Mama Bear Case Analysis

Strengths:
1. Continuous growth of operations
2. Growing number of potential customers
3. They have a lot of institutional partners which are big and stable
4. They have a tie-up with the most reputable and well-known companies in the Philippines
5. Each of the partners are hardworking and frugal and has a positive attitude
6. Has referrals from satisfied clients by word of mouth
7. Advanced and quality childcare services that meet parent’s needs

Weaknesses:
1. Qualified employees leave the company after gaining experience and training 2. Employees left behind by resigned employees need to be teach again 3. Criticized by public commentator/media due to non-giving of overtime pay and meal allowances to their employees rendering overtime 4. Doesn’t have as much bargaining power with customers and suppliers as a big player do 5. Different viewpoint and conflicting opinions of all partners

Opportunities:
1. Opportunity to earn higher income if they will continue to expand and add another market segment 2. Opportunity to become a larger organization and have greater bargaining power with customers and suppliers as their other competitors have 3. Opportunity to further exploit and maximize their potentials 4. Opportunity to upgrade their technology to be above par with their competitors which could give them a greater competitive advantage Threats:

1. Wrong decisions could have a devastating impact on them specially if their decision on their current business situation doesn’t work well for them as expected 2. Radio commentator/media might continually put them into a bad image if they wouldn’t resolve their issues on their employees 3. Threat of losing some of their clients because of the event that happened in the country which threatened the security of foreigners and tourist comprising a large percentage of their customers 4. Threat of losing out to their competitors if it keeps itself numb of significant market data relevant to their business 5. Possible disagreement between each partners if they do not come up and agree on the specific and ideal solution that could have a detrimental effect on their business 6. Threat of having a higher turnover of employees due to the current work condition of their employees

IV. Assumptions None

V. Alternative Courses of Action

Alternative Course 1:
Take advantage of the current business situation by expanding further

Alternative Course 2:
Sell out their business before their competitors outcompete them

Alternative Course 3:
Maintain a status quo on their current business situation

VI. Analysis

Alternative Course 1: Take advantage of their current business situation by expanding further

Advantages:
1. Opportunity to earn higher profit due to having a larger number of potential customers 2. Opportunity to gain a higher bargaining power with customers and suppliers 3. Opportunity for more market opportunities and further exploit the company’s potential 4. Each of the partners have the opportunity to share their innovative and creative ideas that might greatly help their business

Disadvantages:
1. Higher capitalization requirement(e.g. higher investment cost in capitalization in technology areas) 2. Possibility of losing out to their competitors if they keep numb of significant market data relevant to business 3. Might not work out well and generate higher profits as expected 4. Requires continuous innovation & research and developments costs to keep up with the current business trends especially in the areas of technology 5. Possibility of losing some of their customers as a consequence of having a higher technology as a prerogative in their business expansion which includes equipping latest fads that the children are playing(parents might decide not to enroll their kids because they would think that more playtime will happen inside the childcare center instead of studying)

Alternative Course 2: Sell out their business before their competitors outcompete them

Advantages:

1. Relieve the partners from stress, worries and tension with regards to the uncertainties and risks inherent in their business. Also saves them the
effort required in managing their business 2. Each of them will enjoy more time for relaxation since their involvement in their business is taking much of their time

Disadvantages:
1. Losing opportunity to earn higher profit
2. Significant reduction of income on each of the partners 3. Losing the opportunity to grow and the possibility of operating on a larger scale 4. Numerous paperworks involved and things to accomplished and finish as a result of selling out their business 5. High cost associated with the consequences of selling their business- liquidation cost, distribution cost to partners and settlement of accountabilities with various suppliers 6. Losing opportunity of each partners to grow and exploit their own potential

Alternative Course of Action 3: Maintain a status quo on their current business situation

Advantages:
1. Lesser risk of making risky decisions
2. Lesser stress and effort to continually innovate especially in areas of technology 3. Lesser cost

Disadvantages:
1. Losing opportunity to grow and expand and no opportunity to gain higher bargaining power 2. Losing opportunity to earn higher income
3. Becoming stagnant or being left behind and possibility of losing out to their competitors in the near future

VII. Conclusion

Variables: time, effort, energy, resources

Alternative Course 1: Expanding further

Business expansion will typically take more time, energy, effort and additional resources but even though it is risky and costly, the rewards associated with it are also much higher. The riskier the decisions, the higher the returns. Risk is inherent in every business and if we don’t have the courage to do it, we wouldn’t be enjoying the rewards and benefits associated with it.

Alternative Course 2: Sell out their business

Selling out their business will save them the time, effort, energy and resources needed but they will lose the opportunity to grow and earn a higher profit. Even though it means stress free and risks free, it also means losing profits and a losing a lot of market opportunities. In business, you should never give up and maintain a positive attitude and outlook to attract positive energy

Alternative Course 3: Maintain a status quo on their current business situation

Maintaining a status quo means lesser risk, lesser energy and effort , lesser resources and responsibility but then again , you lose the opportunity to grow and earn higher profit. You become stagnant of relevant market data needed to be successful in managing the business which in the near future can have a negative impact on the company because they have no room for improvement. Change is constant and every business must continually strive to innovate to gain a competitive advantage.

All in all, the Alternative Course of action to be adopted is Alternative Course No. 1 because you have to take advantage of the current business situation by expanding further and this might be riskier for them but the rewards and benefits associated with it could be more beneficial to them in the long run since they will have a lot of market opportunities resulting to gaining higher profits.

VIII. Plan of Action

1. Raise enough money for capitalization requirement by selling 40% of their stock to a venture capitalist or to the public 2. Take advantage of their credit line, borrow additional funds needed for expansion 3. Use some of the funds to embark on the new technology needed for expansion and improvement of childcare services 4. They could hire a financial advisor to keep them updated of current business trends and give them a good advice on where to invest the other funds for profitable investments 5. Look for a venture capitalist who has a meaningful and relevant experience that can greatly contribute creative and essential ideas that is of great help to the business for further success 6. Broaden outside contacts with your customers and suppliers, select reliable suppliers to satisfy customers. Establish good relationship with them by giving value added services to them.

For example, you can offer dropping their kids to their houses for less hassle and added convenience for the parents who wouldn’t need to fetch their kids from childcare center specially if they are coming home late from work 7. Adopting a marketing strategy to maintain and increase your current customers. Example, you can give discount to your long time customers specially if they will enroll all of their kids in your daycare center 8. Employing qualified personnel which are closely attached to the kids and has genuine concern for the kids 9. Giving additional incentives and overtime pay and allowances for the employees rendering work overtime and showing good performance.