Academic journal article Journal of the International Academy for Case Studies

InterlandData Web Hosting: Structuring the Organization for growth.(Instructor's Note)

Academic journal article Journal of the International Academy for Case Studies

InterlandData Web Hosting: Structuring the Organization for growth.(Instructor's Note)

Article excerpt

CASE DESCRIPTION

The primary subject matter in this case is formulating strategic decisions that need to be made regarding a small entrepreneurial firm's future direction. The owners are a couple who are faced with the decision of whether or not to expand as well as with the challenges of obtaining the necessary financing, structuring the organization for growth, and allocating management time. This raises several issues and illustrates several lessons. In particular, management proposes potential changes, offering students the opportunity to critique their plans. Evaluated carefully, students should identify the critical success factors and whether and how these elements can be leveraged as they implement their expansion plans. The purpose of this case is to provide students with enough information about the business situation to be able to chart what course of action the company should take at a given point in time. This case has a difficulty level of four, appropriate for senior level. It is designed to be taught in two class hours and is expected to require four hours of outside preparation by students.

CASE SYNOPSIS

During the summer of 2004, the owners of InterlandData, Mark and Susan Hamidi, began to assess their current position within the Web hosting industry and their alternatives for expansion. After nine years in operation, the company had achieved a reasonably stable, yet not highly profitable financial footing. Both owners are experiencing considerable pressure to expand their organization. They believe that opportunities exist to franchise the operation, or grow by expansion. The case ends with the co-owners faced with making a strategic decision about the best way to expand and how to find both the managerial and financial resources to do so. An implicit question in the case involves the long-term viability of the business.

INSTRUCTORS' NOTES

Case Methodology and Data Sources

This case is a field research study. Information about the company was gathered from interviews with the owners/managers and their employees. Background information on the industry was drawn primarily from publicly available information.

Case Objectives and Use

This case is intended for an undergraduate or graduate course in Business Strategy or Entrepreneurship. The case is positioned to discuss the profitability and potential growth issues facing a small company in a broad market.

A major theme of the case is the market potential for expansion. The case can serve as a basis for discussion about:

The competitive forces in the Web hosting industry.

1. Strategic positioning within an industry.

2. The role of the owners/managers in a small business.

3. The opportunities for growth; in particular opportunities and problems presented by franchising.

The case should lend itself to lively discussion of the problems and potential of a small business in a dynamic industry. Students should see how commitment from the entrepreneur is essential to the success of such a venture. In addition, they can assess the potential for growth and expansion.

It is a good case for relatively early in the semester when students have learned to identify strategy, have been introduced to the competitive environment, and are ready to be forced to make strategic choices. It provides a good opportunity to deal with the strategic alternative of franchising, and its pros and cons. There are two ways to approach this case: (1) as a "straight" case, asking students to first detail the current strategy and then focusing on strategic problems facing the firm, evaluating the alternatives, and making a decision; (2) as an out of class group exercise asking students to determine the appropriate long-term strategy InterladData should follow. Each group should evaluate the alternatives, financially as well as organizationally and managerially, and then come to class prepared to present and defend their choices. …

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