Yugesh Samant 1

Wald Press

Wa
ld
Pre
ss
Case
Study
Analysis
(for
referenc
e only)

Yugesh
N
Samant
 Yugesh Samant 2
Wald Press

Executive Summary:

Wald Press was a large New York printing firm, known for unmatched
quality work. Largely dependent on Campbell Brothers, a Manhattan
publishing house, for orders, it started catering to other customers when
orders from Campbell Brothers declined considerably during the Great
Depression. Though barely profitable compared to Campbell Brothers,
these customers kept Wald Press operational during hard times. Now with
increasing orders from Campbell Brothers, Wald Press is facing capacity
constraints. This, along with Campbell Brothers’ pressure to drop other
customers, has brought Wald Press in dilemma to choose between moral
obligation and profitability.
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Wald Press

Word Count: 96

Situation Analysis:

Wald Press was one of the dominant players in New York’s printing
business. Campbell Brothers, a large Manhattan publishing house,
provided it with major portion of its work before the Great Depression.
During the recession, Campbell Brothers couldn’t provide enough work to
Wald Press as its own sales was declining to large extent. Hence Wald
Press had to search for outside contracts to maintain the workflow.
Though these contracts were not as profitable as that of Campbell
Brothers, they provided liquidity to Wald Press in hard times. Also these
contracts were easy to service with little technical requirements.

Now in 1946, with sales increasing to previous highs, Campbell Brothers

required more printing capacity than Wald Press was providing at that
time. After searching for alternate press, it couldn’t find anyone to
supplement the Wald Press’s capacity. Hence it started pushing Wald
Press to drop outside contracts and concentrate only on its orders. To
influence Wald Press’s management, it also promised them to provide
high orders for next 2-3 years.

The manager of Wald Press thought of various options to increase

capacity in short run. But options of working overtime or adding second
shift in schedule were not viable due to monetary and labour constraints
respectively. Also option to purchasing new machinery was not useful as
new machine will be operational after 1 or 2 years only. The manager was
not in favour of dropping outside contracts as it was against the promise it
made to these companies while obtaining contracts. Also it would have
created mistrust for Wald Press in market and nobody would have helped
Wald Press in future.

Problems:
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Wald Press

• The main problem here is how to fulfil Campbell Brothers’ increased

order.
• Also whether to drop outside contracts as per Campbell Brothers’
demand and concentrate whole capacity for it.

Decision Criteria:

• Reputation in market for any company is very important. Care

should be taken that nothing happens to reputation of Wald Press.
• Campbell Brothers account for major portion of Wald Press’s
business volume and profit. Care should be taken that any decision
doesn’t hamper Wald Press’s profitability.
• Any decision should be economically viable to implement.

Alternatives & Evaluation:

• Campbell Brothers accounts for more than 80% of Wald Press’s

billing and more than 95% of its profit. Loosing Campbell Brothers at
the revival of markets after recession will be problematic for Wald
Press as it provides bulk and profitable orders. Dropping outside
contracts as per its demand will secure these orders. But Wald Press
promised these companies that it will take care of their work even
when Campbell Brothers increases its order. Now defaulting on
these promises will damage its reputation. No other company will
provide work to Wald Press if downturn happens in future.
• Keeping outside contracts in force, Wald Press needs to cater to
increased orders from Campbell Brothers. As other contracts need
lesser technical specifications, lesser production time but more
inventory turnaround time, Wald Press can produce these books just
before delivery. It will reduce inventory cost and they can focus on
Campbell Brothers’ orders. But this won’t reduce much load and can
create delivery problems sometimes.
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Wald Press

• Wald Press can outsource some or all work with lesser technical
requirements of other contracts to other small printing firms in
vicinity. This way Wald Press can utilise its expertise in more skilled
work and focus on Campbell Brothers’ work. It will also help to
reduce overheads considerably and increase efficiency of Wald
Press.
• Also, Wald Press should look at this situation as opportunity to grow.
It should expand its present capacity in long run by setting up new
printing press. It can also form joint venture with Campbell Brothers
for capacity expansion. The new press can be dedicated only to
Campbell Brothers’ orders. This move will reduce the risk attached
with expansion and secure continuous flow of work from Campbell
Brothers as it will also have a stake in new press.
• To make other contracts profitable, Wald Press should renegotiate
the terms with these companies, especially for inventory turnaround
time. This will help to increase profit margin as well create a
platform to phase out loss making contracts slowly without hurting
reputation. But it will take a lot of time and its success cannot be
guaranteed.
• Also keeping in mind that such situation can occur in future, Wald
Press should reduce its dependency on Campbell Brothers. It should
try to attract other big publishing houses after expanding its
capacity.

Solution and implementation:

In order to overcome this dilemma, Wald Press should implement a two-

way policy – short-run and long-run.

• Short-run
In order to keep both Campbell Brothers and outside contracts, Wald
Press should divide the work in two parts; work requiring high skills
and work requiring low skills. It should identify few small printing
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Wald Press

firms in its vicinity and outsource work requiring low skills to them.
This will relieve some of its capacity. After that it should stop
producing books for outside contracts for sometime till its piled up
inventory is cleared to considerable extent. This will help to focus
completely on Campbell Brothers’ work in short run.
• Long-run
In order to avoid such dilemma in future and to reduce its
dependency on Campbell Brothers, Wald Press should start
expanding its capacity, with or without the help of Campbell
Brothers. Once new capacity is installed, it should add new
customers and renegotiate with existing ones for better terms.

Closing Summary:

Wald Press should not drop outside contracts as per Campbell Brothers’
demand, but use outsourcing of other work in short run to concentrate on
Campbell Brothers’ work and expand its capacity in long run to meet
future demands. This will help to maintain its reputation as well as to
achieve profitability and growth in future.
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Wald Press

Total Word Count: 96 + 970 = 1066