Corporate Decision Making Case Study Example | Topics and Well Written Essays - 2500 words

Corporate Decision Making - Case Study Example The first operation involves building a fully automated plant which will provide them with efficiency and planned output. This is a good option but it will require three years to complete, whereas the firm wants the quick resolution of the problem. The other option is to lease a plant in Plainville. This will increase the firm's production and they will be able to meet the current market demand. However, the major problem with going with this option is that this plant will not be efficient and will result in higher costs. These higher costs would gnaw BYTE Inc.'s profits and hence BYTE Inc. is wary of this option also. The firm now wants to decide which option to use after assessing the benefits and costs of both the options. In order to decide on the best option for BYTE Inc, Let's first look at the position in which the firm finds it in. We can assess the current position of the firm by looking at it from various strategic management tools. We can look at the firm's position from the lens of SWOT Analysis, Porter Forces and other techniques such as differentiation and cost leadership before deciding on the best option for the firm in the light of its current position. SWOT analysis is going to tell us about the Strength and Weakness of the firm. These strengths and weaknesses are from the firm's internal structure and does not relate to the outside environment, whereas Opportunities and threats occur due to the outside environment in which the firms is operating in. In the case of BYTE INC, we have the following data: Strengths: Market Leader having 32% Market Share Continuous increase in revenue by 12% from last few years. Weakness: Cannot meet the demand which entails that firm is not earning extra revenue which it could earn They have to take a quick decision because the delay in decision making will encourage new competitors in the market. Opportunities: Leasing opportunity is available for immediate resolution of the problem The leased plant will be less efficient and hence less profitable. High unemployment means that it will be able to hire workers at lower wages at Plainville. Threats: 4000 will be affected when the firm moves to new plant. They plan not to tell the people of the town about their move to new plant, when it is completed. Unionized workers might mean that Labor will have strong bargaining power. If we look at the internal structure of BYTE INC, we can say that this firm is very strong internally. The firm is experiencing a rapid growth in the business and a rising demand which it cannot meet currently. This is a good sign as it tells us that any investment in the firm will yield high returns. Talking facts, the firm is experiencing a growth of 12% annually. BYTE INC is also a market leader, which means that most of the market demand is fulfilled by BYTE INC and thus, it enjoys a good brand name also. If we look at the internal weaknesses of the firm, we can conclude that the firm is unable to meet current market demand. This entails that in order to fill this gap between demand and supply, additional competitors will be encourage entering the market. This would be bad for BYTE INC because additional competition would mean that the firm would lose their position of dominance in the market. In the first stage of SWOT analysis which involves Strengths on the company, we have co ncluded that investments in the firms would yield high returns, so BYTE Inc can invest on a new plant. This invest would be worthwhile as it