MGT604 Assessment: Pro-Go Crisis and Strategic Management Report

This report provides a comprehensive analysis of the Pro-Go company's crisis, stemming from product defects, a decline in demand, and the loss of a major contract. From the perspective of a General Manager, the report examines the issues, proposes immediate and long-term solutions, and develops a strategic plan for recovery. The report covers key areas such as the investigation of the problem, legal considerations, remedial measures, and preventive strategies. It emphasizes the need for a systematic approach, effective communication, and proactive measures to address the crisis and prevent future occurrences. The report also includes recommendations for improving the company's strategic management and ensuring its long-term sustainability, including the development of new products and expansion into adjacent markets. The report also provides a teamwork log from a stakeholder meeting.

University:
Individual Assignment
ASSESSMENT 2 Part B BRIEF
Subject Code: MGT604
Subject title: Strategic Management Assessment Stakeholder
Meeting Simulation and White Paper
Name:

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Executive Summary
The whole work has been based upon the terms of carrying a detailed study related to the case of
Pro-Go company. The issues of the company have been considered including their defects in the
products, fall in demand, rise of competition from smartphone cameras and loss of their contract
with their main customer. From a perspective of a General Manager of the company, the issues
associated with the disaster brought on the company has been analyzed keeping in mind the
prescribing of certain ways of remittance which could help the company to avoid the issue and
align to other alternatives ways. Preventive measures have been suggested and a better business
approach and strategy has been devised here.

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Table of Contents
Introduction 5
Aim 5
Discussion 5
Conclusion 8
Recommendations 8
References 10
Appendices 11

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Introduction
Pro-Go had established a firm reputation within the field of high quality action cameras. It was
founded in 2004 and is based in Geelong, Victoria. Pro-Go has been consistently popular among
customers on account of some of its landmark innovations which have been patented. This has
afforded the organization a certain kind of monopolistic power in its niche. Currently, Pro-Go
has been attempting to devise a long term plan which takes into consideration some imminent
threats that might affect its position in the market. The major threat is that most smartphones are
equipped with highly advanced cameras and consumers might not be willing to buy stand-alone
cameras separately.
However, Pro-Go’s ambitions were put to a halt on account of a major setback that required
immediate intervention on the part of the management. A number of Pro-Go cameras have
started to burst into flames and reason behind the occurrence could not be deciphered. As a
result, a retail chain in China which was Pro-Go’s largest customer, accounting for about 70% of
their sales, terminated their contract. Within the span of 24 hours Pro-Go’s sales have dropped
by 50% and therefore, it shall require quick action in order to remedy the harm that has come
upon the organization.
Considering the above situation, a white paper needs to be prepared that shall address the
emergency. It has to be made sure that the reason for the disastrous occurrence is unearthed and
other customers have to be notified about the potential dangers that the cameras might pose. In
addition, a proper strategy has to be formulated that shall resolve the problem.
Aim
The aim of this report shall be to devise a strategy that shall be able to address the above
emergency that has arisen for Pro-Go and come up with effective solutions.
Discussion
In the meeting the chief executives of Pro-Go discussed the various aspects related to the
situation. The possible implications of the occurrence were also duly considered by the team and
a plan was made in order to address the threats that were imminent on the organization. The team

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had decided upon working in the following avenues in order to approach the problem in a
holistic manner:
Investigation of the Problem:
The investigative process shall require the intervention of an expert who shall have to be hired
to look into the technical issues of matter as it is advisable in case of such matters (McNeil, Frey,
& Embrechts, 2015). The employees have to be intimated immediately about the crisis and they
shall have to be asked whether they faced any issues with the handling of the products. In such
cases, the research and development wing might be able to provide valuable information (Wolke,
2017). On the other hand, it would also be of help if the customers’ experiences are put into
account as well. Staff have to be sent to the sites where the explosions have occurred in order to
determine whether there were external environmental factors in play that affected the
mechanism of the devices in an adverse way. Environmental conditions or bugs from other
connected devices might also be the reason for the problem. Often it is seen that there may be a
disorder in the electric connection or battery issues due to incorrect pairing or connecting with
other devices, and this may have been also the issue of explosion.
Discussion of key themes: -
Legal Issues to be Considered:
Different legal issues have come up in the way of the failure towards meeting the demands and
requirements of the customers. There has been several issue of non-compliance with safety
standards and other legal measures to be taken while conducting the manufacture of the Pro-Go
cameras. As per Section 27 of Work Health and Safety Act, the issues should have been
checked by the officers before giving permit at the selling of the products (Model WHS Laws,
2018). As per the Privacy legislations: Privacy Act 1988 and the Telecommunication Act, 1997,
as an individual has the sole right to own and preserve his/her own personal information. Due to
manufacturing of faulty products, the cameras have exploded and this has caused loss of private
data, thus hampering the theme of privacy. With the defects that have come upon, the company
has to abide to measures that would help them from facing legal consequences. Violation of
Safety measures and privacy legislative measures has led to making the products unsafe and
unreliable for use. In these situations, as per the legislation, the products should be recalled. As
per the Schedule 2 of Competition and Consumer Act (ACL), 2010 (Cth), the defective products

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have to be recalled as per the guidelines laid down in (ACL, Sections. 122-127) (Consumer
product safety recall guidelines, 2018). As per Section 128(2), Pro-Go should voluntarily recall
all the products and in written form to be notified to the consumers [Sections 125(3) & 128(5) of
the ACL] (Consumer product safety recall guidelines, 2018). If any changes in the recall or
follow-up of legislative issues occurs, the company has had to notify the Commonwealth
minister, otherwise of which, they can be charged of guilt under Section 201(1) of the Australian
Consumer Law.
Remedial Measures:
First of all, all customers and retailers dealing in Pro-Go cameras must be notified about the
issue that has arisen regarding the devices. Sufficient reparations should be paid to the customers
who have been affected by the bursting and their medical expenses have to be cleared by the
organization if it is revealed that the fault was internal to the devices.
Moreover, since the retailer in China has terminated the contract, attempts should be made at
initiating dialogues with the retailer again by assuring it that the issue shall be properly
identified and measures shall be taken to repair the faulty products. Further, the company as of
now has to diversify in other product and try to find alternative and adjacent markets so that
they can sustain themselves and their activities (Bromiley, McShane, Nair, & Rustambekov,
2015).
Preventive Measures:
The current issues that have come up has to be considered at the first and the overall long term
plans have to be given up for the time being. In order to get out of the grave issue and liquidation
of the company, some important preventive measures have to be taken apart from the first one.
Staffs have to be offered redundancy and redeployment of staffs have to be done so that the
overall skilled staffs remain employed in each the department. For the time being, the total
production level has to be cuddled in order to bring a decrease in the level of demand (scale
back production). This also has to be done at that the defective products can be recalled. The
company also has to consider an exchange plan along with the recall plan which has done by
Samsung company when the Note 6 models started catching fire and exploding when the
customers used them. Samsung exchanged and immediately recall the products. Apart from this

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measure, the defective products available at the stock have to sorted out as per serial numbers,
they have to be repaired and alternative technology have to be used so that such issues do not
arise. Further, the company has to communicate properly with the supplier and enquire about the
product mechanisms and standards that are being followed by them. If it is found that the
supplier does not comply to proper standards while manufacturing and does not maintain proper
quality, then the contract with the contractor has to be terminated. In that case, an alternative and
more responsible supplier has to found and contacted.
Conclusion
Therefore, it can be observed that the issue is of utmost urgency and the key members of the
management have taken up the issue with the seriousness it deserves. The looming problem has
been categorized and classified under the four head mentioned in the discussion section. This
helps in systematically approaching the problem. However, it must also be remembered that the
four categories are not separate entities and they require to function in an integrated manner.
Therefore, a proper communication network must be established among the teams that shall be
deployed in order to resolve the specific issues.
Recommendations
In order to bring forth proper development and issue resolution, the issues have been identified
and they have been categorized on the basis of main for themes. The themes have been arrived
upon based on finding the basis of the issues and defining the legal considerations that have
come up, the remedial terms that can be taken and preventions that can be taken so that in future
such an issue does not occur. The company has to be more systematic and strategic in order to
get rid of the issues and revise its overall status and health. The management body has to
organize teams based on common aptitudes and a transparent form of communication has to be
inculcated in them (Hopkin, 2018). The problems have to be immediately discussed with the
members as well as the immediate reporting person and innovative solutions have to be taken.
The team members have to be given autonomy and each of their prescriptions have to be taken
into account in order to make the remedial strategy more innovative prevent the liquidation of
the organization (Lam, 2014). Further, the company, apart from scaling back the rate of

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production also need to focus on developing new and better products and establish their
existence in adjacent products and markets in order to revive their overall health. For
example, the threat posed by competition from smartphones have to be countered through
making groundbreaking technological advancements that shall make consumers choose Pro-Go
cameras over the ones available in smartphones.

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References
Bromiley, P., McShane, M., Nair, A., & Rustambekov, E. (2015). Enterprise risk management:
Review, critique, and research directions. Long range planning, 48(4), 265-276. Doi:
10.1016/j.lrp.2014.07.005
Consumer product safety recall guidelines. (2018). Retrieved from
https://www.productsafety.gov.au/publication/consumer-product-safety-recall-
guidelines?source=recalls
Hopkin, P. (2018). Fundamentals of risk management: understanding, evaluating and
implementing effective risk management. Kogan Page Publishers. Retrieved from:
books.google.com
Lam, J. (2014). Enterprise risk management: from incentives to controls. John Wiley & Sons.
Retrieved from: books.google.com
McNeil, A. J., Frey, R., & Embrechts, P. (2015). Quantitative Risk Management: Concepts,
Techniques and Tools-revised edition. Princeton university press. Retrieved from:
books.google.com
Model WHS Laws. (2018). Retrieved from https://www.safeworkaustralia.gov.au/law-and-
regulation/model-whs-laws
Wolke, T. (2017). Risk Management. Walter de Gruyter GmbH & Co KG. Retrieved from:
books.google.com

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Appendices
Teamwork Log
Meeting Pro-Go Pty Ltd Stakeholder Meeting
Date of meeting 23 October Time 6:30pm – 7:06pm
Place of meeting Zoom
Invitees Ross Miller (Chair), Ian McFarlane, Nick Ehrlich, Natalie Brown, Allen
Zhuang, Harry Lam
Apologies Amanda Miller
Discussion;
● The group discussed the Part B brief and the tasks of all stakeholders, and the short-term and long-term impacts
of the disruption and the focus moving forward.
● Natalie discussed the impacts from a financial perspective and the costs to mitigate any risks or address any
reputational impacts.
● Ian discussed the reputational impacts from the GM Supplier perspective and how this could assist in the
mitigation on-behalf of Pro- Go to reduce impacts on their business.
● Harry identified the procurement responsibilities in identifying where in the supply chain the issue may have
occurred and how this could be addressed. Use of Samsung Note similar issue to be used as a case study.
● Nick requested the Union remain updated on the impacts for resources.
● The group discussed the options in regards to surplus stock and the 70% production lost.
● Allen suggested immediate recalls of products and then putting in place measures to identify stock that has been
rectified and has not i.e. battery numbers.
● Harry identified the need for a quick response to ensure the safety of the public and to mitigate any further
issues occurring.

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● Harry recommended customer management through providing encouragement to continue use of product
moving forward i.e. vouchers
● Ian posed the question on if the move forward should be to write-off current product or to seek the cause of the
issue. Ross identified that liability is to be considered and the risk by removing the faulty product will address
this. The group was in agreement.
● Decision to scale back on current production in the short-term – all in agreement.
● Warehousing for surplus stock – team agreed there is a just-in-time manufacturing approach and this would not
be a primary concern.
● Discussion regarding the reallocation of resources or the possibilities of cutting back on the workforce. Methods
for managing staff in the short-term discussed i.e. unpaid leave, redeployment, opportunities for optimization of
the current processes and ways of working.
● Discussion of long-term preferences to address initial brief – agreement approach remains the same despite
disruption.
● Agreement to focus on discussion and post on the Discussion Forum during the week in preparation for the next
Stakeholder Meeting.
Next Meeting: 30 October @ 6:30 pm AEST

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Meeting Pro-Go Pty Ltd Stakeholder Meeting
Date of meeting 30 October 2018 Time 6:30pm – 7:10pm
Place of meeting Zoom
Invitees Natalie Brown (Chair), Ian McFarlane, Nick Ehrlich, Amanda Miller.
Apologies Ross Miller, Allen Zhuang, Harry Lam
Discussion;
● The group discussed the Part B brief and the tasks of all stakeholders, and further elaborated on the short-term
and long-term impacts of the disruption.
● Items discussed included:
o Privacy and Legislative requirements – all organizations have the need to adhere to privacy. Discussed
the safety requirements and legislation around recalling of products.
o Partners for new technology options presented may no longer be interested in partnering due to the
defect with the camera.
o Discussed some immediate term options, but agreed the longer term strategy has not changed.
o Discussed the need for a response team to immediately respond to questions and concerns raised by the
major customer looking to break their contract (response team)
o Ian asked if we have we adequately addressed the response to the threat of liquidation
o Discussed the need to enact Critical Management Plans (Survival mode) to avoid liquidation
o Discussed the need to make assumptions around the company (as outlined in the brief)
o Privately owned company’s ability to raise extra equity might be limited
o Natalie discussed the ‘how’ and ‘why’ – The Why: requirement to recall, How? Threat to cash-flow
o Discussed the potential reputational damage, the need to rebuild the customers’ trust. Discussed the
Samsung exploding batteries example – Samsung had two battery supplies and they refused to defame
them in the process. Samsung provided timely and factual communication. Relationship management
o Discussed the requirements by the ACCC: mandatory requirement to notify the minister within 2 days
o Ian offered to copy and paste the forum log – ready for Appendix for Assessment 2B. Thanks Ian
o Discussed that Stakeholder Meeting will not be required next week as discussion is taking place on the
forum and will allow students to finalize their submissions based on the information from the forum