Marketing Case Study Questions and Answers

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1. As a potential product line manager at DS, what is your reaction to the memo in Exhibit 2?
For the product line managers the new system brings clarity and makes us more responsible. Specific goals for profit contribution, providing us with measurable assessment of performance, allow us to track and improve processes. What’s more with individual measurement of financial positions such as sales, revenues, costs etc. we can influence on each of them by increased level of responsibility for making profit. Similarly, each product line will have individually measured costs for each product which will contribute to cost control.
We would also explain the new system to our employees, its rules and the reason for implementing it. Communication within the company is very important aspect that’s why, we would also have to get some information and knowledge ourselves because we believe that it’s not possible to explain and demand doing something we don’t fully understand.
2. Given the organizational architecture of the product lines, how should the manufacturing facility (FAB) be treated?
Given the organizational structure of the product lines, the manufacturing facility (FAB) would be run as cost center, and measured on their ability to achieve this competitive activity-based cost standard.
3. What are the critical tasks of finance to support this new organization? As John Gavin, what is your biggest concern?
The critical tasks of finance to support this new organization are to lead to changes in our business to assure DS more competitive position as a stand-along business and stimulate the division driving for growth and eventual profitability. As John Gavin, profitability would be my biggest concern because the division is still operating at a loss. The new way to solve this problem should be founded and that’s why we would search for feedback, mostly from managers, about the new product line organization and employees.
4. Is the product line concept

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