Awc Inc Case Analysis

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Situation Analysis
• AWC Inc., a medium scale family business, is facing fierce competition due to slow down in economy and construction market which has already wiped out one third of its 37 competitors from the market.
• AWC has introduced a superior product which has high demand and would help them in sustaining in market which is running as low as 3% profit margin, and would increase sales and profit which is 0.13% for 1990. They can’t increase labour or overhead costs neither can cut down labour force.
• AWC either needs a second shift which incurs annual costs or a second welding line which is one time investment sand saves on personnel and additional inventory management costs.
• Environmental regulations have become
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is a medium scale family business in the Aluminium fabrication Industry, in existence for 40 years in South-western Ontario, Canada. It stands today as a well-established family of 100 skilled and capable employees who take it as a matter of pride in being associated with the company for long time. The paternalistic orientation of the company has resulted in high levels of dedication and commitment from the employees, who are the greatest strength and foundation builders for future.
The Aluminium Fabrication Industry is a highly competitive market considering the easy entry and low initial capital requirement. As a result, AWC has 37 direct competitors in South-western Ontario and 15 indirect competitors who actually are suppliers of extruded aluminium but have also entered into manufacturing. AWC handles multiple standard projects simultaneously with the help of a large work force, with the only distinguishing factors among projects being the prices and the distance from suppliers. The fewer solicited custom projects gave higher profits to AWC but ate up higher costs in the
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1. AWC should install a second welding line to meet higher demands of new product.
2. AWC should inform the employees about the government legislations and new equipment installation and the resulting wage and benefit cuts.
3. With the help of a bank loan, they should get the Air Recirculation Filtration system installed.
4. Obtain the clearance certificate from both Ministry of Environment and Ministry of Labour.
5. Minimally cut down the wages and benefits, executive salaries, advertising and trade show expenses by 10-15% to avoid
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