The Solution of Elite Plastic Product Case Study
Report on strategic options open to Elite Plastic Packaging Introduction
Elite Plastic Packaging (EPP) from the financial data given is clearly out performing other companies in the Print and Packaging division – indeed 20X6 has seen it, apparently, become the only profit maker. The operating margins you are generating(40.3% in 20X6), although not excessive for a manufacturing firm looking to cover significant overhead costs, are way beyond those gained by other companies in the division and the group as a whole. This should provide a sound basis for arguing your case for the move into America and Asia but the conservative nature of the Group Executive and your own Divisional Chief Executive make a careful and well prepared and argued case for such a strategic move an imperative.
Consideration of alternative market entry strategies
EPP has achieved significant growth to date through a combination of product and market development. Importantly, this has not led to diversification away from the core business which is important bearing in mind the 1990s experience of the Group Chairman and Chief Executive to previous geographic diversification. The move to becoming a global operator does inevitably involve taking on more risk – which ever the preferred route. The generic strategy of Elite Packaging to date has been that of a focused differentiator, specializing in plastic packaging for food, drink and confectionery manufacturers solely within the European market. From the information given I assume that growth has been largely organic with little experience of growth via acquisition or strategic alliances. This lack of experience of alternative routes to growth may influence your own perception of risk between the four entry strategies but there may be experience and expertise within the Sigma Group that you can use, both prior to making a decision and once the decision is made. It is important to examine your own and your superiors’ assumptions about the options
Elite Plastic Packaging (EPP) from the financial data given is clearly out performing other companies in the Print and Packaging division – indeed 20X6 has seen it, apparently, become the only profit maker. The operating margins you are generating(40.3% in 20X6), although not excessive for a manufacturing firm looking to cover significant overhead costs, are way beyond those gained by other companies in the division and the group as a whole. This should provide a sound basis for arguing your case for the move into America and Asia but the conservative nature of the Group Executive and your own Divisional Chief Executive make a careful and well prepared and argued case for such a strategic move an imperative.
Consideration of alternative market entry strategies
EPP has achieved significant growth to date through a combination of product and market development. Importantly, this has not led to diversification away from the core business which is important bearing in mind the 1990s experience of the Group Chairman and Chief Executive to previous geographic diversification. The move to becoming a global operator does inevitably involve taking on more risk – which ever the preferred route. The generic strategy of Elite Packaging to date has been that of a focused differentiator, specializing in plastic packaging for food, drink and confectionery manufacturers solely within the European market. From the information given I assume that growth has been largely organic with little experience of growth via acquisition or strategic alliances. This lack of experience of alternative routes to growth may influence your own perception of risk between the four entry strategies but there may be experience and expertise within the Sigma Group that you can use, both prior to making a decision and once the decision is made. It is important to examine your own and your superiors’ assumptions about the options