Scribd
Upload
344 views1 page

PMTC's Strategic Dilemma in Tool Innovation

Punjab Machine Tools Corporation faces competition from both domestic and international players in the metal cutting and forming tools industry. The MD, Gyan Chand, has been urged by distributors to introduce new, high-tech tools using latest technology to increase market share and fight dumping of cheap machinery. However, Gyan Chand realizes this would significantly increase costs including R&D, new production lines, inventory, and training. Reflecting on past meetings, he feels marketing often wants more models without understanding the financial burden, and the company has been successful with just a few models. Therefore, Gyan Chand thinks the focus should be on improving existing models and reducing costs rather than introducing new ones.

Uploaded by

Shashank Jain
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
344 views1 page

PMTC's Strategic Dilemma in Tool Innovation

Punjab Machine Tools Corporation faces competition from both domestic and international players in the metal cutting and forming tools industry. The MD, Gyan Chand, has been urged by distributors to introduce new, high-tech tools using latest technology to increase market share and fight dumping of cheap machinery. However, Gyan Chand realizes this would significantly increase costs including R&D, new production lines, inventory, and training. Reflecting on past meetings, he feels marketing often wants more models without understanding the financial burden, and the company has been successful with just a few models. Therefore, Gyan Chand thinks the focus should be on improving existing models and reducing costs rather than introducing new ones.

Uploaded by

Shashank Jain
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

Case Study

Punjab Machine Tools Corporation (PMTC)


PMTC in the business of metal cutting tools and metal forming tools, is engulfed in competition with national as well as international players. PMTCS products are used by capital goods and other engineering industries. The business is cyclical in nature , dependent on capacity utilization levels in user industries. Gyan Chand, the MD of PMTC, had been urged by the distributors in a recent meeting, to introduce high-tech metal cutting tools and new models using the latest technology. They felt that this would help them fight the dumping of cheap second hand machinery and increase the domestic as well as export market share. Gyan Chand realized the implications of the distributors suggestions. This would increase the R & D budget tremendously. A fully automated production line would put pressure on finances. A greater variety of tools, models etc. would require inventory space. Mechanics need to be trained again, especially in running the latest, fully automated robots and gadgets. Reflecting on previous staff meetings, Gyan Chand realized that marketing people always wanted a greater variety of models but never appreciated the huge financial burden such decision would imply. PMTC, after all carried through its operations all along with just a few models quite successfully. In such a scenario, Gyan Chand felt that there is no need to go in for new models. Instead, he thought the focus should be on improving existing models and reducing the cost and price. The customer now-adays is more interested in getting value for money. However, to be on safe side, he sought the opinion of a consulting firm, in this regard. Questions What do you think is the mission of the enterprise? What kind of opportunities and threats exist in the firms external environment? How would you go about evaluating the strengths and weaknesses of the firm? What factors are critical for success or failure? To be successful, an organization must be an open system What does this mean and how does it apply in this case?

You might also like