Gammon Lakes Case Study Sample

Executive summary

This work provides the analyses of the Gammon Lakes case. The main problem is to assess the company’s strategy and find out whether it is appropriate for providing further growth and development. The research draws attention to the fact that the company has been stably developing for the previous years. It has focused on the operation in Mexico, having increased the number of mines. The company has also begun transition from exploration only to production. However, further investigation states that the company spent much money on mining agreements and relevant services with revenue decreasing and costs increasing respectively. Results show that the Gammon Lakes Company has a promising prospective for future growth thanks to its sufficient resources, professional management and other advantages that the company has. On the other hand, the company may suffer a significant problem in future in case it won’t become profitable. In case the prices will go down or the exchange rate will change, for instance, the company won’t simply have enough financial resources to deal with them. Thus, it is recommended that the company should reassess its strategy in order to become profitable.

Body of the Work

While working on the Gammon Lakes case study quite a sufficient work and analyses have been made. Firstly, the current company’s strategy has been assessed and described. Gammon Lakes is a Canadian company exploring and producing gold and silver. The company was incorporated in 1986. Its first name was “Golden Rock Explorations Inc.” Then, in 1998 the company became “Gammon Lake Resources Inc.” Basically, it was Canadian based company with operation in Mexico. However, later the management sold its Canadian properties in order to focus on Mexican ones. So now, the company’s aim and vision is to further develop its operation and production in Mexico. Possessing the the Ocampo and El Cubo projects the company has promising prospects of its future development especially taking into account that both gold and silver are on the rise. This is what now called management strategic management, according to Bryson (2004).
Its organizational performance is quite successive. The company is trying to expand the business by increasing the number of mines explored, establishing production on them and concluding various mutually profitable and beneficial agreements with other companies. The only problem Gammon Lake struggles is making a profit. However, this may be explained by the purchases of mines. So, this issue is expected to disappear when those mines will start to bring profit in future.
PESTLE analysis was conducted in order to assess the company’s external environment. It shows that the company’s business may be affected by various factors: variation of gold and silver prices, exchange rate, complying with various laws. However, Gammon Lake has a very experienced and professional management, so, it’s likely to overcome any challenges which may arise.
Considering Porter’s Five Forces Model, Gammon Lakes is a company with quite a strong position within the industry. Thanks to obtaining almost all the mines in the area and consistent and permanent demand for gold the company has great opportunities for growth. However, the lenient Mexican laws may enable other companies to enter this competitive area.
The assessment of the company’s internal environment provides it has almost only strengths. It relates to the company’s resources, capabilities, relations and capabilities. However, financial resources and marketing capabilities are a bit controversial points. They’re a mix of both strengths and weaknesses.
The stakeholders are divided into two groups: primary and secondary ones, according to the Freeman’s (2010) theory. As to the former ones, they include board members, allied organizations and employees. These are three basic groups responsible for the company’s operation. The first defines strategic direction, the second provide cooperation through alliances with other companies and the third one is actually responsible for the organization’s functioning. The secondary stakeholders include government as a main organ responsible for legislation and exchange rate.
As to the SWOT analyses, Gammon Lakes obtains opportunities and first of due to its strengths. They are, first of all, the company’s’ experience management including Mr. George and Mr. Langille who have an extensive experience in mining explorations and business development. What is more, the company has some prospective projects, including the Ocampo and El Cubo, and agreements with some other companies. On the other hand, such opportunities for growth are threaten with the fact that the company is not profitable with lots of money having been invested into future operations.
Strategic planning is quite important to any company enabling it with the stable future growth according to Bryson et al. (2009). When talking about Gammon Lakes, its main strategic direction is to make company profitable. It has good opportunities so it’s vital to employ them.

References

Bryson, J. M. (2004). Strategic planning for public and nonprofit organizations: a guide to strengthening and sustaining organizational achievement. San Francisco, Calif.: Jossey-Bass.
Bryson, John M., Crosby, Barbara C. and Bryson, John K. (2009) Understanding Strategic Planning and the Formulation and Implementation of Strategic Plans as a Way of Knowing: The contributions of Actor-Network Theory. International Public Management Journal, 12(2), 172 — 207.
Edward, F. (2010). Stakeholder theory: The state of the art. Cambridge: Cambridge University Press.
References
Bryson, J. M. (2004). Strategic planning for public and nonprofit organizations: a guide to strengthening and sustaining organizational achievement. San Francisco, Calif.: Jossey-Bass.
Mintzberg, H. (1989). Mintzberg on management: inside our strange world of organizations. New York: London: Free Press
Van Duren, E., & Sterne, R. (2014). The Ontario Christian Gleaners: A Case Study of a Stakeholder-Engaged Organizational Strategy. Cuizine: The Journal of Canadian Food Cultures / Cuizine : Revue Des Cultures Culinaires Au Canada, 5(1). Retrieved February 9, 2015, from http://www.erudit.org/revue/cuizine/2014/v5/n1/1024278ar.html?lang=en