Executing Organization Strategy- Task 2

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Executing Organization Strategy- Task 2

Table of Contents

A.Resource Weakness in Initial Quarters3

Emergency Loan3

Rapid Expansion of Manufacturing5

B.Actions for Developing a Key Strength in 2nd Year8

Strengthening the Traveler Segment9

Competitive Power of Company Resource11

Competitive Value11

Uniqueness of Resource13

Copy or Imitation of Resource14

Threat of Substitution15

C.Managing Organizational Culture15

Comparison with Management Practices19

D.Creativity and Innovation Fostering20

E.Effectiveness of Balance Score Card21

Balance Scorecard Development22

Leading and Lagging Indicators24

Executing Organization Strategy- Task 2

Resource Weakness in Initial Quarters

The company Zeus Technologies encountered two major resource weaknesses. The company's had to borrow an emergency loan to cover the shortfall of sales. The second weakness was the lower demand of its products. Besides these, the company has increased its manufacturing capacity and with very less demand was incurring unutilized capacity cost. The reduced sales caused severe reduction in revenues causing the company to incur losses. The company's advertising strategy was not working and the financial performance was getting hit by it. The sales office opening decision in Canada and Brazil was counterproductive as they were not large demand areas as compared to United States.

Emergency Loan

The most important resource for any business is the finance or working capital. The shortfall of working capital if not encountered at the start of quarter leads hinders seriously in the operations of the company. The company in the middle quarter is compelled to take emergency loan. At the initial stages of incorporations, as the company has not made any significant business in the market, the banks either decline the request for loans or ask for very high rates of interest. The high interest rates are due the highly risky position of the company.

The loan sharks provide small amount of loans to people or organizations which are in desperate need of the loans. The significant difference is in their operations as compared to banks is that they provide to loans to organizations or people who have less credibility according to bank standards. People approach them only when they are turned down by banks. The banks argue that if a company cannot manage a budget, how they can manage the risk of financial liquidity. The loan sharks capitalize on the vulnerability of people and charge a premium interest rate. They also develop a contract which provides them additional benefits unlike the banks. The borrower has limited choice of negotiation as the banks don't offer him the credit. The loan sharks work under the protection of the legal framework and also make documentations which bound the borrower to pay the interest and hold his commitment.

As the bank loans were not accessible, the company had to approach a financial institution to fill in the deficit which arrived in the third quarter. The financial institution gave us the loan in exchange of shares and also against a high interest rate. The company cannot reduce the shareholding but worked to reduce the loan to avoid pay interest. The debt reduction also increased the company's financial reliability and reduced the financial risk (see table 1).

Following is the industry results of 4th quarter:

Table 1: Industry results of ...
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