Case: The Case of HAECO’s Works Consultative Committee

Identify your character: Stephen Lau, Director- Support and Development Step 1 - Identify the Problem/Opportunity.
How can the Company ensure its’ continued profitability with the cooperation of its 4,800 employees. Step 2 - Identify the Causes of the Problem/Opportunity.
The squeeze on the airline industry’s profits has had a rippling effect on the aircraft engineering industry. With HAECO’s pervious monopoly status undermined and the increased overhead costs of operating in Hong Kong, new strategies have to be implemented.

Step 3 - List Alternative Solutions to the Problem (or ways to take advantage of the opportunity). a) Shut down smaller/ medium sized plants.
Pros:
* Reduce operational costs
Cons:
* Allows competitors and advantage * Employee Lay-offs

b) Pursue more joint ventures
Pros:
* Shared goals of profitability with other companies * Combined resources. * Access to new markets
Cons:
* Communication issues * Time consuming * Costly c) Relocate to a less expensive area to do business.
Pros:
* Increase profitability * Opportunity to penetrate new markets * Competitive advantage to offer lower pricing
Cons:
* High turn over rate resulting from employees who cannot relocate. * High costs associated with relocating * Potential loss of customers

Step 4 - Select the Best Alternative Solution.
The best alternative solution is to pursue other joint ventures. Joint ventures are flexible, strengthen long-term relationships, and reduce competition. They also provide access to new markets and distribution networks. Although, there are still risks involved with joint ventures they advantages far outweigh the risks. Additionally. HAECO has had great success with joint ventures with Cathay Pacific,