Australian Paper Mfg
Australian Paper Manufacturers Case Study Analysis
Australian Paper Manufacturers Case Study Analysis
Executive Summary
Australian Paper Manufacturers (APM), as the name suggests, is an Australian-based company that specializes in paper manufacturing. In 1987, APM moved from its specialty in paperboard manufacturing into the uncoated fine paper market. APM identified its competitive advantage in this transition as the quality of its focused product lines and its keen attention to customer service. The company was very successful in its entrance to the market, earning a 37.2% market share within the first two years. Since that time, the company has reached its operational capacity limits and is faced with a series of options to alleviate this operational challenge. Ken McKrea group general manager for APM, has outlined four separate options for the company, each with merit in its genesis. Three of the respective options consider capacity as the key operational challenge for APM and outline various solutions including the associated capital required to achieve them. The fourth option is one that focuses on diminishing the environmental impact of APM’s operations. While the fourth option has merit in alleviating environmental concerns, it does not have a positive financial impact on APM’s operations. APM created four distinct products that serve the specific needs of four consumer segments. These segments include offset printing, copy paper, dataforms, and recycled paper. The respective segments all offer different contribution margins to APM’s operations and vary greatly in their respective growth in demand over the next six years. The key operational decision is one that affords APM the flexibility to use additional capacity to meet the growing demands of the most profitable sub-segments of the uncoated fine paper market.
Conclusion
APM should choose the option outlined by the group general manager that affords the
Australian Paper Manufacturers Case Study Analysis
Executive Summary
Australian Paper Manufacturers (APM), as the name suggests, is an Australian-based company that specializes in paper manufacturing. In 1987, APM moved from its specialty in paperboard manufacturing into the uncoated fine paper market. APM identified its competitive advantage in this transition as the quality of its focused product lines and its keen attention to customer service. The company was very successful in its entrance to the market, earning a 37.2% market share within the first two years. Since that time, the company has reached its operational capacity limits and is faced with a series of options to alleviate this operational challenge. Ken McKrea group general manager for APM, has outlined four separate options for the company, each with merit in its genesis. Three of the respective options consider capacity as the key operational challenge for APM and outline various solutions including the associated capital required to achieve them. The fourth option is one that focuses on diminishing the environmental impact of APM’s operations. While the fourth option has merit in alleviating environmental concerns, it does not have a positive financial impact on APM’s operations. APM created four distinct products that serve the specific needs of four consumer segments. These segments include offset printing, copy paper, dataforms, and recycled paper. The respective segments all offer different contribution margins to APM’s operations and vary greatly in their respective growth in demand over the next six years. The key operational decision is one that affords APM the flexibility to use additional capacity to meet the growing demands of the most profitable sub-segments of the uncoated fine paper market.
Conclusion
APM should choose the option outlined by the group general manager that affords the
References: Upton, David. (December 13, 1993). Australian Paper Manufacturers (A). Harvard Business School. 9-691-041.