Leadership Case Problem A

The Saratoga Supply Company Needs a Strategy

The Saratoga Supply Company is a distributor of a wide variety of industrial supplies to small- and medium-size companies, as well as schools, hospitals, and government agencies. The range of supplies number in the thousands including paper clips, copying paper, office furniture, desktop computers, pencil sharpeners, paper towels, and cleaning solvents. Saratoga Supply uses state-of-the-art information technology for purchasing, selling, and delivering products.

Although the company has been in business for sixty years, CEO Wes is worried about the future of Saratoga Supply. In consultation with CFO, Darleen, and head of sales, Gary, Wes notices a disturbing and steady decline in sales for almost all the products the company supplies. Wes agrees with Darleen that the downward trend in sales is accelerating (sales are decelerating) at an unhealthy rate. He also agrees with Gary’s analysis that too many customers are now ordering directly from manufacturers through online sales. In the past, most manufacturers did not want to bother with small sales to individual companies. But with e-commerce, sales can be implemented more readily without going through intermediaries such as Saratoga Supply Company.

With a concerned look on his face, Wes says to Darleen and Gary, “We need to develop a business strategy to prevent going out of business. Maybe we should meet for an all-day strategy session real soon.”

Questions

How should Wes and his team go about developing a survival strategy for Saratoga Supply?

Does Saratoga Supply really need a survival strategy? Or should the company just begin to downsize to fit the demand for its products and services?

From the limited evidence presented, how effectively do you think Wes is carrying out the role of a strategic leaders?