EZBOARD

This week’s case shows how a successful internet based company is challenged internally and externally and how the right action by the management could avert the danger of bankruptcy of a company.

Though the company enjoyed a large customer base for a while, few strong competitors were immerging with a new technology and more versatile software than that of Ezboard. I believe that former Ezboard management was comfortable with the status quo due to the fact that they undermined the strength of the small customer based competitors and the number of customer base EZboard had. The company spent its resources fixing old and low capacity software instead of looking for other options. Ezboard is at a crossroad of huge success or failure depending on the outcome of planned changes of its new CEO. Robert Labatt, the new CEO, seems the right person to turn around the danger that the company was facing. Actions such as cutting costs and boosting efficiency by minimizing duplication of efforts kept the company out of possible bankruptcy. With high fixed cost structure, it makes sense to focus on the cost reduction measures to make Ezboard remain relatively low marginal cost company. Labatt’s cost cutting measures were not futile. In 2004, he was able to trim his monthly cost by 30%. Revenue showed a positive trend with 20% growth for the remaining of the year as well. In addition, after its marketing survey Ezboared was able to see its market base and their preferences (I think this should have been done way early)

The cost cutting action taken by the new CEO being the first step, changes such as product upgrade and price structures that Ezboared new management was ready to implement could make or break the company’s future. However, the strategy that these changes are going to be implemented has an impact on the effectiveness of the change. A “big-bang” approach for a very delicate customer base such as Ezboard’s might pose a danger of losing clients to the competition. Hence, changes need to take place slowly with enough cushion of time for correction.