Allentown Materials

Corporation: Electronic
Products Division(A) Case
Analysis
SECTION 2 GROUP 1
Abhilash Dutta FT172001
Abhishek Singh Rana
FT172002
Alok Pathak FT172009
Ankur Rao FT172016
Bhanuu Prashast FT172024
Harshit Sodhani FT172031

Allentown EPD: History

Electronic Products Division(EPD) manufactured high quality

electronic components sold to OEMs and distributors who resold
the components in smaller quantities
Components business grew because of its unique capabilities in
glass.
In late 1980s , business began to shift as military demand declined
Defense market decreased while commercial(PC) markets
exploded
By
1992,
60%
of
EPDs
sales
were
to
computer,
telecommunications and consumer electronics markets
Buyers in commercial markets became more price sensitive
There were many suppliers for Large volume contracts from
OEMs, resulting in sharp price fall and putting pressure on cost
EPD performed poorly in 1991 and 1992
Competition hinged primarily on price but quality and service were
also important
Because of stricter Section
quality2 Group
controls
projected bleak
future
1
2
outlook(profitability and growth) for new plants.

Problems faced by EPD

1. Fall in Operating Margin
Price squeezes due to fierce competition
Shakeout in the electronic component industry
2. Product Development
Slow product development
Conflicts among functional groups around product
development

Root problem: Poor relations among functional

3. Product
Service & delivery
groups.
Poor service to customers
Longer lead times in manufacturing
operation
Section 2 Group 1

Strategy
1. New Products
. Set up priorities in development
. Leverage existing capabilities such as technologies in glass
manufacturing in product development
2. Re-introduce Organizational Development Program
. Strong culture of cooperation
. Group effectiveness
. Also Don Rogers should be trained in more directive
management style
3. Introduction of Cross-Functional teams
. Consensus for organizational goals
. Team composition: People who can contribute in bits and
pieces in sales, marketing and new product development
. This team along withSection
sales 2team
with the customers
Groupinteracts
1
4
to assess the requirements properly

Strategy(cont.)
4. Reinforcing the Sales Department
EPD serves a large set of customers in several markets.
EPD has a small sales force of only 25 sales people.
Business relies on relations with customer and market
insights.
5. Developing Niche products/ Target new markets
Get into new markets such as supplying components for
integrated circuit technology.
Niche products command higher prices & hence higher
profit margin for the company.
6. Change in accounting and control
Make marketing a profit center and the plants cost centers.
Get corporate to alter performance standard for EPD.
Section 2 Group 1