Case: ATH Micro Technologies

Ryan Stroud

Strategic Cost Analysis – 45809
Mini 4, 2011
Professor Glover

What is the Problem?

The ATH Microtechnologies case highlights the problems that the company has faced in five chronological stages: founding, growth, push to profitability, refocus on process, and takeover by new management. In each stage ATH faced a different problem or series of problems with respect to performance goals, controls, measurement, and strategy. In the founding stage, the company focused on sales and earnings as performance goals and did not have adequate controls on spending which grew out of hand. In the growth stage, ATH focused on increasing market share to the detriment of profitability. In the push to profitability stage, the company focused on earnings but at the expense of poor customer satisfaction and low quality products. They also received a “Warning Letter” from the FDA during this stage. In the refocus on process stage, the company strove to address the FDA’s and customer concerns, however, employees were incentivized to avoid problems instead of creating solutions and improving products. In the new management stage, the focus was on product development and technological leadership. This challenge in this stage will be for the company to achieve these goals in lieu of profits, revenues, growth, and quality. As this case illustrates, a company’s life cycle presents new complexity and performance measures and goals at each stage.
How can it be solved?

In order to solve this problem, ATH needs to be keenly aware of what is going on in the market for their products and to focus on the customer. Customer satisfaction and quality will continue to remain integral to their strategy. However, ATH needs to integrate these strategic objectives with financial objectives such as sales growth and profitability to be