High Performance Tires Executive Brief
Ella Encoy
High Performance Tire
BUS 485
Executive Summary
High Performance Tire is a family owned business that was founded in 1952. The founder’s daughter, Jane Wallace, ran the company before turning over management responsibilities to her son, William Wallace in 2001. Since then, the company’s performance has declined. High Performance Tire’s reputation in the industry has turned to negative and employee turnover rate have increased. Jane Wallace is concerned of how the business is running. Her intention of keeping the company within the family is threatened with her son’s inability to run the business effectively. This case is important to look at because it demonstrates the importance of having a strategic plan prior to implementing or making changes to an organization. With proper market and company research, prior to developing a solid strategic plan, William Wallace tenure as a manager could’ve been more successful.
Identification
One of the strategic issues with this case is that William Wallace decided to expand the business by offering automotive maintenance services without making sure that the business can properly deliver the service or that the company will have competitive advantage compared to competitors. There were no properly skilled employees hired to do this job compared to its competitors. Competing companies in the tire industry offer these same services and performs them better the High Performance Tire (HPT). Another issue is that Mr. Wallace cut cost in the wrong areas in order to increase profit. First, in order to compete in the market and lower cost of tires, he elected to purchase and sell low quality tires. Though he was able to lower the prices, customers became concerned and unhappy about the tires they are purchasing due to its poor quality. Sales continued to fall as a result. In order to drive sales, Mr. Wallace changed the salary from the sales staff to commission based salaries. Though this
High Performance Tire
BUS 485
Executive Summary
High Performance Tire is a family owned business that was founded in 1952. The founder’s daughter, Jane Wallace, ran the company before turning over management responsibilities to her son, William Wallace in 2001. Since then, the company’s performance has declined. High Performance Tire’s reputation in the industry has turned to negative and employee turnover rate have increased. Jane Wallace is concerned of how the business is running. Her intention of keeping the company within the family is threatened with her son’s inability to run the business effectively. This case is important to look at because it demonstrates the importance of having a strategic plan prior to implementing or making changes to an organization. With proper market and company research, prior to developing a solid strategic plan, William Wallace tenure as a manager could’ve been more successful.
Identification
One of the strategic issues with this case is that William Wallace decided to expand the business by offering automotive maintenance services without making sure that the business can properly deliver the service or that the company will have competitive advantage compared to competitors. There were no properly skilled employees hired to do this job compared to its competitors. Competing companies in the tire industry offer these same services and performs them better the High Performance Tire (HPT). Another issue is that Mr. Wallace cut cost in the wrong areas in order to increase profit. First, in order to compete in the market and lower cost of tires, he elected to purchase and sell low quality tires. Though he was able to lower the prices, customers became concerned and unhappy about the tires they are purchasing due to its poor quality. Sales continued to fall as a result. In order to drive sales, Mr. Wallace changed the salary from the sales staff to commission based salaries. Though this