What action should Hans Thorborg take? Why?
Answer: Thorborg should explore existing and future capabilities to arrive at the various
options. Here, the bottom line is the capability to produce the plastic rings at a
competitive price while disposing the inventory of steel materials and the steel rings.
Thorborg needs to start retooling the production lines for the plastic rings. The threat
from Henri Poulenc is real and may soon take some market share from PWI. The cost
structure is a very fluid support for decisions as these can significantly change with a
decision to out source, reengineer or rationalize the labor and overhead component.
Whatever options Thorborg choose to act on, needs the support of his key people in the