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Case Study

Phantom Electronics

By Nuno Fernandes

1 pages

June 2016

Reference: IMD-7-1758

This case focuses on value creation, and different alternatives for improvement in a company. The CEO of Phantom Electronics, was looking over the company’s warehouse and thinking about possible ways to improve the profitability of her company. She was being pressed by shareholders to deliver higher returns on their investments, and she knew she had to act.

Learning Objective

This case focuses on value creation, and different alternatives for improvement. The CEO had narrowed down the list to four options. 1) Reduce operating costs by 10% by renegotiating contracts and lowering the general overhead expenses. 2) Increase volumes by 8.5%. 3) Reduce the cost of raw materials (COGS) by 2.1%. 4) Increase prices by 1.7%. What would be the impact of each of these options on its financials? Which would be the most appropriate one to pursue?

Keywords

Value Creation, Return on Capital

Settings

World/global
Manufacturing, Electric and Electronic Equipment

Type

Generalized Experience

Available Languages

English

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