Team submission for Problem identification - a case study in critical thinking and contingency planning.

1. 1
Problem Identification
Stacey Troup, William Cox, Rodrigo Carrasco & Marcel Wesley
Critical Thinking & Decision Making/PHL-320
June 27, 2016
Todd Goodling

2. 2
Problem Identification
This Week 3 group paper will discuss the issue of business expansion (Hillstrom &
Hillstrom, 2002). Throughout the course of this paper we will discuss the overall issues with
expansion, specific problems with expansion plans, discuss why this is an underlying problem,
relate the specific research to the problem at hand and finally, we will explain how a clearly
defined problem can help with the solution.
Summary of the Problem
The article points out eight methods of expansion businesses can utilize in order to
bolster their expansion plans. These methods include: acquisition of a similar business,
franchise ownership rights, intellectual property licensing, business agreements with dealerships
or suppliers, joining co-op ventures, new marketing routes (such as catalog offerings), and
employee stock purchase options.
While all methods are tried and true, the article does warn against rapid growth beyond
the capabilities of the company as well as the growth plans of a company without first laying the
necessary groundwork for success. This framework includes an honest assessment of the
strengths and weaknesses of the company prior to beginning any growth plans.
Identification of the Problem
Successful companies sooner than later eventually face a period of “stall out”, which is
defined as “a sudden large drop in revenue and profit growth or a collapse of once high
shareholder returns to well below the cost of capital” (Zook & Allen, 2016). Business expansion
is a business decision that is commonly strategized with successful entrepreneurs. With business
expansion, business owners are motivated by increased earnings while the decision also presents
itself with a myriad of challenges.

3. 3
There are many common pitfalls to business growth; of which, ironically, is the decision
to expand in the first place. The decision to expand will require more than resources and a solid
strategy, a mindset that fosters will and perseverance to take on the new challenges.
In addition, the warning is present that the desire to grow and implementation of growth
deemed too rapid or in poor timing is detrimental to business overall. Adaptive measures must
be taken from the owners to the employees in order to properly adapt to expansion desires prior
to implementation or failure is eminent.
Explanation of Why This is Underlying Problem
As we discover during the review of this informative piece, the desire to grow can often
lead to widespread failure when not properly planned for. While many businesses seek to grow
their business ventures through the methods outlined, they do so in a way that actually
counteracts their productive ambitions.
Contingency planning is a major step in the expansion process. By not considering all
the alternatives and their ramifications, you cannot properly plan for what lay ahead. Often
leading to squabbling and splits among partners, investor weariness and redeeming of shares held
due to volatility concerns. Having been at a company who failed to consider their options and
subsequent contingency plans in the past, we found ourselves in bankruptcy in 2001, being
delisted from the NASDAQ and reduced to a penny stock and bankrupt a second time after being
purchased, all because of poor planning and overzealous growth plans.
Relate the Research to the Problem
As previously discussed, failure to plan ultimately (often) results in the demise of the
company. Full contingency plans and plans beyond that of a five year plan are needed. Impact
statements relating to the staff, assets, investors expectations and financial obligations are also to
be considered.

4. 4
A previous company of mine, iBeam Broadcasting, found themselves in serious trouble
after expanding their New York office to a staggering 125 people with offices throughout the
U.S. and U.K. Once the attack on the World Trade Center, whereby the president of Akami, our
largest competitor, was killed in one of the planes which hit the Trade Center and the financial
markets began their demise and collapse. Our growth became a flat out stagnation, employees
were fleeing and layoffs began. Over the course of one year we went from growing to
bankruptcy.
Contingency plans and an honest review of the company failed to happen and we found
ourselves on an economic collapse rather than economic incline.
Explain How a Clearly Defined Problem Could Help With Solutions
Problems that are poorly defined may have nuances that are not easy to understand. As
such, the problem becomes harder to solve than one that has been clearly defined. However, a
clearly defined problem can lead to a progressive solution (Moore & Parker, 2016). For example,
when expanding a business, companies that are not meticulous in identifying the problems may
find it difficult to understand why certain issues are important and end up missing opportunities or
wasting resources. As such they may and end up pursuing initiatives that are not aligned with their
strategy. It is for this reason that it is important to become better at asking the right questions to
find the right solutions.
As previously discussed, through an honest evaluation of the company’s strengths and
weaknesses, problems are clearly defined and ultimately help with the end decisions.
Conclusion

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The team agrees that critical thinking as well as contingency plans agree with the article
in that they are a necessary plan of action before any expansion plan should be put into action.
Failure to plan often results in failure and a serious economic decline for all involved if all plans
are not considered, redundancy plans put into place and rechecked for validity to ensure the
overall success of the company and its future plans.

6. 6
References
Hillstrom, L. C., & Hillstrom, K. (2002). Gale Virtual Reference Library. Retrieved from Gale:
http://go.galegroup.com.contentproxy.phoenix.edu/ps/i.do?id=GALE
%7CCX3404300076&v=2.1&u=uphoenix_uopx&it=r&p=GVRL&sw=w&asid=3bd0994
978d4677d8d49ffff67266c6e
Moore, B. N., & Parker, R. (2016). Critical Thinking. Chico, CA: California State University.
Retrieved from https://apollogrp--
c.na13.content.force.com/servlet/servlet.EmailAttachmentDownload?
q=yNXnGOXTTG72VhDqtWySl8dilQk5qPlqzVIal6xe0mcj
%2F0kZ6IIBAZ3aEs1FwNDzkXZGezGFC2VWI8aDwvGy9w%3D%3D
Zook, C., & Allen, J. (2016, 03). Reigniting Growth. Retrieved from Harvard Business Review:
https://hbr.org/2016/03/reigniting-growth

7. 6
References
Hillstrom, L. C., & Hillstrom, K. (2002). Gale Virtual Reference Library. Retrieved from Gale:
http://go.galegroup.com.contentproxy.phoenix.edu/ps/i.do?id=GALE
%7CCX3404300076&v=2.1&u=uphoenix_uopx&it=r&p=GVRL&sw=w&asid=3bd0994
978d4677d8d49ffff67266c6e
Moore, B. N., & Parker, R. (2016). Critical Thinking. Chico, CA: California State University.
Retrieved from https://apollogrp--
c.na13.content.force.com/servlet/servlet.EmailAttachmentDownload?
q=yNXnGOXTTG72VhDqtWySl8dilQk5qPlqzVIal6xe0mcj
%2F0kZ6IIBAZ3aEs1FwNDzkXZGezGFC2VWI8aDwvGy9w%3D%3D
Zook, C., & Allen, J. (2016, 03). Reigniting Growth. Retrieved from Harvard Business Review:
https://hbr.org/2016/03/reigniting-growth