A CASE STUDY: BYTE PRODUCTS, INC.

Viewpoint: James M. Elliott, Chief Executive Officer and Chairman of the Board Time Context : Over the past six years
I.PROBLEM STATEMENT The companys production capacity cannot meet the demand of electronic components.

II. STATEMENT OF THE OBJECTIVE

The companys production capacity should increase to meet the demand of electronic components and to be able to maintain or increase the 32% market share and 12% increase of revenues yearly.

III. AREAS OF CONSIDERATION

Strengths: The company is the largest volume supplier of specialized electronic components and industry leader with 32% market share. Weakness: The company has only 3 manufacturing facilities and already operating in full capacity with 3 production shifts (24hours per day, 7 days a week).

Opportunities: There is increase in demand of electronic components and ease of new firms entry into the industry. Threats: The number of competitors increased due to ease of new firms entry into the industry.

IV. ALTERNATIVE COURSES OF ACTION

1. Construction of a new, state of the art manufacturing facility 2. Buy an abandoned plant facility and renovate it as permanent production facility 3. Overseas facilities and licensing

1. CONSTRUCTION OF A NEW, STATE OF THE ART MANUFACTURING FACILITY

Advantage: The company will be able to meet the demand due to increased production capacity with the new production facility. Disadvantage: The facility will take 3 years to complete the plant and make it operational.

2. BUY AN ABANDONED PLANT FACILITY AND RENOVATE IT AS PERMANENT PRODUCTION FACILITY Advantage: The company will be able to meet the demand and it will make the facility operational in a shorter time.

Disadvantage: It will be depended on the location of the company. It might have inadequate transportation links to its suppliers and markets.

3. OVERSEAS FACILITIES AND LICENSING

Advantage: The company will be able to meet the demand. Disadvantage: There is a potential low product quality and might give away costly proprietary information regarding the company's highly efficient means of product development.

V. CONCLUSION
Cost Efficiency Time constraints ACA 1 1 3 1 5 ACA 2 2 2 3 7 ACA 3 3 1 2 6

Decision Criteria Matrix: 1 good 2 better 3 best

ACA1 will be able to meet the demand but it will take a longer time to make the new production facility. This might make the competitors gain advantage and the company will be able to lose its current market share.

ACA3 will be able to meet the demand but there might be a potential low product quality and might give away costly proprietary information with regards to the company's highly efficient means of product development. Reduction in the quality of the companys production would threaten its position in the industrys market share.

ACA2 will be able to meet the demand and make the facility operational in shorter period of time than making a new production facility but it will be dependent on the location and might have inadequate transportation links to its suppliers and markets. The company should be able to negotiate with the locals with regards to labor cost and should make strategic plan to address the other challenges.

VI. PLAN OF ACTION

Activity Persons involved Time Frame

Hiring of employees for production Allocation of Budget and financing

Production of electronic components strategic planning

HR Finance Employees
top management

3 - 6 months 3 - 6 months 3 - 6 months

3 - 6 months