Sitnasuak Analysis:MBA Coursework

Week 7 Discussion Question

Sitnasuak Native Corporation is headquartered in Nome, Alaska with almost 3,000 shareholders that are indigenous to that geographic area.  I will be focusing on one of the industries within the SNC subsidiaries: SNCT Services (Tactical Apparel) for purposes of this week’s discussion question about meaningful differentiation. 

In 2014, the Business Unit Income for SNCT was -$1.4 million.  This was a devastating failure of performance compared to 2009 when the income was $16 million with a revenue of $212 million.

I served as the President/CEO of Sitnasuak Native Corporation in 2009-2010 for a one-year contract to gain control of SNCT operations.  Later, I was elected to the SNC Board of Directors in 2014.  In between 2010-2014, I was not involved with the company.

In 2014, SNCT Board of Directors approved the hiring of a new CEO for the subsidiary.  This was a differentiating move by the SNCT board of directors because we selected a CEO with a 20-year history in successful commercial apparel manufacturing. 

Prior to 2014, executives were from the military apparel manufacturing space; including executives of our competitors.  This caused for a ‘red ocean’ fight over talented executive-level personnel among the top three competitors.

With the dire outlook of the 2014 income, it was clear that to defend keeping the tactical apparel line, we had to do things differently.  Our operations, supply-chain, and organization were all cookie cutter and in line with competitors.

The SNCT Board made clear to the commercial CEO of the expectations and turn-around work he and his team would manage.

Since his hiring, he brought with him his long-time colleague, a Chief Operations Officer from the same commercial manufacturing company.  The two of these individuals rolled up their sleeves and went to work to not only make SNCT successful in terms of military apparel manufacturing, but using commercial manufacturing principals, methods, and actions to skyrocket our firm beyond the norm that was in place for decades among the top competitors.

“Updates and automation of equipment has been key to our success, allowing Tactical Apparel and its affiliates to have one of the lowest costs per unit in the American industry while keeping quality and performance at its best.  Our internal planning continues to add value”.

SNCT board of directors understood a game-changing move was necessary to regain market share, increase income, and protect the company’s credibility with shareholders.

SNCT embarked upon (what I now know to be) a Blue Ocean Strategy; to take the military client’s expectations of value to a level that is equal to or better than commercial manufacturing.  Commercial manufacturing is incredibly more competitive, face-paced, and innovative in operations, production, and other planning. 

SNCT broke the value/cost tradeoff, aligned the entire system of the company’s activities with its strategic choice of differentiation and low cost.

(One interesting note is that in 2018, there was $120 million in sales at SNCT with an income of $14 million.  As noted above, in 2009 there was $212 million in sales at SNCT with an income of $16 million.) 

Significant work, passion, commitment, candor, dedication, trust, and loyalty was reciprocal between the subsidiary Board of Directors and executive management team. These were all key ingredients to bring the tactical apparel line into stellar performance. 

SNCT executives continue to implement strategies to expand market share and competitive advantage.  The business unit is on track to continue its trajectory of increasing handsome profits; ultimately translating into shareholder equity, dividends, and other benefits for the 3.000 shareholders of Sitnasuak Native Corporation.

www.snc.org

2018 SNC Annual Report, public document

Sherman, Leonard, “If You’re In a Dogfight, Become a Cat!”

Published by Trudy Sobocienski

My blog, "Beyond Leadership" is a creative place to share my personal feelings and thoughts while working in leadership roles for a variety of Alaska Native organizations, both for and not-for profit entities. An incredible leader and mentor of mine once asked while we were in Washington, DC, "What happened to you between the ages of 7-10 that motivated you to serve in a native leadership capacity". I was struck by that poignant thought and as such, include actual entries from my mother and my diaries beginning in the early 1970's. I enjoy sharing these excerpts because it captures the parallels she and I were experiencing throughout life, from two separate worldviews. Hers as a young mother of four and mine as her eldest child. I have never came across a book on leadership that lays bare a leaders personal feelings, thoughts, hopes, fears and dreams they were experiencing. So for me, my goal is two-fold: 1. Share the incredible life my parents created for my siblings and I growing up in remote Alaska; and, 2) Sharing my humanity, through my personal diaries and journals, while serving as the youngest-ever President/CEO for the Alaska Native Health Board. There are passages that will include significant policy issues I was working on throughout my career and travels. There are many more passages that do not. I cannot speak for my mom's passages, because I am reading them as I share them here, with you; with her permission of course.

2 thoughts on “Sitnasuak Analysis:MBA Coursework

  1. Trudy, great paper. Kudos to SNC on finding the secret sauce to win! Thank you so much for sharing some of the thinking that drove your Board to seek entrepreneurial change. Well done!

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