from the case identifies the issue, the alternative generation, consequence evaluation, recommendations and implementation issues.

WRIGHT INDUSTRIES Prem Lobo W widget and Gizmo. The Widget Division has been granted a monopoly to mantn The summarized financial statements for the Widget and Gizmo divisions for 2007 are lustries operates across Canada. Wright is a mature company and has two divi l widgets in Canada. The Gizmo Division is a retailer of giznos and operate highly competitive market presented helow (in S000sla Widget division Gizmo division (monopoly) $1,000,000 500,000 500,000 100,000 $400,000 40% (competitive) Revenues Variable costs Gross margin Fixed costs $500,000 400,000 100,000 50,000 $50,000 10% Profit margin Recenti Giamo Division, has accused Wright of engaging in unfair competitive practices. Alpha alleges that Wright is trying to drive out competition by having the Gizmo Division sell product for below-market prices while having the monopoly Widget Division charge higher prices to compensate As proof that Gizmo is charging below market prices, Alpha presents you with the following: . Alpha ear ned a profit margin of 20 percent on revenues, whereas the Gizmo Division earned a profit of 10 percent for the same period. Alpha is involved in manufacturing processing, and retailing gizmos. Alpha is a fairly new, growth-stage company. Another competitor, Beta Inc., earned a profit margin of 25 percent as compared to percent earned by the Gizmo Division. Beta is involved in manufacturing and retailing gizmos, but not in processing, Beta's gizmos are targeted to a specialty marker, whereas Wright's gizmos are targeted to a mass market. Yet another competitor, Ceta Inc., earned a profit margin of 15 percent as compared to the Gizmo Division's 10 percent. Ceta is a retailer of gizmos and is a mature com- pany. Its gizmos are targeted to a mass market In response the above, Ms. Christine, president of Wright, has stated that "it is simply impossible to compare the performance of our Gizmo Division with that of our competi tors. To begin with, they aren't even in the same value chain. In addition, who knows if each company uses the same accounting policies? There are so many other reasons why we just can't make effective comparisons