Case Scenario 2: Plasco

question 98

Essay

Case Scenario 2: Plasco.
Plasco is a $3 billion U.S.-based manufacturer of flexible plastic products like trash cans, reheatable and freezable food containers, and a broad range of other plastic storage containers designed for home and office use. Historically, Plasco has been the category killer for most of its products and has devoted tremendous resources to new product development on an ongoing basis-this research intensity has allowed the company to release, on average, a new product every day over the past 5 years. Despite its past strength and high brand awareness, Plasco's profitability has been eroded by dramatic increases in the cost of plastic resin, the primary input into its plastic products. Moreover, the retail channel has experienced rapid consolidation resulting in a shift in the balance of power from branded manufacturers like Plasco, to strong retailers like Walmart, who in turn have been unwilling to help Plasco absorb the higher resin costs. Enhancing Walmart's power is the fact that it can always turn to alternative high-volume sources of consumer plastic products like Sterlite. Further hampering Plasco's recovery is the emergence of feisty little foreign competitors like Zig Industries, a $250 million Israeli firm that has begun to take part of Plasco's market share in plastic toolboxes. Ironically, Plasco was the first company to offer plastic toolboxes some 20 years ago. This innovation changed the market dramatically and Plasco's first mover strategy rewarded it with a rapidly growing new segment and a dominant market position. Today, Plasco's toolboxes are viewed as rather boring, while Zig's products are ingeniously designed to catch the customer's eye in the aisle (better merchandising the product)and capture their interest (and pocketbook)with many new and novel features. Zig is also able to provide this new line of toolboxes at between 10 percent to 15 percent less than Plasco.
-(Refer to Case Scenario 2). Is the toolbox business a slow-,standard-,or fast-cycle business?

---

Definitions:

Ethnomethodological

Ethnomethodology refers to a branch of sociology focused on exploring how individuals understand and produce the social order in everyday interactions.

Breaching Experiments

Social experiments that intentionally violate social norms to study reactions to norm violations.

Normative Violations

Actions or behaviors that transgress the accepted rules, values, or norms of a society or group, potentially leading to social sanctions.

Ethnomethodological

Pertaining to ethnomethodology, a sociological approach focusing on the ways people use everyday interactions to construct and understand social norms and realities.