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When the president of TerraCog Inc. introduced Project Aerial, Emma Richardson the Executive vice president had not enjoyed her usual hike to the Lake. For years the company had enjoyed market leadership for its products despite lagging behind technologically. This position was however short-lived when an insurgent threat from a rival company, posthaste, designed a new GPS called “Birds1” satellite imagery that was until then well received in the market. The major challenge that Emma faces is to get all the parties to reach an agreement on the price of Ariel, their own product. The conflicting issues caused by departmental heads have resulted in a delay in the launch of their product, this will be costly for TerraCog in the long run.
Background of the company
TerraCog is a Global Positioning System (GPS) Company that specializes in high-quality GPS systems whose main market has been campers, hunters and hikers. The company president is Mr. Fierro, he is assisted by Emma Richardson as the New Executive vice president. Ed Pryor is the head of sales, Allen Roth is in charge of Design and Tony Barron is the head of the production. The sales department has discovered that the new product introduced by their competitor is a much-preferred choice by customers hence the need to invent or improve on their current product. Aerial’s new GPS product would be placed at a market value of $475, $100 more than the current GPS and $75 more than the competitor product. This has raised conflict between the different departments in the company.
Problems, Issues, opportunities
The major issue that undermines the quick launch of the project is the cost placed on their product ($475). As a result of these, however, other problems which the company had seemingly overlooked emerged. These include poor communication between the staff and different levels of management and lack of coordination and teamwork. Poor management has escalated the problem further. The design team thought there is a hurry to launch the project when there are other projects up their sleeves. Pryor wanted the price lowered to below $425 because Birds1 is $75 lower. Production can only cut the price by 8% and this does not help solve matters at all.
Possible solutions to the conflicts
The myriad problems that have plagued the company require the management to come up with solutions that will help solve all their problems; both internally and externally. There is a need to nurture teamwork among their employees in order to achieve the set goals and objectives. They should avoid petty issues such as blaming each other and avoid petty issues such as blaming each others. On the footpath towards recovery, the company should consider taking the following steps; Launch project Ariel at the cost of $475 to maximize the profit margins.
It could also launch Ariel immediately at the lowest price of $425 possible to capture the share of the market that is being lost to competitors. This should be considered as a short-term plan in order to give the company time to redesign and shift its policies to operate in tandem with the market conditions. The company should advance its machinery to cope with the current technological changes that are being introduced into the market; this would go a long way to lower the cost of production while increasing profitability. The company could also consider delaying the project to allow them to work on lowering the cost of redesigning and then introducing a high-quality product.
After critically evaluating the above possible solutions to the conflict, it’s wise for Emma to recommend the launch of Ariel at $475. However, to avoid conflict of this nature, Mr. Fierro should try to include all parties involved in making a decision of this magnitude. Proper leadership requires good decision-making and steering all parties to a common goal. Already, TerraCog has lost a great deal and may lose more if the management does nothing to sort out the problems in this company, therefore the management needs to act up and follow up on the policies and resolutions that have been set.