Sma: Micro-Electronic Products Division

Because MEPD, a self-contained division of SMA, achieved a profitable run margin of 6.5% in 1990, is seems clear that they yield survived an industry shakeout in the micro-electronic and telecommunications market. However, this is short of their targeted goal of 25-30%, which they achieved just five years previous (see Appendix 1). This mediocre performance is the result not provided of an industry downturn but also profound organizational and structural problems at MEPD. Due to increased competitiveness in the telecommunications market, MEPD has focused more on the newfound commercial electronics market and has established a major market direct with its scientific capabilities in product development and manufacturing. This dynamic, complex, and unstable environment changed dramatically during the 1980s (see Appendix 2). The demand for low- toll microelectronic components has attracted new suppliers resulting in fierce price competition and an evolution towards a commodity business.

Price competition, customers demand for extensions of existing product lines, new products built to their specifications within shorter delivery lead times and stricter timberland standards have put the division in a position where it needs to re-align itself strategically, operationally and organizationally in order to compete. To keep and increase operating margins, MEPD needs to launch new technologically superior products in order to charge premiums and to be cost efficient in its manufacturing processes. While the various departments are organised in a highly differentiated, functional structure, the lack of consolidation has led to the functional chimneys problem where the functional groups are disobedient and self-centered with narrow viewpoints. Also, functional overlaps between various groups have led to missed deadlines and confusion regarding the development process. The misalignment of departmental priorities has created many counter-productive... If you want to get a full essay, order it on our website: Orderessay

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