The Main Issues of Jack

Questions: 1. Identify the main issues that Jack needs to consider and provide evidence from the case study to support your answer. 2.Explain how Jack would benefit from applying the rational decision-making process to address the issues identified in Question One. 3. Describe the different resources (e.g. valuable, rare etc.) that are available to Jack and provide evidence from the case study to support your answer. 4.Identify, explain and apply one of the organizational strategy frameworks that Jack might find helpful as he considers the future of Glasshouse Avocados? Answers: (1). Solution: Jack followed the business sense of his father and business numbers were doing pretty well. With the passage of time, Jack sensed that there are number of factors in the external environment which can turn threat in the time ahead. Considering the case study, main issues that Jack need to pay attention are: Cost of Production-Production costs are the expenses that are incurred to get the finished products. A company that knows how much it will cost to produce an item, or produce a service, will have a clearer picture of how to better price the item or service and what will be the total cost to the company. Here the product is avocado and production cost includes cost of irrigation equipment and managing root rot in the plants. It is a general fact that profits are always lower when cost of production is higher and business cannot sell products at very higher price in order to cover the rising cost of production. In growing avocados, there are several others cost involved as well such as planting, pruning, pest management, fertilization, labor and harvesting. There could invisible cost as well such as interest on capital. (Capital taken to invest in business). (Investopedia) Increasing competition- Competition refers to active demand by two or more organisms for the resources which are rare or are in shortage. (merriam-webster).Earlier Jack enjoyed the higher profits in the business as there was not much competition and with his networking skills, he had marketed his business so well following his fathers footsteps. Earlier there were low number of growers and cost of overhead and transport cost was shared among them. With more and more growers in the same line of business and with no more cost sharing concepts, results were not favorable with downward sloping gains and slipping business. Lower Sales- Lack of process is considered as one of the strong reasons of low sales and sales manager is handicapped if process is missed. (Eyesonsales)Two of the crucial things discussed above are the backbone of the business to achieve higher sales .Here in case of Glasshouse Avocados, the cost of production and competition was cut-throat which resulted in sales number down each year. In 2012, sales number were down by 13%, trend continued further 15% sales down in 2013 as compared to sales of 2012 but in 2014, there was slight rise in the sales by 9%. With sales almost down, profits dipped and slowdown definitely tensed the situation for Jacks business. Product Innovation Impact-When new growers stepped in the business, they too had mighty understanding of facts above so new entrants came up with idea of putting avocado in a tube and this helped them to emerge as better performers. They were earning profits in spite of stiff competition and uncertainties. Natural Conditions- Clean water and clean air forms the part of natural environment and have impacts on the business functions. (Small business) With a growing time almost a year, there is less chance of having farms vacant to grow anything in short run. With longer growing season, weather conditions need to be in alignment with plant growth which is not possible all over the year. Variations in climate affect the growth cycle and quantity produced. Moving from streamlined business to exploring options- There is change in the air.(The Hindu business line) With Glasshouse Avocados in troubled times with all discussed reasons, Jack is considering moving to other options such as real state but this move by Jack is in double minds. He doesnt want to move but seems nothing else is working. (2). Solution: Business decisions are high risk decisions because the outcome of the decision have impact on several spheres of the business. Rational word simply mean to be logical. Rational decision making process refers to multi-step and formal process of analyzing various options available and choosing the best alternative by applying logic and objectivity. The model of rational decision making can be useful for to manage the issues and reach out to possible solutions. Rational decision making if applied well in current scenarios of Jacks business could result to bring him back in activity and profit numbers may expect positive change. (Happy manager) Steps involved in rational decision making in respect to case study: Define Problem- Lower sales profits Goals of the business-To grow revenue and beat the competition Developing alternative solutions-Concentration on custard apple and passion fruit. Evaluation- Compare cost of production, time period and revenue estimates Selection of best solution- Choose the best to achieve the target. Detail description and analysis of the various steps involved in rational decision making process in context with case: Define the problem- In the first part it is well explained the issues faced by Glasshouse Avocados. Lower sales, dipping revenue and competition creating downstream atmosphere are the major issues troubling Glasshouse in present times. The core reason of dipping profits are the dipping sales and sales are down because of the advanced and modern competitors who gained edge over Glasshouse Avocados. Intuitiveandrationaldecision making are the two ways that an individual can approach problem solving. (Study, Ch.-9) Goals of the business The primary goal of any business is to create economic value i.e. maximize profits. Glasshouse Avocados aims to regain its market share by growing its lost sales. The milestone is also to gain long term stability in terms of production and sales.(Boundless) Developing alternative solutions- Since two of the fruits custard apple and passion fruit are the good lead to grow sales because other competitors have their attentions only on avocados. This opportunity can also be utilized to divert other growers attention and avocados could also be taken in consideration. Elias being a marketing expert have few better ideas that deserves attention. His ideas to integrate processing facilities and develop new supply chain initiatives are worth risk taking. By innovative and attractive packaging of tube avocados, Glasshouse can offer quality and substitute products in supermarkets. Further local growers can also be brought in partnership and business could be expanded. Evaluation-Elias idea have more weightage in terms of success rate. Yes, it involves investment but keeping long profits and sales would too matter. Custard apple and passion fruit could be secondary option as Jack considers avocados to be in plenty numbers and yield good profits. Jack have hopes to revive his business and Elias idea somewhere outshines the other in various criterias such as cost involved, estimated earnings and so on. On contrary, if Jack applies idea of custard apple or passion fruit, others growers may start selling identical products and there may again arise situations as currently prevailing. Evaluation is brief terms is the systematic assessment of the merit of something. (Social research) Selection of the best alternative-Number of ideas are evaluated on various parameters and the best idea is chosen which have pros and can help to revive the business out of the downtime period. In the real world we tend to choose solutions that are reasonable or acceptable instead of the optimal one. So it's important to keep these steps in mind when making hard decisions. (LinkedIn) (3). Solution.-Resources can be in the form of tangible resources or human intelligence or environmental factors. Fixed asset are the valuable resources of any organization. Resource can be a stock or supply of money or staff that can be drawn by organization to function effectively. Jack have access to number of resources that could actually turn out to be profitable assets of the business. The land area of 8o hectares is valuable resource to Jack and this could also be utilized in current business of avocados and other utility is that he have real estate option open to go ahead with constructions of residential or office space to sell or lease out. It will give access to funds in abundance. (Business dictionary) Jacks daughter and son possess good business acumen and they understand the current ups and downs of the business very sensibly .The way Jacks daughter Jacqui look at all the factors , their alternatives , cost reduction and decision making skill is very valuable to Jacks business. His son Elias is very creative and have ideas of expanding business in the same products or diversify the product line. Jack being very successful in his venture holds finest reputation and aware of local zones can easily set up his hands in new ventures as well. Goodwill of the Glasshouse avocados is asset for Jack and its good time to reap up the fruits. (4). Solution: In providing solution to the above questions, there has been already good use of strategic model of SWOT analysis where we have discussed and analyzed the strength and weakness of Glasshouse Avocados and also available opportunities and threats. Strong belief is that to have shining future of business, Jack could make the best use of The McKinsey 7-S Framework. This model approaches both internal and external factors and can be used in wide variety of situations. Mckinseys 7 elements are classified into Hard elements and Soft elements. (MindTools) Hard elements are easy to recognize and management have direct influence on them. Soft elements are affected by culture of the organization and perhaps are tough to be identified early. We will look at each element and co-relate it to fit in Jacks business venture. Strategy- It means to have competitive edge over your competitors by selling goods or services that are unique in some or the other way. Glasshouse avocados have ideas to expand business line by selling tube avocados and enabling customers to eat avocados more effectively. (MindTools) Structure- It defines the reporting relationship in the organizations. (MindTools) Glasshouse avocados have plans to add on growers of avocados with them to reduce the overhead costs of small growers and reporting needs to be clear when working professionals grow in numbers. Systems-It defines the processes followed from start till finalization of the product. (MindTools) Glasshouse avocados have set processes and putting them in order with intellectual workers will help in cost saving and thus, profit will increase. Shared Values- It refers to work culture of the organizations and ethics it believes in. (MindTools) From the Errors time, work ethics remained strong and this definitely serves value in the organization. Style- style of leadership in the organization. Glasshouse avocados should have Laissez Faire style of leadership to deal with market conditions. (MindTools) Staff-the human workforce. Glasshouse avocados needs to hire more people if they are with the plan of expanding their business line. People hired must be capable to handle ups and downs of the business and manage the client base. (MindTools) Skill- As marked above, competency of the employees is crucial for the success of the organizations. At Glasshouse avocados, management starting from Errol to his grandson and daughter have tremendous strength to grow their business and hire skilled people to lead Glasshouse avocados. References: Production cost. (n.d). In Investopedia. Retrieved June 1, 2016, Rational decision making model. (n.d.).In Happy-manager. Retrieved June 1, 2016, The Rational Decision Making Model: Steps and Purpose in Organizations. (n.d). In Study. Retrieved June 1, 2016, 6 Steps in the Rational Decision-Making Model. (2015, Sept.10). In Linkedin. Retrieved June 1, 2016, The McKinsey 7-S Framework. (n.d). In Retrieved June 1, 2016, (n.d).In Business dictionary. Retrieved June 1, 2016.