Joel Chen
BADM 2003
Professor Sharp
03/06/12

Business Case Analysis: AWC Inc.
A Case Study on a Small Aluminum Plant in Southwestern Ontario

INTRODUCTION:

AWC Incorporated is a small-scale but profitable aluminum fabrication plant located in southwestern Ontario. The company has been around since 1950, and was founded by Jim Macdonald, father of the current president Alex Macdonald. AWC specializes in the production of commercial aluminum windows, doors, storefronts and curtain wall products. A company deeply rooted in the local community, AWC has 100 staff, with 45 in production and 55 in the office. Because their sense of belonging, the employees are dedicated to the superior quality and competitive prices that the company is known for in the industry, in which the competition has become increasingly fierce. Recently, AWC Inc. is facing a decision regarding the installation of an air treatment system in the welding portion of the plant, as the company’s current pollution control system will no longer comply with the new Ontario’s Environmental Emissions and Occupational Heath and Safety regulations. The cost of the required emissions control system will have a major impact on the company’s overall profit and cash flow, which may jeopardize AWC Inc’s survival under the current recession. This article will examine the past practices and current situation of AWC Inc. using two different frameworks—Bill Gates’ “creative capitalism” and Garrett Hardin’s “Tragedy of the Commons” analogy. Using these frameworks the company’s potential alternative solution of is found unethical or less favorable for the long-term competitiveness of the company. Finally, we will develop a paradigm from the ethical framework outlined by Michael E. Porter and Mark R. Kramer. This methodology agrees with our suggested solution, which perfectly follows government regulations, reduces harmful environmental effects on the greater good of the community, and provides the owner with a positive income in the long run.

I. COMPANY BACKGROUND

One of the most defining characteristics of AWC Inc. is its employees’ commitment integrated into the company’s day-to-day business activity. The force of competent and capable engineers supported by 45 skilled and quality-conscious production workers produce high-quality products that have strong market demand. To encourage workers’ sense of commitment, AWC Inc., a family-owned business, has been dedicated in providing family-friendly benefits to workers. Recently, AWC introduced a superior door design that has given the company a competitive advantage in the sales of commercial aluminum doors. It also increases the company’s need for high volume productions, which requires either a double shift on the existing welding line or the installation of a second welding line. In addition, the effect of the aluminum company’s pollution on its neighbors is not a big issue mainly because the factory does not have any residences locate near it. Indeed, the aluminum company’s closest neighbor is a concrete factory. On the other hand, while AWC Inc has some strong production advantages in aluminum fabrication, there are some underlying problems that could hinder its long-term development. As the result of the low initial capital required to enter the industry, AWC has a great number of competitors in the region alone. The bidding process of the contracts is very competitive, and a majority of these contracts come from standardized products which earn minimal profit, while the more profitable ones come from customized contracts tailored to clients’ needs.

A firm positions itself to earn competitive benefits by making a strategic choice for sustainability rather than only responding to regulatory or public relations pressure.