“Soaring Eagle Skate Company”

The main problem for Soaring Eagle has been taking on projects for which the management lacks expertise. The personal brand that Stan Eagle had developed since he was a teenager was what made the company successful at designing, producing, and selling skateboards. He had learned everything there was to know about skateboards over the years, which had enabled him to handle any challenges that arose while he managed the business. But, when the business chose to take part in other activities that the management was unaware of, it suffered considerable losses. The expansion is paramount for any business, but the management did not factor in the need to have experienced personnel in its other engagements. When entering the clothing business, Eagle got the suggestion from a friend instead of enquiring about it from successful people in the industry. This decision resulted in millions of dollars and over three years being wasted in trying to gain from selling clothing. Eventually, he sold it to a more experienced business, a clothing company. Consequently, his business partner is suggesting that they begin selling other kinds of skates. None of them was an expert in them, but his partner thinks that it could be a sound investment. However, repeating the same mistake of having lack of experience would not be ideal.

Case Analysis

The issue is founded in every business-oriented organization’s desire to diversify. It is risky to have one’s eggs in one basket. Clinging on one segment is risky since if its returns wane, the business could close down. It explains the reason for Soaring Eagle looking for ways to diversify since only dealing in skateboards puts the entity at a high risk. However, running a business in whatever industry one is entering necessitates some experience to avert failure. In each of them, one has to wear several hats including marketing, management, selling, and finance to bring about efficient operations of the venture. Still, one has to comprehend the industry, the skills necessary to avail offerings, and the trends. Lacking these skills should not discourage one as educating oneself on them can be done. This milestone can be realized through talking to people that are successful in the segments, getting a coach, attending classes, reading a book, and doing extensive homework. Failure to acquire significant knowledge concerning an industry is what led to Soaring Eagle using up considerable resources and still not being successful in the clothing industry, a mistake that could be easily repeated by engaging in other kinds of skates.

Also, the lack of experience was accompanied by ineffective marketing. Eagle as a personal brand worked well for the company in appealing to skateboarders. However, his brand is not associated with clothing or other types of skates. The management ignored this aspect since they should have brought in other brand ambassadors for the clothing line, a point that can also be applied to any other expansion endeavors. Effective marketing is a critical element in the future of any product or service. Overlooking it can only lead to failure. Another issue that amplified the lack of experience is that of entrepreneurial excitement. Any entrepreneur feels excited concerning new ideas, but inexperienced ones are incapable of differentiating between feasible opportunities and those that are not. The idea presented to Eagle had the capacity to become a good investment, but the inability to recognize that it could not be put into practice with the current capabilities meant that Soaring Eagle should not have gotten involved in the clothing industry. The company had the money and time to implement the idea but lacked the skills and know-how to execute them productively. It also shows the need to first acquire the necessary capacities before choosing to engage in other types of skates.

Additionally, the lack of experience could lead to loss of customers. Soaring Eagle had enjoyed success in the skateboard segment with it also enjoying a significant number of loyal customers. Engaging in other sectors with adequate financial and time resources could result in high-quality products. However, lack of sufficient knowledge and skills in an area increases the likelihood of delivering customer services that displease the clientele. Dissatisfied customers will move to other providers meaning that the company could undergo declining sales. In avoiding losing its loyal customer base, Soaring Eagle must always seek to incorporate the necessary skills and knowledge in any expansion endeavor.

Discussion Questions

How do the characteristics of management decisions- uncertainty, risk, conflict, and lack of structure – affect the decision facing Stan Eagle?

Eagle has to decide between steering the company towards other types of skates and specializing in skateboards only. Decision making tends to be a process of selecting among at least one course of action. This rational process has many characteristics that are essential in the way forward for Soaring Eagle. The first one is that of uncertainty. Eagle is not sure about the reliability of any of the alternatives. It is challenging to correctly predict the best option for the company, an aspect he must first recognize. Nevertheless, many important matters involve reaching decisions under uncertainty. Hence, Eagle should not be concerned with reducing it, but with the better understanding it and the implications of each choice. Since both play a critical role in the decision-making process, it is necessary to conduct research and monitor what others have been doing over time. By seeing the way their strategic positioning was affected, Eagle is in a better position of charting the way for his company.

Each of the alternatives has particular risks, which the company would have to contend with. Eagle will thereby need to look at all possibilities of numerous events that could occur. Even though both of them have a likelihood of bringing in profits, losses could also be experienced. Also, Eagle’s risk appetite has diminished because of wasted resources in the clothing segment. He is looking to absorb and manage as little risk as possible. Hence, the option that will be found to have a higher quantity of risk will be abandoned. Additionally, Eagle has failed in convincing Williams that expanding into other areas was not appealing at the moment. To avoid conflict, Eagle will thus have to give in to the latter’s suggestion or buy his stake in the company. Moreover, a lack of structure will also have an effect. It is clear that choosing to engage in the clothing sector was not founded on proven answers to back it. Then, Eagle must seek objective advice to avoid repeating the same mistake or exposing his company to more risk.

What steps can he take to increase the likelihood of making the best decision in the situation?

Soaring Eagle will have to institute some measures to enable better handling of the decision-making process in the future. More difficult decisions will continue arising that will prove significant in shaping the company’s profitability. Reaching good decisions is a tactic that should be learned whereby particular steps ought to be followed. The first should always be that of identifying the goal. By always keeping an eye on what is most important, sound decisions can be reached. In this way, living with and defending it is made easier whenever doubts occur. Secondly, it will be imperative to gather all relevant information to aid in weighing the available options. Hence, a better understanding of what needs to be accomplished can be realized in addition to being helpful in the generations of ideas. Information can be gathered from trusted people and experts among other resources.

Thirdly, the consequences should be reflected upon. It entails looking at the way the final decision will affect every stakeholder. The immediate and long-term effects for each alternative should be considered. In so doing, one is aware of all the pros and cons of whichever option they elect. Another step is that of making the decision. At this juncture, a choice is made with it being executed. Some indecision could still be there, but having confidence in the due process conducted, one should feel good about the outcome. The last step entails evaluating the decision together with all the steps utilized to guarantee it is a success. This step is significant since it assists in the further development of one’s skills in making decisions. Its significance also emerges when it necessitates seeking out new information thus dictating the making of changes. Also, if the first decision proves to be ineffective, another one can be chosen.