Case study 121 Schultz co, 2 Situation increase in the crime rate has provided a profitable Schultz Co. in Graz, Austria, is a small company of niche. Demand for their products are somewhat 50 people which manufactures control systems. The seasonal - a |- a higher demand in the spring months for company was created in 1971 by three engineers who security devices (businesses and homes are sometimes perfected a simple security device adaptable to private closed during the summer period) and the space heating homes, hotels, banks, and other businesses. The product and restaurant control products are more in demand was very successful and sold well in Austria, during the winter period. Switzerland, and Germany. In the early 1980s Schultz Schultz is currently pretty integrated regarding the received a large capital infusion from a private investor manufacturing and assembly of the units. Schultz makes and a local bank, which enabled it to enlarge its all the electronic components, sensing units, frames, manufacturing site in Graz. The expansion was cases, computing cards and connecting devices. It is necessary as a result of increased demand for the these parts that were developed by the company and security systems and the addition of two new products, they are strategic to the finished product. Almost the one for space heating and the other for restaurants. In only parts that Schultz purchases are various screws and parallel with that expansion, Schultz hired some very fixation pieces, and some plastic mouldings. The competent computer specialists and four commercial company has several patents on the various units they people to expand its market beyond its former territory. have developed but some of these patents are beginning All the products manufactured by Schultz are very to expire. Competitors are being more and more high tech and the technology employed is constantly dominant, particularly in Britain, which has more ease in being updated. The security devices operate by penetrating the North American market. electronic sensing into a small central computer that can With the expansion of the product demand Schultz is activate alarms, flashing lights, messages to the local considering changing its policy towards manufacturing police station or other central areas, and firmly lock and assembly. All 50 employees are currently full time. doors and windows. The space heating systems. for gas However, labour costs in Austria are very high and the or electric appliances, use somewhat similar control and company is toying with the idea of subcontracting about programming devices which switch on or off according 25% of its operation to a small firm in India that is very : to needs. In addition, a simple control card together with competent in the high-technology field. The alternative peripheries controls the raising or lowering of sunblinds to this is to further expand the facility in Austria and according to ambient temperatures. The other product increase employment levels. programmes cooking/baking units for restaurants. Schultz's business is growing very fast. With Austria's Required entry into the European Union. it now has markets in all Schultz Co. needs to establish a new planning policy 15 member countries. In addition, thanks to some clever regarding anticipated growth. Discuss the advantages. marketing, and flexible systems, it has penetrated the and disadvantages, of the long-term and medium to North American market where, among other things, the short-term planning options