Case Analysis of Elektra Products Inc.

by Marge Javillonar

ADB-MBA Program

A. Background

1. Elektra Products Inc. is an 80-year old publicly held company that was one of the leading

manufacturers and retailers of electrical products and supplies.

2. Recently, the company has faced problems that are critical to its existence. Market share has

been declining due to increased foreign and local competition. The company is lagging behind in

innovation. Internal communications across departments are ineffective and almost non-existent.

Employee’s morale is at an all-time high and many employees are actively seeking jobs elsewhere.

3. To solve this problem, a new CEO has been hired to revive the deteriorating condition of the

company.

B. The Main Issue

4. The current situation of the company is credited to numerous problems as mentioned in para.2.

However, the main issue is that the company is no longer generating enough revenues to sustain its

existence mainly because of its lack of competitiveness in the market.

5. This lack of competitiveness may have been caused by many factors such as lack of innovation,

weak internal communications, traditional way of running an organization, a working environment that

resists change, constant changes in company’s objectives, and dissatisfied and unhappy workforce, to

name a few.

C. Assumptions

6. In order to concretize the alternatives that are to be presented for this case, we will assume the

following scenarios:

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The company’s machinery is outdated. No new purchase of machinery essential in the

production of its electrical products and supplies has been made for the past decades.

There is no Research and Development Unit set up; thus the reason for few product

innovations.

There is no Marketing Unit that handles promotion of products and sustains the company’s

image and position in the market.

The company’s sales force has not received incentives and has been reduced due to

downsizing in the past.

The company did not offer training to introduce its loyal employees to new ideas and

innovations in the workplace.

The company has been slow in hiring new recruits to boost up its personnel inventory and

introduce new blood to the company.

D. Objective

7. In order to provide concrete alternatives, the objective should be established. In this case, since

the company is at the brink of failure due its decreasing market share, the objective now is to increase

the competitiveness of the company to sustain its operations.

E. Course of Action

8. Research and Development Unit. The company will setup this unit where new ideas and

innovations are hatched. In doing so, the company will hire new recruits to infuse new ideas into the

company and be more aggressive in doing research and innovations. This unit will closely liaise with all

departments, such as marketing and sales. A working group will be setup to consist of select people

from all departments to meet on a regular basis for brainstorming and consultation. New products

ideas/concepts that are achievable, doable and marketable will be given incentives.

9. Streamline Product Line. The company will assess its product line to determine saleable and

non-saleable items. Items that are non-saleable or are producing minimal returns to the company will

be phased out and those items that are considered core products of the company or the saleable items

will be retained, and to boost sales of these products, marketing campaigns (ads and promotions) and

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increased product visibility in hardware stores by asking these stores to strategically place them in their

store shelves. Outsourcing some of the items, like those considered “non-core products,” to

subcontractors to reduce overheads. Machineries will also be updated or replaced to allow a more

efficient and increased production and eventually cutting down on production costs.

10. Internal Relations. The new CEO of the company will take time to meet and greet employees.

Since he is relatively new, he will have his hands full in knowing the company inside and out, and the

best way to know the company is by talking to its employees. This will not only improve management-

staff relation, but will also generate trust and confidence, which is what is lacking in the company now.

Since most of the company’s work force has been with the company for decades or more, it would be a

good idea to give recognition/award for their years of service, dedication and loyalty to the company,

which would boost their morale. To further this, technical and personnel training will be provided for

updating and introducing new management ideas/concepts to broaden their perspectives. A suggestion

box will be setup to allow employees to voice out their opinions, and most importantly, suggestions on

how to improve the company, anonymously or otherwise. Incentives policies will be firmed up to

benefit salespeople and non-sales staff who are performing well (bonuses, commissions and other non-

cash incentives).

11. Client Relations. Customer feedback will be solicited and attended to. Knowing what its

customers think (and feel) of their products is essential to improving client satisfaction and quality of

their products, and in most cases, birth of new products due to the ever-changing needs of the market.

12. Market Survey. The company will conduct a market survey to know its demographics,

competitors and the current trends in the market for its products. This will help the company position

itself to become more competitive and profitable.

F. Conclusion

13. In the current situation of the company, given that the areas for improvement are numerous,

the company should prioritize which action should be taken in order to address the main issue of

competitiveness. Since the company has been lagging behind competitors in terms of market share and

product innovations, the establishment of a R&D Unit is essential. Concurrently, the company should

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also address its internal issues in order for these new ideas, concepts and changes to be embraced by

“old timers” and to generate and encourage new product ideas or concepts from its employees who feel

valued and recognized by the company. The other courses of action can be taken thereafter, which can

help improve the current state of the company.

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