Case Studies Club Business Strategy School

Case Success Guide

Overview

The hum of the injection molders at Precision Plastics Manufacturing has always been a steady, predictable rhythm, a testament to their quiet efficiency in the automotive and medical device sectors. But the melody has hit a sour note. A seismic shift in the core business has forced the hand of leadership, presenting a stark dilemma: adapt or face the cold, hard facts of a shrinking bottom line. The central question is not merely about survival, but about seizing an unforeseen opportunity in a burgeoning, high-value niche – the vintage computer restoration market. The analytical approach must be a shrewd calculation, weighing the established yet eroding revenue streams against the alluring, but uncharted, waters of passionate collectors and bespoke component manufacturing. Every angle must be scrutinized, every variable accounted for, for the future of Precision Plastics hinges on this singular, critical decision.

Backstory

Precision Plastics Manufacturing, a tightly run operation of twelve dedicated individuals, has for years been a quiet titan in a specialized corner of the industrial world. From its 25,000 square-foot facility, it has consistently delivered custom ABS and polycarbonate components, primarily for the exacting demands of automotive suppliers and the stringent specifications of medical device manufacturers. Established in 2018, the company has built its reputation on precision and reliability, underpinned by its four Haitian injection molding machines, ranging from 150-ton workhorses to 400-ton behemoths, and its coveted ISO 9001 certification. Annual revenue has, until recently, held a respectable $2.8 million, a testament to its consistent delivery and quality.

However, the prevailing winds of the industry have shifted, bringing with them a chilling forecast. The two largest automotive clients, the very bedrock of Precision Plastics' financial stability, have unleashed a double blow: a demand for a 15% price reduction...