Voltamp Electrical Corporation

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VOLTAMP ELECTRICAL CORPORATION

Written Analysis and Communication Report

A report submitted to Prof. Danesh Gojer

Letter of Transmittal
September 29, 2011 To,
Vice President,
Specialty Appliance Department,
Voltamp Electrical Corporation.

Subject: To determine the course of action to be taken in order to exploit the commercial possibilities of the new magnetic material, TGW, in the best possible ways. This report contains a detailed analysis of different options, criteria for evaluation and recommendation about the department which is best suited for the production of TGW. It also analyses the most appropriate time for the sale of the same outside the company. All the options have been evaluated on the basis of various criteria of development in the context of the company and goodwill are given more importance as these would benefit the company as a whole in the long run.

Regards,
John Carter
(Manager, Audio Products Section)

Executive Summary
Audio Products Section and Magnetic Materials Section as production centres are evaluated to find the most commercially viable strategy to launch TGW, a new magnet developed by APS, along with the perfect time period to launch it. The criteria used for evaluation are Profitability, Leadership in innovation and Development in the context of the company, Opportunities in selling, Time constraint, and Equal opportunity. It is recommended that the Audio Production Section should assign the manufacturing techniques to Magnetic Material Section immediately and receive royalties for TGW.

CONTENTS

Sr.| Topic| Page|
1| Situation Analysis| |
2| Problem statement| |
3| Options Available| |
4| Criteria for Evaluation| |
5| Evaluation of Options| |
6| Recommendation| |
7| Action Plan| |
8| Exhibits| |

Situation Analysis:
The Advanced Development Laboratory of Voltamp Electrical Corporation approached Magnetic Material Section (MMS) for developing a new kind of magnetic material ,TGW which was stronger, smaller in size and was produced at one-third the cost of traditional magnet. This proposition was declined by MMS as it was engaged in the developmental research of other magnetic products. MMS also believed the TGW might not be commercially viable and had apprehensions about the idea being converted into tangible results. The proposal was later offered to Audio Products Section (APS) which accepted the offer Ever since decentralization all inter-departmental decisions are undertaken by section managers on mutual agreement. After 5 years of developmental research and incurring a developmental cost of $500,000, APS discovered a new magnetic material which could replace all other magnetic materials currently used by Voltamp. After the success of the developmental research of TGW and its promising market leadership in innovation, MMS showed interest in taking over the techniques and procedures of manufacturing TGW. Realizing the risk taken by APS, it seems unfair to give away its innovation to other departments which will deny APS its due credit. APS’s research initiative of the development of TGW has been a break through and highly profitable. It can give a competitive edge and also improve the company’s existing magnet product line. APS needs to reap the benefits of their toiling endeavour. By not giving away the right to manufacture the process, APS can command higher profits due to low costs and also through the company policy be able to protect TGW from being replicated by competitors. The production costs of other departments that use magnetic materials will also decrease as the material will now be available internally at lower costs and this will eliminate the need to purchase from manufacturers outside the company. If MMS were to take over the production process of TGW, it would maximize sales and profits as they could sell to outsiders as...
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