Do or Do Not Ltd. is a new firm that will open its doors exactly four months from today. Its business objective is to sell all types of training, fitness, conditioning, and exercise equipment to the general public. Do or Do Not plans to specialize in this equipment and to provide customers with personalized advice geared to a customers specific training or conditioning needs

(e.g., training for a particular sport, injury rehabilitation, strengthening of muscles to deal with back pain, general conditioning, and fitness), whether the customer is eight or 80 years of age.

In order to provide high-quality advice, each store will employ a physiotherapist (to provide advice on problems such as injuries or chronic back pain) and a person with a bachelors degree in kinesiology (to provide advice on training for various sports or other physical activities). A staff member will even sit down with customers and develop a personalized training or conditioning program that meets their own specific objectives and needs, at no cost to the customer.

The remainder of the staff in the store will consist of a manager, with a Bachelor of Commerce degree, and sales staff, who will have at least high school diplomas. Due to the long opening hours, it is expected that between 812 salespeople will be needed for each store. Because the stores are in shopping malls, they will operate on a seven-day-a-week basis, open 9:009:00 weekdays, 9:006:00 Saturdays, and noon to 6:00 on Sundays.

Aside from personally helping customers, the roles of the physiotherapist and kinesiologist will be to train other employees in how each type of equipment can be used for various conditioning and rehabilitation purposes. Initially, sales staff will be given general training, but as time goes by, each salesperson will be expected to learn in depth about all the different pieces of equipment, to help customers diagnose their needs accurately, and to be able to explain proper use of the equipment. Because of the high level of training required, all employees will be full-time.

The founder of the business is Betty Burger, who has undergraduate degrees in kinesiology and commerce from the University of Saskatchewan. While at university, she participated in many sports (and suffered many injuries due to her all-out style of play). She came up with the idea for this business while laid up with one of her injuries. While there were businesses that sold fitness and conditioning equipment, she often found that the people selling it had very limited knowledge and often gave poor advice on what to buy and how to use it.

She has secured funding from private investors and from CanFund, a large Canadian labour-sponsored investment fund. To get volume discounts on the equipment she will be purchasing and to beat competitors into the market, she wants to start off quite large, with stores in major cities in Ontario and the four western provinces, before expanding to Quebec and the Atlantic provinces. She knows that this is a risky strategy, and that cost control will be essential to keep the business going long enough to become well known and develop a stable clientele. She does not expect the business to make a profit for at least one year, or maybe even two.

Her main competitors will be sporting goods megastores and department and discount stores, each of which sells some of the same equipment. Some of these outlets will be able to price their equipment lower than Do or Do Not will be able to, but none have the range of equipment that Do or Do Not will have, and none provide the personalized services that Do or Do Not will.

Betty believes that the key to her business success will be highly motivated and knowledgeable employees who have a strong concern for their customers and who are able to work as a team with the other employees to provide the best possible customer service. Because no two customers are exactly alike, employees will have to be innovative in developing solutions that fit their needs. It will also be crucial to keep up with the latest fitness and training trends, as knowledge about fitness is continually increasing, along with new and different types of specialized equipment. A key aspect of company strategy is to be the most up-to-date and advanced supplier of new products and techniques.

Although Betty has given a lot of thought to her business, one thing she hasnt really given much thought to is how to compensate her employees. Because she doesnt really know much about compensation, she tends to feel that the safest thing would be to just do what her competitors are doing.

You have started on this analysis and are beginning from your past notes:

After Determining the contextual variables of Do or Do Not you have determined that the environment is quite unstable, given the competitors and the changing state of knowledge in physical fitness. The corporate strategy would be most like the prospector, as the firm wants to be the first to make new fitness products and solutions available to its customers. Under Porter, it would be a focused differentiator.

The focus is on technology with a concern for customers and the company. It looks like Betty will need to go with a high involvement management strategy. She is focused on hiring full time employees for stability and a highly trained workforce which fits well with this strategy.

With that information you have already decided to use a pay-for-knowledge skill-based pay for the company because of its flexibility and recognition of job skill areas. This should demonstrate Bettys commitment to the employees and incentivize the employees to learn new skills which links into the hight involvement strategy. This should result in the behaviours needed to support the business model.

Do you think that Do or Do Not Ltd. would be a suitable organization in which to implement an organization performance pay plan? Explain why (with elements of the plan) or why not (with analysis why not).