shareholder vs client scenarios Senario one
A well established profitable public food company has been getting complaints from shareholders that they want more profits so they can get a dividend from the company. The company has been focused on providing the best service and food to their clients.
A new CEO has been voted in by shreholders to bring in more profits. The new CEO decides to cut staff on slow days and asks the chef to buy cheaper products to raise profits. At first things look good food cost is down and staff costs are down. The company is now making more money.
Months down the road sales start slowing down and the company is now not as profitable. WHAT WENT WRONG. Well a customer card was given to each customer to find what happened. In the cards long time customers explained that service has become horrible due to being under staffed. They also said the food is not as good as it has been in the past and they have decided not to return or refer friends.
Eventually customers decid to not come back due to longer wait times for food and poor quality ingrediants. Eventually the company goes into bankruptcy due to loss of customers.
Second scenario
A well established public company that resells after market car parts to customers on the internet. Predominately the company buys equipment from an established car manufacturer in the USA. Due to share holder complaints that they are not receiving dividends and the share price is stagnant.
Again a new CEO has been voted in to raise share holder value and possibly bring in a dividend. The first thing the CEO does is find a new manufacturer from China and India to lower product costs. At first profits SOAR the share price rises and the new CEO installs a small monthly dividend.
Two years later the company is insolvent and can not pay their employees or the rent on their distrubution center. WHAT WENT WRONG !!!
Well existing clients started receiving complaints from their customers that parts do not fit properly, parts are breaking sooner than previous parts and their products are inferior. At first things worked great but eventually clients and their customers started going to other companies to find more consistant products.
Third scenario
a A Public company in the civilian weapons detection field is hearing complaints from share holders that the share price is stagnant and they want to see them have more clients and customers. The current CEO has decided that he must have the best hardware and software that he truly believes is ready before he starts mass deployment. There have been delays in the deployment but he is confident one day soon the company will be 100 % ready for deployment.
Shareholders get frustrated and vote out the current CEO. A new CEO comes on board and decides that the system is ready for clients. Mass commercial roll out happens and sales are threw the roof. The companys share price rises and shareholders are loving life watching the share price rise and sales go out the door.
Six months later there is a mass shooting at a hotel in New York city. This Hotel has the PAT SCAN CMR in their doorways. Somehow the shooter managed to get threw the weapons scanner.
The reason the scanner did not catch the weapon was due to a small glitch which the NEW CEO knew about. tHE new CEO WAS TOLD ABOUT THE GLITCH but decided in the best interests of shreholders to release the system anyways. Since the glitch was only happening on very reare occasions, the new CEO thought it was no BIG DEAL and the sysytem was close enough for deployment.
The next day after news outlets release that the weapons detection system failed the share price TANKS. The share price goes from 14 USD per share to less than a dollar in less than week.
One year later the company solves the glitch problem but it is to LATE. No one want to buy a system that has failed once before. aCREDITED investors will not buy any moree PP. The company now has a fully functioning machine but they can not get sales or money to continue. The company files for bankruptcy, shareholders lose all their money and the system is bought out by the US government for pennies on the dollar.
Pleas explain to me how shareholders are more important than customers. With out happy returning clients and customers there is NO COMPANY !!!
GET YOUR FACTS STRAIGHTS