...Summary of the Case Study This case study involves MagRec, Inc., and the conflict caused by perceptions. This company produces magnetic recording heads, an essential device used for reading, writing, and erasing data on tapes and disks. Nine years ago, it was discovered that one of the parts to the magnetic recording heads had a design flaw due to calculations. The design flaw could be reworked to meet all specifications except one – life expectancy. The heads are sold to Partco – MagRec’s largest customer - with a guarantee to last 2 years or 6000 of actual usage. This design flaw will now cause the heads to be replaced every 12 to 18 months or 2500 hours. After consideration, the Vice President of Operations decided to move forward with the year’s production (about 5000 heads) and ship the defective parts knowing the rework would correct the problem for any future magnetic recording heads. MagRec’s experience told them that customers do not keep accurate records to determine actual usage and life, and if a customer did happen to complain about the actual life expectancy, the service technicians always gave a plausible explanation – such as the temperature must be higher than average – or the customer must be using the computer a lot. Nine years later, after becoming Sales Manager, Pat is approached by Dinah Coates, the secretary of the Sales Department. While cleaning out old files, she came across the nine-year-old report about design and manufacturing...
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...Brief Synopsis Specialty coffee is a strong and growing industry in the United States. Specially coffee consumption increased by more than 48% from 2001 to 2006 and the market is estimated to be over $11 billion annually. Caribou makes coffee the old fashioned way, by brewing it. Also they team up to American icon IBM that aims to improve customer experiences through the use of in-store technology. Caribou Coffee has been able to achieve a competitive advantage by satisfying customer. One way to achieve this is through advanced communication technology and in particular, Wi-Fi. Designed to accommodate the needs of the vast majority of its customer by providing less than one hour per session. The program is about simplicity and privacy with the intention of making each experience a memorable one. It is apparent that in the coffee industry now there is enormous rivalry among competitors which is why Caribou must maintain its differentiation to maintain their customer loyalty. The coffeehouse industry characterized by intense competition not only from the industry leader, but also from the threat of new entrants and substitutes attracted by such huge growth. Conclusion With the industry leader creating new goals that target to make them almost a monopoly in the world of coffee, Caribou is in danger of losing its competitive advantage. In order to compete in the industry and even possible surpass the industry leader caribou Coffee must have a sustainable competitive...
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...Chapter 4 Case Magrec, Inc. 1. Place yourself in the role of the manger. What should you do now? After considering what happened, would you change any of your behaviors? I would indicate a genuine desire to work through the matter. Then I would express the need to come to an understanding and agreement of working together as a team from now and forward. After meeting with Dinah, I would thank her for bringing the Partco matter to my attention. Next thing I would do is express how I truly respect her strong feelings and beliefs behind her actions regarding the Partco matter. Then I would specify that if she felt that powerfully about her action she should have come to me again or another manager within the business. She should have not contacted the customer direct. By contracting the customer directly with the matter cause a ripple effect in the customer base. The company has hurt an excessive financial hardship. I would propose to her that we could have spoken about the matter with Partco in a way that would have made them aware of our mistake. 2. Do you think Dinah was right? Why or why not? If you were she and you had it to do all over again, would you do anything differently? If so, what and why? Every company should truly explain to each employee what ethics is. Ethics-is a set of principles of right conduct. Do you think Dinah was right? I strongly feel like Dinah was right. Dinah brought Pat the file knowing that there was an ethical and legal violation with...
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