Essay about Fraser Company

1843 Words8 Pages
Problem Statement

Columbia Plastics division of Fraser Company, the major manufacturer of skylights in the Pacific Northwest, is facing a severe competition from Vancouver Light which has just announced a further price cut of 10%. Alice Howell, president of the Columbia Plastics is unsure of which options to implement – 1) cut the prices at a level that just cover the costs, or 2) continue the current pricing policy and lose market leadership. Fraser is facing the erosion of its market share.

Situation Analysis

Background, objectives and environment assessment

Fraser Company has been the supplier of metal and plastic fabricated parts for Boeing Aircraft and has recently celebrated its 50th anniversary. In the 1960s, in order
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• Columbia lacks a strategic management plan linking its resources to its market opportunities.
• It lacks thorough understanding of its target market (the needs of the present and future customers).
• It lacks continuous improvement in its production process in order to reduce production costs. (Columbia’s production cost is higher than that of competitors.) Opportunities

• Market development: Columbia can develop new markets to sell its current products. (for example, expansion to California, Mid-Western states and international markets)
• Product development: Using the plastic moulding skills, it can develop new or improved products that will appeal to the customers (for example, improved skylights to reduce heat loss).


• The competitor is cutting its price to a level that Columbia cannot match.
• Columbia is steadily loosing its market share to the competitor (at a rate of 1,000 units per year).

Market and competitive analysis

Total sales of skylights are 45,000 units per year, primarily in Washington, Oregon, Idaho and Montana. The sales of skylights have levelled off in recent years. Prior to the advent of Vancouver Light, Columbia had about a 70% share of this market. Colombia also occasionally sells a large order to California, with a loss or break-even to fill slack in the
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