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A RESEARCH STUDY of Bentley Security Company

The work identified in this statement is the result of my own analysis. All parts of the written text and results that contain been extracted from other work are totally referenced. I understand that cheating and plagiarism constitute a breach of College Regulations and will be dealt with appropriately.

Table of Contents

Individual Job declaration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

Acknowledgment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

Abstract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Topic Page

1 Intro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1. 1 Case study items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1. 2 Launch of analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1. 3 Situation examination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2 Question One Answer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2. 1 Commercial Finance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2. 2 Ansoff matrix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2. 3 Product Life Cycle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2. 4 Value Chain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2. 5 Competitive position of Bentley. . . . . . . . . . . . . . . . . . . . . . 4

3 Question Two Answer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3. 1 Porter Five Examination of Company. . . . . . . . . . . . . . . . . . . . 5

4 Question Three Answer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

4. 1 Bentley's Management Buyouts. . . . . . . . . . . . . . . . . . . . . 6

5 Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

REFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Abstract

This case study about security company Bentley, which offers both the products (alarms) and services (door supervisors) is ideal research study about the situation encountered by medium businesses and companies when they try some development strategy. Bentley tried out an enlargement strategy by going into security services along using its production business to the they proceeded to go for acquisition. Regrettably it was unable to control it properly. There have been many issues related to funding and human resource management. They involve some solutions to gain back their profiting position. Among those alternatives one is going for management buyout either for security Inc or for both businesses. In addition they need to look for efficiency issue of their work force. They need to also invest some money into their research and development division which should helped bring innovation and progress into their security alarm products. Bentley can utilize their experience in industry to regain their position in the market and can also explore new market in future with invention.

1 Introduction

Before making an release to case study we will feel the case study materials to comprehend situation given in the event review to get a better understanding of this case study.

1. 1 Research study contents

Bentley is a Security Company that has been trading in Gotham City for twenty five years. Just lately, the senior management team fulfilled to review progress.

Finance Director: I am worried about our recent financial performance and it seems to me that people are at risk of being bought out at a good deal price. Our come back on owner's equity is 2% below the industry average and we've a large debts due to the leverage purchase of Security Services Inc. What we should can do to improve our financial results immediately and, at the same time, convince the marketplace that people have a long-term feasible future?

Marketing Supervisor: In my own view we've an excellent profile and our problem are mainly due to poor cost control. We progressed from our base in producing domestic security alarm systems into commercial systems and then purchased Security Services Inc - which gives guard and watch services for commercial premises - that capitalized on our center skills at each level. We made a decision into diversify because the domestic market was saturated and there were large rises in the number of suppliers since it is now a fairly easy business to find yourself in as the technology has become standardized. The commercial sector was growing due to the current economic boom; but we have been jammed at 12% market show in the commercial systems market even though Security Services Inc experienced over 300 service agreements when we acquired it, we've not yet been able to entice any clients.

Human Resource Administrator: I will point out that we find it difficult dealing with security personnel which could be one reason for the fact that we don't make much earnings on the security agreements.

CEO: If we solve the brief and permanent issues mentioned by the fund director, then we will remove the motivation for anyone for taking us over. But in the meantime, we should investigate the likelihood of starting a management buy-out (MBO).

1. 2 Launch of study

In this research study we will look critically into the situation of the Bentley Security Company and issues faced by it. We will also try to find some solutions for its restoration from bad performance and we will in end observe how it can do its management buyout to boost its financial and management situation. If we critically check out different facets of Bentley's position in past years we can certainly draw following analysis about its situation to get clearer picture about its problem and its strengths. We can look into all the issues by using different analytical tools like value string, porter five causes, PLC and Ansoff's matrix. We will also examine the problem for management buyout. At end of review we will attract a summary of the study.

1. 3 Situation analysis

Bentley was efficiently staying in the market since previous 25 years till current times when it started out facing many problems from fund to recruiting.

Its major product in past was domestic and commercial alarms later it jumped into home based business of providing door supervisors to its clients. This new acquisition did not brought good fortune for the business enterprise and it started out facing many problems the majority of those were related to this new business of door supervisors. Funding position of Bentley is becoming poorer daily as its making 2% less comes back on assets. Its debts is increasing. It is facing new rivals in the market. Its control over costs is now problematic. You will find no new customers requiring for door supervisors as its staff performance remained poor.

There can be some new goals that will help Bentley going again into a growth and it can meet its financial targets. As advised by the CEO they are looking for incentives removal that can give help their competitors and they are also planning for going into a management buyout.

2 Question One

Use tactical models to recognize the activities the management team might take to deal with Bentley's short-term and long-term problems.

2 Answer

Bentley is a security company which was having alarm products since many years and later it started out its door supervisors business. After some time scheduled to poor performance of its personnel at security jobs and advancement in technology its financial position started towards drop. To make analysis of circumstances and finding some remedies for Bentley's problems we can make evaluation using different tools.

2. 1 Commercial Finance

Bentley is in a financial meltdown as it is supplying 2% less results to its investors on their equity. Therefore Bentley management should put attention towards some short-term and long term solutions for those financial issues.

Short Term Solutions

Bentley hq has extra work force compare to its requirements that placing burden on money so they should make adjustments by using right man right place plus they also should try to reduce extra management lines at head office.

They should look into their lending options and make an effort to cut those quickly so they need to make less repayment on lending options.

Long Term Choices

They should more concentrate on product development to inline their alarms with new systems.

They should focus on human resource concern and solve it by recruiting experienced staff because of their security business.

2. 2 Ansoff matrix

Ansoff's Matrix is good tool to investigate the situation (Peter Cheverton 2005) of any company like Bentley.

Penetration in Market

Bentley can reorganize its business in existing market by focusing on its main competencies of alarm business. Further it can try progressive online marketing strategy (Man Masterman 2006) for this function.

Development of Market

Bentley can make an effort to capture new markets by utilization of its gain in domestic and commercial alarms. Further it needs to explore as much markets as it can. By entering new market segments Bentley can gain back its position available as it was before the crises began.

Development of Product

Bentley can go and develop new alarms with better design and technology and can unveiling it in its existing market. This way it can regain its customer's confidence with use of new technical advancement.

Diversification in Business

Bentley can also try a diversification that may be horizontal or vertical.

In horizontal diversification they can produce new kind of alarms.

While in vertical diversification they may bring some changes in their sales strategies.

2. 3 Product Life Cycle

For Bentley alarms we can easily see these products on maturity level and facing a decline because Bentley didn't adopt new systems. They need to put some progressive change in their products to get gain in sales. If we see on the Security Inc it also is on decline in the market. Now they have to make a decision either to keep with their key competency of alarms development for domestic and commercial purposes or they still can make an effort to restructure their security inc to make it profitable business in future by attracting competent security personnel into this.

2. 4 Value Chain

We can make a value chain examination (Porter 1998) for Bentley business to observe how it can create maximum value for its products. Any company can create a much better value of its product by getting edge over cost through cost control either in supply of raw materials, human being resource success, use of technology, or utilizing the economy of range in alarms production.

It can further reduce the cost and increase the quality by inducting efficient labor force in its development items. Technology is another option that may bring edge (Carr 2004) in its value chain for its production and also in its security business. Bentley should adopt new move forward technology to meet the challenges and competitions. That technology can be utilized in both principal activities for business or in promoting activities. Further it can more focus on effective marketing strategy and offer to markets promptly.

Bentley can further try to redesign alarms with different designs and qualities. Managers can decide about outsourcing, they need to know the firm's power and weakness.

Competitive position of Bentley

Bentley has good business background as it has been into alarm business since previous twenty five years. Its performance continued to be good for a long time. It offers good business with cost leading position in alarm business. After its acquisition of Security inc things began bad for company. Company is cost head in the market, it have durability in security alarm business. They Bentley easily can attract new customers on its good price.

3 Question Two

Is the CEO right to conclude that these actions will remove all incentive for another company to dominate Bentley?

3 Answer

3. 1 Porter Five Research of Company

Harvard teacher Michael Porter gave the analytical tools of five forces (Porter, 2008) that have an impact on the companies in their businesses. These five pushes, give any company's position and future dangers profitability because of its business.

Threat of Rivalry

Bentley's rivals are companies with new technology and which have efficient employees in security business. Competition rivalry in this industry is high for Bentley.

Threat of New Entrants

As Bentley is holding market position since 25 years they have advantages in security alarm systems. This benefit is also anticipated to industry's hurdle to entry. In security industry there are always obstacles from federal regulating firms.

Threat of Substitute

As in security business companies are implementing new and impressive methods. Bentley is facing high hazard from substitutes. It should put extra initiatives and innovation available to compete the market.

Bargain electricity of Buyer

Bentley has good price insurance policy in its products so that it has advantages in buyer's great buy electric power problem.

Bargain electricity of Supplier

Bentley rely less on variety of items as raw materials so it can face easily the good deal ability of the suppliers. For Bentley its low.

4 Question Three

If the team makes a decision on MBO, how much as long as they anticipate to pay?

4 Answer

4. 1 Bentley's Management Buyouts

A management buyout is uncommon phenomena in businesses that mean purchase of a company or its talk about by individuals in management team (Rick Rickertsen 2001).

When companies are facing problems they opt to sell their business or investments a while they feel happy to sell these stocks with their own management. These professionals can be good and willing buyers because they are aware with the all information on business its power and weakness. If they are getting shares then main entrepreneur which is current owner can expect an extra type from those new share holders.

Bentley can also make management buy out for its security Inc that is not doing well. For an effective management buyout, Bentley team may require resting and discus their future strategies. They must take their management into full self-confidence to allow them to arrange an effective layout. They not must look merely to secure their investment; they need to keep the perspective and proper skills to change their business and also to bring better results. Further requirement is their keenness and confidence to encourage the management which will become future shareholders in Bentley business, to work more passionately. There will be following activities that essential to be followed for successful management buyout.

Decision of proceeding

Managers of the Bentley as new traders will be enthusiastic to place their profit Bentley with goals for gaining income. Their likely profits in future can be high than present income since professionals in new installation will effort more for themselves. By understanding these factors which is moving Bentley forward they can lay down foundations for better future.

Business plans

Bentley requires being able to create money and development in its business for short-term before each goes into this kind of buyout. They have to adopt tactics that are of help in the long run; definitely it will be a challenging business to guarantee your own management team which will come onward for buyout about the progress.

Management team perspective

An important part for an effective management buyout is agreement of your management team such way that it might create high-quality results. Because they are the investors they must be aware with the changes being done at corporation and their perspective will need to have importance in every process. Bentley should put a clear purposeful plan and only the business.

Arranging for the funds

Assessing the worthiness of any business like Bentley Company is difficult affair and there are no identified rules for going for assessment. Investors eye-sight will be relate with different facets of the business. These can be some balance linens and current profit records. It will require to primarily putting some cash into current possessions of the business either to raise its capital or even to improve its performance by using different strategies that surely need a little extra funding. This funding can be arranged by existing buyers or by try some loan for brief terms.

Agreeing terms for business

The financing for just about any investment always is dependent upon the equity and arrears situation. Different shareholders among management will be looking for diverse profiting results from the deal, foundation on the assessed risk they'll be calculating. There is important for both side to create some agreeable guidelines for all your business and process in future, they must lessen the ambiguity in the business.

Deal arrangement

We can't place well defined rules for the management buyout. Bentley must ensure the management team that at end they'll be get benefits in this package. They must mutually set up all financial and legal terms for finalization of the deal.

Completion of the process

Holding any discussions for a buyout will not always be an easy task; there must be piece of concern as there are always some inadequate current relationships that putting problems on company earnings and management. It'll be a multipart activity always and you will see great test for the current retailers of Bentley stocks. Hence they can begin a new starting mutually for best results putting skills and money jointly.

5 Conclusion

Bentley has good record in alarm business unfortunately these people were unable to manage the new acquisition of security personals business. Secondly they were bad at version of new technology as they had less budget reserved for research and development. Headquarter got extra shelling out for staffing looking at to over-all human learning resource costs. Now it's the time for Bentley to have important steps for its future business. It's good if they're going into management buyout for security inc. further they need to focus more on the personnel performance which in previous displaying poor results. Bentley have core competency in security alarm business they can do more development and earnings for the reason that business. For just about any future decision they need to look the current environment of the industry which is safe in lots of ways from new rivals. But still they need to be progressive and up to date in their strategy.

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