BYTE PRODUCTS, INC.

CASE STUDY
UNDER SUPERVISION OF

DR. Manal El Kordy

EMBA COHORT 9

GROUP MEMBERS:

ASHRAF KHALIL
MAREY
AHMED BAHER
HANI RAMADAN
SHOUKRY RAMADAN
WAEL BARAKAT

Case Summary
Mr. James Elliot, CEO and Chairman of Byte
Products, Inc., presents his recommendation to
the Board of Directors to purchase an existing
plant in Plainville as a temporary plant until the
new one is on line in three years. All on the
Board except one (101) seem to favor the
proposal.
What ensues is the discussion
between Elliott and Kevin Williams, board
member, over the proposal to purchase a plant
with the intention of closing it in three years.

Case Summary
Byte Products has three existing plants operating at full
capacity (24 hours a day and 7 days a week). The new plant
proposed to be built in the southwestern United States will
require three years before it is fully on line. This means that
Byte cannot meet the anticipated demand for its products.
Alternative courses have been explored - (1) license Byte
products
and
technology
to
other
United
States
manufacturers, and (2) overseas facilities and licensing. Top
management found an existing plant in Plainville, New
England, that would meet the companys immediate
production needs until the new plant will be online in three
years. The Plainville facility had been closed for the last eight
years. It would take about three months to get the Plainville
plant online.

Case Summary
The discussion between Elliott and Williams focuses on
the impact on the town and on the potential 1,200
employees of opening this temporary plant. The town
and the townspeople had gone through a catastrophic
closing eight years ago when the plant in question was
closed. After a lengthy discussion between Elliot and
Williams, a recess in the meeting is called. When the
board meeting is reconvened, a major shift has taken
place. The vote could be 74, or 65 for the proposal,
but Elliott desires a unanimous vote. As the case ends,
Williams is asked if a compromise can be reached. He
responds, respectively, "I have to say no."

Viewpoint:
James M. Elliott, Chief Executive
Officer and Chairman of the Board
Time Context :
Over the past six years
PROBLEM
The companys production
capacity cannot meet the demand

OBJECTIVE
The companys production capacity

should increase to meet the

demand of electronic components
and to be able to maintain or
increase the 32% market share and
12% increase of revenues yearly.

SWOT
Strengths:
The company is the largest volume supplier of
specialized electronic components and industry leader
with 32% market share.

Weakness:
The company has only 3 manufacturing facilities and
already operating in full capacity with 3 production shifts
(24hours per day, 7 days a week).

SWOT
Opportunities:
There is increase in demand of electronic components and ease of
new firms entry into the industry.

Threats:
The number of competitors increased due to ease of new firms
entry into the industry.

QUESTIONS

1- If you were one of the board members, how would you

have initially voted for the proposal? What would your
vote be after the recess in the meeting? Why?
we will vote for the proposal initially,
After recess in the meeting our vote will be with the proposal

under certain condition

1- it will would be as quick solution to refit our market share in

about 3 months.
2- the knowhow will be in Byte hand control so, they will keep

the main competitive advantages.

3- Consider the new plant in Plainville long term investment, as

we have to pay to new infrastructure to create comfortable

environment to our labor and their family as part of our social
responsibility

4- as the plan should be after three years as follow:

The new plant will keep operated on as our vision to serve a new
era of market in north east US

2- Should the executives tell the town

administrators and potential employees that this
is a temporary plant for three years?
We will inform the town local government that our plan

for the new plant will be permanent and temporary and

we have interest to establish a new center for new
market segment and meanwhile will make town
development.

3- What impact does a plant closing have

on a small town like Plainville? What
impact does the closing have on the
employees?
It will destroy the whole town and will make it

as ghost town
Unemployment will increase and will to more
poverty in the town

4- Can you suggest any compromise for

the present impasse?
After recess in the meeting our vote will be with the

proposal under certain condition

1- it will would be as quick solution to refit our market

share in about 3 months.

2- the knowhow will be in Byte hand control so, they will

keep the main competitive advantages.

3- Consider the new plant in Plainville long term

investment, as we have to pay to new infrastructure to

create comfortable environment to our labor and their
family as part of our social responsibility

4- as the plan should be after three years as follow:

-The new plant will keep operated on as our vision to

serve
new era of market in north east US
-We dont know the construction phase and

V. CONCLUSION

Decision Criteria
Matrix:
1 good
2 better
3 best

Our solution will be able to meet the

demand and make the facility

operational in shorter period of time
than making a new production facility
but it will be dependent on the location
and might have inadequate
transportation links to its suppliers and
markets. The company should be able to
negotiate with the locals with regards to
labor cost and should make strategic
plan to address the other challenges.

VI. PLAN OF ACTION

Activity

Persons
involved

Time Frame

Hiring of employees
for production

HR

3 - 6 months

Finance

3 - 6 months

Employees

3 - 6 months

top
management

3 - 6 months

Allocation of Budget
and financing
Production of
electronic
components
strategic planning

5- If you were Elliott, would you call for a

vote on your proposal or postpone the
vote until next meeting?
We will postpone for next meeting as to give
the all board member a chance to dog more
deeper in our compromising solution and may
come with more better assessment of the
situation