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Virtual Organization Strategy Essay

1625 words - 7 pages

Virtual Organization Strategy

FIN/370
October 20, 2012

Riordan Manufacturing is a Fortune 1000 company that employs 550 people with projected annual earnings of $46 million dollars. The company was founded by Dr. Riordan in 1991 and subsequently the company name was changed in 1992 to Riordan Manufacturing after Dr. Riordan obtained venture capital to expand the company. The corporate headquarters is located in San Jose, California with additional manufacturing plants in Georgia, Michigan, and China. Products include plastic beverage containers, custom plastic parts, and plastic fan parts. The company is a leader in the industry of plastic injection molding. (Virtual ...view middle of the document...

This option adds leverage to the organization product coverage. When a company merges with another organization it adds instant coverage, moreover, the market share grows. There are strengths in any strategy but there are also hidden weaknesses that have to be weighed into the equation before making a sound decision.
Weaknesses
Riordan manufacturing understands that choosing a strategy that will help them succeed in their expansion so they must take a comprehensive approach. This approach considers the weaknesses of each option. While considering the IPO approach Riordan must take into account the restrictions and corporate governance regulations, as this approach is more favorable to an organization with solid fundamentals. When acquiring another organization in the same industry Riordan will have to consider the cost to get the operations up to their standards. This is also true with merging with another organization as their operational functionality may be obsolete or not up the current standards that Riordan requires. There are several factors to consider when acquiring an organization or merging because there are differences at all levels to include the manufacturing operations, equipment, staffing, logistics, and management. Though strategies have weaknesses organizations can overcome them if a comprehensive analysis of each option is reviewed.
Opportunities
Riordan Manufacturing can find many opportunities through the three various ways of expansion. If Riordan decides to go public through an IPO, they can earn capital through selling their stock on the secondary market. This method allows the company to use the newly gained capital to reinvest and make improve on the company. In acquisition of another organization, Riordan can gain the company’s existing customers, employees, and reputations. Those alone are great advantages to help keep the company afloat. Riordan will be the only one to reap the benefits from these opportunities. When Riordan merges with another organization, they can keep customers, employees, managements, and reputations from the merging company and Riordan. This expansion can help both companies eliminated each other as competition and have joined forces as a team. This opportunity allows the merged companies more capital, strength, and knowledge to compete with other existing companies. All three methods can provides short or long term benefits to Riordan.
Threats
Whenever a company is interested in the growth of their firm they can use many different approaches. While attempting to raise money there are several threats that can be associated with growing a company. When going public through an IPO a company is no longer held by the founders but is ultimately controlled by the shareholders. This has a major effect on the company because it is no longer about doing things the way the owners see it but is more about the money that the company makes. This changes the whole environment of the...

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