Sykes Enterprises

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Sykes Enterprises

I. Case Background
Given the current state of the economy and the competitive nature of the industry, Sykes Enterprises closes its call centers in rural America, with the recent on in Milton-Freewater, Oregon, and moves its operations to the lower wages country like the Philippines. This left the call centers in America, which helped them to establish its operations by providing huge amount of incentives, to ask for some form of compensation to help them in this huge loss.

With the vision of maximizing shareholders’ wealth and giving them the highest possible return, Sykes Enterprises chooses not to give in to these demands and just continue to take actions that will yield the largest profit for the company.

II. Problem Statement
Given the competitiveness of the customer service industry and the current pressures on Sykes to relocate, how can the company pursue an effective corporate strategy without compromising the demands of its other stakeholders?

III. Analysis
In order to come up with the best set of recommendations for Sykes’ current situation, the group has devised the framework for analysis as illustrated in the following diagram. The group has also considered Caroll’s Four Responsibilities of Business as a guide in this framework.

Stakeholder Analysis
-Identify and evaluate corporate stakeholders
-Estimate effect of strategic decisions on stakeholders (Stakeholders Priority Matrix) Stakeholder Analysis
-Identify and evaluate corporate stakeholders
-Estimate effect of strategic decisions on stakeholders (Stakeholders Priority Matrix) Environmental Scanning
-Assess industry and competition

Internal Scanning
-Analyze Sykes’ business model and value chain
Environmental Scanning
-Assess industry and competition

Internal Scanning
-Analyze Sykes’ business model and value chain

Determine appropriate strategy to be used by Sykes
Determine appropriate strategy to be used by Sykes

Industry Analysis
High tax rates, expensive labor, slowing economy and the constant pressure from clients to reduce prices are forcing call center companies to move their operations to other countries like China, India and the Philippines – which have lower wage rates, more skilled workers and low barrier to entry. Outsourcing has become a political issue in the United States since many believed that it takes away jobs from local communities and depresses the economy. Some risks for these companies are laws or restrictions that will aim to bring jobs back to America. Even with this risk, the call center industry is expected to grow rapidly because a lot of companies are looking to focus more on their core business. Call centers provide voice and non-voice services. Voice service is currently main driver of growth for the industry. These are inbound and outbound calls that are for customer service, sales, telemarketing, payment authorization and order taking to name a few. There is great opportunity for call center companies to take advantage of the growing industry. In addition to this, with further development in technology and increasing demand of customers, there is also a potential market for providing complex services such as accounting, healthcare, payroll, etc.

Business Model
Sykes specializes in providing high quality customer support outsourcing solutions and fulfillment and enterprise support services with its clients. The customer support outsourcing is a revenue-generation segment of the company which accounts for 91% of the total consolidated revenues. This segment emphasizes on inbound technical support services, customer support, marketing support, and speech solutions. On the other hand, fulfillment and enterprise support services accounted for approximately 11% of the total consolidated revenues. This segment provides services such as multilingual sales, order processing via internet and telephone, technical staffing, IT services, and IT help desk....
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