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Aurora Textile Company

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Submitted By smclark03
Words 1210
Pages 5
Case Study 4
Stephanie M. Clark
Capella University

Aurora Textile Company was established in the early 1900s as a yarn manufacturer. The company focused on four major customer segments, which were hosiery, knitted outerwear, woven and industrial and specialty products. Aurora Textile Company grew to become the leader in the textile-mill industry. In more recent years, changes in the market led to significant declines in financial performance for both Aurora and the U.S. textile industry over the last four years. The globalization of the textile market and the lure of cheaper production costs overseas led manufacturers to relocate to Asia. Also, the strength of the U.S. dollar made foreign produced textiles more affordable than domestically produced textiles. Additionally, the World Trade Organization (WTO) banned its members from using quotas, which further opened the market for competition. The negative financial impact of these changes in the textile industry required Aurora’s leadership to analyze the competitive strategy of the organization and to make recommendations to improve its financial performance. Aurora’s leadership identified the purchase of a new, ring-spinning machine, the Zinser 351, as one solution to improve its current financial performance and competitive position (Bruner et al., 2014). This purpose of this paper is to make a recommendation either to upgrade or to not upgrade the ring-spinning machine. First, this paper will analyze the impact of keeping the existing machine on current financial performance. Next, this paper will analyze the impact of purchasing the Zinser 351. Last, this paper will provide a recommendation in regards to the purchase decision for the Zinser 351 for Aurora’s leadership team.
An Analysis of Keeping the Existing Machine Aurora’s current spinning machine is still operational and can be utilized for another

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