Charles Scott should take a few actions to overcome current weaknesses of Whistler Corporation and to make Whistler more competitive in the long term. The company was successful in its business until 1985 because the radar detector market was not in so intensive price competition. However, after 1985 the price competition became severe and Whistler Corporation could not catch up with this change. As a result, it decreased its market share from 21% to 12%. Considering these situations, there are three practical options as listed below. 1. Move all manufacturing plants to off-shore.
2. Restructure domestic manufacturing plants.
3. Move only low-end production to off-shore.
Scott uses three criteria to decide which option will be the best for the future of Whistler Corporation. 1. Keeping Whistler’s strengths in Design and electrical devise invention. 2. Expansion of radar detector market.
Restructuring domestic manufacture process
Considering the recent market shrink and the movement of legislation in the U.S.A., Scott should think about closing domestic manufacturing plants. Even if Whistler Corporation could enhance its domestic manufacturing efficiency by introducing The RACE-ME Program, the total amount of business of radar detector would decrease and its profitability would be also decrease as long as the market shrinks. As EXHIBIT 2 shows, the scale of U.S. market for radar detectors will shrink from 1989. Although The RACE-ME Program will work while the market scale is big enough, this program will not work under small market scale. Under shrinking market, Whistler Corporation cannot recapture its introducing costs by sales profits because introducing The RACE-ME Program to all domestic plants should cost so much. In addition, the data record from this program is only for two months. To restructure all domestic plants based on this short data record is risky. Therefore, Scott should gather much data about the effects of this program and...
Please join StudyMode to read the full document