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Black Diamond Case Analysis

2076 words - 8 pages

IntroductionAn emergency happened in early January (January 1st, 2nd or 3rd) when Jeff Jamison was climbing a frozen waterfall with a Black Prophet, which is a new product from Black Diamond. The Black Prophet was broken as Jeff sunk it into the ice at the top of the last pitch of the climb. The climber did not injury himself but the situation really scared him. Although the Black Prophet had not launched to the market yet, Jeff got it from one of Black Diamond's sales representatives. Black Diamond received the bad news soon and an emergency meeting was called.Problem identificationThe key problem in the Black Diamond case is how to solve the emergent quality problem of the Black Prophet before launching it to the market. The case relates to the public relationship field since the hardest part in the case is about how to find a balance point between good public relationship and company's benefit. The emergent quality problem is very serious because it would badly damage the company's reputation: the product is highly expected by mountaineering world since everyone in the industry is waiting for the axe. The axe will be launched for the 1993 winter season and the first product of the axe had already been shipped to the mountaineering stores throughout the world. Any inappropriate action would definitely do harm to the company's reputation and give its competitors opportunities to take Black Diamond's market share.The problem is also serious since it could fatally hurt the company's finance situation. The innovation cost of providing such axe to the market is huge: Black Diamond spent several years in designing and producing the axe with different vendors to develop the appropriate production process for each component. The innovation cost could not be covered if the problem cannot be solved. Meanwhile, the competition in the industry is brutal due to the market size and the consumer purchasing behavior. Europe is the main market for the product and the Europeans are predominated by their ethnocentrism: They prefer their own countries' product. Based on the character of the European market, the quality problem may totally destroy Black Diamond's sales in the European market.RecommendationWe have the following two recommendations for Black Diamond in this situation. In the short run, the company should set up exchange/inspection policies and use cautionary label to notice the customers. In the long run, Black Diamond should think about ISO9001.Why recall is unacceptableOne important fact should be mentioned that Jeff Jamison's complain may not relate to the product' quality at all, incorrect use should be considered. If the Black Prophet hit any stone under the waterfall, which is always harder than usual stones, it is sure that the tool would break.The distribution of Black Diamond's share in Exhibit 1 shows that the top managers are totally involved in the business and the financial involvement makes the recall internally unacceptable. Based on...

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