MICRO-ELECTRONIC PRODUCT DIVISION (MEPD) Harvard Case Solution & Analysis

MICRO-ELECTRONIC PRODUCT DIVISION (MEPD) Case Solution

Pressure due to fierce competition between the industry players to grab future market share and the demand of the market for that best services at lower prices, the company was in a very difficult situation because of the cost cutting by Guido as customers were demanding lower lead time i.e. not more than four weeks, which was contrary to the need for a long-term manufacture quality component.

Due to this, a friction was provoked between sales and manufacturing department. Manufacturing blamed sales department for not achieving high margins, in a situation where price competition was fierce in the market and no new product development was happening.  This narrow product base and weak marketing put the whole pressure on Guido because without a new and an innovative product, there was no other way of getting out this intense situation.
Because of All this panic situation created in the company the high expectations of company to achieve its profit goal seemed unrealistic and lack of direction gave rise to conflicts, mistrust, lack of confidence and coordination between the groups.

If we briefly summarize the root causes of the performance problems of Guido Spichty, they are as follows:

  • The expectation from SMA were very high and seemed unrealistic, which shifted the pressure on Guido Spichty to take immediate decisions.
  • Due to his authoritative personality, no one argued and opposed  any of his decision instead, they started to blame other departments for lower sales and gross margins. If the department will not coordinate and trust each other then it’s difficult to achieve such growth targets.
  • Due to his policy of merging departments, both responsibilities and direction became blurred and interfused which made easier for employees to avoid responsibilities.
  • Due to his compromising nature towards achieving goals, people were unenthusiastic to work hard and achieve goals on time.

Recommendations about Future Course for Guido Spichty:

After looking at the major performance problems of Spichty Guido, we came to know that it was not just the personal traits but the existing situation which pressurized Guido to take immediate decisions and he was unable to cope up with the pressure and took hasty decisions, which resulted in mistrust, lack of coordination, confidence, and respect among the various departments of MEPD. Which majorly affected the departments such as sales, manufacturing and product development.

As there are two major issues for the company which are innovative product development and to achieve targeted gross margin for the next year. Then the moral issues need immediate attention to minimize the currently erupted issues of mistrust, lack of coordination, lack of trust and communication between the departments.

Following is the list of recommendation for Guido Spichty’s responsibilities:

  • His top priority should be to devise a plan to increase coordination between product development team and technical staff and observe their performances himself to come up with an innovative product as soon as possible.
  • First of all he should schedule periodic meetings with the head of departments to discuss timely progress and issues which they are facing. This would help him devise the proactive strategy for the issues expected to originate in the future.
  • Then he should restart the market development team, which was working with customers on product needs and reported directly to the Vice President. This will help Guido in knowing the market needs and to act accordingly, he should assign specific goals for the individual departments.

Conclusion:

After analyzing the decision making of Guido Spichty, Vice President of Micro-Electronic Product Division (MEPD) and then reviewing the employee’s comments and lastly looking the expectation and challenges faced by MEPD in the current scenario, we identified basic issues related to Guido Spichty’s performance and then recommended some solution which would help him in bringing the division back on track.

Some major performance issues were, Guido’s nature of dominating the conversation and taking hasty decisions which brought all the employees and the departments under pressure. Adding fuel to the fire was fierce competition for quality and cheap electronic components in the market, due to which prices declined and subsequently gross margins. This intensified the lack of trust and coordination between the departments which resulted in below-expected performance and gave rise to the blame game in the organization.

So we provided some crucial solutions, which would help Guido Spichty to bring the company out of the recent crisis. Which included periodic meeting with head of each departments, restarting the operations of the market development team which will report the market activities and customer’s behavior directly to Guido Spichty and then working closely on product development and technical staff to develop an innovative product as soon as possible and then the last is to devise a plan to improve coordination and minimize lack of trust among various departments i.e. marketing, sales and manufacturing................

 

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