Premium Essay

Mueller Lehmkuhl Case Analysis

In: Business and Management

Submitted By gsteinbrenner
Words 4476
Pages 18
Mueller-Lehmkuhl GmbH

Mueller-Lehmkuhl (ML) was a German producer of apparel fasteners. Apparel fasteners are used in the garment industry. ML had been producing apparel fasteners since the late 19th century. In recent years, they had achieved technological superiority which resulted in high margins for their products. ML valued reliability of their products and fast service to their customers. However, competition and domestic market saturation in the 1980s led ML to a crossroads in which they needed to decide how they would maintain domestic market leadership and while expanding to new markets.

Mueller-Lehmkuhl’s Apparel Fastener Products

ML utilized an integrated approach in the apparel fastener industry by marketing their fasteners along with the machines to attach the fasteners to garment. Their strategy was to sell manufactured fasteners that were only compatible with ML’s attaching machines. ML produced five types of fasteners: S-Spring, Ring, Prong (Brass), Prong (SS), and Tack. Each product was designed for a specific application. Of the five major product lines, ML had 700 different varieties. In 1985, ML introduced a specialized line of new fashion snap fasteners and tack buttons. The marketing manager believed that this strategy could provide product differentiation that would allow them to increase their market share. This initiative required significant resources from research and development (R&D). At least 33% of the R&D projects were related to the new fashion fasteners.

As part of the company’s integrated strategy, ML manufactured six models of attaching machines. Three models were manual, and three models were automatic. All of the machines could be modified to attach any of the company’s fasteners. Manual machines were more labor intensive because they required a person to place both parts of the

Similar Documents

Premium Essay

Jack

...Harvard Business School 9-187-048 Rev. April 1, 1990 Mueller-Lehmkuhl GmbH According to Dr. Richard Welkers, president of Mueller-Lehmkuhl: The merger with Atlas has significantly increased our ability to compete with the Japanese. As we are now the largest single manufacturer of apparel fasteners in Europe, we can reap the benefits of economies of scale. At the moment, we are cost competitive with the Japanese. While the Japanese have lower wages and overhead, we are closer to the market and have lower selling costs. Historically, the Japanese have been most successful when they were the low-cost producer. Currently, the Japanese are pricing 20% below us. It is not enough to offset our quality advantage, but if they can match our quality or drop prices even further, we could have a problem. Company Background Mueller-Lehmkuhl (ML), a West German producer of apparel fasteners, was founded in 1876 as a manufacturer of shoe accessories. Soon after, other products were added, including the singlepost snap fastener. Production of these items increased substantially when the company merged with a Hannover firm called Weiser. In 1929 Mueller-Weiser merged with Felix Lehmkuhl to become Mueller-Lehmkuhl. Sales growth and product diversification continued, and in 1938 the firm was acquired by the Moselhammer group. In 1982 ML formed a joint venture with the German subsidiary of the Atlas group, an American multinational. Atlas was a conglomerate of six major businesses, one...

Words: 5765 - Pages: 24

Free Essay

Research

...thought at all.[1] Too often they fall back on saying that they are doing what they are doing because that is the way it is done in the prior literature, which is more of an excuse than a answer. (Of course, once a researcher reaches a certain age, they all feel that youngsters aren’t as good as they were in the good old days!) Therefore, in this class we shall go beyond simply studying research in managerial accounting. For many of you, this is your first introduction to accounting research and to PhD level class. Hence, in these classes we shall also learn how to solve business problems systematically and to understand what it means to have thoroughly “thought through” a paper. We begin not with academic research, but with some real world cases, because we should never forget that ours is an applied research field: accounting research is a means towards the end of understanding business and is not an end in itself, in the way pure science research is. Developing a systematic procedure for solving a real world business problem is the starting point for developing a...

Words: 2437 - Pages: 10

Premium Essay

Jak and Jill

...CASE ANALYSIS | MUILLER LEHMKHUL GMBH | Group - 6 | | Team Members: 1. Adithya J R 2. Bharath. S 3, Karthik Dasari 4. Nanjunda Prasad 5. Nitish 6. SNDS Ramanish Executive Summary : The largest single manufacture of apparel fasteners in Europe, Mueller Lehmkuhl, started as a shoe accessories manufacturer in 1876 and the subsequent organizational reconstructions, acquired technological superiority, diverse product range made it as one of the four major players in the European fasteners market. ML (Mueller Lehmkuhl) is known for high quality, reliable fasteners and prompt support provided. ML's strategy of producing the Attaching Machines for the fasteners and catering the service needs in case of breakdown aided in penetrating into market and building a strong customer base. However, the operations related to the Attaching Machines proved to be a white elephant for the organization. The changing market scenario with respect to the new players in the market, mature growth of the market, changing expectations of the customer, limitations on geographical expansion require ML to re orient the operations to sustain before losing the loyal customers. We perused the intricacies involved in manufacturing of fasteners, attaching machines, production of manufacturing equipment with due consideration to the required technical skill, operational costs etc. The exhibits added further insight into the nuances of running the business. As truly mentioned the product that looks so...

Words: 1015 - Pages: 5

Premium Essay

Wqeqewqe

...loosely divided into two topics: cost management systems and managerial control systems. Each topic is briefly described below. Cost Management Systems: The objective of the cost management system is to provide information about the costs of the goods and services sold by the firm. While financial accounting requires that product cost information be accumulated in particular ways for external reporting, the focus in the course will be on cost systems that aid managerial decision-making. We will start with a study of traditional cost systems still in widespread use today. Next, we will examine the problems associated with these systems in today’s business environment. Through the use of readings and cases, we will discuss situations in which the traditional systems provide seriously flawed or excessively costly product cost information. We will then look...

Words: 1335 - Pages: 6

Premium Essay

Calculating Lagged Delinquency

...Strategic Transfer Pricing Author(s): Michael Alles and Srikant Datar Source: Management Science, Vol. 44, No. 4 (Apr., 1998), pp. 451-461 Published by: INFORMS Stable URL: http://www.jstor.org/stable/2634608 . Accessed: 15/08/2011 07:30 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. INFORMS is collaborating with JSTOR to digitize, preserve and extend access to Management Science. http://www.jstor.org Strategic Transfer Pricing Michael Alles * Srikant Datar CBA 4M-202, University of Texas at Austin, Austin, Texas 78712 HarvardBusiness School,Accounting and ControlArea, Soldier'sField, Boston,Massachusetts02163 M\ost research into cost systems has focused on their motivational implications. This paper , takes a different approach, by developing a model where two oligopolistic firms strategically select their cost-based transfer prices. Duopoly models frequently assume that firms game on their choice of prices. Product prices, however, are ultimately based on the firms' transfer prices that communicate manufacturing...

Words: 8609 - Pages: 35

Premium Essay

Data Costing

...Harvard Business School Publishing Case Map for Horngren, Foster & Datar: Cost Accounting: A Managerial Emphasis, 10th Edition (Prentice Hall) This map was prepared by an experienced editor at HBS Publishing, not by a teaching professor. Faculty at Harvard Business School were not involved in analyzing the textbook or selecting the cases and articles. Every case map provides only a partial list of relevant items from HBS Publishing. To explore alternatives, or for more information on the cases listed below, visit: www.hbsp.harvard.edu/educators Case Title Institution, HBSP Product Number, Length, Teaching Note Geographical and Industry Setting, Company Size, Time Frame Abstract, Key Subjects PART ONE: COST ACCOUNTING FUNDAMENTALS Chapter 1: The Accountant’s Role in the Organization Chapter 2: An Introduction to Cost Terms and Purposes Carver HBSP United States, Consulting Co. #199006 consulting, 10,000 7p employees, 1994 Daniel Dobbins Distillery, Inc. HBSP #189065 7p TN #189172 Tennessee, liquor distillery, 1988 The managing partner of a relatively new consulting firm is concerned because training costs at the firm's new training center are higher than expected. Analysis of actual costs compared to those expected is required. In addition, he is considering capitalizing some training costs for later amortization. A management control system for the center is also a priority. A distiller increases whiskey production and income declines because of accounting...

Words: 6264 - Pages: 26

Premium Essay

Voluntary Principles on Security and Human Rights

...From Compliance to Practice Mining Companies and the Voluntary Principles on Security and Human Rights in the Democratic Republic of Congo Tanja A. Börzel/Jana Hönke SFB-Governance Working Paper Series 25 • October 2011 DFG Sonderforschungsbereich 700 Governance in Räumen begrenzter Staatlichkeit - Neue Formen des Regierens? DFG Research Center (SFB) 700 Governance in Areas of Limited Statehood - New Modes of Governance? SFB-Governance Working Paper Series Edited by the Research Center (SFB) 700 „Governance In Areas of Limited Statehood - New Modes of Governance?“ The SFB-Governance Working Paper Series serves to disseminate the research results of work in progress prior to publication to encourage the exchange of ideas and academic debate. Inclusion of a paper in the Working Paper Series should not limit publication in any other venue. Copyright remains with the authors. Copyright for this issue: Tanja A. Börzel/Jana Hönke Editorial assistance and production: Tanja Kilper/Sara Gebh/Anna Jüschke All SFB-Governance Working Papers can be downloaded free of charge from our website www.sfb-governance.de/en/ publikationen or ordered in print via e-mail to sfb700@zedat.fu-berlin.de. Börzel, Tanja A./ Hönke, Jana 2011: From Compliance to Practice. Mining Companies and the Voluntary Principles on Security and Human Rights in the Democratic Republic of Congo, SFB-Governance Working Paper Series, No. 25, Research Center (SFB) 700, Berlin, October 2011. ISSN 1864-1024 (Internet)...

Words: 16584 - Pages: 67

Premium Essay

None

...system in relation to the decision-making and strategy formulating opportunities it provides based on the ‘logic’ or technical attributes of ABC (Shields, 1995; Malmi, 1997). This paper argues that there is a logic of ABC and tries to identify and illustrate how people relate to, misunderstand and still ‘appropriate’ this logic and start “talking accounting”. This paper shows that the ABC system implemented in this organisation did indeed provide information for decision-making and did to some extent support the logic of ABC. The paper also shows how this knowledge was emergent, the logic was articulated, but not fully understood and it was only when the system was implemented that many attributes of the system were recognised and, in some cases misunderstood. The paper argues that the ‘success’ of this particular ABC system was dependent on the organisational context, and the changing context as well as the logic. This is reflected in the change in attitudes, awareness and understanding of costs in the department where it was implemented. Key words: Activity Based Costing, financial services, and organisational change. 2 Introduction This paper examines the introduction of an Activity Based Costing (ABC) system in a UK Clearing Bank. The development and implementation of the ABC system is traced...

Words: 10529 - Pages: 43