INTRODUCTION
COMPANY BACKGROUND
Unichema, a subsidiary of a well renowned multinational company, is operating all across the world. The company has specialized in manufacturing the oleochemicals; the company derives these chemicals from biodegradable oils and fats from vegetable and animal resources. The products derived by the company are user-friendly as well as their manufacturing process is also environmental friendly.
The company produces above half a million ton Oleochemical for its company in a single year. The product produced by the company has a wide-ranged diversified application all over the world. The main applications of the products of the company are polymers, cosmetics, rubber, textiles, leather, paper and lubricants. Moreover, Oleochemical acts as a starting point for the manufacturing of distilled and fractioned fatty acids, stearine, oleine, glycerine, as well as performance products, which includes, esters, amides, dimeric fatty acids, and soap noodles.
Moreover, the company has earned customer satisfaction as well as customers’ loyalty by providing and facilitating its customers with excellent quality products as well as exceptional customer care services. This has led the company to increase its profitability by increasing its customer base.
SITUATIONAL ANALYSIS
Recently, the company has realized that the competition in the market has been increased drastically and in order to stand tall among all other competitors, as well as to capture a considerable market share in the entire industry the company has to focus on the customer needs. The company realized that the only way to enhance its sales and return on assets is to enhance its customer base.
In order to enhance the customer base of the company, the top management of the company had decided to fulfill the customers’ needs by bringing in necessary innovation in the company’s products as well as providing products to its customers within deadlines. Keeping this view in mind, the company has decided to introduce a logistics department as well as Just-In-Time concept to address these issues.
The logistics department is supposed to contact directly with the customers in order to get aware about the customers’ needs and requirements and providing appropriate knowledge of the customers’ needs to the top management of the company, which assist the top management in bringing innovations into the company’s products and making their products more user friendly.
The just-in-time concept introduced by the company has enhanced the effectiveness of the operations of the company. These both concepts made the company to focus more on the customer needs than the production process, thus making the company more customer driven and less product driven.
Moreover, the company has introduced the ABC costing system in order to analyze the knowledge related to the customers more efficiently and more effectively. ABC costing system provides the company with various stratums of the customers with respect to the products they purchase. This helps the company in developing an understanding about the classes of customers with respect to their desired products.
PROBLEM STATEMENT
The company has to achieve its main objective of quickly responding to the customers’ needs and to deliver the excellent quality products in less time and money. This requires certain changes in the operations of the company as well as implementing the concept of Just-In-Time in the operations of the business, which requires huge costs and is also associated with certain risks.
QUESTIONS
Question 1).What seems to be the condition of this business? Does it require minor improvements or a major overhaul?
CONDITION OF THE BUSINESS
The company is performing well in its business operations. However, currently, the company is facing certain challenges, which needs to be addressed effectively and efficiently in order to compete strongly in the international market. These challenges include the increasing competition in the market, reduction in the market size, global customers, as well as considerable evolution in the technology.UNICHEMA Case Solution
The competition is increased in the market as more companies in the market have diversified its products lines as well as brought a considerable innovations in their products by which they are attracting more and more customers towards their companies. Moreover, they have adopted new and efficient technologies which have increased efficiency in their operations.
Furthermore, the company is facing problems of increasing cost in their operations as well as the company is unable to generate the desired rate of profit on their assets. The company is unable to identify the reason of the increasing costs of their operations as well as the company is unable to identify and implement the means and sources to increase the efficiency of its assets in order to generate handsome profits by using their assets efficiently and effectively................
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