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ACME Electric Motors and Controls Company: strategy for survival

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ACME Electric Motors and Controls Company is a US Based midsize company manufacturing and selling electric motors and controls to customers in US, Canada, and Mexico. Their annual sales last year was $ 200 million. The gross profit margin is 30% with a net profit after taxes of 7%. They have a reputation for quality and service and have a loyal customer base. Each motor / control unit sells for $150.00.

Cheap foreign imports which sell for $ 90 per unit are now threatening their survival. You have been hired as a consultant to develop a strategic plan to help them beat the foreign competition.

Develop a short term and long term strategy to include marketing, operations, finance, HR and legal avenues. Make any assumptions necessary, but justify them.

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Solution Summary

The solution discusses a strategy for survival for ACME Electric Motors and Controls Company.

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There are several short term and long term strategies that Acme can pursue to minimize damage from foreign competition. On marketing front, Acme needs to modify its advertising and promotion strategies to ensure that consumer understands the difference between high quality offerings of Acme versus cheap foreign imports. In other words, the advertising and promotion campaign should clearly highlight the "value proposition" or justification for high prices of Acme's products, as compared to its low priced competitors. The marketing communications should clearly deliver the message regarding strong legacy, high quality product and customer service ...

Solution provided by:
Sandeep Bardia, MBA
Education
  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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