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CRISIS
The State owned manufacturing entity Automotive Equipment Manufacturing limited (AEML) is currently in a financial
and strategical crisis, with the diminishing support from the state government. We have made a critical analysis to
bring out the root causes of the issues and how to prioritize the measure that are required to be taken immediately.
AEML, a 125 year old company was a market leader in manufacturing automobile equipments for many
decades since its inception.
Post LPG (1990), they failed to notice the arrival of various technically superior MNCs which slowly
penetrated the market with advanced machineries at a better build quality and service.
Currently AEML is in a total accumulated loss of over 1.46 million dollars and is also suffering from depleting
skilled workforce.
Arrange an immediate corporate meeting with the board of directors, stakeholders and employee unions, addressing
all the current issues and analyzing their root causes, summarizing them and acting as per priority.
Let’s begin with the simple but effective root causes which have been plaguing the company since the last two
decades.
Internal factors :
Management inefficiency
Political influence in the Trade unions
Centralised decision making
Excessive man power
Poor product quality and quality check
No dedicated teams for R&D, marketing and business development
Communication gap between different teams and poor operations management
Poor customer service and retention
External factors :
Social motives of Government such as unwanted employment generation and no profit motives at all.
Uncertainty in market and customer demand
Intense competitions from globally renowned MNCs which provide modernized products at relatively low
prices
Strategies :
Technology Upgradations:
Continuos Self-
Renewal
management