Executive Summary - Situation Summary 1 Objectives 2 Central Problems 2 Recommended Actions 3 Reasoning Behind the Recommended Actions 4 Alternative Action Programs 6 Risks and Contingency Plan 7 Application of Readings 8 Works Cited 9
EXECUTIVE SUMMARY The New Business Development division of DSM is faced with the decision of whether it should continue to develop the Stamypor resin. The product is already near the end of the second stage of development. If NBD’s management board approves this product to continue into the third stage, it will require €16 million to be invested for equipment. However, if the Stamypor They realized that rigorous improvements were needed from their present technology. The market had changed significantly since DSM-NBD bought the Stamypor patent. The plastic from milk cartons from which Stamypor was derived initially did not live up to the quality requirements of the market. The porosity of the product was still below expectations (1, p13). NBD dabbled with permutations of various processes to create a better method of manufacturing the product. A mini plant worth €682,000 was set up to try out this new process; a decision later determined to have been made too hastily. NBD soon ran into capability problems with the mini plant that forced them to partner with a third party (IGM) to attempt to solve the problem (1, p14). Here again, NBD made a costly decision by not taking the time to analyze whether IGM had the required competence to solve its problems. The crux of all problems seems to be lack of analysis, both in terms of the need for Stamypor and their approach towards realizing the need. These problems were made worse by the lack of a reasonable timeframe for marketing the product, which made it difficult to assess industry needs and understand market potential.
RECOMMENDED ACTIONS After weighing the advantages and disadvantages of continuing with the Stamypor project, it is recommended that DSM’s New Business Development unit end this project. All equipment and other assets that have been devoted to this project should - 3
