Doman Synthetic Fibres Plc

1. Applying the SAFe criteria and techniques of evaluation, we find the following to be apt to Doman Synthetic Fibre’s success.

Suitability

The development of Crylon as a new product was a key opportunity as Doman Synthetic Fibres had predominantly relied on the Britlene as the main income source for a number of years. Further, Britlene’s patent protection is coming to an end and this became a big constraint to the company’s future. According to Johnson, G., Whittington, R. and Scholes, K (2011: 721), sales units of Britlene has indicated slight increase between 2006 and 2008 but the net income before tax was however declining, indicating that a strategic change was needed to turn around the company due to higher increase in costs of production. Johnson et al (2011: 364) indicated strategic options for suitability and the table below shows some examples of how Doman Synthetic Fibres applied those options.

Concept Doman’s application Development Strategy Result

PESTEL • Patent protection about to expire

• Crylon has lower production costs • Develop new product

• Increase profitability

Porters 5 Forces • Threat of alternate supplier producing Britlene after Patent expires

• Competitive rivalry • New Product will maintain future sales

• Using the same plant for both products will decrease production overheads

Strategic Capabilities • Efficient use of production facility

• Production plants in excellent order • Well maintained cost of sales and consistent units output

• Confined working week to week-days with 3 shifts-cost saving

Value Chain • Location of plants • Close proximity to Supplier and main customers

Acceptability

Doman Synthetic Fibres considered several financial models to mitigate risk. New product launch prices were uncertain due to the industrial market being a great unknown. This had to be compensated by deciding whether to open new plants or modify the existing plants to produce Crylon. With focus on an optimised value network,...