Low-End Segment for revering simple applications requiring one to four layer boards, Mid-Range Segment for servicing more complex applications requiring 12 to 24 layer boards, and High- End Segment for servicing the most complex applications, requiring 30 to 50 layer pretax In 2000 to losing $614,000 In 2001 and has been facing turmoil economically since. Problem Recognition An unfit Maggie was now the CEO and in charge of the company, experiencing vast declines in the company financial, and is obtaining difficult and mixed advice.
SOOT Analysts Strengths The company has a 4 decade long standing The company Is established Family owned corporation COO Ben Cushman Shed unprofitable sectors of the business and focused on midrange The company efficiently downsized to 100 employees Decreased wage and operation expenses by operating one shift Recovery efforts to get paid faster Weakness Failure to improve the company processes Reduction in bookings from 2. MM to 1. M in one year and continuing General and administrative expenses were high at 10% of sales Negative effects of the company cash flow Their Inventory levels were inefficient, only half were productive CB had no original tenants Opportunity Process and fabrication technology Investments Smaller competitors had exited the market Potential lucrative investment in purchasing several board designer shops to execute adding new customers Threats Lawsuits due to their 4 million dollar debt to suppliers with extensive overdue periods The company sales were not making any improvement The company did not have a market competitive advantage and competitors are now leading Problem Definition Due to the death of Dieter Adams, Maggie Adams had gone from being a part time employee and secretary of the board to CEO. As a new and inexperienced person as it relates to managing, Maggie may not be an effective leader. The onus is on her to decide on the forward moving direction of Circuit Boards Corporation and the best interest for the family.
Maggie Adams has been drawn between the advices of COO Ben Cushman who advised Maggie to be ready for a turnaround as the market would rebound in the second quarter of 2002, and the advice of Board members Dane Lombard, Will Telltale & Don Armor, urging Maggie to get out of business. In January 2001 , the high-tech industry was negatively affected by the economy, as such he printed circuit board industry had reported between 50 percent and 75 percent declines in quarterly revenue compared to the previous year causing smaller competitors to exit the market. With this occurrence, Circuit Board Corporation had gone from achieving 1. MM pretax in 2000 to losing 614. 000 in 2001.
Alternatives Option 1: Attract investors to purchase Circuit Board Corporation Pro: Allows Circuit Board Corporation to acquire smaller competitors that are exiting market. Pro: Maggie can purchase the facility and create a rental agreement with investors. Con: Family will lose business as well as employment. Option 2: Maggie can file for Bankruptcy Pro: Bankruptcy will eliminate possible lawsuits from suppliers and other debtors. Pro: Anticipate the promised market turnaround foreseen by Ben Cushman Con: Auditors can audit and realize issues with total income Maggie and family have been receiving. Option 3: Sell Circuit Board Corporation Pro: Maggie can receive a sizable offer from potential buyers, making her and her family financially wealthy.
Pro: The new owners of the business can save the reputation of the company and its existence. Pro: The market show no sign of bouncing back Con: Buyers may change the businesses existence or undermanned it to extinction. Con: The market is unattractive and may cause the corporation to sell for a very low Recommendation Maggie should choose the board of directors’ advice and go with option 3, which is selling the business. Maggie needs to accept that she is not competent to manage the corporation. She should sell her shares as there is a strong possibility that the corporation CB does not survive economic downturn. The potential for rent is not worth risk.
Implementation Short Term: There will be potential setback such as finalizing a sale agreement due to the fact hat the market is currently unattractive. Obtain a law team and a business investment analyst agent to value and bargain for the highest possible, emphasizing the anticipated market rebound sales price they can deal for as is with liabilities included. Long Term: After the business is sold, Maggie and family will be financially secure. The business under new management and ownership can be restructured strategically to start generating profits from new investments. The corporations’ reputation will be redeemed and as such Dieter’s business vision and legacy can continue.
