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Medium Profitability Operations Capital Investment

Maxicure

#Manufacturing #Industrials #Pharmaceuticals
ProHub Comment

This is a structured operations case requiring candidates to evaluate capital investment alternatives (refurbish, rebuild same site, rebuild new location, or outsource). The case progresses from strategic framework thinking to quantitative analysis (break-even calculation at 110M units) to stakeholder management (convincing state governor), testing both analytical rigor and business judgment.

Estimated Time 15 minutes
Difficulty Medium
Source Darden
50 / 100
Your client, Maxicure, manufactures and sells an over-the-counter cough and cold medicine. Their sole plant in Kentucky is aging, and its increasing maintenance costs are leading to low margins on their products. How would you advise Maxicure proceed to solve this problem?

Clarifying Information

  1. There are 2-3 larger players in this over-the-counter business who have distribution across the country. Maxicure is one of them.
  2. Maxicure sells all of its products in the US
  3. Objective is to reduce production costs while maintaining product quality (cost, quality and brand image all matter to customers).