Allentown (Epd) Case Analysis

7182 Words Dec 23rd, 2012 29 Pages
Executive summary

This report is to discuss the problems that Electronic Products Division (EPD) had incurred, and to present our finding along with the recommendation to address the issues.
At the organizational level, the new product development process is slow which adversely affects the division’s growth. In addition, the business is becoming fiercely competitive and customers become more price-sensitive which has resulted in sales declines and price erosion. The major problem at EPD is that the current functional organization structure is suboptimal to respond effectively to the dynamics of the industry it operates within. Another observation is that the leadership skills and styles are mismatched with the needs of individual
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, long-servicing sales people; sales force working closely with manufacture customers and secured sales by talking to purchasing agents and design engineers to obtain contracts
EDP 's plants had the lowest gross margins in the company, comments include lack of growth in new product innovations, growth potential in existing products is not leveraged, 2 plants not needed, no operational objectives
Joe Bennett significantly impacted managerial style & culture throughout EPD, with pressure tactics & unrealistic standards being transmitted top-down in the organization; was authoritarian and made most key decisions
Don Rogers, the new head of EPD, was inexperienced in production line management, was promoted from R&D, had only general knowledge of electronics business
Rogers has made a number of changes at EPD including separating sales & marketing functions, centralizing EPD headquarters, Product Development, replaced most of his key managers, and Market Development Divisions to corporate
By 1992, 60% of EPD’s sales were to the computer, telecommunications and consumer electronics markets
Sales budget generated in a 'bottom-up ' process in the Sales, Marketing, and Manufacturing departments which were subsequently modified by Corporate staff
Plants are held responsible for gross margin, EPD plant managers are struggling to meet the gross margin

Urgent Issue:
Don Rogers, the GM of EPD, holds a false belief that declining sales in EPD are due to increased competition

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