As CEO of our sensor company, it has come to my attention that we are faced with an escalating problem of balancing increasing demand, working capital limitations, and constrained manufacturing output. Many of our top executives have been relaying their reservations about our offshore suppliers, while others have been leaning towards expanding our dependence on them. With this information in mind, as CEO, it would seem the best way to move forward is to expand our offshore supplier, but also reinvest in monitoring and support tenfold as well as develop possible alternative suppliers. It is clear that our demand is steadily rising and our current production overseas will not be able to keep up for long. As our Vice President of Production pointed out, this increase is predominately overseas where our current suppliers’ material and labor costs are lower and their location makes shipping domestic sensors unprofitable. It is very important that we increase our capacity for if we don’t we will lose this growing market before we even get a chance to enter it.
So now the question becomes how do we expand our overseas production? At the moment, we have a supplier that can currently meet demand and is in a position to expand to meet this increasing demand. This supplier has also had three brushes with their country’s labor law enforcers. In addition, if this supplier is caught one more time we have to break ties with the supplier. The legal costs for this are roughly 3%, but
F. Alternatives: Two major proposed solutions were described in the case. First option is to acquire monitoRobotics and offer instant service with the existing and new products. The second option is to eliminate the service industry from the company as a whole. Nikolas argues that this would hurt the company’s reputation in brand image Paragon Tool’s has created. He recommends acquiring MonitoRobotics as soon as possible due to close competitions acquiring about the same company. A third solution can also be just leaving everything the same and running the company as it is currently.
This case analysis explores the possibility of Breezy, a leading supplier of carburators and air filters in North America, the possibility of developing offshore busines in countries where car manufacturing is growing. The report is structured as follows: First, there are five important questions that Breezy must consider and ask itself before developing a relationship with a new customer. After Breezy decides to go offshore, it will have to go through the negotiating process, which involves five steps. Breezy then, must have capabilities of how an offshore business is organized, consider the many different costs and risks involved in the implementation and decide how it will finance the project. The report also talks
1. If you or your team decides to introduce a new sensor product, when should capacity and automation be purchased?
I am writing this memo as a member of the Andrews management team to notify you of the developments made on a preliminary business strategy that we are anticipating to be both successful and exciting. The sensor industry has experienced increasing product demand recently, as well as a universal desire for smaller and faster sensors in both the low and high tech market segments. Through the conduction of an external analysis, we have identified five major competitors within this industry, all sharing a similar control of suppliers and buyers to our company. The main goal of our strategy is to gain an advantage
During the course of the simulation, my team’s strategy was to adopt and stick to the Niche Differentiator strategy. To accomplish our mission, we focused on high end, performance and size sensors and hoped to seize a dominant presence in the industry. This approach allowed us to reduce prices in low end and traditional while positioning to better take over High End and Performance industry segments.
A company situation analysis can be defined as “matching the company’s strategy to external market circumstances and to internal resources and competitive capabilities.” We believe that our company, Chester Electronic Sensors, is currently in a position to spring ahead in the Electronic Sensor market. The industry in 2011 (round 0) consists of six competitors in very similar positions, holding virtually equal market share. We will use indicators in the industry to help determine our position and build our marketing, production, R&D and financial strategy. The situation analysis, as outlined by Capsim, will help provide us with a picture of the current conditions of the market and how it will develop in the next 8 years (rounds). This
The majority of our available resources, approximately 60%, will be allocated to High End and Performance sensors, as at the end of six years our goal is to control 35% market share in these two categories to become industry leaders. As mentioned above this will be done by increasing the amount of spending in research and development, production, and the marketing and sales budgets to match the projected sales forecast. The remaining resources, around 40% total, will then be distributed among the other three products as we would like to maintain a market share between 20-30% in each of the remaining categories. Being active in the secondary markets allows us to offset the
The key determinant of Chester’s’ success was the management commitment to superior business processes. Chester has a state of the art facility. Management increased capacity in the years after the government split and will continue to add capacity as growth dictates. However, capacity will be expanded at a lower rate than previously, in an attempt to avoid cash flow shortages seen in prior years. Chester has enhanced automation and quality processes in order to gain production efficiencies and cost savings. Chester has invested in labor recruiting and training; developing core competencies in it’s’ workforce. The firm has and will continue to maintain investment in research and development, as product improvements will continue to be demanded by the customers. The other key factor of the corporation’s success was the superior growth of the industry. It would have been much more difficult to sustain profitable growth in this extremely competitive market without the superior volume growth of the sensor industry.
The large initial capital investment needed for new entrants is another major barrier. The cost of machinery and manufacturing is expensive. It is hugely important and costly to have a global presence in manufacturing as it is extremely expensive to ship machinery to clients around the globe.
Procurement: More than 50 of Intel's most important material suppliers have online access to confidential engineering and product-specification documents, reducing the amount of time it takes to design products and get answers about Intel's needs. Using a "vendor-managed inventory process," allows Intel to accurately reconcile its suppliers' inventory on hand, materials in transit, and shipment projections with a customer's shop-floor consumption rate. The process has given Intel more-accurate forecasting data and allowed the company to respond faster to demand fluctuations.
globalization has a purpose- cheaper production and more consumers. this course on International expansion will help you develop an action plan to expand business through sales and partners.
Many businesses in United States manufacture their product overseas. This involves manufacturing products outside United States where the labor cost is cheaper. Because of cheap labor, it is often more economical for a U.S. company to manufacture overseas and pay the shipping costs than to manufacture in the United States. For a company, the savings may be substantial. However, there are negative impacts on U.S. employment, as many jobs in the United States are being outsourced and replaced by overseas positions. The manufacturers outsource production projects to save time, money or resources. The manufacturing is outsourced so as to remain competitive and maintain a steady work flow. Without outsourcing, manufacturing costs could escalate to the point at which no product would sell and all employees would have no work. Outsourcing comes
Another alternative should be to create a plant in Europe so now they don’t have top ay all the taxes they have to pay so they can export their products, in that way they will be able to give better prices to their clients, and they will supposed to have a better service and more quality because they where the pioneers in those products.
Chester chose to enter the sensor industry in 2016 as the niche cost leader. Our mission is to providing trustworthy products to our customer base. Our goal is to offer these products at a cutting edge price, with low overhead, at a high volume. By focusing on the Traditional and Low End segment of the market, Chester’s ability to achieve our mission made it possible to gain market share. Many aspects went into the logistics of the supply chain in order to carry out our operation. While the cost leader strategy is not always an opportune circumstance for the traditional segment, it allows us to offer lower prices to entice customers to purchase our products over other companies in the industry.
Currently, the developing countries of Asian and Eastern is both of the main sourcing regions and production providers to the world, these countries offers a great deal of low cost and skilled labours, relatively low price raw material which creating the ideal