Byte Products, Case Response

Running head: BYTE PRODUCTS 1

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Byte Products, Case Response

Case Overview

The case revolves around Byte Products, INC., a US-based company, which has

specialized in the production of complex computer products. The company's products are usually

found in engineering applications and other sophisticated businesses. With steadily increasing

sales, Byte Products, Inc. has over 265 million USD worth of sales. As a specialized supplier of

computer components, the company's revenue has increased by 12 percent in the past six years

with over 32 percent market share. Despite the company's increased growth, it is increasingly

facing the challenge of meeting the increasing customer demands. Inability to meet the growing

demand has come been brought by the fact that the company has limited number of

manufacturing plants. Alongside the board, James M. Elliot has facilitated a three-year plan for

the construction of a new plant in the Southwestern US. The pressure to maintain the company's

lead in the industry and market instability are the critical reasons for creating a strategy to

address these looming challenges.

While some solutions were proposed to counter the challenges that the company many

faces in the near feature, only one was considered effective. The licensing of Byte Products as

well as process technology to other manufactured was rejected to be an effective short-term

approach in meeting the immediate demands. The burden of fixed in the production of the

appropriate components was the critical reason the board declined to approach this approach. In

this need, there was the need for the board of directors to also put into consideration the

competition risks associated with approving that initiative. By approving such an approach, Byte

could also risk emulation of the company's manufacturing approach. Retaining the production

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approach to itself serve as an effective protecting the companies from challenges that may arise

from the production of counterfeit products by partner manufacturers.

Investing and licensing the overseas facilities was also rejected. The board claimed that

taking such an initiative was not effective because the top managers were reluctant in approving

such approach. Byte Products’ top management felt that licensing the overseas firm would result

in giving out the company's highly efficient means of production. Low product quality was

another possible challenge of utilizing this approach. Despite the fact that the presented

reasoning in rejecting the utilization of this approach to meet the increasing demand of the

company's product, the board of directors also left out the most important factor: the high costs

associated with the company's operation in the foreign markets. There is the need to note that

licensing foreign firms to produce the Byte Products’ product was subject to increased costs and

faced significant challenges such as legal obligations in the new market. Taking this approach

meant that the company was to be adequately prepared to meet challenges that revolve around

expanding business activities in the international markets.

Concerning the recommendation of the most effective strategy, I feel that the application

of the suggested solution was the most effective in meeting the ever-increasing demand for the

company's products. As a temporary solution, this approach involved the renovating the

abandoned plant in Plainville, a small town in the northeastern US. The effectiveness of this

approach is that apart from the renovation costs, there are no extra costs. Also, adopting such a

move will be part of the long process of ensuring the company’s resources are put to use amidst

the ever-increasing demand of the company’s product.

Rebuttal

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A significant concern that is brought forward revolves the company’s operation in the

town of Plainville. First, if I was a board member; I would have voted against the proposal since

the construction of the new plant may take up to two to achieve completion. Instead of

constructing the new plant, the company could focus on the plants, which are currently working

to their full capacity as the demand for the company's products continues to increase. The

company's profitability will also go down because of the diversion of the company's resources.

Also, lower levels of profitability will also be attributed to the increasing costs of labor,

insufficient transportation from the company to its suppliers, as well as increased warehouse

expenses. I am completely in agreement with Kevin Williams’ argument that the influx of more

than 4000 workers will adversely affect the community.

Another important argument that has been presented is that it would be of greater

importance that the company's administrators tell people of Plainville town that the plant to be

established will be temporary. The people of the town should be told about the duration that the

company will retain its activities in Plainville because they are significantly affected by the fact

that the company will be leaving after three years. Banks, community, the local businesses as

well as schools will be significantly affected. Letting the people of the town know to reduce

costs as the town people seek for other options after the plant has been shut down.

There is a broad range of impacts that the closing of the firm's activity in Plainville has on the

people of the town. Basing on the fact that the company will be the primary employer to the

people of this town, the shutdown will lead to the highest levels of unemployment. As a result,

many people from the town will have difficulties in supporting their families. Also, the shutdown

of the company’s operation in Plainville will result in the massive relocation of the town

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dwellers, who will be out to seek new forms of employment. Relocation of town dwellers will

make it hard for other companies to survive in the town.

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