Australian Paper Manufacturers (A)

  • Reference: HBS-602S13

  • Year: 1987

  • Geographic Setting: Australia

  • Publication Date: Feb 22, 14

  • Source: HBSP (USA)

  • Type of Document: Case

  • Company: $500 million sales

  • Industry Setting: Paper

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Description

Describes a company which has broken an unwritten cordial agreement amongst the three Australian paper manufacturers to split the domestic market three ways by market segment. The company invades another's "territory" with advanced technology, quality, and, importantly, by using the other company's poor environmental record to protect itself against retaliation. The defender finds itself unable to respond by adding capacity as public pressure denies it the ability to add capacity and upgrade the technology. Having won a large share of the market, and having successfully introduced a new recycled paper product, the invader is now considering the financial, strategic, and ethical issues of further expansion.

Keywords

Business ethics Environmental protection Expansion Manufacturing strategy Market segmentation Operations management Product development Production Technological change