2-36: Describe Tartan’s competitive strategy. On the basis of this competitive strategy, what recommendation would you make to the task force?
Tartan’s competitive strategy is high standards of quality in the industry and the product differentiation.
Tartan Corporation has been manufacturing high-quality home lighting systems for more than 90 years. The high quality products with several distinguish and practical features secured the company’s success in the initial process. Additionally, the company introduced a number of new product lines that were also popular with customers.
According to Jess Jones, the company’s CFO, the company has trouble in some of the product lines in recent years, especially the Classic line. Although some plant supervisors suggested shutting down the Classic line to make capacity for other product lines, I recommend that the company keeps the Classic line. Because the Classic line tends to only have a strong support in the northeast states, and in some sales districts in these states, it represents a relatively high proportion of total sales. Furthermore, eliminating the Classic line will make obsolete about $233,000 worth of raw materials inventory that is used only in the manufacturing of Classic line products. In addition, the workers in the Classic line are likely to be old and very loyal. The loyal workers are a big assets to the company. It also concerns about the business ethics issues. If the company suddenly obsoletes the line, the employees will lose their job, which will reduce all employees’ loyal and have strongly bad impact on its image and reputation.
Finally, since its competitive strategy is high standards of quality, I suggest the firm to improve the Classic products in long term, which can remain the traditional conceptions as well as increasing sales.