Case Analysis

Analyse the case step by step.

Step 1. Clarify the Issue

Discussion questions:

1. What does Microcomtec Corporation do?

a) What is its major product?

b) For what market does it manufacture?

c) What are Stanley’s major recommendations?

2. In the background a number of problems with Microcomtec are mentioned, either directly or indirectly by way of proposed changes.

a) Make a list of these problems.

b) Then write a one-sentence statement describing each problem.

Step 2. Consider exhibits

Exhibit 1

Sales of the Microcomtec 100

Third and Fourth Quarter, 2000 (in US$)

Exhibit 2

Microcomtec’s Balance Sheet

As of December 2000

(Actual US$)

Discussion questions:

1. Exhibits 1 and 2 show Microcomtec’s financial situation. Judging from these figures, is Corporation in serious trouble? Support your answer with specific references to the exhibits.

2. Does exhibit 2 suggest that Stanley’s recommendations will be adopted by Dixon? Why or why not?

3. Create a graph using Exhibit 1, expressing the domestic and international sales trends for the third and fourth quarters of 2000.

4. Write a brief summary of the balance sheet using Exhibit 2. Your analyses should include a comparison between assets and liabilities. Note that while the total assets and total liabilities are exactly the same (and must be if a balance sheet is to “balance”), there are a number of points to compare: total current assets versus total current liabilities, accounts receivable versus accounts payable, cash versus notes payable, etc. From your comparison, how would you rate the financial position in the company?

Step 3

a) Consider the memo from H. Dixon to D. Robinson:

Interoffice Memorandum

To: D. Robinson

Fm: H. Dixon

Re: Direct Mail

Date: Jan. 22, 2001

With underwritten be advised that I contacted the people at Industrial Collaborative today in an effort to purchase direct mail lists. They claim to have very vertical lists of primary purchases both in the U.S. and abroad for materials-testing automation. They are going to sell one list for $1,200 or two for $2,100 (over 1,000 names in each). Names and titles are included into the lists. I strongly suggest that we should obtain the lists, as it was recommended by Ms. Stanley. We should also create a direct mail piece to accompany existing product leaflets. Harvey, from International Communications Department, promises he can have design and copy in a matter of some days for a three-page brochure describing our automation packages. Harvey will phone back later to confirm. Let’s discuss the matter this afternoon.

b) Create a dialogue between Robinson and Dixon regarding the above Memo:

R.Henry, it seems as if you’re missing the basic points of Ms. Stanley’s recommendations.

D. _____________________________________________________

R.I say that because her report explicitly states that we should abandon these markets and change our direction.

D. _____________________________________________________

R.I know you believe we should give it more time. But, evidently, we don’t have more time.

D. _____________________________________________________

R.Well, maybe I am making a mistake. But we have to try to get a product that actually sells.

D. _____________________________________________________