Manufacturing Capacity
A consumer electronics giant needed to decide whether to expand its display manufacturing capacity in the Asia-Pacific region. Concerns about market growth, the commodity nature of the product, and potential oversupply kept the company from committing to a course of action.
Working together, we developed several strategy alternatives, based on distinct choices on technology, additional capacity, and plant location. Evaluation of the alternatives revealed the precariousness of being a commodity player and the short-sightedness of the company’s traditional financial criteria for evaluating projects, which could easily overlook long-term consequences. The company decided to build a local plant and to reconsider its global positioning as a commodity player.
