Subject category:
Production and Operations Management
Published by:
International Institute for Management Development (IMD)
Version: 18.12.2003
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Abstract
In January 1996, Bata Hellocourt Director Guy Zwick reviews the manufacturing plant''s financial situation. In 1995, the designer and manufacturer of predominantly young women''s town shoes had barely broke even - with 35% of Bata Hellocourt''s shoe sales going to the Bata Shoe Organisation (BSO). However, the forecast for 1996 showed sales to BSO dropping by 30%. Top management believed achieving profitability in 1996 meant increasing volume by 32%. To do so, Hellocourt needed not only to be price competitive but also to capitalize on its unique manufacturing capabilities to respond to retailer demand for quick deliveries of shoes in a wide range of models and sizes. Without an improvement in their financial results, Zwick was concerned about the future of the Hellocourt facility. Selling the plant was not an option, and the costs which would be incurred in closing the plant were prohibitively high. The alternative would be to shrink the organisation.
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Abstract
In January 1996, Bata Hellocourt Director Guy Zwick reviews the manufacturing plant''s financial situation. In 1995, the designer and manufacturer of predominantly young women''s town shoes had barely broke even - with 35% of Bata Hellocourt''s shoe sales going to the Bata Shoe Organisation (BSO). However, the forecast for 1996 showed sales to BSO dropping by 30%. Top management believed achieving profitability in 1996 meant increasing volume by 32%. To do so, Hellocourt needed not only to be price competitive but also to capitalize on its unique manufacturing capabilities to respond to retailer demand for quick deliveries of shoes in a wide range of models and sizes. Without an improvement in their financial results, Zwick was concerned about the future of the Hellocourt facility. Selling the plant was not an option, and the costs which would be incurred in closing the plant were prohibitively high. The alternative would be to shrink the organisation.