The Best Laid Incentive Plans
"The Best Laid Incentive Plans".
Summary: Current State:
Cheryl Hailstorm is the new, and first non-founding family, CEO of the 94 year-old company Lakeland Wonders Toy Company. Cheryl has found herself caught between aggressive new objectives and opportunities, and a deep-rooted internal culture that resists change to anything that is outside the common company norm.
Summary: Desired State: Lakeland is a large producer of a high-end brand of wooden toys, who now has the opportunity for entrance into a new major-retail chain named Bulls-Eye with a less-expensive or mid-market toy line, and now for the first time must look to outsourced manufacturing overseas to keep costs down supporting the required new product price points.
Problem Sentence: The proud “built-in-the-USA” culture, and established marketing strategy, of Lakeland is very concerned about diminishing their branding with lesser value toys that may “cannibalize” the market of their higher-end toys, ruin their domestic production persona, and upset their union workforce with the possibility of a perceived threat of moving all production eventually off-shore.
Driving Forces:
Five factors driving Cheryl to push for this mid-line of toys, produced offshore, for the Bulls Eye opportunity:
1. Bulls Eye’s size and scope is a huge opportunity for revenue growth and brand expansion.
2. Bulls Eye is looking for an exclusive line of wooden toys and is very interested in it all coming from Lakeland.
3. The Lakeland Board-of-directors has set aggressive growth targets. Opportunities like a new line with the Bull’s Eye stores is the only perceivable way to meet these targets.
4. Mr. Swenson, the previous CEO and part of Lakelands founding family, has sold 30% of his holdings to a venture firm named Hastings Curtiss, and they are expected to be relentless in pursuing growth.
5. Market research shows that middle market, non-electronic toys, are the only toy market segment projected for
Summary: Current State:
Cheryl Hailstorm is the new, and first non-founding family, CEO of the 94 year-old company Lakeland Wonders Toy Company. Cheryl has found herself caught between aggressive new objectives and opportunities, and a deep-rooted internal culture that resists change to anything that is outside the common company norm.
Summary: Desired State: Lakeland is a large producer of a high-end brand of wooden toys, who now has the opportunity for entrance into a new major-retail chain named Bulls-Eye with a less-expensive or mid-market toy line, and now for the first time must look to outsourced manufacturing overseas to keep costs down supporting the required new product price points.
Problem Sentence: The proud “built-in-the-USA” culture, and established marketing strategy, of Lakeland is very concerned about diminishing their branding with lesser value toys that may “cannibalize” the market of their higher-end toys, ruin their domestic production persona, and upset their union workforce with the possibility of a perceived threat of moving all production eventually off-shore.
Driving Forces:
Five factors driving Cheryl to push for this mid-line of toys, produced offshore, for the Bulls Eye opportunity:
1. Bulls Eye’s size and scope is a huge opportunity for revenue growth and brand expansion.
2. Bulls Eye is looking for an exclusive line of wooden toys and is very interested in it all coming from Lakeland.
3. The Lakeland Board-of-directors has set aggressive growth targets. Opportunities like a new line with the Bull’s Eye stores is the only perceivable way to meet these targets.
4. Mr. Swenson, the previous CEO and part of Lakelands founding family, has sold 30% of his holdings to a venture firm named Hastings Curtiss, and they are expected to be relentless in pursuing growth.
5. Market research shows that middle market, non-electronic toys, are the only toy market segment projected for
References: McNulty, E. (2003). Harvard Business Review article: “Welcome Aboard (But don’t change anything)”. Harvard Business School Publishing.