Assignment Task:
This case was prepared by Professors Dan R. Dalton and Richard A. Cosier of the Graduate School of Business at Indiana University and Cathy A. Enz of Cornell University. The names of the organization, individual, location, and/or financial information have been disguised to preserve the organization's desire for anonymity. This case was edited for the SMBP- 9th, 10th, 11th, 12th, 13th and 14th Editions. Reprint permission is solely granted to the publisher, Prentice Hall, for the book, Strategic Management and Business Policy - 14th Edition by copyright holders Dan R. Dalton, Richard A. Cosier, and Cathy A. Enz. Any other publication of this case (translation, any form of electronic or other media), or sale (any form of partnership) to another publisher will be in violation of copyright laws, unless the copyright holders have granted an additional written reprint permission.
Byte Products, Inc., Is PrImarIly Involved In the ProductIon of electronIc compo-nents that are used in personal computers. Although such components might be found in a few computers in home use, Byte products are found most frequently in computers used for sophisticated business and engineering applications. Annual sales of these products have been steadily increasing over the past several years; Byte Products, Inc., currently has total sales of approximately $265 million.
Over the past six years, increases in yearly revenues have consistently reached 12%. Byte Products, Inc., headquartered in the midwestern United States, is regarded as one of the largest-volume suppliers of specialized components and is easily the industry leader, with some 32% market share. Unfortunately for Byte, many new firms-domestic and foreign-have entered the industry. A dramatic surge in demand, high profitability, and the relative ease of a new firm's entry into the industry explain in part the increased number of competing firms.
Although Byte management-and presumably shareholders as well-is very pleased about the growth of its markets, it faces a major problem: Byte simply cannot meet the de-mand for these components. The company currently operates three manufacturing facilities in various locations throughout the United States. Each of these plants operates three production shifts (24 hours per day), seven days a week. This activity constitutes virtually all of the com-pany's production capacity. Without an additional manufacturing plant, Byte simply cannot increase its output of components.
James M. Elliott, Chief Executive Officer and Chairman of the Board, recognizes the gravity of the problem. If Byte Products cannot continue to manufacture components in suffi-cient numbers to meet the demand, buyers will go elsewhere. Worse yet is the possibility that any continued lack of supply will encourage others to enter the market. As a long-term solu-tion to this problem, the board of directors unanimously authorized the construction of a new, state-of-the-art manufacturing facility in the southwestern United States. When the planned capacity of this plant is added to that of the three current plants, Byte should be able to meet demand for many years to come. Unfortunately, an estimated three years will be required to complete the plant and bring it online.
Jim Elliott believes very strongly that this three-year period is far too long and has insisted that there also be a shorter-range, stopgap solution while the plant is under construction. The instability of the market and the pressure to maintain leader status are two factors contributing to Elliott's insistence on a more immediate solution. Without such a move, Byte management believes it will lose market share and, again, attract competitors into the market.
1) Describe the "Byte Products, Inc" industry (competitivity, rivals, growth, stakeholders...).
2) Draw the SWOT matrix for "Byte Products, Inc".