Ehmke Manufacturing Company: Strategic and Marketing Dilemma—Make or Buy

Ehmke Manufacturing Company, Inc., a technical fabric products company established in 1929 in Philadelphia, United States, was facing challenges attracting and retaining employees. In the first half of 2022, issues such as critical open positions and an exponential number of resignations were being experienced across numerous industries around the globe. On June 1, 2022, the company’s chief executive officer met with his entire management team to discuss his company’s dilemma and various options, including the reputation of the company’s brand. He had to decide how to manage the increasing workforce challenge, despite unprecedentedly high demand for his company’s products and services. His company’s growth projections, from a relatively small company to a medium-size international business, did not account for customer disappointments due to product order delays, especially considering that the company manufactured products used for critical search-and-rescue, military, and other governmental applications in the United States and allied countries. The chief executive officer had three options: accept current conditions, increase wages and benefits, or outsource production.

This case, along with the accompanying interactive Microsoft Excel spreadsheet, is intended for use in undergraduate or graduate-level courses on marketing or strategy fundamentals. It is suitable for core or elective courses that cover marketing, leadership, or strategy. It can also be used in executive education courses for participants from mid-sized manufacturing and services business environments to discuss the possible effects of make-or-buy business decisions. The case offers students a view into the difficult decisions of managers in marketing and other business areas, including the make or buy manufacturing option, driven by internal and external forces. Marketing and business strategy students are exposed to the challenges that can impact brand equity, demand, and perceived value across both business-to-business and business-to-consumer product and service lines. Students will gain a critical understanding of how political, economic, and social events impact a company’s marketing and operation management strategies, its workforce, and its brand’s reputation. After completing this case and answering the assignment questions, students will be able to accomplish the following objectives:<ul><li>Understand the importance of determining the bargaining power of suppliers and buyers, based on Michael E. Porter’s Five Forces framework, with respect to operations and marketing business model recommendations.</li><li>Understand the key drivers of the political, economic, social, technology, legal, and environmental (PESTLE) framework on both supply and buyer sides, which can influence attracting and retaining a workforce, pricing decisions, contracts, and potential marketing strategies.</li><li>Learn the value of how a shift in production costs and quality can influence buyer pricing decisions and perceived quality.</li><li>Use the goal, strategic, tactic, implementation, and control (G-STIC) framework for marketing planning in the development of recommendations for maintaining or increasing brand value perceptions after making a decision to outsource production.</li><li>Understand the cross-functional decisions that marketing managers must consider, analyze, and recommend in a small or medium-size business environment.</li></ul>

• branding
• Porter's five-forces
• PESTLE
• GSTIC
• marketing
• make or buy
• brand equity
• demand
• perceived value
• marketing strategy
• operation management strategy
• workforce
• brand’s reputation
• bargaining power
• pricing decisions
• contracts
• small business environment
• medium-size business environment