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1.Situation Analysis
Holmesafe Ltd.’s business has been growing steadily, with profits and client base increasing year on year. Increasing demand of advisory services resulted in additional fee income for the company and improved its product support. As a result of this growth, the company has recently expanded by adding new premises, signing new contracts and recruiting full time employees.
Holmesafe Ltd.’s largest client is Dawson’s Ltd. Dawson’s has been a loyal customer and is much valued being the company’s very first client. Frank Jackson, the chief buyer at Dawson’s was offered director’s post owing to the support provided by him during the initial phase of the company. However, Jackson refused the offer after considering the advice from his supervisor, Harry Thomas, who raised concerns about conflict of interest.
Mid-way through Holmesafe Ltd.’s second year of operation, George Holmes, the founder of the company received a phone call from Jackson informing him that he was under pressure to evaluate the possibility of shifting Dawson’s business to another supplier (Browns). According to Jackson, Browns had improved their manufacturing methods and were extremely competitive and very reliable. In the same conversation, he also expressed his personal need to generate additional income and sought Holmes’s advice on how to go about doing so.
George Holmes requested for some time and set up a lunch meeting next Saturday to discuss the matter.
2.Problem
Possible loss of business from Dawson’s Ltd. and threat of competition from Browns (and possibly other companies).
3.Options
A.Retain Dawson’s Business
B.Let go of Dawson’s Business
C.Expand Market (Reduce reliance on Dawson’s)
4.Evaluation Criteria
I.Adverse impact to revenue
II.Adverse impact to Referrals /New Business (owing to negative reputation) iii.Adverse impact to Business Plan (for the future)
6.Recommendation
Based on the above evaluation, it is recommended that Dawson’s business must be retained. Expansion of market will not have as much impact to business as the impact the other options will.
7.Action Plan
A.Meet Jackson with a proposal to:
I. Improve the existing pricing and service terms in order to retain the business, and thereby make a counter offer to what the competitor Browns seem to have provided to Dawson’s.
II. Offer a revenue share to Jackson as an additional incentive for helping maintain a long – standing relationship and being Holmes’s most valued client.
8.Contingency Plan
Engage directly with Harry Thomas in case the deal with Frank Jackson is not struck. As Jackson’s supervisor, this may be an alternative recourse for the company in order to help retain the business.
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