Case Questions
PLANT LOCATION PUZZLE
1. What is the competitive environment facing EDC? What is EDCs strength in manufacturing? Should EDC establish a manufacturing division in Asia? Justify your answer?
Ans. Ann realises that the demand for bicycles was fluctuating; she also notices the increase in competition. The doubling in the sales of bicycle in the Asian market and on the other hand US market was able to yield only 2% growth in sales annually was a major issue. Eldora was unable to serve the Asian markets by having its base in US. All the major competitors of EDC had moved to Asian markets due to cheap labour. Moreover, Eldora’s foreign sales were disrupted since past two years.
EDC as an organisation had its own strengths which made it stand out in the US market. The various strengths are mentioned below:
They had followed the conventional way and decided to serve the local market. This led to greater cooperation among various departments in the company and made it more profitable.
Mountain bikes were the latest trend with front suspension and cushion and were being provided at a higher rate by Eldora’s counterparts. However, Eldora was able to provide its customers with relatively inexpensive mountain bikes and excelled in this product category as well. Though it was slightly expensive than other low end competitors, yet consumers were ready to pay the premium amount because of the trust they had on Eldora. Eldora had been consistently providing innovative designs and styles to its customers with timely deliveries which Eldora’s competitors couldn’t match.
Another advantage that Eldora enjoyed was that Colorado had a huge number of bicycle lovers. Its employees too were passionate about bicycles and readily learnt the new trends of the bicycle industry. Each employee provided their innovative ideas in order to improve the bicycles and they always had people ready to try out new prototypes.
Eldora was located on one campus and thus provided greater benefits in the
1. What is the competitive environment facing EDC? What is EDCs strength in manufacturing? Should EDC establish a manufacturing division in Asia? Justify your answer?
Ans. Ann realises that the demand for bicycles was fluctuating; she also notices the increase in competition. The doubling in the sales of bicycle in the Asian market and on the other hand US market was able to yield only 2% growth in sales annually was a major issue. Eldora was unable to serve the Asian markets by having its base in US. All the major competitors of EDC had moved to Asian markets due to cheap labour. Moreover, Eldora’s foreign sales were disrupted since past two years.
EDC as an organisation had its own strengths which made it stand out in the US market. The various strengths are mentioned below:
They had followed the conventional way and decided to serve the local market. This led to greater cooperation among various departments in the company and made it more profitable.
Mountain bikes were the latest trend with front suspension and cushion and were being provided at a higher rate by Eldora’s counterparts. However, Eldora was able to provide its customers with relatively inexpensive mountain bikes and excelled in this product category as well. Though it was slightly expensive than other low end competitors, yet consumers were ready to pay the premium amount because of the trust they had on Eldora. Eldora had been consistently providing innovative designs and styles to its customers with timely deliveries which Eldora’s competitors couldn’t match.
Another advantage that Eldora enjoyed was that Colorado had a huge number of bicycle lovers. Its employees too were passionate about bicycles and readily learnt the new trends of the bicycle industry. Each employee provided their innovative ideas in order to improve the bicycles and they always had people ready to try out new prototypes.
Eldora was located on one campus and thus provided greater benefits in the