Failure Analyses of A Manufacturing Company Diversified from A Successful Trading Service Company – The Case Study of the Company X

• Main Authors: Cheng-Dao Lin, 林政道
• Other Authors: Po-Young Chu
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/67828308437441933135

碩士 === 國立交通大學 === 管理學院高階主管管理碩士學程 === 95 === This is a case study of failure analyses about a manufacturing company diversified from a successful trading service company. The company X is a commerce agent. For avoiding the threat from suppliers’ going direct the company X decided to diversify itself into a new business to manufacture its own products. The trust issues between the board and the division general managers emerge as the new business cannot make a break-even and keep losing money after operating for a period of time. Under such a critical situation, the new change agent was assigned by the board to make a turn-around. Nevertheless the operation of the new business was not improved and the board finally abandoned the whole new business. The case was analyzed from various theoretical perspectives with the following findings: 1.It is difficult of core competence transfer as it takes a long time to acquire. 2.If a new product fails to win the specific buyers over it is very likely to fall into the chasm; the penetration of a low-end disruptive innovation technology demands the high commitment of owners and sustained capability of the organization. 3.The agency problem would become worse if business continued losing money and general managers of the new business own only minor equities. 4.The room of making change is quite limited if the initial strategy is wrong. The only way to stop loss is to withdraw gradually or completely if the new business unit cannot generate income by current products.