CASE: Hector Gaming Company (HGC) Hector Gaming Company (HGC) is an educational gaming company specializing in young childrens educational games. HGC has just completed its fourth year of operation. This year was a banner year for HGC. The company received a massive influx of capital for growth by issuing stock privately through an investment banking firm. It appears the return on investment for this past year will be just over 25 per cent with zero debt! The growth rate for the last two years has been approximately 80 per cent each year. Parents and grandparents of young children have been buying HGCs products almost as fast as they are developed. Every member of the 56-person firm is enthusiastic and looking forward to helping the firm grow to be the largest and best educational gaming company in the world. The founder of the firm, Sally Peters, has been written up in Young Entrepreneurs as the young entrepreneur to watch. She has been able to develop an organizational culture in which all stakeholders are committed to innovation, continuous improvement, and organizational learning. Last year, 10 top managers of HGC worked with McKinley Consulting to develop the organizations strategic plan. This year the same ten managers had a retreat in Aruba to formulate next years strategic plan using the same process suggested by McKinley Consulting. Most executives seem to have a consensus of where the firm should go in the intermediate and long term. But there is little consensus on how this should be accomplished. Peters, now president of HGC, feels she may be losing control. The frequency of conflicts seems to be increasing. Some individuals are always requested for any new project created. When resource conflicts occur among projects, each project manager believes his or her project is most important. More projects are not meeting deadlines and are coming in over budget. Yesterdays management meeting revealed some top HGC talent has been working on an international business game for college students. This project does not fit the organization vision or market niche. At times it seems everyone is marching to his or her drummer. Somehow more focus is needed to ensure everyone agrees on how the strategy should be implemented, given the resources available to the organization. __________________________________________________________________________________ _____________________________________________________________________________ 3 .. .. Examiner: I. Kgololo-Ngowi Moderator: M. C. Mamogobo Yesterdays meeting alarmed Peters. These emerging problems are coming at a bad time. Next week HGC is ramping up the size of the organization, a number of new products per year, and marketing efforts. Fifteen new people will join HGC next month. Peters is concerned that policies be in a place that will ensure the new people are used most productively. An additional potential problem looms on the horizon. Other gaming companies have noticed the success HGC is having in their niche market; one company tried to hire a key product development employee away from HGC. Peters wants HGC to be ready to meet any potential competition head-on and to discourage any new entries into their market. Peters knows HGC is project-driven; however, she is not as confident that she has a good handle on how such an organization and its projects should be managed especially with such a fast growth rate and potential competition closer to becoming a reality. The magnitude of emerging problems demands quick attention and resolution. Questions: You have been appointed as the Project Management Consultant for HGC. How would you resolve the following problems. 1. There are disagreements on how company goals should be managed and each Project Manager believes that his or her project is most important. (25 marks) 2. a. Facing and managing competing projects constraints during project planning and execution. (10 marks) b. Translate the following information into a Project priority matrix. Support your decision with detailed explanation. (15 marks) HGC is committed to launching its new monster truck versions each April to take advantage of the summer season. HGC has many other innovations that it brings into the market each year. However remains, the launch of a electronic monster truck, is organized and announced well before it takes place. Many customers are waiting for the new toy and the company creates a buzz around the product and many speculations on what new features it will bring are already on the various blogs and rumors start spreading fast. So it is imperative that the company sticks to its announced deadline, especially that customers will start placing their orders shortly after, manufacturers will start __________________________________________________________________________________ _____________________________________________________________________________ 4 .. .. Examiner: I. Kgololo-Ngowi Moderator: M. C. Mamogobo receiving their respective part orders, and the complex chain will be on the move. The toys have been sold at unprecedented price levels. Obviously, the cost of this toy could exceed what has been predefined at the projects launch. This is especially true given the companys marketing policy to sell its new toy at a premium thus targeting customers with higher purchasing power. The company places itself at the top of innovation technology leaders and underlines this position with new features that customers are willing to pay for. Therefore, it is needed to keep its leasing marketing position to be ready to enhance the existing features. The established markets levels of incorporated features are constantly on the rise, and customer expectations are continuously getting higher. 3. Some Project Managers and Team Members are always requested for any new project created: (25 marks) 4. Using Financial and non-financial models to select projects: a. Assume the information in the table below; discuss which criterion is most important. Which project (s) is/are the most attractive? Support your answers. (5 marks) Project/Criteria & Weight: New Products 10 Customer Relations 6 Supplier Relations 7 Success Probability 5 Project A 5 3 3 3 Project B 3 4 5 4 Project C 3 4 3 2 Project D 2 2 5 3 b. If the company invests 1.2 million dollars in a new gaming system and a quarter of a million dollars on the third year of its launch, how does the net present value look if the company anticipates annual inflows of 0.9 million dollars each year for 5 years? The rate of return is set at 10%.