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Sunrise Ltd.’s Public Relations Management Case Study

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Updated: Jan 21st, 2021

Introduction

As the public relations officer at the Sunrise Real Estate Development Co., the key role of my office is to provide, practice, and manage the flow of information between Sunrise Ltd and its public. The public population includes the clients, the press, the community, and external authorities (Ury, 2000).

What direction a firm should deal with in the PR process, using Porter’s “five forces driving industry competition.”

In the area of the possible threats of new market entrants, Sunrise is at a good standpoint. This is the case, considering that the major real estate development players in Riyadh, were affected by the Chemco Ltd. crisis. These other players include Royal Garden and the Lake View real estate development companies. Citing that the three companies are the only actors, who have earned customer loyalty, therefore the major brands at the Riyadh real estate market, it is conclusive that new entrants into the sector cannot threaten the success of Sunrise Ltd. is also not threatened by the possible entry of new companies, as they have managed to earn the confidence of their customers.

This is partly as a result of the Inter alia warranty, offered by Sunrise Ltd. From the indebtedness of the key players in the Riyadh market, it is evident that the fixed costs of operating real estate development in Riyadh are high. These fixed costs include the procurement of supplies from companies like Chemco, and this will serve to restrict the entry of new investors. In the area of flooring systems, Chemco Ltd. is the only actor, which shows that there is a scarcity of Real estate development establishments.

As a result, this will limit the entry of new investors into the real estate development industry. Therefore, all these serve to show that Sunrise, which is among the three key players within the industry, is safe from the threat of new entrants (Gilley & Rasheed, 2000).

One major industrial threat facing Sunrise Ltd is the power of the major supplier of flooring system, Chemco Ltd, which has been pressurizing for the payment of the procured flooring systems. The high power of Chemco Ltd. may be attributed to the fact that there are no other suppliers of flooring systems at that part of the Saudi Arabian construction industry. At the moment, there are not many substitute flooring systems within the industry, therefore, this serves to place more power and control in the hands of Chemco Ltd.

From the case, the three companies, including Sunrise Ltd, have had difficulties in meeting their financial obligations to Chemco, which clearly shows that switching to alternative suppliers is a major challenge. The vital nature of the flooring systems supplied by Chemco also contributes to the power of Evergreen. This is a threat to the success of Sunrise. This is the case, as customers cannot accept houses without flooring systems. From the discussed power of Chemco, thus the control of the three companies; it is clear that Sunrise is under threat (Linnea & Mccord, 1999).

In the aspect of the power of buyers, it is clear that Sunrise Ltd. is under threat, considering the value of the houses that are traded to the real estate clients. The number of buyers for the houses is also limited, thus their turning against Sunrise may mean great losses. Also, the buyers of these houses may postpone the buying of the houses, opting to live at rented houses before the crisis is settled, a case that may place Sunrise Ltd. in jeopardy. These factors show that Sunrise Ltd. has to address the concerns of the customers in a very sensitive manner; a failure to do that may lead to the collapse of the company (Michel & Fitzgerald, 1997; Porter, 1998).

In the aspect of the availability of substitutes, Sunrise Ltd. is not under much threat, because there are a few players within the real estate development industry in Riyadh. Therefore, there is a low threat of competition from substitute products. This strength serves to show that Sunrise is not under threat, therefore, its success in the future will depend mainly on the way the administration will address the crisis, resulting from the Evergreen flooring systems issue. In the area of inter-industry rivalry, Sunrise is not under threat, considering that there are only three key players in the Riyadh Real estate market. This aspect serves to show that Sunrise stands in a fair position if only the administration will effectively address the crisis, thus keeping customer confidence.

From this comprehensive account, it is evident that the only parties that Sunrise Ltd. should deal with, include the government, regarding the issue of the harmful products. Another party is the media, to have them communicate that Sunrise Ltd. was not responsible for the ineffective engineering of the flooring systems; and the Chemco Company, to resolve, on how to replace the harmful flooring systems, and the course to be taken in the area of payments for the supplies.

The most important party that Sunrise Ltd. should deal with is the client population, as it has a public relations challenge at hand. The public relations challenge will involve the recovery of the customer confidence, assuring the clients of their safety, and possibly a replacement of the harmful flooring systems. The direction to be taken by Sunrise Ltd will involve recovering the reputation of the company, though assuring the client population of the faults discovered from the outsourced systems, in an honest, open manner. Towards succeeding at this stage, the company may involve local communities in verifying the quality of the products, except the outsourced systems.

The next step will involve reassuring the client population that it has worked to deliver value for their money. This can be verified by taking into account the legal as well as ethical considerations involved in product delivery, as well as showing business conduct at the different levels of operation. Restoring trust from authorities and the client population is another very important aspect, where the decisions made are to be undoubtedly based on integrity and fairness, relating openly with the client population, in a way that involves them and seeks to renew the commitment towards delivering the best to them. From taking these steps during the recovery process, the company will be able to earn the clients and their market share again (Roger & Gaylord, 2007).

Describe how PR should be deployed under the following situation

Towards describing the public relations efforts, to reclaim the crisis and the deployment model to be used, a prior understanding of the case in an explicative manner will be important. The issue to be resolved covers some parties and relationships, which may be summarized as follows. The Chemco Company is the manufacturer of the flooring systems outsourced by Sunrise Ltd among the three key real estate development firms operating in Riyadh. These other firms include Royal Garden and Lakeview.

The three companies have used the Evergreen flooring systems in their apartment buildings, offering a warranty of 25 years for them. These three companies have also borrowed from banks, for procurements, thus are under pressure from the banks, supplies, and workers.

From government inspections, the Evergreen flooring systems have been declared as containing a chemical content, which may cause cancer. This is due to its high proportion in the engineering ratio, which is beyond the ratio directed by the government. Following the news, customers have been making inquiries, whether the apartments they purchased have the reported flooring systems. From the current case, these are the counsels I would offer to the CEO of my employer, Sunrise Ltd (Porter & Porter, 1986).

First, I would like to point out to the CEO, that Sunrise Real Estate Developers is principally wrong, to have outsourced the Evergreen flooring systems, which is not produced as per government provisions and guidelines. In supporting this point, I would put it clear to the CEO, that, during outsourcing, several considerations have to be made, regarding the outsourced service or product. Before outsourcing the flooring systems, a detailed evaluation of the flooring systems of the systems should have been carried out (Michel & Fitzgerald, 1997; Gilley & Rasheed, 2000).

Secondly, in an attempt to maintain a good image, I would also advise the CEO that, Sunrise Ltd may keep its good image before the public, by denouncing the knowledge that, the flooring systems of Chemco Ltd were not engineered, as per the established government regulations. Also, it would be advisable to note that, at the time of entering into the outsourcing contract, the paperwork provided by Chemco Ltd, had proved that the products were safe, and effectively engineered. In this line, Sunrise Ltd. may argue that the quality of the flooring systems, in the aspect of not meeting the chemical composition requirements, was compromised after the procurement of such supplies had been started; after entering into the outsourcing contract (Morris, 1990; Nellis & Parker, 2006).

List the necessary elements that would be qualified for being accused of defamation

In the current case, the only party, who can qualify for the four elements to be met before making a defamation claim, is the Sunrise Company. In this case, the company would be using the reporting agency, which may have published claims linking the ineffective engineering of the systems to Sunrise Ltd. This is the case, as legally speaking, Sunrise is not in any way, involved or responsible for the productive processes of the supplier, Evergreen Ltd (Michael, Parkinson, & Marie, 2006; Linnea & Mccord, 1999).

The elements to be met, before qualifying to make a defamation claim, include the following:

  1. A publication was delivered to other parties, except to Sunrise Ltd, regarding being associated with the ineffective engineering of Chemco Ltd.
  2. Proving a false account of fact in the current case, the report associating Sunrise Ltd. with the ineffective engineering of the flooring systems.
  3. Proving that the report is comprehensible – as giving reference to Sunrise Ltd. and directed in a manner likely to harm the reputation of the company.
  4. Proving that malice was implied or explicated on the public image of the company.

Further, it should be noted that in the case, any of these conditions are not met, a claim of defamation may not be applicable. For instance, the customers of Sunrise, can not sue Sunrise Ltd for defamation, and the company as well, cannot sue Chemco for the same (Michael, Parkinson & Marie, 2006; Linnea & Mccord, 1999).

References

Gilley, K., & Rasheed, A. (2000). Making More by Doing Less: An Analysis of Outsourcing and its Effects on Firm Performance. Journal of Management, 26 (4), 763-790.

Linnea, B., & Mccord, J. (1999). Defamation vs. Negligent Referral: A policy of giving only basic employee references may lead to liability. Graziadio Business Review, 2 (2).

Michael, G., Parkinson, L., & Marie, P. (2006). Law for advertising, broadcasting, journalism, and public relations. London: Routledge Publishers.

Michel, V., & Fitzgerald, G. (1997). The IT outsourcing market place: vendors and their selection. Journal of Information Technology, 12, 223-237.

Morris, C. (1990). Conflict Transformation and Peacebuilding: A Selected Bibliography. Victoria: Peacemakers Trust publishers.

Nellis, J., & Parker, D. (2006). Principles of Business Economics. London: Prentice Hall.

Porter, M. (1998). Competitive Strategy: Techniques for Analyzing Industries and Competitors. London: Free Press.

Porter, M., & Porter, M. (1986). Competition in Global industries. Harvard: Harvard Press.

Roger, L., & Gaylord, A. (2007). Business Law Today: The Essentials. London: Cengage Learning.

Ury, W. (2000). The Third Side: Why We Fight and How We Can Stop. New York: Penguin Putnam Press.

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