Problem Statements

• State the ideal– Refer to mission and stakeholder stakes in

determining the “ideal” state– What values are involved?

• State the reality– Describe a condition that conflicts with the

goal, values or “ideal state”

• Describe the consequences

Examples

• Statement #1– In order to provide excellent patient care at

minimal cost, Middletown Hospital needs diagnostic procedures that are safe, efficient and accurate, and not overly painful for patients.

• Statement #2– Right now, Middletown’s main diagnostic tools

are CAT scans and spinal taps. The CAT scan fails to make clear diagnoses 60% of the time. When they fail, doctors must resort to the spinal tap, which is accurate, but very painful and often dangerous for the patient

• Statement #3– If Middletown Hospital continues to do the 2

procedures, they will be wasting time and money which jeopardizes efficiency and earning potential, and they will subject patients to undue suffering, which may cause them to select another hospital with more advanced facilities

Example #2

• Statement #1– According to the Southern University mission

statement, the university seeks to provide students with a safe, healthy learning environment.  Dormitories are one important of that learning environment, since 55% of SU students live in campus dorms and most of these students spend a significant amount of time working in their dorm rooms.

–  – However, –  

• Statement #2– B.     Students living in dorms W, X, Y, and Z currently

do not have air conditioning units, and during the first month of the Fall semester, it is common for room temperatures to exceed 80 degrees F.  Many students report that they are unable to do homework in their dorm rooms.  Others report problems sleeping because of the humidity and temperature.  The rooms are not only unhealthy, but they inhibit student productivity and academic achievement.

–  

• Statement #3– If conditions continue to cause discomfort and

difficulty for students, they will choose other living arrangements, including off campus housing, which will create financial problems for Southern University

Example #3

• Statement #1– According to the PSU police mission

statement, the goal of the university is to assist students faculty and staff in maintaining a safe environment and to enhance the quality of life at Portland State. Consequently every weekend numerous students venture downtown to enjoy a good time filled with dancing partying and drinking.

– However,

• Statement #2– After a night filled with drinking many students

well over the legal limit still climb into the driver seat of their cars to get home. Each weekend is full of Portland police and PSU police reports of students receiving DUI'S (driving under the influence). Not infrequently there are additional reports of accidents and injuries due to drinking and driving. This produces not only a campus problem but a community problem as well.

• Statement #3– If the situation doesn’t change, some student

or community member will undoubtedly be killed. DUIs and accidents cause severe legal and financial problems for students. In addition, tensions between the community and the University will increase.

Terra Cog

• Terra Cog is a successful privately held high tech firm that develops GPS systems for consumer markets.

• Their success has been based on a core competence of converting consumer needs in products with exceptional design and function.

• The company is caught off guard by a competitor’s introduction of a GPS system using novel, Google-earth like imagery.

• When Terra Cog pursues development of a competing product, project costs are exceedingly high and the time frame lengthy.

Problem statement?

• Statement #1– Terra Cog’s mission is to offer the sportsman

markets exceptionally well-designed, high functioning GPS products.

• Statement #2– A competitor has entered the market with an

enhanced imagery GPS unit that consumers and retailers respond well to. Initial product development at Terra Cog indicates that the company cannot produce a competing product with advanced features at a comparable price point in a timely fashion.

• Statement #3– If Terra Cog cannot enter the market with a

superior, well-priced product it will jeopardize its relationships with retailers and its reputation with consumers, leading to a market share decline.

IKEA

• IKEA has an environmental and social welfare mission to “create a better life for everyday people.”

• The company has grown to a $4.5 billion company by offering well-designed, inexpensive home furniture and furnishings.

• Cost savings are achieved by using under-utilized manufacturing capacity in underdeveloped economies, including India, where it’s discovered that child labor is used to weave IKEA rugs.

Problem statement?

• Statement #1– IKEA’s mission is to create a better life for

people, which extends into its policies of creating environmentally friendly products that do not use any virgin timber, formaldehyde or PVC.

• Statement #2– A documentary uncovers that child labor is

being used in India run weaving operations that make IKEA rugs. While not directly in violation of Indian laws regarding child labor, outlaw of the practice had been ratified by 120 countries in the world and the International Labor Organization. India had not ratified.

• Statement #3– If IKEA continues to sell rugs made by Indian

children, they will contribute to a system that abuses children and keeps them from adequate education. This will in turn lead to a decrease in reputation for IKEA and cause people to stop purchasing IKEA rugs.

Examples• …This product demand lifecycle is normal for a business, and

especially so for a technology based company such as Qwest. However, this technology change has created a glaring problem for Qwest. Customer demand for the Legacy Services that Qwest provides is decreasing on a sequential basis. Revenue for these services continues to fall, while costs to maintain the network that provides these services stay constant. Since Qwest is an ILEC as of the merger in 2000, they are unable to simply discontinue their Legacy services.

• Their root problem is that their Legacy Services continues to be a set of services that Qwest has to provide, but demand and revenue continue to decrease. This is an urgent problem that Qwest needs to address as soon as possible.

Example• In an ideal scenario, DIRECTV is a premiere provider of television

entertainment whereby it builds upon its large satellite television subscriber base to provide original and relevant content to a growing online market.

• However, the current situation is such that DIRECTV provides limited on demand services to complement its vast array of satellite television programming.

• If the current market trends continue the consequences of no action will find DIRECTV playing catch-up to an emerging market dominated by online giants like Apple & Google.

• The problem can be stated: DIRECTV’s traditional satellite distribution system faces stiff competition from an emerging market dominated by such giants and Apple and Google that, left unchecked, could undermine its subscriber base and negatively affect revenue.

Example

• As is stated in Kroger’s mission statement, the company wants to be a leader in the distribution and merchandising of food, pharmacy health and personal care items, seasonal merchandise and related products and services.

• However, while Kroger is a leader is the grocery store segment, they train behind Wal-Mart in the general sales segment 1.6% to 3.2%. Walmart’s presence has caused a reduction in margins and reduced market share of Kroger.

• This expansion will continue unless Kroger can become more competitive

Example

• The manufacture and trade of counterfeit Nike branded products results in damage to Nike and its consumers both financially due to higher costs, and perceptually due to inferior or faulty products being sold in the marketplace.