C-091339

Written Analysis and Communication

Case Analysis of
“Wald Press”

(Date of submission: August 03, 2009)

In partial fulfillment of the requirements of the course

"Analysis of Cases and Written Communication" of MBA (Full Time)

Submitted To:- Submitted By:-

Prof. Jayshree Rammohan Rohit Bhura
Roll No: 091339
MBA(FT) First year
Section-C
 Executive Summary
Wald Press, a large New York based printing firm, had for many years in close
association with Campbell brothers, which supplied it with the major portion of its work.
During depression of thirties, the publishing house experienced a large drop in sales so
Campbell Brothers couldn't supply Wald Press with enough work to keep it operating at
reasonable output level. So Wald Press obtained contracts from other publishing firms. In
1946, with sales again at high level, Campbell brothers wanted Wald Press to drop
outside contracts to take all their remaining work.

Problem Statement

In the given case manager and owner of WALD PRESS is in dilemma that whether they
should drop all its outside contract and concentrate all its facilities on production for
Campbell Brothers, their major customer.

Decision Criteria

 Campbell Brother is the only Profit Making Customer.

 Past experience of dealing with one major customer.

 Moral obligation to continue outside contracts.

 Effect on the GOODWILL of the firm.

 Maximizing of Profits.

 Outside contracts are not profitable and also had more finished goods inventory.

 Outside contracts took 15% less time to produce as compaired to Campbell

Brothers' book
 Alternates

1. Continue with Campbell Brother only.

As Campbell Brother is the only profit generating customer and the president of
Campbell Brothers had assured that enough work would be forthcoming to replace that
loss if outsider contracts were dropper so the management can even look at this option.

Meanwhile they can order for new machinery which would be obtained between 1-2
years from now. And as they get their machine they can search for some new customer.
But they should not forget that it will not will easy to attract them back so they have to
bet on their capability of getting them back.

PROS CONS

 Can concentrate on profit generating  Make outside customers unhappy

customer
 Have to depend on single customer
 Less Inventory
 Affect goodwill
2. Retain the outside customers

Retaining the outside customer doesn’t means that they should ignore Campbell Brothers.
I want to say that they need to serve both the parties and this can be done in the following
ways:

1. Purchase /acquire an existing old firm.

2. Partnership with another printing firm.

3. Outsourcing the job and order a new machine immediately.

4. Diversification of work.

5. Increase outside customer base

6. Decrease outside customer base

PROS CONS

 Will have different customers  Huge investment required

 Less risk and uncertainty  Short-term increase in cost due to

lack of skilled workers
 Both Campbell brothers and outside
will be happy

 Would not decrease their goodwill

 Will have enough work to operate at

bad times also
 Best option and recommendations

By looking at the pros and cons of both the alternates I fell that Alternate-2 is better as
compaired to Alternate-1. As already stated above that alternate-2 itself have different
alternates but as various things are not in their control, for example: purchasing old
printing firm, so I think it is better to have a set plan to go for according to priories.

First they should try to Purchase /acquire an existing old firm but they should make sure
that the firm which they are purchasing had enough skilled workers or there is any
other source from where they can get them otherwise this will not solve the problem
and even increase the overhead and maintenance cost.

And even if any one is not ready to sell his firm but ready for partnership then they can
go for it given that they have sufficient skilled workers and are operating below their
capacity. Both alternates will satisfy their short-term as well as long term goals of profit
maximization and retaining more & satisfied customers.

If both of these didn’t work out then they can outsource their job for initial 1-2 years, but
should not outsource Campbell Brothers work as it is given that they were unable to
find other printers to do their part of job so it is fair enough to assume that their job
cannot be done by others easily and as they are their biggest customer so it is not
advisable to share their information with anyone else.

But outsourcing will solve only short-term problem of serving both the parties but from a
long-term objective of increasing consumer base and, maximizing profit they need to
order for a new machine. And need to train workers so in both the case, whether they
are able to outsource or not if skilled works are not available then they should first hire
unskilled workers and provide them Training with the existing skilled workers (for initial
6-12 months) and then should use them for second shift for the time being and have
enough well-skilled workers when they get new machine
In addition to all these they can again go for two different strategies regarding the share
of Campbell Brothers and outside contractors. Either increase the outside customer base
or decrease them. I think that they should increase their outside customer base but not
at the cost of loosing Campbell brothers. If they find more scope for growth in outside
contractors then they can increase their production capacity further and serve them.

Other recommendation:

1. They can even diversify their work, as till now they are only dealing with books
printing but they can also look for some different job such as magazines, posters,
greeting cards printing etc. But they always remember that their core business
is book printing so look for other areas just to reduce their risk and have
diversified consumer base.

2. They should also look at their accounting policies, as mentioned that they divide
their overhead expenses between the customers depending on the number of the
book but this is not a correct policy as the overhead expenses just not depend
on the no of books printed but also on various factors such as size and quality
of book, inventory storage and time requirement etc.

3. From exhibit-2, I can say that a lot of cost is incurred on the maintaining of the
inventory and as stated in the case that Wald Press normally print them as soon as
they get orders and then store them till they are delivered so instead of that they
should print their books when they are required to be delivered and also try to
print them in quantity to reduce the printing and cost of shifting from one job to
other. Or they can also force the outside contractor to take their books as soon
as they are printed. It will reduce the inventory handling cost.
 Monitoring

 If going for outsourcing then make sure that the quality of work done is proper.

 Information supplied to the outsourcer is not misused by him.

 Regular monitoring at the training of new workers.

 Try to analysis the future demand and if they see any scope make proper plans for
that.

Word Count: 1070