BA363 Le Petit Chef Case Analysis

TECHNOLOGY AND INNOVATION MGMT BA 363
Section 001
Date 2/9/2020
ADISORN SRIBUA
Le Petit Chef Case Analysis
As stated in the case, there were five project proposals which were debated on which one
to pursue where each has its own benefits in terms of the resources required, time of completion
and the NPV. For obvious reasons, the project that could offer efficient utilization of the scarce
resources, minimal completion time and maximizing the NPV would be the ultimate choice for
Le Petit Chef, but certainly that was not the case presented in one of the proposals. Le Petit Chef
had a great reputation being the top kitchen appliance producer in the Western Europe’s
economy and has been delivering high quality products derived from the fact that they have an
effective production line that was automated. After analysing the case and the exhibit provided, I
would suggest Gagne to pursue on developing “Liberté-express,” the quick-heating model by
upgrading to a novel and more powerful magnetron. Since the company had experienced the
difficulty in allocating its scarce R&D resources from the product line growth, it signifies that Le
Petit Chef should maximize its capabilities from limited resources. Additionally, engineers had
complained on being overworked due to too many projects in the pipeline that lead ineffective
management of human resources, and with their higher than industry’s average spending on
R&D, hiring more engineers to solve the problem was not a viable option. Therefore, developing
the Liberté-express seems the most suitable in this situation. The project requires the least
amount of workers of 24 person-months that will allow the remaining workforce to reinforce
other projects. Furthermore, the project takes comparatively less completion time of six months
meaning that the company bears minimal risk and becomes more flexible in case the project fails
as it saves more time for the company. In terms of NPV, the project has the second highest
compared to other projects but still required significantly lesser resources and completion time
than pursuing cost reduction of Egalité. This would help to retain the reputation of Le Petit Chef
as the provider of high quality products while offering a more powerful magnetron to its
customers.
There were several intrinsic and extrinsic factors that led Le Petit Chef to experience
undesirable outcomes and sales began to slowly decline after 1995. On the intrinsic side,
resources within the company were becoming more scarce while the company continued to
produce in large quantities. There were several complaints from their engineers that led to
dissatisfaction among workers thus reducing productivity. Due to immense competition arising
from new entrants from European and Asian countries, this caused the company to overspend
their R&D budget from their sales and expand their product line beyond their capability to
become competitive in the market, which was the root cause of the problem. Extrinsically, as
competitions were high, Le Petit Chef were forced to reduce their prices to compete that had an
effect on their sales revenue. Their cost control approach did not compromise with the quality of
the products leading them to fall behind on manufacturing complexity that their competitors
were able to offer a more functional and advanced products.
In such a highly competitive market and the nature of the product being homogenous,
Gagne could utilize product differentiation to tackle the situation. As Le Petit Chef has spent
ample amounts of their sales percentage on R&D, they could focus on bringing unique products
that stand out from their competitors in the market. This will deviate their focus from price
reduction to being able to set their own premium price in the market and still sustain their
reputation as the high-end product. Moreover, it could potentially increase the margin for their
products and subsequently earn more sales revenues. To the extent that Le Petit Chef are able to
deliver innovative products to the market, customers would be willing to pay the premium price
to compensate for the innovation they receive.
To successfully establish an effective executive meeting, Gagne has to carefully address

the root cause of the problems and focus on the key success factors of Le Petit Chef. On
choosing a project to go after, she needs to efficiently manage the scarce resources, sustaining a
high quality image of the company and ultimately aim towards achieving and maximizing their
NPV. If these aspects were managed properly, it would be most useful for the R&D department
to pursue only those projects that are impactful to the company’s success and eliminate those
projects that are not vital to ensure that Le Petit Chef remains competitive in the market. The
dissatisfaction among workers, suffering from health issues, overworking engineers are all
symptoms that suggest inefficient utilization of the workers and engineers that Gagne should aim
to prioritise in solving. I believe that by adopting product differentiation and integrating
innovation strategy while preserving the high-quality image, Le Petit Chef would be able to
compete against European and Asian businesses and appeal to a wide range of customers that
will improve their financial status and steadily increase their revenues.
Word Count: 831

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TECHNOLOGY AND INNOVATION MGMT BA 363

To successfully establish an effective executive meeting, Gagne has to carefully address

Word Count: 831

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