Mba500

Global Communications

Global Communications (GC) once enjoyed profitability and an increased stock price. Recently, the company has been faced with declining revenues and increased expenses. A new CEO was recently appointed to help turn the company around. Her vision for the company was not communicated well. The investment community, its customers, employees, and labor union was caught off Ð'-guard by the company's decision to outsource its customer service thereby displacing many workers. GC has lost credibility. The company needs to look within to determine what causes its current problems and create a vision for the future.

Issue and Opportunity Identification

Diminishing returns

Global Communications and the telecom industry as a whole are in a state of decline. Stockholders are concerned about diminishing returns on investment and the industry's ability to rebound.

Industries do not fail overnight. GC Management has an opportunity to restore investor confidence by analyzing what went wrong during the period of slow-decline and what corrective measures must be taken to restore the company to profitability. ESI Horizons Newsletter provides a model for restoring the company in its article Saving Trouble Projects: Five Steps to Rapid Recovery, (2007). Below is an adaptation:

1) Define the mission:

a) Define goals in detail.

b) Understand cost versus benefits.

c) Determine priorities.

d) Devise a written plan.

2) Develop the plan:

a) Identify critical documentation that needs to be reviewed and analyzed

b) Identify stakeholders and conduct interviews.

c) Establish a team for the recovery effort.

3) Assess current state:

a) Determine status of the company and industry.

b) Identify threats, opportunities, and problems.

c) Learn about competition and potential new entries to the market.

4) Develop the recovery plan:

a) Establish a schedule.

b) Track goals meticulously.

c) Identify reasons for Ð''hits' and Ð''misses.'

d) Recalibrate the plan.

e) Manage risks.

5) Conduct Recovery:

a) Work the plan.

b) Measure progress.

c) Communicate to stakeholders)

After communicating the recovery plan to the Board of Directors, the management team is then being held accountable. Since "return on investment is a more pure measure of management's success in operating the business," results of the plan can be identified (www.investor.reuters.com, 2007).

Too much, too soon

Global Communications did not anticipate changes in market conditions. More competitors entered into the telecom marketplace with new products targeting GC local customers. The company failed to consider its product life cycle.

Product life cycle is based upon the biological life cycle:

Introduction, growth, maturity, and declineÐ'...After a period of

development [the product] is introduced into the market; it gains more and more customers as it grows; eventually, the market stabilizes and the product becomes more mature; thenÐ'...the product is overtaken by development and the introduction of superior competitors; it goes into decline and is eventually withdrawn (www.marketingteacher.com, 2006).

GC has created an opportunity to add to its product line by creating an alliance with a satellite provider to provide video service and broadband. The company is focusing on globalization to expand its customer base.

High costs, low resources

Skyrocketing costs have reduced profitability. The lack of highly skilled labor, combined with spiraling labor costs has led GC to consider outsourcing its call centers to Ð''contact centers' in India and Ireland. According to wikipedia.org (2006), "The decision to outsource is often made in the interest of lowering firm costs, redirecting, or conserving energy directed at the competencies of a particular business or to make more efficient use of worldwide labor, capital, technology, and resources."

Can you hear me now?

Global Communications acknowledges that outsourcing may save labor costs but might result in loss of customer confidence. The company has branded itself as a company that has loyal employees who are the backbone of its business. Heartmath indicates in their whitepaper on contact centers that consumers are increasingly dissatisfied.

Customers make contact with contact centers because they want their problems solved, yet a study commissioned by Richmond Events, Ltd. revealed that 51% say they feel apprehensive, nervous, worried, or mistrusting as they enter a customer experienceÐ'....Contact center agents are often the customer's primary touch point. Yet, contact call center agents have become guardians of handle times and reducing queue loads, rather than enhancing the relationship between customer and product Ð'- and by extension Ð'- the company (www.heartmath.com, 2004).

Besides potentially cutting costs through outsourcing, GC has an opportunity to increase revenue through its expansion of products. Loyal employees do not create customer retention. It is the perception of service being provided. Insight Executive instructs companies to:

Be conscious of the following duality: good service and customer loyalty are not the same, though you need good service as a prerequisite for loyaltyÐ'...Customers expect something and compare it to their perception of what they received (www.insightexec, 2007).

The company must capitalize on its new products to increase customer confidence.

We are in the communications industry!

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