Bridgeton Industries: Automotive Component & Fabrication Plant

Case Solution

Robin Cooper, Patricia J. Bost
Harvard Business School ()

Bridgeton Industries posted lower sales. To be more competitive, a product classification process has been introduced based on their productivity and other factors. The products have been divided into three groups: world-class, potentially world-class, and non-world-class. The company outsources products that are not world class. This outsourcing leads to an increase in the cost of the remaining products, as some of the costs associated with the outsourced products have not been eliminated. These residual costs meant that more products did not become world-class and therefore became candidates for outsourcing. The company has entered the death spiral.

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