Pompey Plastics – Case Study
Pompey Plastics had grown steadily since opening its first factory in Portsmouth. The business is owned by Dave McKintyre. At first Dave’s business had struggled to compete with its competitors but when Dave patented a new process for finishing the plastic products the level of profitability grew rapidly.
Initially these profits came about from cheaper manufacturing costs. However, Dave realised that the process could help many manufacturers that were not in direct competition with Pompey Plastics. As a result the company licenced the process to a number of other businesses.
With this new revenue source Dave and his managers were able to focus on some business weaknesses:
* The marketing budget was expanded so that more market research could be undertaken. This led to a series of highly successful advertising campaigns. As the business expanded Pompey Plastics was able to use a wider range of media enabling it to reach more potential customers in a cost effective way
* R&D spending was increased leading to a number of new products that Pompey Plastics patented. In addition to increasing sales volume these patents helped the company to increase its prices and profit margins
* The company’s ICT system was also upgraded so that more advanced manufacturing software could be utilised. This enabled the company to pan more effectively using network analysis. It also improved communications and planning in the business.
Most of Pompey Plastic’s customer were small – to medium scale businesses that used the plastic to manufacture finished products. Initially these businesses were attracted to Pompey Plastics by Dave’s ability to offer low prices and consistent quality.
However as more and more of these businesses adopted lean production methods, speed of delivery and the flexibility to meet changing orders became the top priority. Dave adopted a 24-hour...