455.Paper.Frama-Tech Strategy by Brandon Kampschuur.AUT07

The frame perspective derived from their being both

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Unformatted text preview: ow frame scope that caused them to focus only on a few alternatives, namely spreading geographically via acquisition or from scratch (“de novo”), or creating a new product line. The frame perspective derived from their being both the owners and decision makers of an edgebanding company, and involved the assumption that breakout growth for FTI was possible. Robert and Dianna may have suffered from “group think” as a result of being a husband‐wife team running FTI as co‐owners. By being constantly around each other in both work and home, Robert and Dianne could easily create an environment where alternative opinions, especially those of naysayers, are less likely to be considered and thus trap themselves into a narrow line of thinking. This is the main reason why large, more heterogeneous decision making bodies are often desired. At the very least Robert and Dianna should be aware of this limitation for family run businesses and consciously work to overcome the limitation by “wearing different hats”. However, a husband‐wife team running a business allows for synergies as well. In order to improve this frame and assessment, it may be beneficial for the decision makers to broaden their frame by scope. To see how this might help, consider that Robert and Dianne’s core strength is admittedly in business operations, not edgebanding, which they knew nothing about before buying FTI. With a broader scope that includes radical alternatives they could then consider leveraging their core skills by becoming a conglomerate of acquired small businesses that crates value by improving operations. Their perspective would then change to a kind small business private equity firm and correspondingly their assumption would be that they could repeat the turnaround success of FTI with other small business. The assessment phase would not need to focus on the edgebanding industry and instead would be very similar to the kind of assessments they made when originally looking for a company to purchase. Step 2: Developing the Decision Basis (Alternatives, Information, and Preferences) Developing Information In order to gather information the decision makers relied on an informal approach centered on talking to industry contacts whenever possible. Following their frame, they looked to gain information about what other product lines were worth pursuing or which competitors might be worth acquiring. They also researched new locations and the costs and risks associated with opening up a new distribution location de novo. Breakthrough information came from an unorthodox source. Robert and Dianne met an ex‐ manager who had worked for a competitor and was fired in an insulting way. They paid this guy to come to California and download all industry and competitor information he could. They showed him the list of competitors they were interested in acquiring and he told them that one of the competitors, Central Edgebanding, Inc. (“CEB”) was owned by older people who were of retirement age. Located in Texas, CEB app...
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This document was uploaded on 02/17/2014.

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