You are the CEO and principal owner of a privately owned Electrical Distributor, the Alamo Company, which is headquartered in Houston, Texas, and has 14 branches located in the Southwest with 2017 sales of $2.5 Billion. Alamo sells electrical parts and supplies to such customers as residential contractors, commercial contractors, and industrial firms. Suppliers include Rockwell (Allen Bradley), Square D, Eaton-Cutler Hammer and GE. Earlier last week, the Senior Vice President of Operations, the Senior Vice President of Sales, two experienced sales employees and two experienced operations employees resigned from Alamo. You have learned that these six former employees are now working for a small industrial distributor, Baytown Supply that has a single branch in Houston with 2017 sales of $5 million. Also, none of these six employees had signed a non-competing agreement with Alamo.[1] You have also learned that a Large European Conglomerate (LEC) had acquired Baytown Supply in September 2017. LEC did not have a presence in industrial distribution in the U.S. and acquired Baytown Supply as a means to enter the U.S. Distribution market. You have also learned the following information about the entry of LEC into the U.S. as follows:
Baytown Supply will be renamed and will become the U.S. headquarters for LEC located in Houston;
LEC will add future branches in the Southwest and Southeast;
The renamed Baytown Branch in Houston will be enlarged and will become a general line distributor and a distributor of electrical parts and supplies to residential contractors, commercial suppliers, and industrial firms;
Suppliers to the renamed Baytown Operation will remain the same as those firms that supplied the “old” Baytown operations. Those suppliers are: Rockwell (Allen Bradley), Square D, Eaton-Cutler Hammer, and GE;
As Alamo’s CEO, what action plan would you develop to deal with the departure of Alamo’s six employees to LEC? How would you implement that plan?