Australian Paper Manufacturers (A) case study looks into how Ken McRae took APM into the fine papers market. It discusses the technological, operations, and capital investment factors that were considered. Additionally, it presents the issues and solutions this move has caused the environment.
​David M. Upton; Joshua D. Margolis
Harvard Business Review (691041-PDF-ENG)
December 07, 1990
Case questions answered:
- What opportunities and risks did Ken McRae face as he contemplated taking Australian Paper Manufacturers (APM) into the fine papers market? Be specific with respect to technological, operations, and capital investment (as well as other) considerations?
- How has the environment fared in this battle?
- As Ken McRae, what technology and operations strategy options are available? Which do you think he ought to pursue? Why?
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Australian Paper Manufacturers (A) Case Answers
This case solution includes an Excel file with calculations.
Q1. What opportunities and risks did Ken McRae face as he contemplated taking Australian Paper Manufacturers (APM) into the fine papers market? Be specific with respect to technological, operations, and capital investment (as well as other) considerations?
Opportunities for Australian Paper Manufacturers
- People had stopped using check-out bags preferring plastic – Australian Paper Manufacturers (APM) grabbed this opportunity to enter into the fine-paper market
- Upgraded Maryvales machine 3 for producing uncoated fine paper
- Use of toll-free number and computer-based information system for better information flow (eliminating the middle man) and control on the production
- By experimenting and implementation, they learned new capabilities for making the fine paper better than others and meeting the market demand
- Clear division of products for meeting demands of different customer segments -CopyRight (White Collars), PrintRight (Blue collars), and DataRight (for technology-oriented consumers)
- Investment in the marketing campaign and provide customer friendly package by having advertisements and bearing distribution and packaging cost
- Introduction of environmentally friendly products like ReRight made of 100% recycled paper
Risks for Australian Paper Manufacturers
- Adverse effects of dioxins included reproductive disorders in animals, suppressing immune systems and hence affect humans.
- Environmental safety and regulations, susceptible to adverse outcomes of the competition between Australian Paper Manufacturers and PCA.
- Sustaining in the business by replacing the merchants and dealing directly with the customer.
- Deforestation rate in Australia led to the greater forest scrutiny, and deforestation was put under the radar.
- Attracting the fine paper distribution merchants which PCA is Distributing
Q2. How has the environment fared in this battle?
DEFORESTATION
Problem
- 4 tonnes of wood to produce 1 tonne of paper and with 358,000 tonnes of paper requirement in…
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