SomPack: If You Can’t Beat Them, Join Them? Harvard Case Solution & Analysis

This case considers efforts by a Turkish producer of cosmetic packaging to trade off quality for price, in order to compete with the inflow of low cost products from China. It describes the challenges faced by SomPack management in their own attempt to live in the face of low cost Chinese competition in addition to the credit crisis. The firm had grown due to its focus on quality and customer relations, but had to slash costs first in response to foreign competition and after that again as a result of international credit crisis.

The case discusses many facets of the company's strategy: business efforts at automation to reduce labour costs in conjunction with their efforts to reduce product quality for parts that were to have automated fabrication; use of more economical raw material that needed specialized gear; use of more affordable prices in conjunction with their efforts to reduce product quality for parts that were to have automated construction; use of cheaper raw material that required specialized equipment; use of more affordable machines that were not acceptable to customers who needed high-quality production; execution problems with a lower-price ERP system; and attempts at outsourcing particular components. Choices to reduce the quality of either processes or products must be made with great care: even though they are meant to be short-term survival measures, they could create considerable short term interruptions apart from possible long-term difficulties, including making the business less appealing as a supplier to customers who may still favor quality and service over cost.

SomPack If You Can't Beat Them, Join Them case study solution

PUBLICATION DATE: September 16, 2010 PRODUCT #: 910M71-HCB-ENG

This is just an excerpt. This case is about SALES & MARKETING

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