Case Study

Phantom Electronics

1 pages
June 2016
Reference: IMD-7-1758

This case focuses on value creation, and different alternatives for improvement in a company. The CEO of Phantom Electronics, was looking over the company’s warehouse and thinking about possible ways to improve the profitability of her company. She was being pressed by shareholders to deliver higher returns on their investments, and she knew she had to act.

Learning Objective

This case focuses on value creation, and different alternatives for improvement. The CEO had narrowed down the list to four options. 1) Reduce operating costs by 10% by renegotiating contracts and lowering the general overhead expenses. 2) Increase volumes by 8.5%. 3) Reduce the cost of raw materials (COGS) by 2.1%. 4) Increase prices by 1.7%. What would be the impact of each of these options on its financials? Which would be the most appropriate one to pursue?

Keywords
Value Creation, Return on Capital
Settings
Global
Manufacturing, Electric and Electronic Equipment
Type
Generalized Experience
Copyright
© 2016
Available Languages
English
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