Fisk Alloy Case Study Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Fisk Alloy Case Study Case Study Solution

Economic Trend

Fisk Alloys has operated in two different regions namely Hawthorne & Oriskany. The condition of employment differ in both regions which had made company hiring people at different wage rate. For instance; the labor in Hawthorne has hired on $15 while labor in Oriskany has hired on the rate of $10. The difference depicting the differences in labor law policies and economic conditions.

Industrial Analysis

The copper alloy industry has been saturated with few market players at the current moment in the market. The trend has allowed company to maximize its market share by improving its operations & process that aligns and meets with the market shift. In doing so, the company had developed the competitive edge by harnessing its expertise for producing the copper alloys free of cadmium. Thus, another competitor in the market had offered similar alloy in Peron category to regard as the number one product.

Since in past, the brand awareness and quality of copper alloys along with the acceptability of product is greatly adhered with the certification, hence it is not supposed to easy for entering into Peron industry easily because of the high government regulations and market barriers with the string brand loyalty.

Financial Analysis

The income statement is being projected on the basis of the prior year in order to have a closer look over the financial stability and position of company in long run. It would measure the future income and expenses of business. It would helpful for planning as well as company budget, ultimately allowing the company to employ raw material at lower cost.

Several assumptions have been taken in preparing projected income statement which are listed below;

The revenue is projected for 2008 on the basis of prior year i.e. 2007.
The revenue for years 2008-2012 is increased by 6%, 12%, 15%, 20% and 25% respectively.
The cost is assumed to be increased by 6%, 12%, 15%, 20% and 25% for years 2008-2012.
The tax is assumed to be remain same for all years.

	2008	2009	2010	2011	2012

Revenue	31507993	36234192	43481030	54351288	70656674
Cost	20687131	23169586	26645024	31974029	39967536
Income from business operations	10820862	13064606	16836006	22377259	30689138
Other income (& expense)	100000	100000	100000	100000	100000
Income before income taxes (EBIT)	10720862	12964606	16736006	22277259	30589138
Income tax	100000	100000	100000	100000	100000
Net income	10620862	12864606	16636006	22177259	30489138
Foreign currency translation adjustment	0	0	0	0	0
Comprehensive income	10620862	12864606	16636006	22177259	30489138
Net profit margin	34%	36%	38%	41%	43%

Table 02 shows projected income statement

After reviewing projected financial statement, it is being analyzed that the company would remain be in profitable zone while reducing the cost of sales as the company would extract major portion of profit from its total sales.

Strategic Alternatives

The strategic alternatives are discussed below:

Employ Raw material at lower Cost

Fisk Alloys should opt for employing raw material at low cost for reducing the raw material cost. By doing so, the company would look for outsourcing the functions for raw material procurement. This in turn, would most likely reducing the cost of manufacturing raw material while decreasing the sales cost.

Maintaining production with capacity

Since in past, Fisk Alloys had great opportunities in the market which might be increasing the product demand in long run, therefore, the company must deal with the problem through maintaining the alloy production with the equipment capacity. In doing so, Fisk Alloy can retain & hire some of the mechanism fully utilizing the production capacity of equipment, thus, offering a low cost production as well as meeting the market demand.

Sustain the position of excellence

The pertinent problem with the company had the availability of skilled force that can operate the machines effectively and meet the external increasing demand, also the company would then be able offering products that would be free from faults. The company would retain and ire skilled mechanics. The skilled labor force is a competitive advantage for the company, also it could not be replaced, and therefore, the company would develop such culture where the labor mechanics would have a feeling of owning the corporation. In this manner, the company would retain its competitive advantage over the competitors and sustain the highly competitive market arena.

Recommendation with Justification

The recommendation would base on the decision criteria matrix which is tabulated below;

Factors	Alternative 1	Alternative 2	Alternative 3
Sustainability	1.5	1.5	2
Excellence	1	1.5	2
Market share	2	1	2
Profit	1	1	2
Total	5.5	5	8

Table 02 shows Alternative Choice- Decision Criteria

After taking into account the necessary factor required to address the problem, it is being analyzed that alternative 03 would be beneficial as it would offer competitive advantage to Fisk Alloy. It is to justify that by retaining employee workforce it would offer great productivity & performance to company and by provide training sessions to new employees the company would be able to create a pool of skilled labor internally (Pahuja, 2012)

In addition to this, by opting to sustain the position of excellence, the level of uncertainties and error would be reduce in business operations and performance level of company, thus offering standard form of products to customers every time in the market.

Even though, it would increase the retaining cost of an employees because of the enhanced rewards, labor law and compensation plans to sustain and retain the employee turnover rate, also it would increase the company’s dependency on human resource skills thus increasing information silos, but the company can better deal with issue by utilizing the production capacity, hence offering a low cost production as well as meeting the increasing market demand (Qehaja, 2011)

Implementation

Action plan- (Long Run)

As such, in long run Fisk Alloys would design training and development program internally that would most probably train the new employee force. In doing so, the labor force and senior executives would help in training joiners, offering senior’s empowerment and authority while training new employees, mitigating the dearth of skilled labor from company.

Action Plan (Short Run)

Since, maintaining and retaining the talent pool of employee would offer the company competitive edge over competitors in forthcoming years, not only this, but also help the company in sustaining the excellence. For the purpose of doing so, there is a likelihood that the company would incorporate open culture into the organizational structure to empower employees while developing competitive salary structure to employees.

In addition to this, Fisk Alloys would develop such kind of policies offering transparent succession growth path and planning to mechanics as well as value of their work. This in turn, would make employees feeling a sense of owing the company ad ultimately increasing the retention rate. Furthermore, by doing so, the company would be able to ensure the right amount of talent is being present in the organization, which would eventually help in exploring and capturing the future opportunities in market while also sustaining the market excellence. The key tend to be lies in retaining and maintaining skilled and capable employee workforce in order to meet the target in the long run.........

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