Industrial Grinders Essay

1903 Words8 Pages
MBA 622 Industrial Grinders Case Analysis Problem Statement Lawrence Bridgeman, the general manager of the German plant of Industrial Grinders faces a quandary of whether or not to produce a substitute ring to be competitive with a rival firm. This rival firm, Henri Poulenc has produced and begun to sell, “a plastic ring substitute for the steel rings presently used in certain machines sold by Industrial Grinders (I.G.).” (I.G., p1) The plastic ring is cheaper to produce, sold at the same price as the steel ring (currently produced and sold by I.G.) and has a longer product life. His problem of whether or not to produce the plastic ring is complicated by one significant constraint: excess inventory of special steel used to make steel rings that cannot be sold and disposal may cost money in addition to the money already spent to purchase the materials. This leaves him with making a decision to determine the cost to benefit of various alternatives. Thus, Bridgeman’s problem is determining how to keep IG competitive in a changing market functioning under various constraints, staying true to IG’s core business values and ensuring that IG is in the strongest market position as a result of his decision. Plainly stated, should Bridgeman produce plastic rings instead of steel rings despite his excess inventory of material used to produce steel rings? Background Information Industrial Grinders is a manufacturer that produces industrial equipment and parts for such equipment and has done so for over 70 years. The Cologne plant employs thousands of people and produces machines that are sold as low as $4,500 and as high as $6,820. Additionally, “parts, which accounted for a substantial part of the company’s business, were sold separately” (I.G., p.1). The parts produced by the company not only worked for IG machines but machines produced by competitors

More about Industrial Grinders Essay

Open Document