Peerless Starch

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Peerless strategy

Case Overview

The first plant of the Peerless starch industry was started in Blair during the civil war times. It is one of the highest wages paying plants in the region sporting a five story building supported by two massive towers. The other plants in the region have all shut down and currently Peerless starch is the only active plant in the region and it employs 8000 of the 120000 residents of the Blair. Company has three more plants in Illinois, Oregon and Texas which are not as massive as the one in Blair but they have modern equipment and machinery and running in profit. The three other plants combined employ same number of employees as the Blair plant and now the plant at Blair is running in huge losses and because of which the company as a whole is suffering. Following reasons can be attributed towards the poor performance of the plant 1) The man power employed is four times what is required

2) The product quality is poorer than what the competitor or even the other plants of Peerless are offering hence there is high rejection rate. 3) The plant is being run by old machineries and equipments. 4) New players have immerged in the marking with synthetic starch production.

On the other hand the other Peerless plants are performing well. Plant at Oregon has even established a successful running synthetic starch production line. The situation at Blair plant had grown grimmer with the demise of the director of Peerless starch the Grandson of the founder and now the new director has been asked by the board to decide the future of the Blair plant and hence of the company in six months.

The available options

The following options are available
1) Closing the Blair Plant
2) Modernization of the Blair plant
3) Starting a plant from scratch at Blair

The director has to make a trade off between the welfare of the company and the load that the employees of the plant other than the Blair has to bear if options...
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