| Right, Jason and Karin, |
| now I asked you to look at the case study for Box Telecom as part of your exam assessment. |
| It's interesting because they are in the middle of problems at the moment |
| and I want you to track how they deal with them. |
| Let's start with you, Karin. |
| Having read through the case study, |
| can you just summarise what the problems were that Box Telecom had to take on board? |
| Um, yeah... |
| Well of course what first came to their attention was that, despite a new advertising campaign, |
| they were suffering from falling sales - |
| and this is something that had many causes. |
| On top of that immediate problem, |
| what had also happened over the last two years was that, |
| although they had invested in an expansion plan, |
| they had to face up to increased competition. |
| And, before they had a chance to get to grips with the effects of that, |
| they were stalled by a strike |
| and it was just when they were thinking about making a colossal investment in new machinery for their plants. |
| So they were really in trouble. |
| Yes, I think that's fair. |
| And Jason, you contacted the company, didn't you? |
| What did the company define as the reasons for these problems? |
| Well, I think they've hit on the right things - |
| it would be easy to say they had invested too heavily, or at the wrong time, |
| but in fact, the signs were good |
| and what they were set back by was high interest rates. |
| At the same time, their longer-term problems, which were affecting their market share, |
| were eventually credited to poor training - |
| and having looked at the details in their last report I think that's right. |
| So, onto the larger issues then. |
| Karin, what do you think the company will do? |
| Obviously they have the choice of accepting the very favourable terms that another company - KMG Plc - have given them to buy them out. |
| That would mean creating a new company with a new image. |
| Or they could decide on a bolder move and offer some new shares if they wanted. |
| But I think they're much more cautious than that |
| and expect they will start trying to find individuals who'd be prepared to back them with some of the capital they need. |
| Well, you mustn't always assume that dramatic problems require dramatic solutions. |
| Sometimes there's a simple fix such as changing the guy at the top. |
| If they truly are cautious, |
| then I suspect they will seek to shut down some of their shops. |
| But a more ambitious approach, |
| and one which I think would have more chance of success, |
| would be to alter how they're running things - |
| the management layers and the processes. |
| So, in your analysis, try to think of all the options. |
| Jason? |
| Yes, it's interesting because I've found it a really useful company to study. |
| Its problems cross all types of industries |
| and it's lucky it's so big - |
| a smaller or even medium-sized company would have gone under by now. |
| Ah well in fact, what I want you two to do |
| is to go away when we've finished our discussion today and write a report. |
| We've looked in general at the telecommunications market in the UK over the last few sessions |
| and I want you to take Box Telecom as an example |
| and suggest some ways in which they might overcome their problems. |
| And outline the reasons why you think as you do - |
| but try and keep it intrinsic to the company |
| rather than dragging in other examples. |
| Is that okay, Karin? |
| Yes, I think I can do that. |
| Personally I've got great hopes for it. |
| I think it will recover. |
| That advertising campaign they did was very strong |
| and they're very innovative with their products - they set new trends. |
| The company's got to recover, don't you think, Jason? |
| Hmm... I'm not sure. |
| I think it can but it's not a foregone conclusion |
| unless they manage to attract the right level of investment. |
| The company definitely needs a boost |
| and to attract more highly skilled workers if their recovery is to be long-lasting. |
| When I was talking to the marketing manager |
| he said to me that he thinks the company had got a great management team |
| but he would say that, wouldn't he? |
| but they are suffering from having to work with outdated production machinery |
| and that could cost a lot to put right. |
| Well, personally I think the stock market is to blame. |
| I think they were expecting too much of the company |
| and then inevitably it looked bad when it didn't perform. |
| The market should have had more realistic expectations. |
| And I disagree with you about the advertising campaign, Karin. |
| That's where they could do with some innovation - to get sales kick-started. |
| Anyway, let's see what you come up with... |