Byte Products Case Study

Topics: Strategic management, Board of directors, Management Pages: 4 (1505 words) Published: October 15, 2012
Brief case study for “The Recalcitrant Director at Byte Products, Inc.” Terri Grisafi MGMT 6301 Fall 202 Prof. Christian

Byte Products is a leading manufacturer of specialized electronic components used in computers for business and engineering. With their main headquarters located in the Midwest, they are the largest volume supplier with 32% of the market and an industry leader with annual sales of $265 million and for the last six years sales have been increasing every year an average of 12%. In this case study, the situation Byte is facing is that their production facilities are operating at 100% capacity. Byte has three facilities in the United States and they are all running three 8 hr. shifts, 24 hours a day. Since demand for the products is so high, Byte has an immediate need to increase production but lacks the physical space to do so. This is a serious problem because other companies, both domestic and international, have been entering the market due to the high profit margin and consumer demand. Lack of available products from Byte will leave their loyal buyers no other choice but to entertain these new manufacturers. The C.E.O. and Chairman of the Board of Byte Products, James Elliot has addressed this problem by proposing the construction of a new production plant in the Southwest United States which once in operation will bill able to produce enough to keep up with the current demand. Unfortunately the new plant will take three years to build and if Byte is unable to supply enough product they will lose their hold on the market and other companies will step in to satisfy demand. Mr. Elliot has heard various suggestions from staff specialists on how to address this shortage of product. Byte could license production of their products to another company in the U.S. but premium charged to them to cover the overhead costs would increase the price of the product and they would lose customers. Another option...
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