AIC (Introduction of Netbook) Harvard Case Solution & Analysis

Qualitative Analysis:

The qualitative analysis are about the pros and cons of selecting an alternative and any future implications of such option selection. The detailed qualitative analysis is defined below.

Alternative 1:

In the first option the benefit is this the supply is increasing beyond the expectation and this option is only suitable when the demand is high in the market.

The first drawback is that the supply is in excess of 20% of the market demand and the demand cannot be increased in one month at this price.

The problem with this alternative is to hire experienced and skilled employees in a short notice period to work for third shift. It may not be easy for AIC to hire such employees and achieve desired results from them. The current employees may not be willing to cut their wages through a decline in hour per day, therefore it may not be easy to convince its current employees to cut their wages.

Alternative 2:

The second option is to increase the production lines and increase the production 14% above the demand. The increase in supply is noticeable therefore it can affect the price at some extent.

The production line can only be increased through new number of employees that is not easy to hire on the short notice. If the employees are hired, then it has some cost to implement the new production line therefore it is a time taking and costly process. The process is useful in those days when the demand is around 150,000 units per month.

Alternative 3:

The third alternative is attractive because in this there is nothing about hiring more employees and training them and waiting for the days when the employees give their production output.

This increase the supply 6% above the demand that is accepted by the market participants and it does not affect the price. The excess units are in moderate number therefore the strategy is required to sell them at least at a cost of production to earn the breakeven priceof these units.

The working strategy for 7 days a week may not be acceptable to the employees because working for 7 days may affect their personal, social life therefore they may not accept this offer. This strategy has also long term implications that can affect the health of employees and they may not work for longer period 7 days a week. This can create dissatisfaction in the employees and high employee turnover can be expected in near future.

Alternative 4:

The last option has a benefit that excess supply is only 3% of its current demand and this cannot affect the current profitability, and these excess units are easy to sell through promotion at a price of $221.8 i.e. also cost of production.

This is highly probable that employees may agree to work for an extra hour per day for 6 days a week. The profitability is higher than base case production line and it is possible that excess units can also be sold at a price that has some profitability.

This option does not affect the satisfaction level of employees and there are negligible chances that this strategy can affect the health of employees and employee turnover cannot increase because the working hours are not high.

AIC is not required to hire more employees and train them, this strategy is quick and easy to follow by its employees.

Conclusion:

The concluding point is that the alternative option 4 is most suitable and viable option in the current situation analysis. In this option every aspect of the company is secured in current terms like; it can meet the demand, excess demand is not noticeable, employees are satisfied, no external other hiring is required. In this process every condition of the current situation is satisfied and in the near future there may not be any consequences of changing the strategy to meet the market demand for a Netbook. It is advisable for AIC to implement this strategy as soon as it is possible because the implementation of this strategy is not time taking. In the short notice period the strategy can be followed.

The option is suitable in the current situation, but another strategy is also required to generate operating efficiencies. In this case the employees’ learning curve can result in the operating efficiency. The employees take 50 seconds to assemble 1 unit of Netbook, the efficiency can be increased through any other measures to take place. The measures can be better communicated by employees that can save time and the assembling process can be completed before 50 seconds per unit. The employees can better access the situation and a favorable results can be expected from employees because they are working in that environment. It is required by senior management to give a chance to the employees to get the advice from them for any implementation process that can save time and increase production units is the same time. The suggestion must be implemented as soon as possible and act according to meet the market demand....

 

 

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