Growing For Broke
Stephen Kim
MGMT 430
Growing for Broke Case Write Up
A. Executive Summary: Paragon Tools is having a difficult time deciding if the company should acquire MonitoRobotics or completely remove the service area from the company. The company was facing foreign competition. So they decided to launch a number of different initiatives that were designed to spur revenue growth, which gave aggressive pricing and sales to increase with more share in the core market. Those tactics drove out most of the new foreign markets. The decision of acquiring MonitoRobotics was in between half from favoring and half declining. The reason was the amount of funds it will take to overhaul the culture and capabilities. Potential seems promising with huge sales and profit growth. Paragon Tools should acquire MonitoRobotics to move up with providing instant services and staying on top of the competition.
B. Industry Dynamics: Paragon Tools is a healthy company. It’s a well-known manufacturing company that is used in aerospace engines. It has fairly good margins, despite the battering that the machine tool industry as a whole had taken over the previous decade. The market for the products was stagnant and foreign competition was beginning to step in. The competitors were about price and cutting back in quality. In aerospace engine category quality is highest importance comparing it to price. Paragon Tools managed to carry out the outstanding quality while cutting the price to drive out the foreign competition.
C. Situation Analysis Summary:
(Appendix A) Stakeholders Analysis
Nikolas strongly believes acquiring MonitoRobotics will offer the company a high standing in both products and services. Also knows that the profits will turn slowly but will dramatically increase after the break-even point.
William Littlefield is worried that it will take too long for the service department to generate profits. He is thinking that this is the perfect time to go the other way
MGMT 430
Growing for Broke Case Write Up
A. Executive Summary: Paragon Tools is having a difficult time deciding if the company should acquire MonitoRobotics or completely remove the service area from the company. The company was facing foreign competition. So they decided to launch a number of different initiatives that were designed to spur revenue growth, which gave aggressive pricing and sales to increase with more share in the core market. Those tactics drove out most of the new foreign markets. The decision of acquiring MonitoRobotics was in between half from favoring and half declining. The reason was the amount of funds it will take to overhaul the culture and capabilities. Potential seems promising with huge sales and profit growth. Paragon Tools should acquire MonitoRobotics to move up with providing instant services and staying on top of the competition.
B. Industry Dynamics: Paragon Tools is a healthy company. It’s a well-known manufacturing company that is used in aerospace engines. It has fairly good margins, despite the battering that the machine tool industry as a whole had taken over the previous decade. The market for the products was stagnant and foreign competition was beginning to step in. The competitors were about price and cutting back in quality. In aerospace engine category quality is highest importance comparing it to price. Paragon Tools managed to carry out the outstanding quality while cutting the price to drive out the foreign competition.
C. Situation Analysis Summary:
(Appendix A) Stakeholders Analysis
Nikolas strongly believes acquiring MonitoRobotics will offer the company a high standing in both products and services. Also knows that the profits will turn slowly but will dramatically increase after the break-even point.
William Littlefield is worried that it will take too long for the service department to generate profits. He is thinking that this is the perfect time to go the other way