ABI: The Stanhope Project Case Analysis
ABI: The Stanhope Project Case Analysis
Automotive Builders, Inc. (ABI) is a company that consistently changed its production lines and strategic goals relative to the needs of the times, starting out producing diesel engine parts for tractors in the 1940’s, switching over to the production of parts for military vehicles during World War II, and then, after the war, settling into its current placement in both the automobile and tractor industry. Due to the downturn in the economy and stiff and superior competition in both quality and price rising up from the Japanese who had recently entered into the industry, ABI is trying to find productive and innovative ways to improve sales and guarantee placement as the number one company in its market. The preferred modification addressed in the proposal would be to add new pistons to the 6-cylinder engines making the engines more powerful. The company recently changed its strategic goals and management is using these goals to help guide the decisions being made within the company. ABI corporate employee, Jim Wickes, reviews the details of the proposal of the Stanhope project, weighing the benefits and risks of the company taking it on before presenting it to the executive vice president of the company for final decision on whether or not to implement it.
A huge and expensive factor of this proposal (totaling over $8 million) is to open a new plant in Iowa for the production of the modified engines that would house the winner of the three piston manufacturing systems that the company decided on. The new factory would have 65 employees (in line with one of ABI’s strategic goals) that would be trained in almost every skill necessary to complete any job within one of the four skill classes in the plant which cuts back on the costs of machine maintenance, product inspection, and number of workers in general. While they ended up deciding on the most expensive equipment system, it made the most sense because of the
Automotive Builders, Inc. (ABI) is a company that consistently changed its production lines and strategic goals relative to the needs of the times, starting out producing diesel engine parts for tractors in the 1940’s, switching over to the production of parts for military vehicles during World War II, and then, after the war, settling into its current placement in both the automobile and tractor industry. Due to the downturn in the economy and stiff and superior competition in both quality and price rising up from the Japanese who had recently entered into the industry, ABI is trying to find productive and innovative ways to improve sales and guarantee placement as the number one company in its market. The preferred modification addressed in the proposal would be to add new pistons to the 6-cylinder engines making the engines more powerful. The company recently changed its strategic goals and management is using these goals to help guide the decisions being made within the company. ABI corporate employee, Jim Wickes, reviews the details of the proposal of the Stanhope project, weighing the benefits and risks of the company taking it on before presenting it to the executive vice president of the company for final decision on whether or not to implement it.
A huge and expensive factor of this proposal (totaling over $8 million) is to open a new plant in Iowa for the production of the modified engines that would house the winner of the three piston manufacturing systems that the company decided on. The new factory would have 65 employees (in line with one of ABI’s strategic goals) that would be trained in almost every skill necessary to complete any job within one of the four skill classes in the plant which cuts back on the costs of machine maintenance, product inspection, and number of workers in general. While they ended up deciding on the most expensive equipment system, it made the most sense because of the