Le Petit
Le Petit
Le Petit
This case depicts the need for a newly appointed R&D director of the company s flagship products to address R&D issues and to provide a guideline for proper R&D project selection and funding level in an urgent and imperative manner. The following were the main context that prompted the need for this swift action. Market: Le Petit Chef had experienced competitive pressure from European appliances manufactures for high end market in microwave oven due to Asian consumer electronics manufactures penetration to low-end, low-cost market. Technology: With company founder s objectives on cooking appliances that the technology strategy of the company was a technology pull based on the needs and wants from the customers Competition: Le Petit Chef had competitors from high-end market from Europe, its strong market segments as well as potential competitors from Asia that wrestling for the low-endmarket. Supplier: 35% of manufacturing costs of a basic unit was for Most of the microwave oven manufactures buy magnetron and high voltage power supply unit, two of the main components from the same suppliers like Sharp and Samsung. Le Petit Chef enjoyed the similar economics of scale on these components as its competitors. Leadership: With Brigitte Gagne as new R&D director for microwave oven division, she needed to make a pressing decision on project selections as well as the remake of Le Petit Increasing competitive pressures When Asian manufactures expanded their low-end microwave ovens into European markets that took away some profit margins that forced some large European companies (Electrolux and Bosch-Siemens) to move into up-market that in turn pushing down Le Petit Chef s profit margin. To counter these competitive pressures that Le Petit Chef spent much more than needed in advertising and promotion that cut into company s performance. Because the competition, the price of microwave oven also dropped by 10% each year from 1996 to 2000 that further reduce company s revenue. Other reason was the over extent their capabilities in the introductions of new products. With very limited R&D resources, Le Petit Chef had expanded its products from around 7 in 1995 to almost 30 different products in 1999. There were 7 ongoing projects in the pipeline and 5 proposed R&D projects. With the company size of 600, it could not compete with other well-funded big company like those Japanese, Korean companies for low-end, low-cost product and need to speed up the development of niche product that can differentiate their high-end higher margin product to attract customers.
4) Re-establish Le Petit Chef as the leader of French Chef in the microwave oven It is will be like a kitchen in the executive meeting room, but for Gagne it will be a walk in the park for her to handle other executives.