Entr 3100 Escape Outdoor Living Designs Inc.

Yvonne Liu

100280409

ENTR 3100

Critical issues

Escape outdoor living designs Inc. increase its net income to $38,969^[1] in the 2013 in order to have significantly improve on company’s financial position by solving the following critical issues:

1.  How to increase employee loyalty and successfully maintain customer service.
2. How to obtain large size project so that company can be more profitable when facing the strong competition in the market.
3. How to establish business focus in order to have sustainable growth in the high competition market.

Situation Analysis

Escape Outdoor Living Designs Inc. is widly focus on landscape constructions and designs, based on its high-quality performance and various landscape construction. In London, landscape construction is considered as high-end project, the steady growth of high-end home development help Escape company growth. Escape company has high turnover rate which is affecting its profit and customer service. The level of employee’s loyalty is low, cost company more money to hire and training new employees. Also, in the high competition market, Escape company hard to obtain large size projects to increase revenue, lack of focus on the landscape constructions. Doing different smaller jobs such as ice rink, play system and 3D design cause Escape decentralized operation. Under management part, the owner Harrison has strong interpersonal skill and provide training to employees. However, due to the high intention seasonal works and company decentralized operation, company has high employee turnover rate, which cost more to hire new employees.

Decision Criteria

The viable option for Escape Outdoor Living Designs Inc. must:

• Increase the profit to $38,969 in 2013.
• Centralized the job area to design, landscape construction and snow removal.
• Hire a HR manager to help Harrison to manage the team
• Depend on the employees working hours, provide more employee benefits, such as for long term contract employees can have health insurance.
• Focus on marketing, more advertisement is worth for long term development.

Option Analysis

Option 1: Focus on Design, andscape Construction and Snow Removal

One option for Escape company is to centralize the job. As the steady growth of high-end suburban home development in London, new home buyers are more willing to pay money to design their yard. Also, Harrison can use his unique 3D design to help people to renovate their yard. The advantage of design is low cost and high profit, and no seasonality. Landscape construction and snow removal is seasonal work, so that Escape can set up a package for customer, include design, landscape construction or renovation and snow removal. This will decrease employee stress level and specialize the jobs.

Option 2: Provide more Employee Benefits Depends on the Length of the Contract

 In order to improve employee retention rate, increase the employee loyalty, one option is to provide more employee benefits. For example, if employee sign a length of three-year contract, employee can have $200 per year coverage for dental, two weeks vacation with one-week vacation pay. This can significantly reduce the employee turnover rate and reduce the employee stress level, which can help o maintain employee’s loyalty. High employee retention can increase company’s revenue and maintain good customer service. So that the revenue can fully covered the cost of employee benefits.

Option 3: sell the business

The last option is to sell the business. Harrison invest many machines to be more efficient. Sell all the assets can cover the negative cash flow and prevent more lose in the next year. Consider as a seasonal industry, difficult to obtain large project and low employee retention, sell the business is an acceptable option for Harrison.

Recommendation  

Escape Outdoor Living Designs Inc. should consider the option 2 and provide more employee benefits depends on the length of the contract. The critical issue for the company is the low employee retention and low quality of customer service. When company increase employee loyalty, this will cause high employee retention, improve customer service and increase the number of returning customers. In order to obtain large project, Escape needs to build their reputation. Higher reputation can increase popularity of the company, more new customers as well as returning customers. The profit will have a significant increase in 2013. A strong organization management can help Escape build a solid relationship between employee and employer, so that employee can provide more efficient work in the future.

Exhibit 1. SWOT Analysis

Conclusion: Escape company has strengths and opportunities to support the business, however, the weakness and the threats cause the problems. This exhibit analyzes the main issue for the company and point out the internal factors of the company.