Fisk Alloy Wire, Inc. Harvard Case Solution & Analysis

Fisk Alloy Wire, Inc. Case Study Solution

      I.            Strategic Profile and purpose of case analysis:

a)    Strategic Profile:

Its founder MR. John Fisk who offered the high quality copper wires in the market and started to grow by expanding hisbusiness by product development strategy. He started the business of Fisk Alloy wire in the year 1973. The company offered new alloys of copper, which were cadmium free, and it was creating a point of differentiation in the minds of customers.

The use of cadmium in wires was banned and the use of eco-friendly productswas encouraged after the announcement of renewal policy of the European Union. Moreover, the initial adaptation in the company’s processes let the company to receive more acceptance and reputation in the market and company was able to receive support from its customers and value chain members.

Company was able to create a better brand image and brand positioning in the mind of its customers by receiving certificate from military units in early stages so that its product get acceptance in the market. The better brand image allowed the company to compete with its major rival Phillip Dodge who also deals in aluminum and copper wires offer in the market.

Company received the second mover advantage of entering the market, because its rival Phillip Dodge received the first mover advantage by entering the market through the introduction of high quality copper products and aluminum wires, which created strong market positioning of its brand category for PD135.

New product development strategy faced so many complexities and problems for the company in the initial stage because people were not ready to accept new product Fisk Alloy against PD135 as it had the strong brand image and customers were using pull strategy by demanding the product with its name. Therefore, the company had to switch its value chain strategy by switching its production and material incursion strategies. Company strived a lot in receiving the certification and it took around 2 years to receive the acceptance from military via certification for the company’s new product.

This leads to the introduction of substitute product for PD135 and the company received a lot of appreciation, brand acceptance and created awareness of the brand in the minds of its customers very quickly. This resulted in the increase of size which became problem for the company due to the need of expert labor to operate the machinery for producing cadmium free products.

Company was facing scarcity of resources in terms of its human capital because it was very difficult to find the trained and skilled engineers for running the technical machineries effectively and efficiently. This created a serious concern for the company to develop a roadmap to solve these issues through its strengths and opportunities and creating distinct capability for meeting the demand to maximize its returns.

b)    Purpose of case analysis:

To sustain the market share, it is necessary for the company to evaluate all the pros and cons of the dramatic growth and market demand so that it becomes easier for the company to utilize its opportunities for successful growth strategies and capturing the successful and sustainable market share in different markets.

The purpose of the case is to evaluate whether the operational efficiency can be achieved through the effective management of scarce resources or not and what impact will scare resources bring to bring operational efficiency. Moreover, it is also determined from the analysis of the case about the effective management of its supply chain activities. Furthermore, it is also considered whether the company should restructure its cost strategy by using differentiation or cost leadership strategy for gaining the competitive advantage within the market.

   II.            Situation Analysis:

Company needs to evaluate its situation through the four major types of evaluation techniques, which include:

  1. General Environment Analysis:
  2. Industry Analysis
  3. Competitor Analysis
  4. Internal Analysis

a)    General Environment Analysis:

The analysis of general environment is normally done through PESTEL analysis but this case includes major factors such as economic,political, legal, socio-economic trends and global trends that are discussed separately.

Socio-economic trends:

It shows the change in consumer’s trends and its preferences towards the adaptable technology and the modern demand. Consumer’s demand and preference are changed from the cadmium products to the eco-friendlier products which are currently demanded in today’s world because the use of cadmium had harmful effects on the environment. This resulted in the shift of demand towards cadmium free products such as Fisk Alloy, which is certified by the defense military.

Global Trends:

The use of eco-friendly products has been emphasized throughout the world and this practice has become global as well. Companies are trying to use the safety measures to protect the environment and use the technology in production processes and manufacturing processes which meet the certain environmental friendly requirements for reducing the impact of disturbing the ozone layer and damaging the ecosystem. This resulted in changing the infrastructure of the companies from traditional to the more eco-friendly structure and strategies for protecting the environment.

Economic Trends:

The presence of the company’s product in different regions has lead the company to provide different payroll to its employees. It means that the employment conditions in both the regions will differ because the expertise and wage rate of the country will differ due to the change in economic conditions of the country. The presence of Fisk Alloy is in two major different regions such as Oriskany and Hawthorne. The labor conditions and the economic conditions of the country differ due to which the wager rate at Hawthorne is provided at $15 and in Oriskany, wage rate is around $10.

Political and Legal trends:

The political and legal trend is moving towards the healthier and safer environmental conditions, which do not consist of any product that has harmful effects for humanity as well as for the environment. European Union has restricted the companies from using cadmium in theirproducts because it has harmful effects and radiations, which cannot be touched by the people while recycling the waste material. This trend is emerging not only in European countries but it has become acceptable throughout the world and the trend is shifting quickly.

b)    Industry Analysis:

The nature of the industry is very saturated because there are only two firms, which are currently producing cadmium free wires and Fisk Alloy wire with Percon. There is the oligopoly market situation because there was a competing firm, which was providing high quality products which company has introduced after getting certification, thus able to secure a better brand image and brand positioning within the minds of its customers. The market shares depend upon the effective alignment between the operational and manufacturing process, which can quickly respond to the shifts in market demand.

The trend in the industry is to attract its customers towards more eco-friendly products, whichprovides the company a competitive advantage by utilizing its expertise for Fisk Alloy production. There are the more barriers of entry and strong regulations of government for the creation of brand loyalty towards certain brand because they need the certification from military for the acceptance of any new product in the market, as people are reluctant.

c)     Competitor Analysis:

Competition faced by the Fisk Alloy wire Inc. is very intense because it has close rival, which has created a large customer base and strong brand image in the mind of its customers by creating strong brand positioning of its product PD13. The customers are reluctant to replace this product with any other product and this is because Phillip Dodge received the first mover advantage in the market.......................

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