Pinnacle Machine Tool Company is an example of an opportunity and a problem that needs to be examined. The CEO of Pinnacle, Don Anglos, has the opportunity to acquire Hoilman Inc. If Pinnacle Machine Tool Company acquires Hoilman Inc, they have the resources to develop software that transmits real-time information on its customers’ equipment. This advantage will enable the company to upgrade itself and be more sufficient to its customers. However, CFO and some of the senior managers on Pinnacle Machine Tool Company do not agree that gaining Hoilman Inc. is a grand idea.

The CFO feels that the timing is wrong and that a negative impact on the company’s earnings will produce a negative influence upon their investors. Also, the CFO feels that it will be a mistake to get into the service business because their competitors have already begun the transition. Don Anglos must persuade the CFO and senior managers to see that acquiring Hoilman is an opportunity. Question 2(Situation Analysis) The state of disequilibrium is between the Don Anglos, CEO of Pinnacle Machine Tool Company and the CFO of the company trying to decide whether to acquire Hoilman or not.

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The problem occurs when the organization profit margins were declining due to lowering prices of their products to keep customers returning. The situation begins when Don has an innovative ideal to transform the organization into a high-tech service company and the CFO does not agree stating the timing is wrong and that a negative impact on the company’s earnings will produce a negative influence. Don wants to acquire Hoilman to increase the company’s growth and transform the company. The result is Don’s uncertainty to trust his gut or follow the CFO decision.

Question 3 (Development of Alternatives) Amongst Don Anglos’s problems are several alternatives. One alternative for Don Anglos is that he should acquire Hoilman Inc. , a company established by its cutting-edge technology. Furthermore, this change would switch his company from manufacturing to a high-tech service company. The advantage of acquiring Hoilman Inc. is that Don Anglos’s Pinnacle Machine Tool Company would surpass its current standard maintenance and service contracts through better software and equipment.

However, the cons to such an acquisition are that he would make several senior managers working in his company unhappy, including CFO Sam Lodge. In addition, he would lose several of his customers since the add-on services from the acquisition will possibly be too expensive for them and it is such a huge gamble that Pinnacle’s profitability could continue to drop. Another alternative solution would be to not acquire Hoilman Inc. The benefits of such an instance are that Don Anglos would keep the trust of several of his senior managers and he would be able to keep several of his customers from leaving.

Also, he would not have to make any of his investors feel uncomfortable with such a drastic change to his company. In addition, the new cutting edge technology equipment could save man power and save his company money in the long term. The cons to keeping his company the same without acquiring Hoilman Inc. are that his investors seeing that his company is resistant to change would become weary of it. Also, his chief competitors could acquire Hoilman Inc. , and profit tremendously from it. Question 4 (Most Feasible Alternative)

Pinnacle’s recent drop in profits is a red flag that a decision needs to be made for the future of Pinnacle. The best alternative to the opportunity is to acquire Hoilman. Pinnacle Machine Tool Company would benefit by surpassing its current standard maintenance and service contracts through better software and equipment. Don Anglo’s was hired to make the decisions that would maximize the growth of Pinnacle and provide excellent services to his customers. Question 5 (Implementation of Chosen Alternative)

As CEO of Pinnacle, the board members elected Don Anglos for the responsibilities and tough decision that great leaders need to have in these types of situations. Don has the motivation to carry out this acquisition and believes in his gut that this will benefit the company in the future. Don has a board meeting with all his upper management to explain the direction Pinnacle will move with the purchase of Hoilman. Don implements a customer service team headed by the CFO to find a way to decrease the price of the new software program so they will be able to present a reasonable price package to existing customers.

Don made his decision based upon the transition of Pinnacle’s competitors. Question 6 (Evaluation and Feedback) The customer service team directed by Sam Lodge was able to discount the price for current customers and this allowed Pinnacle to retain most of the customers. The new discount strategy helped profits rebound into the positive. Don Anglos received high praises from his upper management for providing a new branch of technological software.