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Allentown Materials Corporation: the Electronic Products Division

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Allentown Materials Corporation: The Electronic Products Division

A) Main organizational causes of EDP’s performance problems

1) Analyze the main changes occurred in EDP’s environment and explain how they impacted EDP’s strategic priorities.

Allentown Materials Corp is a company with more tan a century with a steady growth and high reputation in the market by the end of the 80’s. A great deal of its success is based on a strong technological capability in the invention and manufacture of glass products supported by a strong Technical Staffs Division (R&D). It was competing through product differentiation and growing profitably (average of 10% per year) without substantial competitive pressures through premium prices of government military contracts and specialized products for OEMs.

Most divisions maintained relatively small sales departments with few salespeople servicing the small number of important accounts. Many of the divisions had limited marketing efforts. The corporation operated like a relatively close-knit family; people interacted informally. Besides, Technical Staff Division (R&D) was regarded as very important by top management; growth was linked to technology.

However, by the end of the 80’s, the demands of the industry began to change to a fast paced price sensitive computer, telecommunications and consumer electronics commercial market, therefore, pressures from the dynamic new market required Allentown to be a lower cost producer to be competitive.

Sales of the Electronics Products Division (EDP) started to stagnate and operational margin decreased dramatically. The división had recently been restructured in their business units by their new leader Don Rogers and lack of synergy between the business units in the development of new product extensions was threatening the growth and profitability of EPD and Allentown as a

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