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The XYZ Corp. is a manufacturer of widgets which is faced with declining sales volume and profits. The company’s top management must therefore make some strategic decisions. The case presents three alternative strategies: 1) Forward integration by opening retail stores 2) New product development 3) A joint venture with the ABC Corp.

In analyzing all of the various facts and issues presented in the case, I believe that the most critical issues are: 1) The company’s financial position is weak. Therefore any strategic action chosen must involve only moderate expenditures and must offer a fairly quick pay-back. 2) New product development will be lengthy and costly. The company’s management currently has no specific ideas for new products. 3) XYZ Corp. has no retailing experience. 4) The ABC Corp. is financially strong, has some good ideas for a joint venture, but is weak in manufacturing capabilities where the XYZ Corp. has strength.

 

 

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