Industrial Grinders Case Study

Industrial Grinders is facing a new problem like any company faces or would face by the launch of a new variant of the grinder ring product in their field of business by its French competitor Henri Poulenc. This has caused the G.M Lawrence Bridgeman to take up the decision making process by discussing with the sales manager and the engineer and considering their inputs to make the best decision possible so that the company would benefit in all manners.

The case is that the French competitor Henri Poulenc has brought a new plastic ring into the market that has a long life compared to the steel rings produced by I.G and is equally priced as compared to the steel ring. The burden that falls now on the G.M is that he has to keep the market share of the company the same if not increase it considering the present conditions so that the company doesn’t lose any customers and in turn lose profitability down the years as a result of lost market share and lack of strength to compete by not having a better product.

There are a few things that hinder the company’s immediate production and sale of plastic rings. The problem faced by the G.M is that there is huge inventory of steel that has to be sold before they can start selling plastic rings and other things to be taken into consideration are

1) Henri Poulenc is a French firm and it offers competition only in France which accounts to 10 % of I.G total market share.

2) The time in weeks for moving to plastic rings from steel is 14 weeks from present date which would be around mid of September.

3) The steel inventory (processed) is around 26,640 in quantity and 34500 in quantity to be manufactured by using special steel inventory (un-processed).

4) The company doesn’t just manufacture steel rings, it manufactures grinders to which steel rings are an addendum and are also used by grinder manufacturing competitors.

5) The new plastic ring would cut down the manufacturing costs to $66.6 per 100 rings as...