Case study “Le Petit Chef”
1. What is the relevant context of this case?
This case depicts the need for a newly appointed R&D director of the company’s flagship products to address R&D issues and to provide a guideline for proper R&D project selection and funding level in an urgent and imperative manner. The following were the main context that prompted the need for this swift action.
Market: Le Petit Chef had experienced competitive pressure from European appliances manufactures for high end market in microwave oven due to Asian consumer electronics manufactures’ penetration to low-end, low-cost market.
Company Culture: The founder was a chef that would like to “build microwave ovens that would take the art of French microwave cooking to new levels”.
Technology: With company founder’s objectives on cooking appliances that the technology strategy of the company was a “technology pull” based on the needs and wants from the customers Competition: Le Petit Chef had competitors from both high-end market from Europe, its strong market segments as well as potential competitors from Asia that wrestling for the lowend market.
Supplier: 35% of manufacturing costs of a basic unit was for Most of the microwave oven manufactures buy magnetron and high voltage power supply unit, two of the main components from the same suppliers like Sharp and Samsung. Le Petit Chef enjoyed the similar economics of scale on these components as its competitors.
Leadership: With Brigitte Gagne as new R&D director for microwave oven division, she needed to make a pressing decision on project selections as well as the remake of Le Petit
Chef’s project portfolio.
2. What factors explain Le Petit Chef’s poor performance? What actions do you recommend to remedy this situation?
The main reason was the increasing competitive pressures. When Asian manufactures expanded their low-end microwave ovens into European markets that took away some profit margins that