ASSIGNMENT 01: CASE STUDY

INDUSTRIAL OPERATIONS MANAGEMENT (CST406NT2)

T.R.C Perera
2018/ET/070

1) What is the competitive environment facing EDC?

The “Eldoro Company” (EDC) is a bicycle maker company So there are so many competitors in this field. And
other company’s also growing up in the field. As well as them also using new technologies and the new trend to
make mountain bikes like front suspensions, cushions, and better shock absorb suspensions for off-road riders.
So that reason Demand and supply also will be reduced.
And the other thing is that Demand and popularity also will change with time and according to customer
preference, the orders for cross bicycles, mountain/road bikes, and hybrid bikes fall in popularity.
When we talk about the international market, they try to open a local plant in Asia, they consider wage rate,
proximity to market, and material cost, and EDC chose China as the best place, but the popular Competitive
companies already have caught their market and filled demand in China and Taiwan. As well as if they make a
local plant it will take a long time to make it.
2) What are EDC’s strengths in manufacturing?
Eldoro company’s manufacturing operation wasn’t moved overseas they did their manufacturing with a
domestic manufacturing strategy which is not a traditional strategy and keep all company parts in the same
location, company has used this strategy to increase cooperation among all those involved in the business.
EDC sold its products lesser cost than other competitive companies with good product quality.
As well as they have not being stuck in the same technologies and designs, EDC gave great competition to other
companies with great designs, technologies, art styles, and features with timely deliveries.
And also, another best reason was the place which the company was located in bicyclists mecca.
EDC always had people willing to test their new prototypes.
According to EDC strategy all staff, engineers, and designers are in nearby places. (in one place), because of
this reason, communication, and manufacturing planning were fast and efficient.

3) Should EDC establish a manufacturing division in Asia?

China Taiwan has infrastructure the manufacturing so the cost can be reduced. But they already have product
manufacturers(competitors). As well as far from the US. So, EDC can’t compete with others from the US
without the plant. And there is a power failure, road facilities are very poor on the other hand Often, untreated
wastewater and cleaning solvents are poured into the waterway.
If they build a plant there, we might find it difficult to operate. Also, Singapore offers great tax arrangements
for new manufacturing operations. Mexico is also closer to EDC's main factory, making it cheaper to distribute
products there, and has a wage rate that is comparable to that of Asian countries.
So, I think Asia is not the place to establish a manufacturing division.

4) What plan of action would you recommend to Ann Reardon?

I think EDC should think twice before establishing a manufacturing division in Asia. If EDC wants an
international market Singapore and Mexico are better than Asia for establishing a manufacturing plant.
The first thing that Eldoro should consider is the Cost of manufacturing and transporting, wage rate, as well as
the quality of the products.
Currently, the business is in a good position with a well-known business name so the current business plans and
domestic manufacturing strategy. And try to use new technologies and designs, focus on all children and young
customers, and Create new designs based on their ideas. So, I suggest that it is good to keep it the same and
invest in another new idea or new business.