Seminar 2 Case study 1 Flashcards
Why is the machine tool industry so important? How is it different from other industries?
Machine tools were essential for reproducing the technologies required in an industrialized economy. As machine tool manufacturers typically sold their products worldwide, a weak domestic machine tool industry meant that manufacturers risked losing access to the latest manufacturing technologies.
Further, as the machine tool industry supplied capital goods to other capital goods industries, it suffered from the cycles of economic demand (see Exhibit 2).
In addition, this industry helped foster innovation in manufacturing processes and played a key role in defence production and the automotive
industry.
What is market orientation? Is Sat & Co. a market-oriented company? Is there a relationship between the market orientation of the company and its business performance? Can this relationship be moderated by external factors?
Before 1996, the company was market-oriented as it had market-led skills.
+All of the company’s products had been manufactured to International Standard Organization standards of quality to ensure that customers received consistently high quality products.
+ It provided turnkey engineering solutions to suit specific customer requirements.
+To maintain the high level of customer support and service, the company held a significant number of spare parts in stock all the time, and dispatched over 90 per cent of orders received before noon of the same working day.
+ Another aspect of customer support was taking
care of potential customers’ needs prior to sales. The sales personnel of the company would begin by
evaluating the buyer’s needs and would continue with the offer of various financing packages, if needed
necessary to meet customer needs.
Relationship: From 1996 onwards, as a result of the company’s failure to focus on the market (It constantly add new feature to the machine but not all customers want this), sales from both divisions declined to a
point where it was absolutely necessary to turn around the divisions. In early 2006, poor management of resources and lack of market orientation hit machine tool manufacturer Sat & Co. and led it to a loss of 50 per cent of sales.
External factor that can moderate the relationship: customers needs. Marketing research on customer needs did confirm that the market was willing to try something new.
What should McGuire do to achieve market orientation for the company? What are the critical success factors for the company?
McGuire did:
1. Conduct EXTERNAL market research in order to reveal the needs of the company’s customers.
2. Communicated the customer-related information
to all the departments as quickly as possible. (Change department position v..v (McGuire was
determined to achieve market orientation by developing low-cost simple machines with fewer frills. The in-house research team of the company conducted an audit by interviewing end-users of the machines and
discovered that the company should also consider manufacturing a Flexible Manufacturing System (FMS)
as there was a significant demand for it.)
3. It was McGuire’s responsibility to develop the product with the technical specifications and the
specified price for the market.
4. Conduct research to know the extent to which his company was currently successful in meeting the market orientation expectations of the company’s end-users.
The critical success factor:
Develop the product with the technical specifications and the specified price for the market.
What he has to do:
- improve the service after sales
- frequently polls our end-users to assure the quality of its products and services. (100)
- takes corrective actions immediately for any complaints.
After sales management
Sat & Co. produces and offers products that are truly satisfying our needs.
He survey end-user bc they r the one who purchase the products not the one who use
Why are the end-users’ perceptions of the company’s machines so important to McGuire? How can McGuire use this information to reduce the gap between the customers’ expectations and the company’s delivery on these expectations?
In order to promote sales, it is essential to understand the customers’ expectations.
