Sma 's Micro Electronic Products Division Problems Essay

1225 Words Jan 28th, 2016 null Page
SMA’s Micro-Electronic Products Division Problems and Possible Solutions 2002 was as difficult year for Spichty and the rest of the Micro-Electronic Products Division. Throughout 2002 and into 2003, Micro-Electronic Products Division had a sharp decline both in sales and in profit. There are a multitude of outside problems that have effected the division’s prosperity in the past few years. The major external problem is the current state of the economy. The economy is a major issue because consumers in general are buying less at this point in time. 2002-2003 was a rough moment for the electronics business according to the case. This meant increased competition among other micro-electronic companies. Competition meant that prices and gross margins were extremely important in the SMA company. This became a main focus for many of the plants and departments within the Micro-Electronic Products Division. In fact, if plants did not reach gross margin, they had to retreat and adjust many of their numbers in order for each to reach the gross margin numbers projected by the Micro-Electronic Products Division marketing team. The gross margin numbers also meant that the product quality might be affected due to their need to decrease in costs. Since they had increased competition, they also had to make sure their products were superior in addition to being less expensive to have a competitive advantage. This meant that both time and capital had to be spent to make sure that the…

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