Jordan Communication Corporation

Background

Jordan Communication is a startup firm that develops, manufactures, and markets a miniature telephone. Last year’s sales revenue was $7.2 million, resulting in its first profitable year in its first three years of business. The phone is unique because it's only two inches long, weighs two ounces, and a miniature receiver is worn in the ear. The phone speaker and microphone carry out all the normal functions of a phone (except dialing) without the use of a mouthpiece. The phone uses bone conduction technologies that detect small, minute vibrations in the skull when a person talks. The phone sells for $99. Jordan’s markets have grown quickly and have become worldwide; analysts believe the market will grow 50 percent per year for the next five years.

Most of the development of the miniature phone was done by the founder, Ms. Connie Jordan, an electrical engineer. She is also the primary source for more than 20 new products already designed with accompanying engineering drawings. Jordan believes innovation in modes of telecommunications is the key to future success of the company. She believes quality is number one; profits and returns to stockholders will follow.

Only last month the company purchased a small circuit board company that specializes in bonding small silicon chips on printed circuit boards. Jordan Communication stock sells over the counter. Management is thinking it will be necessary to be come listed on the New York Stock Exchange if large expansion becomes desirable.

Management

The company employs 120 people and is organized in a matrix form to facilitate the project environment. Every employee behaves as if quality is an obsession. Jordan believes the management style should be collegial, the workplace environment should be one employees enjoy, and the company should provide products that make life easier and more productive. Marketing is responsible for direct and original equipment manufacturer (OEM) sales. Engineering is responsible for design and improvement of all products. Manufacturing controls production and product quality.

Future

External. The market for telecommunication products is expected to grow by 20 per cent for the next seven years. Although Jordan Communication has no competitors to day, many new entrées in the market are expected in the near future. Time to market will become more important with each passing day. Keeping a flow of new products will be necessary to survive. Strategic alliances with computer and communications firms appear inevitable as the industry and product lines develop. The biggest threat comes from the Orient.

Internal. The most exciting new product prototype is the cordless miniature telephone. This phone will allow people to walk around and use their hands while wearing the phone. The phone fits in the ear and requires the user to carry a small pack about the size of a chewing gum pack and weighing approximately one ounce. Marketing expects to sell the phone for $150. The next step is setting up for manufacturing large quantities as quickly as possible. Manufacturing is asking, “Do you want the new phone good, fast, or cheap? Pick any two.”

Another product is a miniature phone that uses voice-activated technology for computers—to dial customers and to record and transmit data. This prototype has been demonstrated with the Apple line of computers. Because the phone uses bone conduction technology (not air), background noise is virtually filtered out, so sound is significantly improved over traditional phones. Marketing believes this phone can sell for about $200.

Other products designed, but not developed as prototypes, are listed here:

1. Voice imprint documentation.

2. Miniature programmable phones to hold more than 100 telephone numbers.

3. Special sets for major surgery operations to send and receive instant information, For instance, to and from Mayo Clinic or Texas Cancer Clinic. This product is dubbed the “socially conscious” product.

4. Voice-activated cellular phone communications for the military and police, the elimination of the traditional microphone, voice activation, and ability to “wear the phone” all have attracted many classes of target customers.

5. Reduction of printed circuit board size by 75 percent by the new acquisition has unlimited potential.

Jordan Communication management feels now is the time to prepare for full-scale manufacturing and a marketing thrust into the communications and computer industries. The company currently has $2 million in cash reserves to start this effort. Additional funds for future expansion are available through stock issues.

Jordan has asked your management team to develop a mission statement, three major goals, and objectives for Jordan Communication. She also wishes each functional area to develop four key objectives that support your corporate objectives. Be prepared to justify the document you submit to her.