At the end of Chapter 3, read the case study Custom Molds, Inc. Answer the topical questions at the end of the case study
Be thorough and complete in your responses
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1. Custom Molds has reached a point in its development where its competitive priorities are changing due to its traditional fabrication market shrinking and its newer parts manufacturing market is growing. It faces two distinct sets of issues requiring different perspectives. Firstly, day-to-day operational issues, waste and delays are mounting up, whilst alongside that, the changing environmental market factors lead to growing strategic dissonance (Burgelman & Grove, 1996).
Major Strategic Issues: The Millers are facing a strategic inflection point (SIP) due to the shrinking size of their core market (Burgelman & Grove, 1996). Their core competencies were traditionally fabrication, but through development of their capabilities in customisation of molds, they took strategic steps to forward vertically integrate into parts manufacture (Prahalad & Hamel, 1990). Through the 1980s, this strategy allowed them to grow, but by 1990, their core fabrication market started shrinking (Appendix A – Fig. 2). Their customers moved towards stronger strategic supplier relationships, rather than backwards integration. Strategic alliances allow customers to rely on their suppliers to develop low cost manufacturing competencies ensuring timely delivery of high quality parts. These changes in the external environment impact both the fabrication and the manufacturing sides of the business. For fabrication, although the number of orders remained the approximately the same, the market for multiple molds was shrinking, so the absolute number fabricated was reducing. Although it can be assumed that fabrications orders with high order size would have been discounted, the 18% fall in fabricated...
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