Question

6:05 pm Fri 5 Apr 令47% 1.0 a instructure-uploads-apse2.s3.ap-southeast-2.amazonaws.com Thomas (CEO of the Sages group) is currently recovering from his heart attack, but he is still feeling little weak. He does not consider himself in danger of dying immediately, but he is still thinking of moving his company's management to his children. Knowing that the ownership and management do not necessarily have to go hand in hand, Thomas has decided to offer Timothy the full CEO role (although he only owns 5% of the company's stocks), because he has played an important part in leading the Sages Group as his father's right hand man for the last couple of years. In addition, Timothy has shown himself to be very entrepreneurial. Thomas's thinking is that Timothy deserves the job as CEO and he is also interested in earning some extra money recently lost a good part of his savings through gambling. One of Timothy's first tasks would be to lead to buying out the franchises to bring the business back in house. He is now talking on the phone and discussing details of this purchase because he After a long talk, Timothy (having been appointed the new CEO of the Sages Group) hung up the phone with satisfaction. The franchisee of the Sages Group operating supermarkets in Melbourne Australia ("Good Locals") would sell its Melbourne site to the Sages Group and the Commonwealth Bank acting on the family's behalf had negotiated a very good price. This was good news for the Sages family because the franchisee was no longer respecting the group's long-standing principles of great quality at a good price; the business was declining, and the franchisee was becoming difficult to deal with. Timothy had become aware that the family owning its own franchisee was in conflict, with some members eager to exit the venture One question was st looming: how would the Sages Group finance this acquisition In the best scenario, the potential sales of Good locals Melbourne would represent about 10% of the group sales. However, the real estate of Good Locals Melbourne was also up for sale as well This was the first time that the group had considered a buy-out of one of its franchises, and Timothy felt it necessary in order to regain market share in the South Australia. This represented an important investment and Timothy wanted to identify the best approach before formally suggesting this purchase to the board Timothy also had other thoughts in mind; he always wanted to be a toy store owner. He thinks that maybe buying out the Melbourne franchisee could help him develop the skills necessary to become a successful entrepreneur in the toy sector, too. Timothy also knows that the shopping centre in Melbourne (where the current franchise store is located) would be an excellent location for such a toy store, because it is located in family-friendly area and the mall's traffic is highly family-oriented. Timothy has a really strong drive towards his work, but like his father Thomas, he often works too hard and that can compromise his eating/drinking, sleeping, and exercise habits at times. Timothy realises that he cannot make the franchisee purchase decision alone, but needs some advice from the board. Timothy does not have a clear plan for the next board meeting (members: Thomas, Martia, David Junior, Timothy as a new CEO and head of the meeting, Caroline, Jim, Lucie, and Peter) and he is considering how tell the others about these innovative plans for the establishment of a toy store after buying out the Melbourne franchisee. Timothy wishes that the consultancy company, of which members have been invited to participate in the boardroom meeting again, could be of a particular help. The following topics should be considered and decided upon:

1.Timothy has recently applied the incubation and idea experience parts of his creative process. How could the knowledge accumulation and evaluation/implementation parts of the creative process help him with regard to the toy store business?

2. Which type of thinking(analytical or creative)would be most important in the situation where Timothy is planning a new model (invention) of his thoughts on a toy store?

3. How could Timothy’s ideas be tested as an innovation before trying to implement this toy store idea as a potential opportunity?

4. The Sages group has been using the competition model of opportunity in the beginning of their new venture’s short history; however, it now seems that the competition is getting stiffer. How would identifying the other opportunity types (innovation, alertness, or social need) help the Sages family business? What other businesses could the Sages family acquire? Is Timothy’s suggestion (the toy business) such a business?

Answer 1

Ans 1: The knowledge accumulation and idea experience can help Timothy overcome the initial hiccups in the new business. It will also help him train and guide the store manager of the store about being methodical and goal oriented. The creative thinking will help in designing of the store and as mentioned Timothy has already in a plan to open the store in a family locality which is visited by family including kids.

Ans 2: Creative thinking would be necessary for execution of this kind of innovative idea but an analytical bent of mind that Timothy posses will help him do good while using his already gained experience while working under the aegis of his father Thomas.

Ans 3: Timothy's idea can be tasted by storing some of his product in other toy stores located in the same locality. A research based on the customer insights obtained from the sales or potential customers involved in product handling at the other stores will give Timothy an idea of how to go about with the toy store, whether to start big or go slow.

Ans 4: Stiffer competition would lead to better production techniques resulting in cutting cost to hold on to the profit margins. This would lead to innovation at each level of the organization. Related diversification based on social needs can be another way of creating a blue sea for Sages. Timothy's idea of the toy store can be a good idea if accepted by the board. The board , management and other stakeholders must be convinced about the ambitious plan of Timothy which can be a game changer for Sages in the future.