Case Study

International Machine Company

Kamal Nath the president of international machine corporation

(IMC), leaned back in his chair and reflected with well deserved
satisfaction on the success of his company, which produces and
distributes a line of farm machinery. That afternoon, at the
meeting of distributors from various parts of the world, Mr. Kamal
had been urged to introduce new models to satisfy the changing
demands of the customer.

The president, who had an engineering background, recognized

the implications of the distributor’s suggestion. It would require
greater investment in research and development. Furthermore,
the changes in the highly automated production line would be
very costly indeed. Also, having a greater variety of models would
require stoking many more spare parts. Depending on the kinds
of changes, mechanics also need to be retained.

Reelecting on the previous staff meetings, the president realized

that the sales and marketing people always wanted a greater
variety of models but never acknowledged the cost involved in
changing models. After all, the company had been extremely
successful with just a few models. Consequently, the president
decided against the introduction of new models. Instead, he
considered improving the current models and reducing the cost
and price. He felt that what the customer really wants is the
value. Nevertheless, to test his judgment, the president a
consultant for an opinion.

1. How would you state mission of the enterprise?

2. What would u think are the opportunities and threats in the

external environment?
3. How would you go about evaluating the strengths and
weaknesses of the firm? What factors are critical for success
or failure?

4. It is said that to be successful an organization must be an

open system. What does this mean, and how does it apply to
this case?