Ferrofluidics

Case Analysis: Ferrofluidics

Problem Statement

The fourth generation of the ‘Six-Four-Two’ puller is full of bugs and hurting the division on several fronts.

Ferrofluidics has been losing profits from its Systems Equipment Division (SED) after a slow start and poor market entry with their puller products. Despite product potential in a market of demand, SED has had only one good financial year. SED’s fourth generation ‘Six-Four-Two’ puller is hurting the division’s reputation and ultimately the company. Additional problems that support the initial problem statement include narrow focused vision on product upgrade and newer generations instead of debugging the current product production. SED had focused too heavily on future products and market share that they neglected current customers. The division focused on new undeveloped technologies in other markets before having a solid position in current endeavors. Lastly, the upper management of SED believed they were fully capable to put their ‘materials-based’ technologies such as the silicon pullers into an effective fabrication and assembly process.

Short Summary of the Facts

Ferrofluidics occupied their Systems Equipment Division (SED) because “they perceived the production of silicon pullers as a relatively ‘low technology’ industry, where the application of their technological expertise would give them a huge advantage.” To get the division started, Ferrofluidics purchased a company that had previously entered the market and continued to push their product with limited success. SED developed their own designed and labeled it the ‘Six-Four-Two’ puller derived from the size of the ingots it produced. In early 1982, it was the most advanced puller of its time. Because of the silicon industry’s rapid growth and to secure a larger control