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Burgmaster Corp. was a successful LA-based machine-tool maker. It made a significant contribution to the local economy in the 1960s. However, new entrants into the machine-tool making industry reduced Burgmaster’s market share in the 1980s. Burgmaster’s problems were exacerbated, when LBO’s became a popular tool for speculators. At the end, Burgmaster could no longer compete. Burgmaster was forced to shut down.
- Burgmaster was severely affected by external factors making it extremely difficult to create a profitable business in the 1980s. There were two external factors that contributed to the demise of Burgmaster. First of all, the unexpected surge of Japanese products in the American market caught many businesspeople unprepared. Japanese firms were able to provide American consumers with high-quality and low-cost products. These products were strategically positioned to eat into the market share that was supposed to be under the control of U.S. based companies like Burgmaster. In addition, U.S. policies made it extremely attractive for speculators to initiate LBOs. In the beginning it made money for many speculators. However, the LBOs created unnecessary pressure for U.S. based companies like Burgmaster to generate cash flow, and LBO’s compelled business leaders to cut corners in order to appear profitable. With regards to internal factors, Burgmaster’s corporate leaders became complacent after they experienced tremendous success in the 1960s.
- Inadequate strategic planning was a major factor that contributed to the demise of Burgmaster. The appropriate application of strategic planning skills would have enabled corporate leaders to understand the threat posed by Japanese products that invaded the American market during that time period.
- Burgmaster had a fighting chance if corporate leaders were able to develop an effective supply chain strategy. Burgmaster should have worked closely with suppliers and customers in order to develop a cost-efficient supply chain. As a result they could have lowered their operating costs. Burgmaster does not have to lower the price of its products. However, the company should work closely with its customers to develop products that are best suited to client’s needs. As a result, Burgmaster would have benefited from stronger brand loyalty.
Home-Style Cookies is a New York-based baking company. It is a small company with fewer than 200 blue-collar workers. It produces only one type of product sold in different variants. The company sells soft cookies. Competitors like Nabisco, Sunshine, and Keebler produce crisp cookies. They are able to accomplish this feat by using a baking technique that forces most of the water out. The company utilizes a combination of automated and manual processes to produce home-style cookies. There were a number of suggestions made to improve the cost-efficiency of the production process. However, the owners are reluctant to entertain new strategies because of concerns that these may have a negative effect on the quality of the cookies. In addition, some of the suggestions made were rejected on account of corporate social responsibility.
- Due to the absence of preservatives and additives, home-style cookies are made to order. Computer software calculates the amount of ingredients that has to be mixed on a daily basis (Baltzan, 2011). The automated process allows for the automatic mixing of ingredients in giant mixing machines. When the cookies emerge from the ovens, the same are fed into cooling racks. This is the end of the automated process because after the cooling phase, workers manually place cookies into boxes.
- The company was able to increase productivity by allowing nonfilled cookies to be cut in a diagonal manner. Productivity was also enhanced after increasing the length of the oven by 25 feet. By increasing the length of the oven, the company was able to bake more cookies under the same time constraints.
- The company is making the right decision not to automate the packing of cookies because of two primary reasons. First, it is a more effective way to detect deformed cookies. Second, it retains the employment of at least 30 workers. The company is mindful of corporate social responsibility. In other words, the company wants to give back to the community. Aside from the size of the company, the decision not to fully-automate the production process is also based on the need to maintain the production of high-quality cookies. Since it is a small company, the owners could afford not to fully-automate the production process.
- Due to the absence of preservatives and additives, the company was forced to carry minimal amounts of certain inventories. As a result, the company can claim that it produces “good food.”
- It is important to consider the taste, and the ingredients used to bake the cookies.
- The advantage is that the company can increase its revenue selling to health-conscious individuals. The disadvantage is that the company may not be able to cope with demand, because it cannot stockpile cookies in a warehouse.
- The company focuses on quality-based strategies. The company produces a product that is far better when it comes to health benefits and taste.
Your Garden Gloves
The company maintains flower gardens for both commercial and residential customers. It has grown substantially over the years. It employs eight seasonal workers. Company owners noticed that large jobs took longer to complete. Since the company operates on a small profit margin, it has to find ways on improving the productivity of its workers.
- The team with the crew size of 2 men had the highest productivity levels. However, the one with the crew size of 3 was the least productive. One possible explanation is that two people work faster because they know that they have so much ground to cover.
- The four-man crew is not as efficient as the two-man crew. However, it would give peace of mind to the client that the company is doing its best to clean up the mess in time for the garden party to commence.
- Leadership, employee relations, and motivated workers are qualitative issues that could play an important role in enhancing the team’s productivity.
- The Abu Dhabi National Oil Company will benefit from studying management principles gleaned from the analysis of Home-Style Cookies. ADNOC is a state-owned company, thus, there is less incentive to improve the cost-efficiency of its operations (Thompson, Peteraf, Gamble, & Strickland, 2014). However, the future success and sustainability of the company is dependent on the volume of oil that is able to process on a daily basis. It is imperative that ADNOC officials understand the importance of reducing inventory, in order to reduce the cost of operations. It has to be made clear that an oversupply of oil will cause a glut in the market. As a result, oil prices will plummet, and this will affect the people working for ADNOC (Kaufman, 2003).
- There are two ideas or principles that analysts can glean from the study of Home-Style Cookies case. First, the ability to anticipate demand means that the company will only produce a product that is needed within a particular time period. Thus, there is no need to build or rent warehouses in order to store excess inventory. Thus, this will help lower the cost of operation and increases the value of the company. Second, this particular case study highlights the importance of corporate social responsibility. ADNOC officials must be sensitive to the needs of the workers and the other members of the community. The ability to maintain optimum levels of inventory means that prices are stable. This means that the workers will not be negatively affected by abrupt changes in the company’s profitability.
Baltzan, P 2011, Information systems, McGraw-Hill, New York.
Kaufman, B 2003, Industrial relations to human resources and beyond: the evolving process employee relations management, M.E. Sharpe, Inc., New York.
Thompson, A, Peteraf, M, Gamble, J, & Strickland, J, 2014, Crafting and executing strategy: the quest for competitive advantage, concepts and cases, McGrawhill, New York.