Organizational Environment - 35 points (900 words limit)
Krazy Koalas has been making small quantities of stuffed koalas for many years. The koalas are customized and are very high quality and premium priced. Currently, the koalas are produced in one factory in Louisiana and sold in only three locations in the U.S.: New Orleans, Louisiana, Atlanta, Georgia, and San Francisco, California. Production is 10,000 koalas per year, and prices range from $75 - $200 per koala. The demand for these koalas has increased significantly in the U.S. In addition, as the U.S. dollar falls, there is now demand for the koalas in Ireland and Spain. Krazy Koalas just hired a new young marketing manager who is eager to expand and has been talking about the potential of a much larger market, particularly if the company adds a line of non-customized koalas that would still be relatively high quality, but could be sold for around $25. The marketing manager has been talking about the potential in the Middle Eastern market as well. The company will have to invest in production equipment to meet any increased demand.
Answer the following questions about Krazy Koalas. Be sure to state clearly any assumptions you make about the organization as part of the description of factors to consider and state the reasons for including each factor. Use organizational structure language and theory in your response.
• In deciding whether or not to produce larger quantities, what factors should this organization consider?
• What additional factors should be considered if Krazy Koalas decides to expand to Ireland, Spain, and possibly the Middle East?
• What are your specific recommendations for Krazy Koalas. What should the company do, and why?