The Dixon Auto Parts Company
Summary:
In 1948 Karl Dixon took over Dixon Auto Parts after his father passed away. The headquarters is located in Detroit, Michigan. The Detroit Plant only produced gears for the automobile industry. Dixon decided to expand the company and a new plant was built in Cleveland, Ohio. Around the late 1950’s the profit began to decrease. An executive group started a plan to begin viewing the company’s operations more in depth. The only advantage about the Detroit Plant was the proximity to most of the customers. Modernizing the Detroit Plant would be too expensive, so the group came up with some alternatives. One alternative was moving the plant to Osburne, Kentucky. Osburne has a skilled labor force and lower taxes. Before following this plan they may face some legal issues and think about another alternative.
Competitive Environment:
Dixon Auto Parts, Inc. has been one of the main staples in the Detroit automotive scene. The Dixon Company has held the role as one of the main suppliers of automotive gears for the past 40 years. Recently R & K International has entered the automotive parts industry and immediately coursed a great deal of Dixon's market share. This sudden entry into the market has forced Dixon to stay competitive by drastically lowering their prices. While this has kept them competitive, it has also taken a strain on their profits. R & K are not only able to produce cheaper gears; they are also able to produce them in less time. Prior to R & K's entry onto the scene, Dixon auto parts were able to produce these gears at a reasonable price and still take in 25% profit off each gear. Dixon, produced each ge ...