OBH Day4 “Corning Glass Works（CGW）: The Electronic Products Divisions （A）”
1 Conduct a situational analysis of EPD using the information presented in the case. Why has there been such a strong tension among functional department?
EPD is struggling to face a transformation of business model. They should change their business from product oriented to customer oriented because the key success factor of the component market is not technological advantage anymore. In the instable component market, it is needed to have market-oriented people and built a close communication among teams in order to introduce new product into market quickly. They also don’t have enough marketing staff and their evaluation criteria are not fit to their situation. In addition, organizational changes, especially moving from plant to Corning, and luck of appropriate leadership, directive leadership style, and inappropriate evaluation system causes a conflict among functional department.
1-2 EPD Business
In this report, I would like to think about a EPD business with contrast by Corning Glass Works(CGW) because their strength and weakness were affected by CGW. I will describe their business as follows; strength and weakness, key buying factor, key success factor, business strategy, structure and HRM system, and leadership.
Strengths/capabilities and weaknesses of EPD
The EPD is the passive component manufacture. Their strengths are R&D and manufacturing and their weakness is marketing. EPD’s specification affected by Corning Glass Works(CGW). CGW is a leading company who has invented and manufactured glass products. CGW have invested in research and development and they have built a technological capability. They have a technological competitive advantage because of investment of research and development. They are relied on customers because their technical hi-reliability and they had strong relationships with customers. They created new product with customers, and they can maintain customers with small number of sales person. In addition, research and development of new products takes a long time and product life cycle is longer than consumer products. Their market is stable and their market share is also stable comparing with short-term lifecycle products for end users. Therefore, they have had competitive advantage for a long time in their market.
Key buying factors of the passive component market
The customers of component market are OEMs and distributors. Their needs, especially for OEMs, are a low price, a variety of product line, high quality and good service such as quick delivery. If comparing with strengths of EPD, customer’s needs and their capabilities do not math well. The reason that EPD doesn’t meet customer’s need is the change of external environment. In 1950, their customers were government because of the space program and missile defenses led by the government. At that time, customer’s demand was the highly reliable component. EPD could meet their specific needs because of their capabilities of R&D and manufacturing. After that, their market was gradually changing because the demand of military market decreased. In 1960s, instead of the military market, the new commercial market has grown such as consumer electronics (TV),data processing and telecommunication(telephone market). In the new market, the customer’s needs was low price, a variety of product line, quality and service such as quick delivery as I mentioned before.
Key success factors of the new passive component market
There is another characteristic of the passive component market. Compared with the military needs, new market is not uncertain and instability. The product life cycle is shorter than other CGW’s products and end user’s need is always changing. The cycle of technological innovation is rapid and it is hard to maintain competitive advantage. In the market, KSF are cost-competitiveness and...
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