MGT 604 Report: Strategic Options for Pro-Go's Crisis Management

This report addresses the crisis faced by Pro-Go Pty Ltd due to technical faults in their camera products, leading to a loss of customer confidence and a canceled contract with a major Chinese client. The report examines various strategic options discussed during stakeholder meetings, including establishing public relations, promoting alternative product ranges, and renegotiating the contract with the Chinese client. After evaluating the pros and cons of each option, the report recommends renegotiating the contract with the Chinese client as the most suitable strategy. This approach focuses on replacing faulty cameras with advanced models and re-establishing trust to regain revenue and brand reputation. The report further discusses defender and prospector strategies, emphasizing the importance of public relations to restore brand image and the potential of promoting other product lines. The suggested strategic choice is to work on contract arrangements with Chinese counterparts. The report concludes that focusing on the Chinese contract is the best way to resolve the crisis and ensure Pro-Go's future success.

MGT 604: STRATEGIC MANAGEMENT
NAME OF STUDENT
NAME OF COLLEGE
AUTHORS NOTE
MGT 604
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Contents
Executive Summary.........................................................................................................................3
Introduction......................................................................................................................................3
Aim..................................................................................................................................................4
Discussion........................................................................................................................................4
Conclusion.......................................................................................................................................7
Recommendation.............................................................................................................................8
References........................................................................................................................................9
Appendices....................................................................................................................................10
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Executive Summary
The primary concern that Pro-Go is presently experiencing is crisis faced due to technical fault
detected in their camera products which were of severe nature as these were blown up into
flames and causes behind this defect were unrecognised. This led to collapse in customer
confidence and one of their major corporate clients located in China had to scrap contract with
Pro-Go due to these severe technical faults. Cancellation of major sales contract not only
damaged sales and revenue of Pro-Go but also lessened their repute and brand identity. So it was
essential for Pro-Go to look for potential strategic options that could help them overcome this
crisis while in meantime the technical and R&D teams were investigating causes behind product
faults. Different strategic options were discussed in meeting with relevant stakeholders under the
chair of General Manager of Pro-Go where various decisions were offered to resolve crisis. The
strategic choices identified during stakeholder consultation were establishing public relations to
revive brand imagery and reputation in markets, undertaking exhaustive promotion of alternative
product ranges and working upon contract with Chinese client. However by measuring different
pros and cons, the best suitable option that was preferable for Pro-Go so as to resolve existing
crisis was to work upon their contract with clients and engage in activities that would enable
resume of export as it would help Pro-Go to enhance revenues in short span as well as regain
reputation and imagery of their brand in long term.
Introduction
The present discussion is aimed to resolve existing issues that have surfaced at Pro-Go Pty Ltd
for which the company seeks different tactical choices that can help them concur the
circumstances. Useful suggestions are presented through potential solution that can resolve
concerns of Pro-Go Pty. Reportedly the primary issue encountered presently is withdrawal of
agreement by major client of Pro-Go which has erupted as company cameras have suddenly met
with an unexplained accident that raises big questions over quality of camera. Citing this incident
and without any appropriate explanation one of the major clients of Pro-Go Pty from China have
abandoned sales contract with company which has resulted to decline in demand of camera as
well as have affected revenue generation. Hence the General Manager of Pro-Go Pty has
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initiated consultation with different stakeholders to consider strategic moves and suggestion that
could lead them forward.
Aim
The aim of present discussion is to recognise different strategic options that can aid Pro-Go Pty
to cope with existing problems and then suggest best possible approach to steer company
forward which will support in overcoming issues that are encountered by capturing sales decline
and slash in revenue generation.
Discussion
Pro-Go Pty currently needs to look out gathering information and opinion from relevant
company stakeholders who are affected by this situation so that strategic decisions can be taken
that may help them overcome the issues as well as make them move forward to capture sales
decline and poor revenue performance (Yuliansyah, et al. 2017). Involvement of stakeholders
within decision making procedure is essentially required by Pro-Go Pty at this crisis stage so that
stakeholders can be updated about the complication of the crisis as well as their shared
responsibility to overcome issues can be encouraged regarding proposal of best possible strategic
directions at this time. After consultation with different stakeholders about the present crisis
encountered at the firm, the General Manager of Pro-Go Pty is tasked with liability to establish
diverse alternative decisions that can aid them to concur the concerns as well as simultaneously
lead them to remain competitive within market. Initially during discussion with stakeholders the
General Manager of Pro-Go identified the concerns that emerged due to Pro-Go camera’s that
blew up into flames and their intended consequences were determined. During stakeholder
consultation it was discerned that burning and blow up of Pro-Go cameras had immensely
affected company repute with negative publicity and had damaged their brand identity, which
altogether had declined sales and dropped revenues.
Further as opined by Agarwal, et al. (2014) general observation is that whenever a brand turns up
into debacle or washout then revenue of firm is hardest hit, so during the period when technical
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and R&D teams of Pro-Go Pty investigates to find exact cause of the Pro-Go Camera’s
catastrophe, the following approaches can be considered during the stakeholder consultation by
General Manager that can be undertaken and reviewed to resolve crisis situation within the firm.
Defender Strategy: (Establishing public relation movement so as to intensify brand imagery):
firms executing defender strategy try to secure their existing markets and so narrow down their
focus and makes major adjustments either in technology, structure or approach of functioning
(Trigeorgis & Reuer, 2017). As such under defender strategy the initial choice that can be
considered by Pro-Go Pty so as to resolve crisis situation is establishing public relation
movements to boost brand imagery and repute of the firm. These movements will also discard
negative publicity and will push in public confidence when Pro-Go will come out in public to
discuss the crisis and will insure that their brand resonance does not reach to drastically poor
levels (Caputo, et al. 2019). The primary aftermath that is interconnected with product fallouts
or concerns encountered due to product issues is seen over esteem and portrayal of the firm
amongst public and consumers. As sales and profitability of a firm is largely sustained on
reputability and representation of the brand amongst consumers, so Pro-Go Pty should insure that
their status and brand imagery are not drastically damaged. For this it is wise to consider coming
out in public and talking about the crisis through public relation campaigns which will help to
emphasize company’s commitment and positive sense of communication as well as response
through sensible focus over delivering high precision products by meeting to industry protocols
and regulations (Teeratansirikool, et. al. 2013). Also coming out in public will convey
dedication of Pro-Go in insuring wellbeing for their consumers. Further the public relation
movement that can be considered by Pro-Go need to concentrate on communication efforts and
best practices undertaken by the firm to boost positive sentiment as well as to overcome and
prevent reoccurrence.
Prospector Strategy: (Publicising other products)– firms executing prospector strategy look for
new possibilities and take risks for growth. To execute this approach firms need flexibility and
creativity to respond to emerging opportunities. As such, second choice that can be considered
for Pro-Go Pty so as to concur the crisis condition within the firm is to concentrate on
publicising other products within the company’s portfolio aggressively so as to make up for the
loss incurred due to decline in revenues and sales of camera’s as well as damage incurred
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because of contract abandonment by Chinese clients who were major segment of market
(Goldman, 2012). As Pro-Go is recognised brand within industry that provides extensive
product range to customers so the firm should concentrate on recalling all their affected version
of Pro-Go camera’s from the markets. Rather they can concentrate on publicising other product
ranges that have potential capacity to meet market demands and needs of consumers. The
promotion and advertisement of variant products ranges of cameras can aid the firm to enhance
brand resonance and marketability of alternative line of camera’s and will minimise dependence
of firm on limited product ranges (Lay & Jusoh, 2012). This will even encourage market demand
and earning of revenue from alternative product varieties.
It is recommended that meanwhile Pro-Go Pty while publicising their alternative product line in
markets, can conduct exhaustive investigations to find out the causes behind failure and blow up
of camera followed by which they can modify their overwhelmed product line and re-introduce
these again by integrating pre-eminent quality benchmarks and accreditations.
Defender strategy: (Working out contract agreement with Chinese client)- third choice that can
be considered by Pro-Go Pty is to re-work on their abandoned contract with clients from China
who are major consumers. As China is biggest market for Pro-Go nearly consisting of 70% of
camera exports from clients so it will be advisable that Pro-Go does not give up their major
consumers as it may weaken their revenue generation as well as may dampen brand repute.
Hence it is highly recommended that Pro-Go Pty should re-focus and review on their products
and find out causes of failures so that with discussion the crisis can be worked out with clients
from China (Dhliwayo, 2014). Replacement of faulty cameras can be arranged by supplying
advanced level of cameras without added cost and reimbursement as token of apology that can
deliver similar requisite of clients with extra precision and superiority. Pro-Go can propose new
changes in contract negotiation where it can recall faulty models of cameras and replace with
advanced models at no added cost (Hahn, 2017). Also the re-worked contract can include a
clause where client from China can scrap the agreement if they experience any issues with
superior models of Pro-Go camera that are replaced or in case if their requisite are not delivered.
This re-negotiation of contract will mean that revenue of Pro-Go is not hit at extreme levels. It
will also mean that Pro-Go get time and buy-in of client’s confidence to investigate exact cause
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of fault in cameras so that adequate amendments are made into affected models and then re-
launched in market (Mandina, et al. 2014).
The strategic choice that is suggested for Pro-Go Pty is to work out their contract arrangement
and clauses with their Chinese counterparts as they are the primary customer segments.
According to revised contract, Pro-Go will be liable to replace all faulty cameras that have blown
up with superior and advanced models of Pro-Go camera’s without added cost to insure that
needs of clients are met and they do not encounter similar complications in future (Weinstein,
2012). Further under the revised agreement, the clients from China will reserve their rights to
cancel the contract in case they discover that even advanced version of cameras that have been
substituted does not meets expected needs and requisites.
The benefit of preferring this option is that it will enable Pro-Go Pty to reduce their losses
incurred within a short duration and will even insure that the brand identity and repute of their
camera products are reinstated. Other benefit that is interconnected with adopting recommended
strategic choice is that it will assist in boosting reputability of their advanced model of camera
product range while in meantime Pro-Go Pty may focus on investigating the detailed causes
behind original product line that were overwhelmed with technical issues (Husniah, et al. 2015).
This will enable Pro-Go to remodel their cameras and then re-launch them in markets. Further
benefit that can be interconnected with adopting the recommended strategic choice is that in case
the advanced model of Pro-Go cameras that have been substituted to clients of China are capable
to fulfil the specific needs, then the clients will more likely get interested in continuing
procurement of advanced models of camera which will mean impressive earning for future
business (Kumar, et al. 2015).
Conclusion
Thus it can be summarised from the discussion that the best strategic choice for Pro-Go Pty so as
to resolve the crisis situation experienced by them is to work upon re-negotiating their agreement
with clients from China as they are major customers and resume of contract will support Pro-Go
to re-capture their revenue losses within short span of time. It will even help to revive repute and
identity of their brand in long term. Further it can be inferred that re-negotiation of contract with
clients from China is most preferable solution for Pro-Go to resolve crisis time and subsequently
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strive forward as Chinese clients are largest customers of their products and thus maintaining
contract with them is worthwhile as it will boost not only reputation but also retain demands in
future.
Recommendation
The suggestion that can be offered to the management of Pro-Go Pty so as to prevent similar
foreseeable crisis and to boost revenue generation and repute of their firm is to maintain diverse
quality benchmarks during production procedure of their camera products as well as undergo
stringent Quality testing before products are dispersed to markets so that they may not
experience any kind of technical faults or severe concerns during future (Pick, et al. 2016). By
adhering to diverse quality protocols and certifications Pro-Go Pty can insure that their products
contain no defects or errors that can be damaging. It is even suggested that Pro-Go can insure
exhaustive quality testing and control measures for entire product line before these are dispersed
into diverse markets and consumers so as to insure highest level of precision and quality in their
products (Rashid, et al. 2014). Moreover it is advisable that Pro-Go drives public relation
movement to insure that products retain their identity and brand resonance amongst diverse
customer segments and markets so that in event of any kind of complication encountered the
repute and imagery does not get adversely affected (Beckers, et al. 2014).
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Reference
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industries. Customer Needs and Solutions, 1(2), 91-104. Retrieved from: 10.1007/s40547-
014-0015-y
Beckers, S. F., Risselada, H., & Verhoef, P. C. (2014). Customer engagement: A new frontier in
customer value management. In Handbook of service marketing research. Edward Elgar
Publishing.
Caputo, A., Fiorentino, R., & Garzella, S. (2019). From the boundaries of management to the
management of boundaries. Business Process Management Journal, 25(3), 391-413.
Retrieved from: https://www.emerald.com/insight/content/doi/10.1108/BPMJ-11-2017-
0334/full/html Accessed on 12 April 2020
Dhliwayo, S. (2014). Entrepreneurship and competitive strategy: An integrative approach. The
Journal of Entrepreneurship, 23(1), 115-135. Retrieved from:
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Goldman, E. F. (2012). Leadership practices that encourage strategic thinking. Journal of
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Hahn, R. (2017). The role of the negotiation in management and the results of an organisation.
The formation of the team of negotiation, features, Guidance. North Economic
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id=595426 Accessed on 12 April 2020
Husniah, H., Supriatna, A. K., & Iskandar, B. P. (2015). Improving service contract management
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Science 2014 (ICIBSoS 2014), 1-2, Bali, Indonesia. (p. 409). CRC Press.
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Kumar, V., Bhagwat, Y., & Zhang, X. (2015). Regaining “lost” customers: The predictive power
of first-lifetime behavior, the reason for defection, and the nature of the win-back
offer. Journal of Marketing, 79(4), 34-55. Retrieved from:
https://journals.sagepub.com/doi/abs/10.1509/jm.14.0107 Accessed on 12 April 2020
Lay, T. A., & Jusoh, R. (2012). Business Strategy, Strategic Role of Accountant, Strategic
Management Accounting and their Links to Firm Performance: An Exploratory Study of
Manufacturing Companies in Malaysia. Asia-Pacific Management Accounting
Journal, 7(1), 59-94. Retrieved from:
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2020
Mandina, S. P., Maravire, C. V., & Masere, V. S. (2014). Effectiveness of corporate social
responsibility in enhancing company image. The Journal of Applied Business and
Economics, 16(3), 152-170. Retrieved from:
http://www.na-businesspress.com/JABE/mandina_abstract.html Accessed on 12 April
2020
Pick, D., Thomas, J. S., Tillmanns, S., & Krafft, M. (2016). Customer win-back: the role of
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Rashid, M. H. A., Ahmad, F. S., & Othman, A. K. (2014). Does service recovery affect customer
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Trigeorgis, L., & Reuer, J. J. (2017). Real options theory in strategic management. Strategic
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Appendices
Appendix 1
Strategy Matrix
Options Porter’s
competitive
strategies
Miles and Snow’s
adaptive strategies
Ansoff’s
product/market
strategies
Current Broad target
(Cost Leadership)
Seek New Markets Expand Market
Strategy 1 Prospectors Market Penetration
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Current Uniqueness Some Innovation Improve Product
Strategy 2 Differentiation Analyser Product development
Current Cheap products Defend Niche Have More Products
Strategy 3 Focused Cost
Leadership
Defender Diversification
Team Participation Grading Matrix
Member Name/ID Average Participation Score
(1-5)
1. Member Name and ID 4
2. Member Name and ID 5
3. Member Name and ID 4.5
4. Member Name and ID 4
5.
6.
Appendix 2
Peer Evaluation Grading
Member Name/ID Rating (1-5)
1. Member Name and ID 4
2. Member Name and ID 5
3. Member Name and ID 3
4. Member Name and ID 4
5.
6.
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