Strategic Response: Analyzing Pro-Go Pty Ltd Camera Recall (MGT604)

This report examines the strategic response to the Pro-Go Pty Ltd camera recall, triggered by defective cameras bursting into flames. It outlines the importance of brand reputation and the need for immediate action to mitigate the impact of defective products. The paper identifies product recall as the primary short-term strategy, emphasizing its role in protecting the company from legal issues and minimizing reputational damage. It explores the implications of a product recall, including financial impacts, risk management considerations, and safety issues. The report also discusses innovation, technological advancement, and market diversification as long-term strategies. It concludes by highlighting the significance of a robust risk mitigation system and provides recommendations for corrective product development and diversification. The analysis covers challenges resulting from the strategy and provides insights into the financial, legal, and operational impacts of the recall process.

Running head: MANAGEMENT 1
Strategic Management
Student Name
Institution
Author’s Note

MANAGEMENT 2
Executive summary
The impact of disruption especially defective product has an impact on the company's
operation and revenue obtained from products. The paper focuses on the strategy in response to
the incident of Pro-Go Pty Ltd cameras bursting into flames. Some identified strategies that some
are derived from previous stakeholders meeting include product recall, diversification and
innovative product development or technological advancement. The paper identifies product
recall as the immediate strategy to respond to an incident of defective cameras to reduce the
impact on the brand. A product recall is chosen as the short-term response strategy since it
protects the company from legal issues arising from the defective products that burst into flames.
The impact of the strategy includes financial impact, risk management issues and the safety
issues that will need to be addressed. The Pro-Go Pty Ltd is most likely to lose revenues as
challenges affecting the company after the recall process. The paper concluded by identifying the
importance of risk mitigation system that helps the company to reduce the impact of risk. Some
of the advanced recommendations include product recall to pave the way for innovative
corrective product development and diversification of product and market.

MANAGEMENT 3
Table of Contents
Introduction.................................................................................................................................................4
Aim.............................................................................................................................................................4
Strategies to manage the defective Pro-Go Pty Ltd cameras risk.................................................................4
Product recall...........................................................................................................................................4
Innovation and technological advancement.............................................................................................6
Adjected products and market.................................................................................................................7
Preferred option...........................................................................................................................................8
Implications of a product recall in Pro-Go Pty Ltd..................................................................................8
Challenges resulting from the strategy.....................................................................................................9
Conclusion...................................................................................................................................................9
Recommendations.....................................................................................................................................10
Appendices................................................................................................................................................13
Appendix I: Product recall process........................................................................................................13
Appendix II: Recall and manufacturing process.....................................................................................14

MANAGEMENT 4
Introduction
Brand reputation is important for continuous market visibility and revenues generated
from products sold by a company. Defective products are disruptive that requires a faster
strategic response to prevent impact on company brand reputation and financial implication.
Despite the strategies that Pro-Go Pty Ltd developed through stakeholders meeting that will
ensure company development for the next five years, disruption resulting from defective product
requires strategizing. Development of strategies requires immediate short-term requirement and
long-term needs for risk management. There are also some challenges that may result from
implementation of the strategies developed by the company that must be foreseen. The following
white paper, therefore, presents strategies to manage the case of Pro-Go Pty Ltd bursting into
flame to prevent impact on the business.
Aim
The aim of this report is to develop strategies to reduce the impact of defective Pro-Go
Pty Ltd cameras and market risk management bursting into flames.
Strategies to manage the defective Pro-Go Pty Ltd cameras risk
The three options that exist include innovations related to previous stakeholder strategic
plan, diversification of product or market and product recall for defective products. This include
product recall, innovative product development, and diversified products or market (Rowling,
2015).

MANAGEMENT 5
Product recall
The alternative strategies to help the company that has both legislation and privacy
solution is a product recall an alternative market. Defective products as was the case with the
Pro-Go Pty Ltd cameras requires immediate recall leading to protection of both the company
reputation and any possible market impact. The company needs to consider recalling products to
reduce the negative impact of the defective product especially type of cameras that were bursting
into flames. Privacy legislation work in partnership with the product recall process that ensures
that the company and customer are shielded from the impact caused by the risk. There are some
strategies that will help protect the company and the customer from litigation and privacy
(Maromo, 2017).
Firstly, a product recall is the immediate strategies that will help protect the company
from the negative effects of the product. The product line that is bursting into flame should be
immediately recalled to allow the company to investigate the possible cause of the defectiveness
of the product. Product recall is important as it shows that company is considering the damage or
the safety of customers (Yücel & Önal, 2015). Secondly, the financial implication of the product
recall process is established to reduce the financial impact of the product recall as shown in the
figure below. The financial effect of the product recall needs to be established to determine the
impact of product defective. Cost of the defective product is established to determine the cost
and overall financial challenges that the company will face resulting from defective cameras.
Thirdly, determining the time of product recall is another strategy that helps the company to
manage the recall process. The immediate time for the product recall is important for enabling
rapid response to the bursting cameras (Mayounga, 2018).

MANAGEMENT 6
Innovation and technological advancement
Innovative product development that will factor in the defects that might result in
cameras bursting into flames is a strategy to reduce the impact of defective cameras.
Technological advancement is another short-term strategy that is important for ensuring that the
company cover all the loses that has been incurred due to defective cameras. Innovation was
identified as a strategic option in the previous stakeholders meeting conducted by Pro-Go Pty Ltd
management. The company needs to come up with technologies that detect a malfunction within
the camera itself (Shamoon & Saiqa, 2011). For instance, warning when the camera battery is
Financial risk Recall process
Risk management Defect correction
Recall strategy

MANAGEMENT 7
defective is important to prevent bursting that result from the battery. In addition, the cameras
should be designed with an overheating warning feature that prevent the camera from bursting
due to overheating. This can make use of heat sensor technologies that are currently available in
the market to ensure that recalled cameras. There is a need for the immediate development of
cameras that has advance features to ensure cameras correct the damage that has been created by
the defective cameras. As part of innovation and technology development research is required for
the company (Hill & Gareth, 2012).
Business research is another strategy that has a projection of helping in future response to
risk such as bursting into a flame that is currently affecting the company. Doing research in
developing a product is a strategy that will provide a long-time remedy to the defective features
in cameras. Developing the product that can withstand a huge amount of work is important as
this will reduce the risk that has affected the company today. Connected devices are other areas
that need research as this will ensure that many different devices that can be connected to the
camera with minimal chance of risk effect on cameras. Connected devices may result in
overheating of the cameras leading to camera bursting into flames (Besanko, Dranove, Schaefer
& Shanley, 2012).
Adjected products and market
Product and market diversification sis another long-term strategy that can help the
company manage the risk of bursting into flame of cameras. Firstly, the diversification product
as a strategy identified in the previous stakeholders meeting (Spaniol & Rowland, 2018). Product
diversification especially the Pro-Go Pty Ltd camera products and accessories is important for
risk mitigation that protects the company against such as disruption risk. For instance, the

MANAGEMENT 8
company needs to come up with a number of camera related products that defect in one product
will lead to mitigation by another product. Product diversification analyses the alternative
products that can either reduce the impact of the risk or prevent the risk from occurring in the
future (Petty, 2016).
Secondly, diversification of the market is another risk management strategy that has both
long term and short-term implication. The company will have to seek for an alternative long-term
market that will reduce the impact contract cancelation by the China-based retailer. The company
needs to identify or sign a contract with other companies as this will help in the mitigation of risk
in the event risk occurs. Failure in one market will be offset by another market hence the impact
of the market is not great on the business. Moreover, the company needs to identify many
different market options that are not necessarily a single company that is important for risk
management. Considering the impact or threat that a single company trading with Pro-Go Pty Ltd
poses to the company, Pro-Go Pty Ltd need to sign contract with other more firms (Eckhardt &
Bengtsson, 2010).
Preferred option
The preferred option to respond to the current situation is product recall as this will
prevent further company reputation and brand damage. A product recall is an immediate action or
strategy that the company uses to address the defect in cameras. Pro-Go Pty Ltd the management
coming up with product recall process and the system is going to address the issues through a
number of reasons (Alan, 2015). Firstly, product recall will uphold the legislation and privacy
issues as the company will be viewed as responding to the situation. The process will help the
company to redesign its products to remove the defective feature that led to bursting into flames

MANAGEMENT 9
of cameras. Secondly, the product recall will allow time for the other two strategic options. For
instance, after product recall financial analysis will determine the cost implication of the defective
products is determined. There will be time for product research and innovative development of
the product to remove the defect from cameras. The product recall will therefore, help diversify
product manage the risk. Thirdly, product recall will make the company to determine the financial
implication that results from defect (Rumelt, 2011).
Implications of a product recall in Pro-Go Pty Ltd
There is a number of effects or implications of the product recall that will impact the
business and its operations. The impact of the product recall has both short and long-term impacts
of the product recall. Short term impacts include financial, reputation, legal impact. Firstly, the
financial implication is the most important effect as many products that are recalled will reduce
the revenue as shown in Appendix I. There will financial challenges that will affect the company
as many other customers that have Pro-Go Pty Ltd product may also not buy the product leading
to reduced revenue. Secondly, product recall will result in legal and privacy implications as recall
serves to prevent brand damage. Moreover, product recall will serve to protect the customer from
continuous negative comments. The product recall will assure customers that the company is
responding to issues raised by defective products. Thirdly, the product recall process will reduce
the revenues and the company is most likely to face financial issues especially in its operations
(Laszlo & Zhexembayeva, 2011).
Long-term implications include safety issues and risk management issues. Firstly, the
safety issues will be long term impact of the product recall and other strategies as the company
will have to address the safety issues resulting from defective products. This will help in

MANAGEMENT 10
manufacturing process of cameras within the company as shown in Appendix II. Manufacturing
process has recall process factored in the manufacturing process as this help in enhancing the
recall process. Secondly, risk management system within the company will be affected as the
company has to go back to redesign the risk management strategies. Risk management will be
developed to help the company deal with safety concerns as this is important for reassuring
customers of risk mitigation. Thirdly, legal issues that result from recall is another long-term
impact that the company will have to address in order to restore the confidence of customers in
the company. Companies will fear singing contract with the Pro-Go Pty Ltd as they fear loss and
this will also result into canceling of signed contracts (Cameron, 2014).
Challenges resulting from the strategy
There are some challenges that may result from the cameras recall and these challenges
are related to business operations. Firstly, the financial challenge is challenging as there are a
huge amount of revenues that will result from the defective products. Defective cameras that are
recalled requires money to cover the loses that arise after those cameras are damaged. Defective
camera leads to customers fearing for their safety and as a result more effort and finance is
required to restore the image of the brand in the market. Secondly, brand and reputation damage is
another challenge that has result from product recall. Brand reputation damage is disastrous as
company will lose customers who cannot trust the products sold within the company. Moreover,
the image of the firm is connected to the amount of sale because the image of the company result
from trust customers place on the firm (Schallehn, Burmann & Riley, 2014).

MANAGEMENT 11
Conclusion
In conclusion, the incidence of cameras bursting into flame has both brand reputation and
financial impact on Pro-Go Pty Ltd. Considering the situation the three options left for the
company is to recall products to prevent further impact, increase product and market
diversification and innovative product design to prevent further risk of defective cameras being
sold to customers. Pro-Go Pty Ltd considering product recall as the preferred option or strategy as
to deal with incident will help protect the company from brand and reputation damage.
Recommendations
In light of the strategies that are discussed in this white paper, there are some
recommendations that are important for the company to address the defective cameras. Firstly,
the company needs to recall the product line that is defective to reduce the impact of cameras
bursting into flames among customers. Secondly, as a long-term strategy, the company need to
diversify market so as to prevent the threat from single large customers canceling the contract
with the company. Thirdly, the company needs to come up with innovative ways to redesign its
products eliminating defects through research and development. Lastly, the challenges such as
financial implications of the recall or other damage resulting from defective products should be
calculated and mitigations developed.

MANAGEMENT 12
Reference
Alan, B. (March 9, 2015). Constructing a Successful Business Continuity Plan. Business
Insurance Magazine. Retrieved from
http://www.businessinsurance.com/article/20150309/ISSUE0401/303159991/
constructing-a-successful-business-continuity-plan
Besanko, D., Dranove, D., Schaefer, S. & Shanley, M. (2012) Economics of Strategy, John
Wiley & Sons
Cameron, B.T. (2014). Using responsive evaluation in Strategic Management. Strategic
Leadership Review 4 (2), 22-27. Retrieved from
https://submissions.scholasticahq.com/supporting_files/248937/attachment_versions/
249177
Eckhardt, G.M. & Bengtsson, A. (2010). A Brief History of Branding in China. Journal of
Micromarketing, 30, (3): 210–221
Hill, C. W. L. & Gareth, J. R. (2012). Strategic Management: An Integrated Approach (10 ed.).
Mason, Ohio: Cengage Learning. p. 21. Retrieved from https://books.google.com/books?
id=Xax9awcoiDsC

MANAGEMENT 13
Laszlo, C. & Zhexembayeva, N. (April 25, 2011) Embedded Sustainability: A strategy for
market leaders. The European Financial Review. Retrieved from
http://www.europeanfinancialreview.com/?p=2927
Maromo, J. (16 January 2017). No brand is bigger than the law. IOL. Johannesburg:
Independent Media. Retrieved from http://www.iol.co.za/motoring/industry-news/no-
brand-is-bigger-than-the-law-7422513
Mayounga, A. T. (2018). Antecedents of recalls prevention: analysis and synthesis of research on
product recall. An International Journal of Supply Chain, 19(3).
https://doi.org/10.1080/16258312.2018.1530575.
Petty, R.S., (2016). A History of Brand Identity Protection and Brand Marketing, in The
Routledge Companion to Marketing History, D.G. Brian Jones and Mark Tadajewski
(eds), Oxon, Routledge, pp 97–114
Rowling, M. (2015). New global disaster plan sets targets to curb risk, losses | Reuters. Reuters.
Retrieved from http://in.reuters.com/article/us-disaster-risk-agreement-
idINKBN0ME27720150318
Rumelt, R. P. (2011). Good Strategy/Bad Strategy. Crown Business. Retrieved from
https://en.wikipedia.org/w/index.php?title=Good_Strategy/Bad_Strategy&action=edit&re
dlink=1
Schallehn, M., Burmann, C. & Riley, N. (2014). Brand authenticity: model development and
empirical testing. Journal of Brand Management. 23 (3): doi:10.1108/JPBM-06-2013-
0339

MANAGEMENT 14
Shamoon, S., & Saiqa, T. (2011), Brand Management: What Next?" Interdisciplinary Journal of
Contemporary Research in Business 2.12: 435–441. Business Source Complete.
Spaniol, M. J. & Rowland, N. J. (2018). Defining Scenario. Futures & Foresight Science. 1: e3.
doi:10.1002/ffo2.3.
Yücel, E., & Önal, Y.B., (2015). Industrial Diversification and Risk in an Emerging Market:
Evidence from Turkey. Emerging Markets: Finance and Trade, 51, pp.1292-1306.
Retrieved from http://www.tandfonline.com/doi/abs/10.1080/1540496X.2015.1011544?
journalCode=mree20#.VoGSI_mLTIU

MANAGEMENT 15
Appendices
Appendix I: Product recall process
Appendix II: Recall and manufacturing process