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- Sample Questions
Upon successful completion of this course, the student will be able to:
1. Explain the complexity of the decision-making process
2. Use common decision-making tools and exercises
3. Examine personal, organizational, and cultural constraints on managerial decision making
In this project, you will apply managerial decision-making concepts and tools to conduct a case analysis about a current event. You will also have the chance to evaluate a hypothetical situation related to this decision in order to practice using quantitative analysis.
Case Study: American Suzuki Motor Corporation Leaves the US Auto Market
In 2012, American Suzuki Motor Corporation sought Chapter 11 bankruptcy protection for its US operations. The US federal bankruptcy judge approved the bankruptcy in 2013 and allowed Suzuki to establish a new corporate entity that would continue sale of its motorcycles, marine products, and all-terrain vehicles. Sales of its automobiles, however, were to end after existing inventory were sold, though car warranties would be honored by the Japanese-based automaker.
Suzuki Corporation did not close its doors. Rather, it left the highly competitive US automobile market because of significantly declining sales and other factors and instead chose to strengthen its position as a leading manufacturer and seller of cars in India and Southeast Asia.
Suzuki cited as reasons for its decision the high cost of maintaining its distribution system and its drop in sales from over 100,000 vehicles in 2007 to 21,000 in 2012. GM sold its stake in Suzuki in 2009, which further hindered the Japanese company. By late 2012, Suzuki carried over $346 million in debt against $233 million in assets and held only 0.2% of the market share in the US. (By comparison, Toyota had 14.4% of the US market share.)
Suzuki is not alone in leaving the US. Isuzu departed in 2009 after bankruptcy; the same happened to Saab. The Saturn, Pontiac, Oldsmobile, Hummer, and Mercury brands were retired during the US recession, and analysts are looking closely at other companies to predict the next likely brand departure. The implications of Suzuki’s case thus extend beyond its decision to pull out of the US market.
Create an analysis of Suzuki’s management decision to end its automobile sales in the US and a discussion of the hypothetical scenario presented below. Cite all of your sources and format your analysis according to APA style. The suggested length for your analysis is 10-12 pages, and recommended lengths for each section have been included in the sample outline below.
Begin your analysis by accessing the following links to gain an overview of the company history, its 2012 announcement, and its reorganization. You should conduct additional research beyond these articles to help sharpen your investigation.
Case Study Resources
After conducting your research, begin composing your report. Be sure to address the following information.
Section I. Overview of the decision (1 paragraph)
Using what you have learned from your research, briefly summarize Suzuki’s situation.
Section II. Key decision issue (usually 1 sentence)
What was the key decision faced by Suzuki management?
Section III. Identification of decision makers (2-3 pages)
What individuals and teams were likely involved in the critical company decision? Use information from your research as well as what you have learned in the course to identify who you think was involved in the decision. For example, this may include not only the executive team, but also teams such as logistics, marketing, finance, and legal.
For each team or individual that you select, provide an explanation as to why they would likely be involved in the decision.
Section IV. Internal and external factors that led to this decision (2-3 pages)
What internal issues and constraints contributed to this decision? What external factors, including the business environment, contributed to the decision?
Provide an explanation as to why the issues you have identified contributed to the decision. How did the internal and external factors impact Suzuki, and what is the impact of each factor that you identified?
Section V. Quantitative analysis (1-2 pages)
Construct a decision tree and calculate the expected monetary value using the following hypothetical marketing information.
Hypothetical Expansion Situation
Could Suzuki reorganize to restart its US sales by building automobiles branded under different makers, like Mitsubishi, Nissan, or Kia? Given current economic progress, there is a 40% chance of a good economy and a 60% chance the economy will slow. Suzuki’s cost to expand its American factory is estimated conservatively at $10 million, if the company decides to do so. The expansion and the partnerships are predicted to yield
$40 million in annual revenue if the market remains good, but if it slows, the annual revenue will likely be closer to $25 million. To be cost competitive, the American factory is critical.
Create a decision tree showing these choices and calculate the expected monetary value for each alternative. Based on this hypothetical information, should Suzuki reorganize itself to produce and sell vehicles through new partnerships and not under its own brand name? Explain your reasoning.
Section VI. Identification of alternatives (2-3 paragraphs)
Identify two viable alternatives to the decision that American Suzuki Motor Corporation ultimately made. Your alternatives must be unique and cannot repeat the hypothetical expansion scenario given in Section V, although a different partnering scenario is acceptable.
Section VII. Recommendation (2-3 pages)
Next, consider the two alternatives you have identified and choose one to recommend to Suzuki.
Begin your recommendation section with an overview of why you made the choice you did. Support your choice, providing relevant details such as current (to the case study) or future economic, industry, technology, and market conditions both domestically and globally. In addition, you may consider including information regarding Suzuki’s internal conditions at the time, such as commitment to different markets, current R&D efforts, and strategic focus. Some resources you may find helpful for getting started on this task are included below.
Be sure to properly cite any research using APA style and formatting guidelines.
Auto Industry Resources for 2012-2013
1. A title page is not required for project submissions. Because evaporators do not see student names when reviewing student work, it is important that students not include any personal identifiers in their project submissions.
2. If your project requires a video, you should post the video to a free video hosting site like , or another free web hosting site. The following website maintains a list of video hosting sites. In the written materials that you submit as part of the assignment, you should include the title of the video and a link for the evaluator to use to grade your submission. Please make sure that the privacy settings on your video are set to allow third parties to view it.
3. When you are ready, click on the Upload Files button in the Project tab of your course to submit your assignment. Your project should be graded within 7 days. Please contact your instructor if this is not the case.
4. Your assignment will not be returned to you, so keep a copy for your files.
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