Empire Case 2 Outstanding

Empire Case 2 Outstanding - EMPIRE GLASS CASE STUDY...

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EMPIRE GLASS CASE STUDY ORGANIZATION Empire Glass Company is a manufacturing company with a number of plants located throughout Canada. Empire Glass Company was a diversified company organized into several major product divisions, one of which was the Glass Products Division. Each division was headed by a vice president who reported directly to the company's executive vice president, Landon McGregor. All of the corporate and divisional management groups were located in British City, Canada. McGregor's corporate staff included three people in the financial area—the controller, the chief accountant, and the treasurer. The controller's department consisted of only two people—Walker and the assistant controller, Alien Newell. The market research and labor relations departments also reported in a staff capacity to McGregor. All of the product divisions were organized along similar lines. Reporting to each product division vice president were several staff members in the customer service and product research areas. Reporting in a line capacity to each divisional vice president were also a general manager of manufacturing (responsible for all of the division's manufacturing activities) and a general manager of marketing (responsible for all of the division's marketing activities). Both of these executives were assisted by a small staff of specialists. VOLATILE GLASS INDUSTRY The Empire Glass Company operates exclusively as a manufacturer of glass food-and-beverage bottle. Organized along functional lines, it has number of plants in Canada and operates as an independently run profit center with its operations tied to its parent through its strategic plan and budget. Highly dependent on the overall economy's health, the glass industry is characterized by cyclical demand and uncertainties that make planning difficult, even in the short term. Glass buyers often postpone purchases until their own business operations are profit- able, and demand is normally seasonal. Dominated by the customers were large and bought in huge quantities, many were relatively small, the Glass industry is faced with an increasing level of industry competition. As these customers continue to consolidate and grow, they put tremendous price pressure on their suppliers. Manufacturers that do win contracts often expand capacity to meet increased volume. As time passes, the large customers pressure suppliers to maintain or even lower prices, thereby disallowing cost increases incurred by suppliers to be passed on. Suppliers often find they are victims of their own success—their revenues increase, but profits are squeezed by rising costs. Yet they become captive suppliers to the large customers whose volume is needed to absorb the cost of expanded capacity. Given these highly uncertain industry conditions, considerable planning and coordination is needed to ensure that production capacity is used fully and unit costs are maintained or reduced. THE COMPANY’S VS. COMPETITORS PRODUCT PRICE AND QUALITY
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This note was uploaded on 04/04/2011 for the course ACCT 5230 taught by Professor Szendi during the Spring '10 term at Kean.

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Empire Case 2 Outstanding - EMPIRE GLASS CASE STUDY...

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