Stamypor Case Essay

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Stamypor Case Study: TABLE OF CONTENTS Executive Summary - Situation Summary 1 Objectives 2 Central Problems 2 Recommended Actions 3 Reasoning Behind the Recommended Actions 4 Alternative Action Programs 6 Risks and Contingency Plan 7 Application of Readings 8 Works Cited 9 EXECUTIVE SUMMARY The New Business Development division of DSM is faced with the decision of whether it should continue to develop the Stamypor resin. The product is already near the end of the second stage of development. If NBD’s management board approves this product to continue into the third stage, it will require €16 million to be invested for equipment. However, if the Stamypor…show more content…
The project must also have the potential for an average annual market growth that exceeds 10%, and should reach a €10 million turnover within 5 years. The objective of the NBD is to ensure that DSM’s financial goals are met by increasing each product’s market potential and improving production technology. At the same time, NBD must keep its costs under control so that the product can be sold at a low price. For Stamypor, improved methods of cost reduction and a manufacturing system that will give the product a consistent porosity level are the main requirements that need to be met for this project to continue to the next stage. CENTRAL PROBLEMS The root cause of Stamypor’s problems was an unstable value proposition (2, p85). DSM-NBD underestimated the value of a need analysis, which was evident from that fact that they skipped the first stage of the Stage-Gate process. This evaluation stage is used to ascertain the need for a new product (1, p9). The omission lead to uncertainties over Stamypor’s claimed ability to add value to the resin industry. Additionally, a significant portion of DSM’s budget was assigned to corporate R&D and not to NBD. Therefore, fundamental research was not involved in the Ideation stage of the Stage-Gate process (3, Figure 5.4). The fact that DSM-NBD went ahead with a sizable investment - 2 - without understanding its
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