visionary leader will bring new perspective and energy. A strong leadership is important to guide the company to next level. Sweetman wrote, “Branded leadership bridges a company’s identity in the minds of its best customers to employee behaviors throughout the enterprise” (Sweetman, 2007 p 47). Additionally, external consultant will bring expert skill set in the organization where the company lacks.
Make the Decision
Based on TeraTech’s alternative solution the pros and cons present a positive decision to hire external project managers and an OD consultant to help the company realize its end state goal. The pros outweigh the cons in this area and indicate a good option. Hiring and external help provide expertise help, meet desired deadline and allow the company to focus in other areas besides the problem. Lay-off the SVP Customer Service and add a new talent to the team will help by bring fresh and innovative ideas to the company. The pro benefits the cons in this area as well and could provide positive outcome. The ideal solution will for TeraTech is that the CRM will be completed and tested in time to market to customers, a new corporate culture will be implemented that values customer service and the company will retain and gain new clients.
The alternative solution will help the company to be a strong frontrunner in the pharmaceutical industry. TeraTech will be equipped with a strong product and company image. A strong customer service environment that will commit to service its client is valuable. Hiring external consultants will help the company conduct careful research and implemented effective strategies to prepare the company to the next level. The company will be prepared with advance technology and structure organization.
The CRM technology change and industries will change in the future. New technology and requirements are needed to accomplish the work needs to be done. “Industries follow distinctive change trajectories. Investments in innovation are more likely to pay off if you take those pathways into account” (McGahan, 2004). TeraTech invest in new technology and company will increase its chance to dominate the market in the pharmaceutical industry. Frequent changes in technology to balance with future trends will help the company continue long-term growth and realize its end goal. Additional note to add, “Pharmaceutical CRM is set to benefit from five key areas of new technology development. These technologies include further sales force automation, speech/voice recognition, increased bandwidth, real-time CRM and interactive television” (Seget, 2004 p 137).
Develop and Implement the Solution
TeraTech need to develop an implementation plan base on the optimal solution selected. There will be five action deliverables that includes (1) Hire external experts in IT project manager specialize in CRM and OD consultant with a timeline of one month that Jack, Wendy, and Chris Riggs will be responsible. (2) Develop CRM analytical and modeling tool program will be given a 10 month deadline after an external and OD consultant is hired. The IT project manager and Wendy Martin will find resources to work on this project. (3) Communicate strategy goals to employees within 2 weeks to announce company goals to employees. Informing employees will be important to ensure they are understands the strategy will be presented by Jack.(4) OD consultant and Chris Riggs will work collaboratively to help with creating a new customer service focused culture. The OD consultant has 5-8 months to train, plan and lead the company to improve corporate culture from poor customer service to highly valued customer oriented company. Then (5) Market to Customers immediately where Christine Defalco will take the lead in this project. The company will have a 12 month deadline to plan and implement the product.
Evaluate the Results
Based on the end-state goals the company will ensure that the CRM analytical and modeling tool will be implemented successfully and improve product ratings and customer satisfaction. The metrics TeraTech will evaluate is testing three current clients systems as guinea pigs to ensure the product works effective. The customers will provide feedback on new CRM product with positive feedback. The goal is to have the product 100% tested internally and externally before the company market the product. Customer service survey for our clients will be sent out for every technical problem from installation to post installation. The survey will be reviewed quarterly and improve certain areas that show concerns from customers. The company will realize its end state goal in becoming the industry leader in CRM pharmaceutical technology by demonstrating cost and product leadership.
Conclusion
TeraTech like many companies faces challenges in the business world. Companies that failed in product launch then become successfully through trial and tribulation such as Apple Inc inspire leaders to strategize and grow. Companies that make poor decision and leadership skills that cost billions such as General Motors provides examples for business leaders to learn from. This paper illustrates a common theme either a company failed or succeeded through benchmarking examples. The common theme in this paper is careful planning. Companies must develop strategic plan annually to remain competitive and make sound decisions that will move the companies forward. In the scenario with TeraTech the leaders of the organization made poor decisions and lack of planning to compete in a market that is competitive. Through careful planning by maximizing resources from internal and external help the company become a frontrunner in the pharmaceutical industry.
References
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Table 1
Issues and Opportunities Identification
Table 2
Stakeholder Perspectives and Ethical Dilemmas
Table 3: Analysis of Alternative Solutions
Table 4: Risk Assessment and Mitigation
Table 5
Pros and Cons of Alternative Solutions
Table 6
Optimal Solution Implementation Plan
Table 7
Evaluation of Results
