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RESPONSE #1-Discussion Question #6: Whistler Corporation
Peer Responses
Read the presentations and critiques of Presenters and Critics. Make at least three comments on their posts or the comments of other students by Sunday.
-150 to 200 words.
-No plegiarism
POSTS:
Background
Whistler Corporation has recently become no longer profitable and has been losing an estimate of $500,000 per month (Ellet 2007 p.255). In order to keep the company going, Charles Scoot had to make a decision between 3 options.
Options
Whistler has three possible options here: (1) radically restructure the domestic manufacturing operations in an attempt to become cost competitive with off-shore manufacturers, (2) expand the company’s long-standing and successful relationship with a Korean consumer electronics company by moving more production offshore, and (3) move all productive offshore and shut down the two domestic plants.
Critique of options
Restructuring domestic manufacturing operations is not the best idea because the United States is losing a market for radar detectors based on certain states trying to pass legislation to ban them. Though restructuring domestic manufacturing operations will improve financial results, it will do so only slightly. Something needs to be done offshore to ensure the best manufacturing solution suited to radar detector importance.
Total outsourcing In the long run it may be necessary to have total outsourcing, however, in the short term it is not a good idea. The Fitchburg plant just opened up two years prior and the workers have made good progress there regarding manufacturing. By closing the plant, there will be an absurd amount of layoffs. This will result in a decline of productivity in other facets of the company.
Recommendation
The recommended decision should be to expand the company’s long-standing and successful relationship with the Korean consumer electronics company and move more production offshore. The company is best at design and engineering. They can save more money and concentrate on product development simply by moving more production offshore. It is important for the company to focus on their strengths as much as possible. This decision affords the necessary change to occur without completely altering the entire company structure. Established companies often cannot handle a big change and therefore, its better to have a gradual and systematic movement from one state to another. Lastly, by moving more production offshore, Whistler gets a 33% reduction in costs. This amount is still substantial and those resources can now be allocated to the most important areas of the company.
Referece
Ellet, W. (2007). The case study handbook; How to read, discuss, and write persuasively about cases. Brighton, Massachusetts: Harvard Business Review Press.
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