Aloha Products Case Solution
This case study is based on Aloha products. Aloha is a coffee producing company which was established in the year 1910. The company’s headquarter is located in Columbus Ohio. This case is based on the company’s plant managers who are facing problems regarding itsoverall control system.
This case mainly revolves around the problems being faced by the company’s control system in its marketing, purchasing and manufacturing departments. These mentioned departments of the company arebeing operated chaotically, resulting in an ineffective and inefficient utilization of its resources. Due to this,the plant managers of the company are becoming severely dissatisfied with the operations of these mentioned departments. The plant managers are unable to have a complete control over prices, sizes and volumes of their concerned plant’s outputs or inputs and they are continuously complaining about computations of gross margins. The problems are indicating towardsa negative sign regarding the growth of the business.
It is analyzed from the facts given in the case that the company operates under a centralized control systems because the plant managers are not given the control over the prices and volumes of the inputs and the outputs of their concerned plants. It is evident in the case that the managers have been complaining about this system for several years. In the beginning of this case, it is shown that Lisa Anderson, one of the company’s plant managers, expressed complete dissatisfaction over the company’s overall control system, stating that she felt like hostage under a very impulsive performance by the company’s departments. Since the company works under a centralized control system so the manager showed frustration on being assessed based on anyone else’s execution.
A centralized control system is a type of a system in which the overall operations of the company are being managed and handled by only a single central unit or department of an organization. So in the case with Aloha products. The company’s major operations like manufacturing, purchasing, marketing, sales and others are being managed from its Headquarters, allowing no control to its plant managers regarding the main operations of the company. The managers could not even make decisions regarding the green coffee beans in their concerned plants. This control is given to the central purchasing department of the company. But since the plant managers are held responsible for the overall performance, such as the product mix; the managers are completely dissatisfied with this centralized system.
The same is the case with the marketing department of the company because of being centralized the top management of the company is responsible for the advertisement and the promotions of the organization like the president and the vice president. So all the marketing of the company is being done via its central department.
On the other hand, at an organizational level, the centralized system have always proved to be very effective in a sense that because of it there are several operating costs that could be reduced, effective communication and decision making could be done and also proper commanding could be maintained.Like in the case of marketing activities, the central marketing unit is responsible to do all the advertising and promotional operations for the company, because of it the cost of advertising by each plant is reduced to only one unit.
But despite all these benefits,centralized systems also promotes democratic leadership and employees’ loyalty gets severely affected, then there also arises some major crises such as the criteria to evaluate the performances of individual departments or plants being based on their profit levels, which is not considered as a fair method to measure the performances, so as a result, the managers are getting fed up from such control systems leading towards continuous complaining In this section, we also need to analyze the actions and changes that could be made in the current control system of the organization considering its competitive advantages,but having said that, changing the control system of the organization tends to be very costly to the company has many operating and overhead expenses would get increased and there would be more workload because changing the system would require separate departments for each plants or branches of the company so the work would be doubled and the costs would increase.
So considering the whole situation it is better to bring minor but effective change to the current centralized control system in a way that all plant managers’ complains are addressed and solved. This could be done by bringing maximum integration and implementing effective communication channels in the company. By doing so,the status quo of the company’s performance and its control system could be maintained, and problems and discords in the plants could be resolved.
In order to analyze the company’s internal features; following strategic models can be taken under consideration:
The SWOT analysis is a strategic model used to address the overall strengths, weaknesses which may help the company to attain a future opportunity and the associated threat of the company. The biggest strength of the company is its more grounded consumption capacity and its peaceful services. This make a company extremely grounded and differentiated from other. As far as the strengths are concerned, there are some of the weaknesses attached with the company such as the political and economic environment surrounded by the company. These weaknesses can be mitigated if strategies would be implemented well and can be used as a future opportunity. (See Appendix 1)
Aloha Product Company financially solid position in the market. In 1994, the sales earnings of the Aloha Product Company appeared $150 million. The investment of the Aloha Product Company was nearly carry by representative of creator of the coffee house. The Aloha Product Company’s employees are work hard for generation of strong sales earnings of the year, allowing the company to develop and growth of your coffee company year by year and this is the reason for increase the goodwill of the Aloha Coffee Product Company.
Aloha will quickly open huge amount of coffee shops in a year, it is a great influences of the market for your competitors through product and goodwill. Aloha Product Company produces high-quality services and products. Its management is consisted of a motivated staff having high service culture. And Coffee is the major and important drink, which is popular in the young community customer because they are very excited for coffee containing drinks, making it a strong point for the Aloha Coffee Product Company…………………….
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