To: Board of Directors, New World Computing Inc.
From: Casey Hampton, Consultant (Vidhan Jain)
Subject: Consultation report
Working on a new, innovative and an easy to use product in the form of Pulse in the growing market of medical technology, New World Computing has tapped what is a very promising business idea. With limited competition and superior product design, the firm has immense potential to mass market its product and to reap the benefits of the growing medical information system industry.
While Rosenberg Minsker and our team continue to remain optimistic about the prospects and continue to pitch to new clients, we have not been able to deliver the promised packages on time and fulfill contractual obligations. Existing clients are thus beginning to express dissatisfaction and are retracting. Inability to provide these packages on time and failure to charge for services has left New World Computing in a cash crunch situation, requiring working capital of about $100,000 to fund its operations.
After being approached by Laura, I have decided to help New World Computing through a pro bono consulting agreement. This venture represents an opportunity for me not only to give back to the medical technology industry, but to also get a promising business idea back on track. The first step is to create a report which would investigate;
* What issues/problems within the company have gotten New World into this predicament? * What can be done to improve the situation of the company? * What should be the long term vision and business plan for New World Computing?
The purpose of this report is to explore the causes which have gotten New World into this predicament, to suggest a few options for changes in management, and to demonstrate how incorporating these changes would lay the foundation for a comprehensive business plan, which would allow New World Computing to achieve its full potential as a pioneer in their industry.
Overview of Discussion
After reading literature on technology start-ups and comparing that literature with New World it appears that most mistakes have been in the management of the enterprise. The company has a wonderful product in the form of pulse which is capable of being mass marketed in a relatively new market. It appears, however, that mistakes have been made with regards to negotiation of contracts, inability to charge customers for services, and the compensation of employees. In addition there is internal conflict within the company and dissatisfaction amongst the employees. One of the biggest challenges New World faces is to retain the services of its top level employees. These concerns can be addressed by changing the management strategies of the firm. The report tries to suggest some of these changes, and also lays emphasis on the incorporation of new procedures, in particular those with regards to more rigorous paperwork policies and research environment.
Introduction to Discussion
To develop a complete understanding of the reasons for the concern, I have read literature on technology start-ups and compared notes and observations from my previous assignments to understand the reasons for the failure of start-ups and compared those variables with the ones in the company which may be causing problems. After reading those articles and reviewing my assignments, there are many similarities between the management problems of new start-ups and those faced by New World Company.
Issues and Concerns:
After reviewing the company’s current contracts and comparing them to similar ones in the existing market, New World Computing is overpaying royalty to some institutions. In addition, Laura has expressed concern in her report about the billing structure of certain contracts which may need to be re-negotiated. Timely delivery of the promised software has also emerged as a major issue. New World Computing may have made promises and...
Cited: a) IDCC 320 Assignment 4, case Handout ( Exerts taken from the case)
b) Failure Process and cause of Company Bankruptcy: a typology, Hubert Ooghe and Sofie de Prijker
c) Start up Business Advice from Business Owners to Would-Be entrepreneurs, Robert N. Lussier
d) www.investopedia.com Keyword Search: Business Plan
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