Making Trade-Offs

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Wilmont's pros and cons table

The careful weighing of pros and cons is a big part of strategy. Show that you can see the pros and cons of different strategies and pick the one that best aligns with business objectives.

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Richard works as a product manager for a furniture company, Wilmont Brothers. Wilmont has decided to pursue a new business strategy. Its objectives include boosting revenues by hiring high-profile designers to create new products for the high-end market, maintaining flexibility in case a downward turn in the economy dries up the market for high-cost luxury furniture, and minimizing the time and money needed to begin producing the new products. Richard must consider how many, if any, changes to make in the company's production infrastructure to accommodate daring new designs.

Each of the options he considers has pros and cons associated with it, and some of those align with Wilmont's business objectives more than others.

Option 1 is to minimize changes to the current production infrastructure. The pros of this option include the following: It leverages the current infrastructure. It minimizes downtime. It has a low cost. The cons include the following: It limits the potential of new designs. It may lead to additional marketing costs to compensate.

Which of these could be another con for Option 1?

Correct choice. High-profile designers will be less willing to work for a company whose production infrastructure is not really suited to producing high-end designs.


Not the best choice. In fact, of the three options, this one seems the least likely to damage morale, since it minimizes changes to the status quo.


Not the best choice. The furniture will still be produced in-house, under the same high level of oversight given to the company's existing furniture lines.


Option 2 is to outsource production of new pieces to specialty workshops. The pros of this option include the following: It allows a wider range of furniture production. It's more attractive to designers. The cons include the cost of hiring contractors, the lack of oversight on construction, and the potential for escalating costs if more contractors are needed to satisfy production demands.

Which of these could be another pro for Option 2?

Correct choice. The specialty workshops will already have the infrastructure and personnel needed to start immediate production on Wilmont Brothers' new, high-end furniture designs.


Not the best choice. Outsourcing production means that the company's current production infrastructure will not be used.


Not the best choice. The introduction of a new product line will almost always require some increase in marketing costs.


Option 3 is to modify the existing infrastructure to allow more flexibility in production. The pros include the following: It allows for a wider range of furniture production. It's more attractive to designers. It partially leverages the current infrastructure. Wilmont Brothers would also maintain a high level of control and oversight. The cons include the training required for new equipment, and the cost of upgrades.

Which of these could be another con for Option 3?

Not the best choice. A specialized high-end production department will give Wilmont Brothers greater freedom in tackling a wide range of new designs.


Not the best choice. This option will make use of the company's current staff, not contractors.


Correct choice. The production overhaul will likely result in lower production volumes as employees are trained and new equipment is installed.


Weighing all the pros and cons, which of these options aligns best with the company's strategic objectives?

Not the best choice. While making minimal changes to the company's production infrastructure will certainly save time and money and preserve flexibility, it will do little to attract the high-profile designers Wilmont Brothers needs in order to launch a truly impressive line of high-end furniture designs.


Correct choice. Outsourcing the production of its high-end designs to specialty workshops has some drawbacks, but it strikes the best balance between the company's objective to move into the high-end furniture market and its objective to minimize costs and maintain flexibility (in case it needs to later move out of that market).


Not the best choice. Although overhauling Wilmont Brothers' production infrastructure might be the best long-term solution in terms of moving into the high-end furniture market, it is the worst solution in terms of minimizing costs and maintaining flexibility.


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