Of the factors marked with an * rank them and identify which represent a threat and which an opportunity.
3) Page 6.1 p99 of text (Think of an occasion in the past three years when the organ. recognised the need for change in good time, and think of another time when it failed to do so. List the factors which may have contributed to these different outcomes. (Factors that contributed to the recognition for the need for change and factors that contributed to the failure to recognise the need for change (Table) Reflect on your unit's past record for recognising the need for change. Note anything that you or others could do to help ensure that in the future your unit or organisation will be more alert to the need for change. (Notes)
The company chosen for analysis is VTech. It is, to use their own words, "one of the world's largest suppliers of corded and cordless telephones" (TEL) "and a leading supplier of electronic learning products" (ELP's). "It also provides highly sought-after contract manufacturing services" (CMS). "Founded in 1976, the Group's mission is to be the most cost-effective designer and manufacturer of innovative high quality consumer electronics products and to distribute them to markets worldwide in the most efficient manner." (Results FY 2007)
It may be noted that VTech has made several changes in the past five years (2001-02 to 2006-07), some on its own, and some in response to environmental stimuli. It must however be noted that none of these changes are transformational in nature. This is not to deny the major changes that have occurred. But even the major changes may be classified as 'incremental' because there has been no change in the basic structure of the Company. (Hayes, ch1, pp15-17)
Q2 Current Nature of the External Environment faced by VTech
1) Hong Kong (HK) where VTech is located was a British Colony, which has reverted to China in 1997.
2) HK has a unique history of being politically close to both China and the West.*
3) HK can retain its economic independence from China for 50 years after 1997*.
4) VTech has access to cheaper labour in China, where it has located some of its production facilities.*
5) HK, like China and Japan, has a unique set up of manufacturing of an imitative nature, where it competitively produces the same products made by the West. Some of VTech's products also fall into this category.
6) Technological changes in the telecom sector have been rather fast*
7) The age at which people start using hand phones is getting lower. Even children use these phones*
PI, P2, E3 and E4 are linked directly or positively.
E5 and T6 are indirectly or negatively linked. Quick technological changes make it difficult to come out with good imitations. Besides, tightening of patent laws to include products and not only processes, make it more difficult to 'imitate'.
T6 and S7 are also positively linked. A decrease in the age of users could speed up technological changes to meet the demands of the new clientele.
Classification of Factors Vital for VTech's Survival into Threats and Opportunities.