Pacific Systems upload to web site

Pacific Systems upload to web site - Pacific Systems...

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Pacific Systems Corporation Case OVERVIEW Pacific Systems Corporation, Inc. (PSC) is a medium-sized high technology company located north of San Francisco. In its early years PSC produced component parts and subsystems for personal computers and engineering workstations. In 2000, PSC added its own line of engineering workstations to its product offering. Recently, the company decided to expand its product line to include fully assembled personal computers (PCs). The company, recognized as a well-established component and subsystem manufacturer, has grown from a single product manufacturer with annual sales of $2.5 million, to a multi-product $3 billion firm in just ten years. This growth was helped in part through acquisitions in server markets and related computer industries. Pacific Systems Corporation has a strong reputation for manufacturing high quality products with on-time customer delivery. The company also emphasizes state-of-the-art technology in its product design, production, information, and delivery systems. PSC’s decision to enter the personal computer market occurred during the peak of the Internet boom in late 1999. In particular, the marketing department decided to focus on the home PC user, to exploit the booming growth in home computer use. The projected growth rate of U.S. PC shipments to the home sector in the 1990s exceeded the business sector, and was predicted to surpass the business sector in total share of shipments. 1 Although Pacific Systems Corporation was a small player in this market the company decided to pursue an aggressive strategy of selling high quality computers at affordable prices. The new line of computers, called the 9000x series, would come with a Pentium 600 MHz microprocessor, 128 megabytes of memory, 8-14 gigabytes of hard disk space, a read/write CD-ROM/DVD (digital video disc) drive, and a 17-inch flat screen color monitor. Although industry forecasts have certainly been downgraded, PCS is betting that in 2003 the computer industry will grow at a slow but steady state as consumers upgrade their computers with the predicted slow but steady growth in the economy. This decision poses some risks, given that there is a “mixed bag” of opinions regarding the growth of the electronics sector in 2003. The decision was made to pursue the home computer user, through a strategy focused on shipping low-cost, high-quality computers directly to customers as orders are received (make-to-order). This production model is similar to the Dell approach, and appears to be the model that will dominate the PC industry. Because the company does not plan to build finished PCs (i.e., make-to-stock) in anticipation of future sales, market demand forecasts, supplier quality, supplier capacity, lead time, and delivery reliability are critical factors. The company is willing to carry some units in component inventory as safety stock as a buffer against missing customer order commitments. Pacific Systems Corporation will assemble the computers in its own facilities, but intends to
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This note was uploaded on 07/02/2011 for the course MGSC 487 taught by Professor Jayaram during the Spring '10 term at South Carolina.

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Pacific Systems upload to web site - Pacific Systems...

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