Byte Products Inc., Case Study

INTRODUCTION:

BYTE PRODUCTS, INC., is primarily involved in the production of electronic components that are used in personal computers. Although such components might be found in a few computers in home use, Byte products are found most frequently in computers used for sophisticated business and engineering applications. It was a privately owned firm that has now entered to be a publicly traded company. The majority of the stockholders are the initial owners of Byte, when it was still privately owned It's headquartered in the mid-western United States, is regarded as one of the largest-volume suppliers of specialized components and is easily the industry leader, with some 32% market share.

Byte Products has three existing plants operating at full capacity (24hours a day and 7 days a week). The new plant proposed to be built in the southwestern U.S. will require three years before it is fully online. This means that Byte cannot meet the anticipated demand for its products. Alternative courses have been explored - (1) license Byte products and technology to other U.S. manufacturers, and (2) utilize overseas facilities and licensing. Top management found an existing plant in Plainville, New England that would meet the company's immediate production needs until the new plant comes on-line in three years. The Plainville facility has been closed for the last 8 years. It would take about three months to get the Plainville plant on-line

The discussion between Elliott and Williams focuses on the impact on the town and on the 1,200 potential employees of opening this temporary plant. The town and the townspeople had gone through a catastrophic closing eight years ago when the plant in question was closed. After a lengthy discussion between Elliot and Williams, a recess in the meeting is called. When the board meeting is reconvened, a major shift has taken place. The vote could be 7-4 or6-5 for the proposal, but Elliott desires a unanimous vote. As the case ends - Williams is asked whether a compromise can be reached. He responds, "I have to say no."

PROBLEM:

How can Byte Products, Inc., meet the increasing demand for electronic components while waiting for the 3-year construction of the new plant in order to at least maintain if not increase its 32% market share at the same time taking into account their corporate social responsibility?

Byte Products, Inc. is facing competition in the industry where they belong. A dramatic surge in demand, high profitability, and the relative ease of a new firm's entry into the industry explain in part the increased number of competing firms. James M. Elliott, Chief Executive Officer and Chairman of the Board, recognizes the gravity of the problem. If Byte Products cannot continue to manufacture components in sufficient numbers to meet the demand,