Stamypor Case
Stamypor Case Study:
TABLE OF CONTENTS
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 project is ended, no further expenditures will be required, allowing DSM-NBD to cut its losses and move on. Stamypor currently faces several problems, in addition to the large amount of money that must be invested for the project to continue. Several direct competitors already have the ability to provide similar products, while indirect competitors have the process technology to also enter this market, if they choose to do so. It is likely that Stamypor will not be able to compete without investing in a new production process. Furthermore, DSM-NBD may have difficulty finding a customer for this product. For these reasons, it is recommended that the Stamypor project should not continue. By ending this project now, no further money will be wasted on a project that probably has more potential competitors than potential customers. The Stamypor project suffered from a severe lack of analysis at several stages of its development. First, it was a poor idea to purchase a patent and try to create a need for this product. Instead, NBD should first perform research to listen to the voice of the customer, and then develop a product that the customer wants. Furthermore, the stubborn decision to ignore Stamypor’s potential competition has
TABLE OF CONTENTS
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 project is ended, no further expenditures will be required, allowing DSM-NBD to cut its losses and move on. Stamypor currently faces several problems, in addition to the large amount of money that must be invested for the project to continue. Several direct competitors already have the ability to provide similar products, while indirect competitors have the process technology to also enter this market, if they choose to do so. It is likely that Stamypor will not be able to compete without investing in a new production process. Furthermore, DSM-NBD may have difficulty finding a customer for this product. For these reasons, it is recommended that the Stamypor project should not continue. By ending this project now, no further money will be wasted on a project that probably has more potential competitors than potential customers. The Stamypor project suffered from a severe lack of analysis at several stages of its development. First, it was a poor idea to purchase a patent and try to create a need for this product. Instead, NBD should first perform research to listen to the voice of the customer, and then develop a product that the customer wants. Furthermore, the stubborn decision to ignore Stamypor’s potential competition has
Cited: (1) Rein Neiland, et al. Stamypor Case Text. Richard Ivey School of Business. University of Western Ontario. 2005. (2) Carlson, Curtis R. and Wilmot, William W. Innovation. Crown Publishing: New York. 2006. (3) Cooper, Robert G. Winning at New Products, 3rd edition. Perseus Publishing: Cambridge. 2001.