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Manufacturer of Electronic Components
Background
The firm was founded in Cleveland, Ohio in 1917 as a machine shop that
primarily supported the electrical industry and the growing local economy. The
firm has a long history of profitable operations. In the 1930s, the company
moved from Ohio, to New York to expand its air-cooled transformer line and to
begin producing fluorescent lamp ballasts. At the time 40 people were employed
at the firm. Business continued to grow even through the war years, with the
firm supplying transformers to both the U.S. Army and Navy.
Over a span of 79 years the firm experienced phenomenal growth which fueled new
construction and plant expansion. In 1968, a new facility was added in North
Carolina to serve the Southern markets, and in 1978, another facility was added
in Utah to serve the Western markets.
Sales grew from $50 million in 1980 to $75 million by 1986. However, this
fantastic growth rate also created some duplication of effort among many of the
firm’s locations. It was during these years the board of directors made some
major decisions about the firm’s future. They decentralized the company and
registered it with the New York Stock Exchange in 1982. Growth continued with
sales reaching $90 million in the early-1990s and peaking at $96.5 million in
1996.
At that time defense cutbacks were seriously
affecting two of the firm’s three divisions. The electronics industry as a whole
was feeling the sway of the Asian movement. The downward trend began in 1998
when sales declined by $5.6 million. Cheaper products imported from Asia were
hampering the firm’s ability to compete.
Assistance Provided
The NYS TAAC performed a diagnostic review of the firm’s operations that concluded the
markets for the firm’s products were mature, and at best, stagnant. Although
manufacturing was state-of-the-art, sales representation was weak. Moreover, the
market had almost entirely moved to overseas manufacturers.
The recovery plan, developed jointly between the NYS TAAC and firm, had both
long-term and short-term proposals to help the firm recover from the effects of
lost sales revenue due to defense cutbacks and increased import penetration. The
very first order of business was to replace lost sales. Without
increased sales the firm's long-term prospects were dim. After analyzing the
strengths of the business, it was determined that drawing on the firm’s
excellent reputation for quality, high performance, and timely service could
generate new sales.
Technical assistance put in place a sales and marketing function that will
identify customers that have an immediate need for the firm’s expertise. This
plan required a well-defined marketing program that addressed public relations,
market research, selling tools, long-term strategies, and sales force
recommendations appropriate for this type of industry.
Project Results
An entirely different approach to developing new business was formulated. Firm
management had to embrace new ways of generating business and implement a
high-tech approach that reflected the firm’s new strategic direction.
The project accomplished all that and more. It re-defined and re-introduced the
firm’s core competence for forward integration, better defined as “complete
build of the box” technology. The consultant quickly realized the firm’s
strengths, and began introducing and focusing management’s energies on a more
profitable and growing market based on their manufacturing expertise.
Shortly after completion of this project, the firm secured two,
multi-million-dollar, multi-year orders, which are expected to double sales from
the previous two years. Additionally, the firm has been searching for a number of
skilled professionals to fill some critical positions that were newly created as
a result of the two orders.
Management predicts the exposure acquired from these orders will propel the firm
into the mainstream of development, engineering, and manufacturing fulfillment
and on to the leading edge of contract electronics manufacturing.
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